UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: ~~September~~March 3031, ~~2024~~2025

☐ 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: 000-55925

AERKOMM INC.

(Exact name of registrant as specified in its charter)

Nevada		46-3424568
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

44043 Fremont Blvd., Fremont, CA 94538

(Address of principal executive offices, Zip Code)

(877) 742-3094

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
None		N/A		N/A

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. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐ No ☒

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.

	Large accelerated filer ☐		Accelerated filer ☐
	Non-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 comply 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~November~~October 1324, ~~2024~~2025, there were 18 19,~~352~~638,~~613~~ 849 shares of the registrant’s common stock issued and outstanding.

AERKOMM INC.

Quarterly Report on Form 10-Q

Period Ended ~~September~~March 3031, ~~2024~~2025

TABLE OF CONTENTS

		Page
PART I FINANCIAL INFORMATION
Item 1.	Financial Statements
	Unaudited Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023	1
	Unaudited Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024	1
	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the Nine Months Periods Ended September 30, 2024 and 2023	2
	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Periods Ended March 31, 2025 and 2024	2
	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Nine Months Periods Ended September 30, 2024 and 2023	3
	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Periods Ended March 31, 2025 and 2024	3
	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Periods Ended September 30, 2024 and 2023	4
	Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Periods Ended March 31, 2025 and 2024	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4139
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5962
Item 4.	Controls and Procedures	5962
PART II OTHER INFORMATION
Item 1.	Legal Proceedings	6164
Item 1A.	Risk Factors	6164
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6164
Item 3.	Defaults Upon Senior Securities	6164
Item 4.	Mine Safety Disclosures	6164
Item 5.	Other Information	6164
Item 6.	Exhibits	6264

AERKOMM INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Balance Sheets

	September 30, 2024			December 31, 2023
	March 31,			December 31,
	(Unaudited)			As restated
	2025			2024
Assets
	(Unaudited)
Current Assets
ASSETS
Cash	$	56,952		$	4,202,797
CURRENT ASSETS
Short-term investment		1,119,677			1,156,875
Cash	$	89,871		$	93,974
Account receivable - related parties		-			41,088
Short-term investment		107			107
Inventories, net		~~190~~1,~~392~~008,449			~~170~~1,~~892~~007,461
Prepaid expenses		~~291~~221,~~668~~014			~~158~~195,~~171~~633
Other receivable - related parties		34,~~913~~109,~~133~~314			24,~~147~~155,~~501~~511
Other receivable		~~398~~382,~~550~~807			~~122~~383,~~024~~216
Other current assets		7390,~~112~~580			6590,~~937~~651
Total Current Assets		65,~~043~~902,~~484~~142			85,~~065~~926,~~285~~553
Long-term Investment		4,850,648			5,013,814
NON-CURRENT ASSETS
Property and Equipment
Long-term Investment, net		2,101,612			2,127,249
Cost		5,454,172			5,436,657
Property and Equipment, net		1,552,919			1,728,227
Accumulated depreciation		(3,292,976	)		(3,085,789	)
Intangible asset, net		10,836,603			11,279,893
		2,161,196			2,350,868
Construction in progress		3,750,000			3,750,000
Prepayment for land		3940,~~315~~169,~~937~~413			40,~~114~~223,~~286~~001
Prepayment for equipment		325,668			324,866
Right of use assets, net		149,379			176,406
Net Property and Equipment		41,802,801			42,790,020
Prepayment for equipment and intangible assets – customer projects – related parties		736,027			2,146,807
Other Assets
Prepayment for equipment and intangible assets – customer projects		279,710			279,710
Prepayment for equipment and intangible assets – customer projects – related parties		2,083,650			2,076,138
Restricted cash		15,253			15,253
Prepayment for equipment and intangible assets – customer projects		9,175,532			8,326,017
Deposits		384,904			392,907
Restricted cash		20,077			3,225,905
Intangible asset, net		11,709,434			13,024,692
Goodwill		4,573,819			4,573,819
Right-of-use assets, net – operating leases		211,644			221,417
Total Non-Current Assets		64,549,639			66,693,272
Deposits		404,818			534,515
Total Assets	$	70,451,781		$	72,619,825
Total Other Assets		28,178,974			31,982,503
LIABILITIES AND STOCKHOLDERS’ EQUITY
Total Assets	$	80,875,907		$	87,851,622
CURRENT LIABILITIES
Liabilities and Stockholders’ Equity
Short-term loans	$	7,311,275		$	6,976,721
Current Liabilities
Convertible long-term bonds payable – current		200,000			200,000
Short-term loan	$	5,546,907		$	5,712,244
Convertible long-term bonds payable – current		2,287,349			10,303,775
Convertible long-term note payable - current		23,173,200			23,173,200
Accounts payable		1,900,767			1,900,317
SAFE liabilities		5,460,000			5,410,000
Accrued expenses		7,956,269			5,995,972
Accounts payable		2,485,170			2,489,080
Other payable - related parties		830,929			726,802
Accrued expenses		8,311,810			8,260,411
Other payable		12,353,185			8,057,112
Other payable - related parties		1,238,485			1,168,597
Prepayment from customer - related parties		6,607,717			6,534,908
Other payable		11,289,848			10,435,027
Contract liability - current		762,000			-
Prepayment from customer - related party		5,470,434			5,323,044
Long-term loan - current		-			5,045
Contract liability - current		762,000			762,000
Lease liability - current		211,205			168,433
Lease liabilities - current		138,602			168,251
Total Current Liabilities		6165,~~629~~840,~~528~~824			6264,~~577~~366,~~808~~331
Long-term Liabilities
Convertible long-term bonds payable		200,000			200,000
Lease liabilities - non-current		25,654			56,303
Contract liability - non-current		-			762,000
Total Long-Term Liabilities		25,654			56,303
Lease liability - non-current		89,847			120,932
Total Liabilities		65,866,478			64,422,634
Restricted stock deposit liability		1,000			1,000
STOCKHOLDERS’ EQUITY
Total Long-Term Liabilities		290,847			1,083,932
Preferred Stock, $0.001 par value, 50,000,000 shares authorized, 0 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively		-			-
Total Liabilities		61,920,375			63,661,740
Common Stock, $0.001 par value,90,000,000 shares authorized, 19,638,849 and 18,352,613 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively		19,638			18,352
Stockholders’ Equity
Additional paid-in capital		115,509,627			114,391,555
Preferred stock, $0.001 par value, 50,000,000 shares authorized, 0 shares issued and outstanding as of September 30, 2024 and December 31, 2023		-			-
Subscribed capital		-			527,783
Common stock, $0.001 par value, 90,000,000 shares authorized, 18,203,451 shares and 16,720,451 shares (excluding 149,162 unvested restricted shares) issued and outstanding as of September 30, 2024 and December 31, 2023		18,203			16,720
Accumulated deficit		(110,353,287	)		(106,674,555	)
Additional paid in capital		110,561,069			97,015,470
Accumulated other comprehensive loss		(590,675	)		(65,944	)
Subscribed capital		3,499,496			5,004,000
Total Stockholders’ Equity		4,585,303			8,197,191
Accumulated deficits		(94,166,348	)		(77,479,704	)
Total Liabilities and Stockholders’ Equity	$	70,451,781		$	72,619,825
Accumulated other comprehensive loss		(956,888	)		(366,604	)
Total Stockholders’ Equity		18,955,532			24,189,882
Total Liabilities and Stockholders’ Equity	$	80,875,907		$	87,851,622

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

AERKOMM INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss

	Three-Month Period Ended September 30,						Nine-Month Period Ended September 30,
	For the Three Months Ended March 31
	2024			Restated 2023			2024			Restated 2023
	2025			2024
	(Unaudited)			(Unaudited)			~~(Unaudited)~~			~~(Unaudited)~~
Net Sales	$	48,843		$	-		$	48,843		$	-
Net sales		-			18,480
Net Sales – Related Party		47,465			-			65,945			446,367
Service income - related party		-			34,775
Service Income – Related Party		-			61,582			34,775			61,582
Total Sales		-			53,255
Total Revenue		96,308			61,582			149,563			507,949
Cost of sales		-			38,116
Cost of Sales		285			26,666			61,128			472,115
Total cost of sales		-			38,116
Gross Profit		96,023			34,916			88,435			35,834
Gross margin		-			15,139
Operating Expenses		3,686,838			4,303,845			15,241,275			11,577,414
Operating expenses		3,079,484			5,108,102
Loss from Operations		(3,590,815	)		(4,268,929	)		(15,152,840	)		(11,541,580	)
LOSS FROM OPERATIONS		(3,079,484	)		(5,092,963	)
Non-Operating Income (Loss)
NON - OPERATING INCOME (LOSS)
Foreign currency exchange (loss) gain		190,811			(806,619	)		(639,448	)		(1,126,762	)
Unrealized investment gain		-			672
Interest expenses		(272,197	)		(369,859	)		(864,822	)		(1,096,509	)
Foreign currency exchange loss		(50,614	)		(688,595	)
Unrealized gain (loss) on investments		(21,150	)		(2,650	)		(20,370	)		(106,165	)
Other income		3,041			-
Other income (loss), net		959			341,568			(6,764	)		450,975
Interest expense		(267,229	)		(286,631	)
Net Non-Operating Income (Loss)		(101,577	)		(837,560	)		(1,531,404	)		(1,878,461	)
Change in SAFE liabilities		(50,000	)		-
Loss before Income Taxes		(3,692,392	)		(5,106,489	)		(16,684,244	)		(13,420,041	)
Loss on deconsolidation of subsidiaries		(234,454	)		-
Income Tax Expense		-			-			2,400			2,400
Other income (loss), net		8			(12,656	)
Net Loss		(3,692,392	)		(5,106,489	)		(16,686,644	)		(13,422,441	)
Net non - operating loss		(599,248	)		(987,210	)
Other Comprehensive Income (Loss)
LOSS BEFORE INCOME TAXES		(3,678,732	)		(6,080,173	)
Change in foreign currency translation adjustments		260,941			(554,120	)		(590,284	)		(776,054	)
INCOME TAX EXPENSE		-			2,400
Total Comprehensive Loss	$	(3,431,451	)	$	(5,660,609	)	$	(17,276,928	)	$	(14,198,495	)
NET LOSS		(3,678,732	)		(6,082,573	)
Net Loss Per Common Share:
OTHER COMPREHENSIVE LOSS
Basic	$	(0.20	)	$	(0.51	)	$	(0.92	)	$	(1.35	)
Change in foreign currency translation adjustments		(550,029	)		(669,236	)
Diluted	$	(0.20	)	$	(0.51	)	$	(0.92	)	$	(1.35	)
TOTAL COMPREHENSIVE LOSS	$	(4,228,761	)	$	(6,751,809	)
Weighted Average Shares Outstanding - Basic		18,352,613			10,021,349			18,149,372			9,920,450
NET LOSS PER COMMON SHARE:
Weighted Average Shares Outstanding - Diluted		18,352,613			10,021,349			18,149,372			9,920,450
Basic		(0.20	)		(0.34	)
Diluted		(0.20	)		(0.34	)
Weighted Average Shares Outstanding - Basic		18,609,860			17,839,228
Weighted Average Shares Outstanding - Diluted		18,609,860			17,839,228

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

AERKOMM INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024

	Common Stock				Additional Paid in		Accumulated			Accumulated Other Comprehensive			Total Stockholders’
	Common stock				Additional paid in		Capital			Accumulated			Accumulated other comprehensive
	Shares		Amount		~~Capital~~capital		~~Deficits~~Injection			~~Income (Loss)~~Deficit			~~Equity~~loss			Total
Balance as of January 1, 2023		9,720,003	$	9,720	$	79,078,005	$	(53,645,981	)	$	(373,974	)	$	25,067,770
BALANCE, December 31, 2023		16,720,451	$	16,720	$	97,015,470	$	5,004,000		$	(77,479,704	)	$	(366,604	)	$	24,189,882
Stock compensation expense		-		-		54,891		-			-			54,891
Issuance of common stock		1,093,000		1,093		6,556,907		(5,004,000	)		-			-			1,554,000
Other comprehensive income		-		-		-		-			134,254			134,254
Stock compensation expense		-		-		633,048		-			-			-			633,048
Net loss for the period		-		-		-		(3,754,436	)		-			(3,754,436	)
Foreign currency translation adjustments		-		-		-		-			-			(669,236	)		(669,236	)
Balance as of March 31, 2023		9,720,003	$	9,720	$	79,132,896	$	(57,400,417	)	$	(239,720	)	$	21,502,479
Net loss for the period		-		-		-		-			(6,082,573	)		-			(6,082,573	)
Issuance of common stock		-		-		-		-			-			-
BALANCE, March 31, 2024		17,813,451	$	17,813	$	104,205,425	$	-		$	(83,562,277	)	$	(1,035,840	)	$	19,625,121
Stock compensation expense		-		-		209,995		-			-			209,995
Other comprehensive income		-		-		-		-			(356,188	)		(356,188	)
Net loss for the period		-		-		-		(4,561,516	)		-			(4,561,516	)
Balance as of June 30, 2023 (Restated)		9,720,003	$	9,720	$	79,342,891		(61,961,933	)		(595,908	)		16,794,770
Issuance of common stock		7,000,448		7,000		16,493,000		-			-			16,500,000
Stock compensation expense		-		-		589,852		-			-			589,852
Other comprehensive income		-		-		-		-			(554,120	)		(554,120	)
Net loss for the period		-		-		-		(5,106,489	)		-			(5,106,489	)
Balance as of September 30, 2023 (unaudited)		16,720,451	$	16,720	$	96,425,743	$	(67,068,422	)	$	(1,150,028	)	$	28,224,013

For the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025

	Common Stock				Additional Paid in			Subscribed			Accumulated			Accumulated Other Comprehensive			Total Stockholders’
	Common stock				Additional paid in			Subscribed			Accumulated			Accumulated other comprehensive
	Shares		Amount		~~Capital~~capital			Capital			~~Deficits~~Deficit			~~Income (Loss)~~loss			~~Equity~~Total
Balance as of January 1, 2024		16,720,451	$	16,720	$	97,015,470		$	5,004,000		$	(77,479,704	)	$	(366,604	)		24,189,882
BALANCE, December 31, 2024		18,352,613	$	18,352	$	114,391,555		$	527,783		$	(106,674,555	)	$	(65,944	)	$	8,197,191
Issuance of common stock		1109,~~093,000~~280		~~1,093~~109		6527,~~556,907~~674			(5527,~~004,000~~783	)		-			-			~~1,554,000~~-
Stock compensation expense		-		-		633,048			-			-			-			633,048
Cashless exercise of stock options		1,176,956		1,177		(1,177	)		-			-			-			-
Other comprehensive income		-		-		-			-			-			(669,236	)		(669,236	)
Stock compensation expense		-		-		591,575			-			-			-			591,575
Net loss for the period		-		-		-			-			(63,~~082~~678,~~573~~732	)		-			(63,~~082~~678,~~573~~732	)
Balance as of March 31, 2024		17,813,451	$	17,813	$	104,205,425		$	-		$	(83,562,277	)	$	(1,035,840	)	$	19,625,121
Deconsolidation of subsidiaries		-		-		-			-			-			25,298			25,298
Issuance of common stock		390,000		390		2,339,610			-			-			-			2,340,000
Foreign currency translation adjustments		-		-		-			-			-			(550,029	)		(550,029	)
Capital Injection		-		-		-			3,499,496			-			-			3,499,496
BALANCE, March 31, 2025		19,638,849	$	19,638	$	115,509,627		$	-		$	(110,353,287	)	$	(590,675	)	$	4,585,303
Stock compensation expense		-		-		3,411,183			-			-			-			3,411,183
Other comprehensive income		-		-		-			-			-			(181,989	)		(181,989	)
Net loss for the period		-		-		-			-			(6,911,679	)		-			(6,911,679	)
Balance as of June 30, 2024		18,203,451	$	18,203	$	109,956,218		$	3,499,496		$	(90,473,956	)	$	(1,217,829	)	$	21,782,132
Issuance of common stock		-		-		-			-			-			-			-
Capital Injection		-		-		-			-			-			-			-
Stock compensation expense		-		-		604,851			-			-			-			604,851
Other comprehensive income		-		-		-			-			-			260,941			260,941
Net loss for the period		-		-		-			-			(3,692,392	)		-			(3,692,392	)
Balance as of September 30, 2024 (unaudited)		18,203,451	$	18,203	$	110,561,069		$	3,499,496		$	(94,166,348	)	$	(956,888	)	$	18,955,532

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

AERKOMM INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Cash Flows

	For the Nine Months Ended September 30,
	For the Three Months Ended March 31
	2024			Restated 2023
	2025			2024
	(Unaudited)			(Unaudited)
Cash Flows from Operating Activities
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(163,~~686~~678,~~644~~732	)	$	(136,~~422~~082,~~441~~573	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1573,~~531,453~~921			~~897~~506,~~046~~980
Amortization of Right of Use Assets		95,919			75,899
Amortization of right of use assets		29,641			-
Stock-based compensation		4591,~~649,082~~575			~~847~~633,~~738~~048
Unrealized (gain) loss on investments		20,370			106,165
Change in fair value of SAFE liabilities		50,000			-
Amortization of discount and bonds issuance costs		-			380,684
Unrealized losses on trading security		-			(672	)
Changes in operating assets and liabilities:
Loss on disposal of subsidiaries		234,454			-
Accounts receivable		41,088			-
Change in operating assets and liabilities:
Inventories		(19,500	)		-
Accounts receivable					41,088
Prepaid expenses		(132,~~148,502~~811	)		~~(4,134,587~~-	)
Other current assets		(259,042	)		(1,129,394	)
Other receivable		(1,962	)		-
Deposits		129,697			(223,550	)
Other current assets		(1,032	)		(1,271,205	)
Accounts payable		450			(386,312	)
Deposits		6,798			3,418
Accrued expenses and other current liabilities		6,799,449			9,622,337
Accounts payable		-			(2,497	)
Operating lease liability		29,783			(5,902	)
Accrued expenses		625,963			2,620,514
Net Cash Used for Operating Activities		(4,816,397	)		(7,372,317	)
Other payable		942,827			-
Cash Flows from Investing Activities
Other payable, related parties		76,373			-
Prepayment for land		(349,131	)		-
Operating lease liability		(7,327	)		14,401
Disbursement for other receivable - related parties loans		(1,790,291	)		-
Net cash used in operating activities		(590,312	)		(3,537,498	)
Proceeds from disposal of long-term investment		-			325,578
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(44,969	)		(379,128	)
Prepayment for land		-			(346,070	)
Net Cash Used by Investing Activities		(2,184,391	)		(53,550	)
Disbursement for other receivable-related parties loans		(114,199	)		(331,375	)
Cash Flows from Financing Activities
Proceeds from other receivable-related parties loans		122,017			-
Proceeds from subscribed capital		4,421,782			7,000
Cash outflow from disposal of subsidiaries		(2,741	)		-
Proceeds from equity financing		2,585,200			-
Purchase of property and equipment		-			(11,275	)
Repayment of convertible long-term bond payable		(8,016,426	)		-
Net cash provided by (used in) investing activities		5,077			(688,720	)
Repayment of short-term loan		(940,652	)		(384,189	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term loan		~~951~~556,~~657~~149			-1,349,995
Repayment of long-term loan		(4,823	)		(8,723	)
Repayment of short-term loan		(32,926	)		-
Payment on finance lease liability		(8,322	)		(8,619	)
Repayment of long-term bond payable		-			(7,251,237	)
Net Cash Used by Financing Activities		(1,011,584	)		(394,531	)
Repayment of long-term loan		-			(3,086	)
Net Decrease in Cash and Restricted Cash		(8,012,372	)		(7,820,398	)
Proceeds from subscribed capital		-			(5,004,000	)
Cash and Restricted Cash, Beginning of Period		7,428,702			10,101,920
Proceeds from issuance of common stock		-			6,558,000
Foreign Currency Translation Effect on Cash		660,699			1,196,111
Payment on finance lease liability		-			(2,826	)
Cash and Restricted Cash, End of Period	$	77,029		$	3,477,633
Net cash provided by (used in) financing activities		523,223			(4,353,154	)
Supplemental disclosures of cash flow information:
Net Decrease in Cash and Restricted Cash		(62,012	)		(8,579,372	)
Cash paid during the period for income taxes	$	2,400		$	2,400
CASH AND RESTRICTED CASH, beginning of Period		109,227			7,428,702
Cash paid during the period for interest		864,822			-
Foreign Currency Translation Effect on Cash and Restricted Cash		57,909			1,269,445
Cash and Restricted Cash:
CASH AND RESTRICTED CASH, end of Period	$	105,124		$	118,775
Cash	$	56,952		$	253,278
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Restricted cash		20,077			3,224,355
Cash paid during the period for income taxes	$	-		$	-
Total	$	77,029		$	3,477,633
Cash paid during the period for interest	$	1,854		$	-
CASH AND RESTRICTED CASH:
Cash	$	89,871		$	103,756
Restricted cash		15,253			15,019
Total	$	105,124		$	118,775
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS:
Issuance of common stock	$	527,783		$	-
Cashless exercise of stock options	$	1,177		$	-

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

AERKOMM INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 1 - Organization

Aerkomm Inc. (formerly Maple Tree Kids Inc.) (“Aerkomm”) was incorporated on August 14, 2013 in the State of Nevada. Aerkomm was a retail distribution company selling all of its products over the internet in the United States, operating in the infant and toddler products business market. Aerkomm’s common stock is quoted for trading on the OTC Markets Group Inc. OTCQX Market under the symbol “AKOM.” On July 17, 2019, the French Autorité des Marchés Financiers (the “AMF”) granted visa number 19-372 on the prospectus relating to the admission of Aerkomm’s common stock to list and trade on the Professional Segment of the regulated market of Euronext Paris (“Euronext Paris”). Aerkomm’s common stock began trading on Euronext Paris on July 23, 2019 under the symbol “AKOM” and is denominated in Euros on Euronext Paris. This listing did not alter Aerkomm’s share count, capital structure, or current common stock listing on the OTCQX, where it is also traded (in US dollars) under the symbol “AKOM.”

On December 31, 2014, Aircom acquired a newly incorporated subsidiary, Aircom Pacific Ltd. (“Aircom Seychelles”), a corporation formed under the laws of the Republic of Seychelles. On November 8, 2021, Aircom Seychelles changed its name to Aerkomm SY Ltd. (“Aerkomm SY”) and the ownership was transferred from Aircom to Aerkomm. Aerkomm SY was formed to facilitate Aircom’s global corporate structure for both business operations and tax planning. Presently, Aerkomm SY has no operations. Aerkomm is working with corporate and tax advisers in finalizing its global corporate structure and has not yet concluded its final plan.

On December 15, 2016, Aircom acquired a wholly owned subsidiary, Aircom Japan, Inc. (“Aircom Japan”), a corporation formed under the laws of Japan. On November 9, 2021, Aircom Japan changed its name to Aerkomm Japan, Inc. (“Aerkomm Japan”) and its ownership was transferred from Aircom to Aerkomm. The purpose of Aerkomm Japan is to conduct business development and operations located within Japan. Aerkomm Japan is in the process of applying for, and intends to be the holder of, Satellite Communication Blanket License in Japan, which is necessary for Aerkomm to provide services within Japan. Aerkomm Japan also provide local supports to airlines operating within the territory of Japan.

On December 28, 2016, Aircom Pacific Inc. (“Aircom”) purchased approximately 86.3% of Aerkomm’s issued and outstanding common stock as of the closing date of purchase. As a result of the transaction, Aircom became the controlling shareholder of Aerkomm. Aircom was incorporated on September 29, 2014 under the laws of the State of California.

On February 13, 2017, Aerkomm entered into a share exchange agreement (“Exchange Agreement”) with Aircom and its stockholders, pursuant to which Aerkomm acquired 100% of the issued and outstanding capital stock of Aircom in exchange for approximately 99.7% of the issued and outstanding capital stock of Aerkomm. As a result of the share exchange, Aircom became a wholly-owned subsidiary of Aerkomm, and the former shareholders of Aircom became the holders of approximately 99.7% of Aerkomm’s issued and outstanding capital stock.

On December 3115, ~~2014~~2016, Aircom acquired a ~~newly~~wholly owned ~~incorporated~~ subsidiary, Aircom ~~Pacific~~Japan, ~~Ltd~~Inc. (“Aircom ~~Seychelles~~Japan”), a corporation formed under the laws of ~~the Republic of Seychelles~~Japan. On November 89, 2021, Aircom ~~Seychelles~~Japan changed its name to Aerkomm SYJapan, ~~Ltd~~Inc. (“Aerkomm SYJapan”) and ~~the~~its ownership was transferred from Aircom to Aerkomm. The ~~Aerkomm~~purpose SYof ~~was~~Aerkomm ~~formed~~Japan is to ~~facilitate~~conduct ~~Aircom’s~~business ~~global~~development ~~corporate~~and ~~structure~~operations ~~for~~located ~~both~~within ~~business~~Japan. Aerkomm Japan is in the process of ~~operations~~applying for, and ~~tax~~intends ~~planning.~~to ~~Presently~~be the holder of, ~~Aerkomm~~Satellite SYCommunication ~~has~~Blanket noLicense ~~operations.~~in ~~Aerkomm~~Japan, which is ~~working~~necessary ~~with~~for ~~corporate~~Aerkomm ~~and~~to ~~tax~~provide services ~~advisers~~within inJapan. ~~finalizing its~~Aerkomm ~~global~~Japan ~~corporate~~also ~~structure~~provide ~~and~~local ~~has~~supports ~~not~~to ~~yet~~airlines ~~concluded~~operating ~~its~~within ~~final~~the ~~plan~~territory of Japan.

On October 17, 2016, Aircom acquired a wholly owned subsidiary, Aircom Pacific Inc. Limited (“Aircom HK”), a corporation formed under the laws of Hong Kong. On November 8, 2021, Aircom HK changed its name to Aerkomm Hong Kong Limited (“Aerkomm HK”) and its ownership was transferred from Aircom to Aerkomm. The purpose of Aerkomm HK is to conduct Aircom’s business and operations in Hong Kong. Presently, its primary function is business development, both with respect to airlines as well as content providers and advertisement partners based in Hong Kong. Aerkomm HK is also actively seeking strategic partnerships whom Aerkomm may leverage in order to provide more and better services to its customers. Aerkomm also plans to provide local supports to Hong Kong-based airlines via Aerkomm HK and teleports located in Hong Kong.

On December 15, 2016, Aircom acquired a wholly owned subsidiary, Aircom Japan, Inc. (“Aircom Japan”), a corporation formed under the laws of Japan. On November 9, 2021, Aircom Japan changed its name to Aerkomm Japan, Inc. (“Aerkomm Japan”) and its ownership was transferred from Aircom to Aerkomm. The purpose of Aerkomm Japan is to conduct business development and operations located within Japan. Aerkomm Japan is in the process of applying for, and intends to be the holder of, Satellite Communication Blanket License in Japan, which is necessary for Aerkomm to provide services within Japan. Aerkomm Japan intends to also provide local supports to airlines operating within the territory of Japan.

Aircom Telecom LLC (“Aircom Taiwan”), which became a wholly owned subsidiary of Aircom in December 2017, was organized under the laws of Taiwan on June 29, 2016. Aircom Taiwan is responsible for Aircom’s business development efforts and general operations within Taiwan.

On June 13, 2018, Aerkomm established a then wholly owned subsidiary, Aerkomm Taiwan Inc. (“Aerkomm Taiwan”), a corporation formed under the laws of Taiwan. The purpose of Aerkomm Taiwan is to purchase a parcel of land and raise sufficient funds to build and operate a ground station for data processing. As operation of such a ground station would, as a matter of local law, require that Aerkomm Taiwan not be a majority foreign-owned entity, on December 29, 2022, Aerkomm and dMobile System Co., Ltd. (the “Buyer”) entered into an equity sales contract (the “Equity Sales Contract”) pursuant to the terms of which Aerkomm agreed to transferred a majority interest of 25,500,000 shares (the “Shares”) of Aerkomm Taiwan (51% of the issued and outstanding shares of Aerkomm Taiwan) to the Buyer for NT$255,000,000 (approximately $8,300,000). The Buyer has not yet paid for the transferred shares and under the terms of the equity sales contract Aerkomm has the right to demand that the transferred shares be returned.

Despite the sale of 51% of Aerkomm Taiwan to the Buyer, Aerkomm treats Aerkomm Taiwan as a consolidated subsidiary because Aerkomm owns 49% of the shares of Aerkomm Taiwan and controls the other 51% by contract. The Buyer has not yet paid Aerkomm the amount due to Aerkomm for the sale of Aerkomm Taiwan shares to the Buyer. Under the Equity Sales Contract, Aerkomm has the right to declare a breach of contract and demand return of the transferred shares from the Buyer if the purchase price has not been paid within 180 days of date of the Equity Sales Contract, which date has passed because the contract is dated December 29, 2022. Furthermore, the shares held by Buyer in Aerkomm Taiwan and all rights to exercise rights in respect of such shares are pledged to Aerkomm’s designee, Mr. Albert Hsu, who is to execute all rights with respect to the pledged shares as a pledgee under the instruction of Aerkomm and who is a shareholder and director of Aerkomm.

~~AERKOMM~~On ~~INC~~June 13, 2018, Aerkomm established a then wholly owned subsidiary, Aerkomm Taiwan Inc. ~~AND~~(“Aerkomm ~~SUBSIDIARIES~~Taiwan”), a corporation formed under the laws of Taiwan. The purpose of Aerkomm Taiwan is to purchase a parcel of land and raise sufficient funds to build and operate a ground station for data processing. As operation of such a ground station would, as a matter of local law, require that Aerkomm Taiwan not be a majority foreign-owned entity, on December 29, 2022, Aerkomm and dMobile System Co., Ltd. (the “Buyer”) entered into an equity sales contract (the “Equity Sales Contract”) pursuant to the terms of which Aerkomm agreed to transfer a majority interest of 25,500,000 shares (the “Shares”) of Aerkomm Taiwan (51% of the issued and outstanding shares of Aerkomm Taiwan) to the Buyer for NT$255,000,000 (approximately $8,300,000). The Buyer has not yet paid for the transferred shares and under the terms of the equity sales contract Aerkomm has the right to demand that the transferred shares be returned.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 1 - Organization - Continued

On November 15, 2018, Aircom Taiwan acquired a wholly owned subsidiary, Beijing Yatai Communication Co., Ltd. (“Beijing Yatai”), a corporation formed under the laws of China. The purpose of Beijing Yatai is to conduct Aircom’s business and operations in China. Presently, its primary function is business development, both with respect to airlines as well as content providers and advertisement partners based in China as most business conducted in China requires a local registered company. Beijing Yatai is also actively seeking strategic partnerships whom Aircom may leverage in order to provide more and better services to its customers. Aircom also plans to provide local supports to China-based airlines via Beijing Yatai and teleports located in China. On November 6, 2020, 100% ownership of Beijing Yatai was transferred from Aircom Taiwan to Aerkomm Taiwan.

On October 31, 2019, Aerkomm SY established a new a wholly owned subsidiary, Aerkomm Pacific Limited (“Aerkomm Malta”), a corporation formed under the laws of Malta. The purpose of Aerkomm Malta is to conduct Aerkomm’s business and operations and to engage with suppliers and potential airlines customers in the European Union.

Despite the sale of 51% of Aerkomm Taiwan to the Buyer, Aerkomm treats Aerkomm Taiwan as a consolidated subsidiary because Aerkomm owns 49% of the shares of Aerkomm Taiwan and controls the other 51% by contract. The ~~Company~~Buyer has not yet paid Aerkomm the amount due to Aerkomm for the sale of Aerkomm Taiwan shares to the Buyer. Under the Equity Sales Contract, Aerkomm has the right to declare a breach of contract and demand return of the transferred shares from the Buyer if the purchase price has not been paid within 180 days of date of the Equity Sales Contract, which date has passed because the contract is dated December 29, 2022. Furthermore, the shares held by Buyer in Aerkomm Taiwan and all rights to exercise rights in respect of such shares are pledged to Aerkomm’s ~~organization~~designee, ~~structure~~ Mr. Albert Hsu, who is to execute all rights with respect to the pledged shares as ~~following:~~a pledgee under the instruction of Aerkomm and who is a shareholder and director of Aerkomm.

On September 04, 2022, Aerkomm acquired a wholly owned subsidiary, MEPA Labs Inc. (MEPA), a California corporation. The purpose of the acquisition is to extend business development and operations related to the satellite products.

On September 28, 2023, Aerkomm acquired a wholly owned subsidiary, Mixnet Technology Limited (Mixnet) and its wholly owned subsidiary, Mesh Technology Taiwan Limited (Mesh), a Taiwan company. The purpose of the acquisition is to extend business development and operations related to the satellite products. Mixnet’s name changed to Mesh Technology Limited as of September 7, 2023.

On March 29, 2024, the Company entered into a merger agreement (the “Merger Agreement”) with IX Acquisition Corp. (“IXAQ”), a Cayman Islands exempted company (which will re-domicile from being a Cayman Islands company and become a Delaware corporation), and AKOM Merger Sub Inc., a Nevada corporation and a wholly owned subsidiary of IQAC (“Merger Sub”). The ~~Merger Agreement provides that, among other things and upon the terms and subject to the conditions thereof, following the domestication to Delaware of IXAQ, Merger Sub will merge with and into the~~ Company’s ~~(the~~organization ~~“Merger”),~~structure ~~after~~is which the Company will be the surviving corporation and a wholly-owned subsidiary of IXAQ. In connection with the Merger, IXAQ will be renamed “AKOM Inc.” The Merger will become effective upon the filing of the certificate of merger with the Secretary of State of the State of Delaware or at such later time as ~~is agreed to by the parties to the Merger Agreement and specified in the articles of merger.~~following:

Liquidity

The accompanying financial statements have been prepared on a going concern basis. The Company's ability to remain solvent and settle its obligations when they come due is dependent on its ability to raise additional capital in the form of permanent equity and to successfully gain listing of its common stock on a national exchange such as the NASDAQ capital markets, so that its current investors that have invested in the form of convertible debt and convertible notes are incentivized to convert their debt holdings into common stock that could be traded in an orderly market. As result of the Company’s primary operations being in the area of research and development of communication equipment in the aerospace industry that is still in the testing phases, the Company has not yet been able to legally market and to generate sustainable re-occurring revenue from the sales of its products; however, the Company does believe that it has made significant progress towards gaining approval from the FAA and other regulatory agencies, but success is not guaranteed. As a function of the Company’s continued efforts to develop its products the Company reported a net loss of $16,686,644 and net cash outflows of $8,012,372 for the nine months ended September 30, 2024, and as of September 30, 2024, the Company had a working capital deficit of approximately $56 Million because much of the investment from investors were still in the form of convertible debt instruments that are either at, or near their maturity dates. These conditions give rise to substantial doubt and uncertainty regarding the Company’s ability to continue as a going concern. If the Company is able to carry out its plans as detailed below within one operating period, the Company could alleviate this doubt.

~~AERKOMM~~On ~~INC~~March 29, 2024, the Company entered into a merger agreement (the “Merger Agreement”) with IX Acquisition Corp. ~~AND~~(“IXAQ”), ~~SUBSIDIARIES~~a Cayman Islands exempted company (which will re-domicile from being a Cayman Islands company and become a Delaware corporation), and AKOM Merger Sub Inc., a Nevada corporation and a wholly owned subsidiary of IQAC (“Merger Sub”). The Merger Agreement provides that, among other things and upon the terms and subject to the conditions thereof, following the domestication to Delaware of IXAQ, Merger Sub will merge with and into the Company (the “Merger”), after which the Company will be the surviving corporation and a wholly-owned subsidiary of IXAQ. In connection with the Merger, IXAQ will be renamed “AKOM Inc.” The Merger will become effective upon the filing of the certificate of merger with the Secretary of State of the State of Delaware or at such later time as is agreed to by the parties to the Merger Agreement and specified in the articles of merger.

~~Notes~~On December 27, 2024, the Ministry of Foreign Affairs of the People’s Republic of China issued Decree No. 16, designating Aerkomm Inc. among several U.S. and foreign companies subject to ~~Unaudited~~countermeasures ~~Condensed~~under the ~~Consolidated~~Law ~~Financial~~of the People’s Republic of China on Countering Foreign Sanctions. The decree ordered the freezing of the Company’s ~~Statements~~properties, assets, and interests within China and prohibited Chinese entities and individuals from conducting transactions or cooperation with the Company. As a result of these sanctions, the Company determined on January 4, 2025 that it had lost operational control over its subsidiaries, Aerkomm HK and Beijing Yatai whose operations and assets are located in China.

~~NOTE~~Liquidity ~~1 -~~and ~~Organization~~Going ~~- Continued~~Concern

The ~~Company~~accompanying ~~has~~financial ~~taken~~statements ~~measures~~have ~~and is~~been ~~experiencing~~prepared ~~and~~on ~~anticipates~~a ~~developments~~going ~~that~~concern ~~management~~basis. ~~believes~~The ~~will~~Company’s ~~improve~~ability ~~its~~to ~~financial~~remain ~~position.~~solvent ~~These~~and ~~include~~settle ~~that~~its ~~two~~obligations ofwhen ~~the Company’s~~they ~~current~~come ~~shareholders~~due ~~(the~~is ~~“Lenders”)~~dependent on ~~have~~its ~~each~~ability ~~committed~~ to ~~provide~~raise toadditional ~~the~~capital ~~Company~~in athe ~~$10~~form ~~million~~of ~~bridge loan~~permanent ~~(together,~~equity ~~the “Loan Commitments”~~ and ~~loans~~to ~~made~~successfully ~~under~~gain ~~the~~listing ~~Loan~~of ~~Commitments,~~its ~~“Loans”)~~common ~~for~~stock anon ~~aggregate~~a national ~~committed~~exchange ~~principal~~such ~~amount~~as ofthe ~~$20~~NASDAQ ~~million~~capital markets, toso ~~bridge~~that ~~the~~its ~~Company’s~~current ~~cash~~investors ~~flow~~that ~~needs~~have ~~prior~~invested toin ~~its~~the ~~obtaining~~form aof ~~mortgage~~convertible ~~loan~~debt toand beconvertible ~~secured~~notes byare aincentivized ~~parcel~~to ofconvert ~~land~~their ~~(the~~debt ~~“Land”)~~holdings ~~the~~into ~~Company~~common ~~purchased~~stock inthat ~~Taiwan.~~could ~~The~~be ~~Lenders~~traded ~~also~~in ~~agreed to~~ an ~~earlier~~orderly ~~closing of~~market. upAs toresult ~~25%~~ of the ~~principal~~Company’s primary ~~amounts~~operations ofbeing in the ~~Loans~~area ~~upon~~of ~~the~~research ~~Company’s~~and ~~request~~development ~~prior~~of tocommunication equipment in the ~~time~~aerospace industry that ~~title~~is tostill in the ~~Land~~testing isphases, ~~vested in~~The ~~the~~ Company’s ~~subsidiary,~~has ~~Aerkomm~~not ~~Taiwan,~~yet been able to ~~pay~~generate ~~the~~sustainable ~~outstanding~~recurring ~~payable~~revenue tofrom the ~~Company’s~~sales ~~vendors.~~of Onits ~~April 25~~products, ~~2022,~~as ~~the~~it ~~Lenders~~has ~~further~~only ~~amended~~achieved ~~the~~limited ~~commitment~~sales; ~~and~~however, ~~agreed~~the toCompany ~~increase~~does ~~the~~believe ~~percentage~~that ofit ~~earlier~~has ~~closing~~made ~~amount~~significant ~~from~~progress ~~25%~~towards togaining ~~100%,~~approval ~~thus~~from the ~~making~~U.S. ~~the full~~Federal ~~$20~~Aviation ~~million~~Administration of(“FAA”) ~~the~~and ~~Loan~~other ~~Commitments~~regulatory ~~available~~agencies, tobut ~~the~~success ~~Company~~is not guaranteed.

In ~~addition~~assessing to the ~~foregoing,~~Company’s ~~on March 1~~liquidity, ~~2023~~the weCompany ~~entered~~monitors ~~into~~and aanalyzes its ~~letter~~cash ~~agreement~~on-hand ~~with~~and ~~Well~~its ~~Thrive~~operating ~~Limited,~~and ~~one~~capital ofexpenditure ~~the~~commitments. ~~lenders~~The ~~under~~Company’s ~~the~~liquidity ~~Loan~~needs ~~Commitment,~~are into ~~which~~meet itits ~~was~~working ~~agreed~~capital ~~that~~requirements, tooperating ~~support~~expenses ~~the~~and ~~Company,~~capital ~~one-half~~expenditure ofobligations. ~~the~~Cash ~~Loan~~flow ~~Commitment~~from ~~amount~~investing ofand ~~Well~~financing ~~Thrive~~activities ~~Limited~~have ~~(thus,~~been ~~$5,000,000)~~utilized to ~~would~~finance bethe ~~funded~~working ~~(by~~capital ~~Well Thrive~~requirements orof bythe ~~lenders~~Company. ~~arranged~~As byof ~~Well~~March ~~Thrive)~~31, at2025, nothe ~~interest~~Company ~~and~~had ~~with~~cash nooutflow ~~fixed~~from ~~maturity~~operating ~~date,~~activities of ~~with~~approximately ~~the remaining~~ $~~5,000,000~~0.6 ofmillion ~~Well~~and ~~Thrive Limited’s~~had ~~Loan~~cash ~~Commitment~~of toapproximately be$0.1 ~~funded~~million. onThe ~~the~~Company’s ~~basis~~working ofcapital ~~the~~deficit ~~originally~~was ~~agreed terms~~approximately $60.0 million Asas of ~~December~~March 31, ~~2023~~2025. ~~and~~These ofconditions ~~September~~give ~~30, 2024,~~rise ~~from~~to ~~one~~substantial ofdoubt ~~the~~and ~~Lenders~~uncertainty ~~under~~regarding the ~~Loan~~Company’s ability ~~Commitment~~to wecontinue ~~did~~as ~~not~~a ~~have~~going ~~any~~concern. ~~loans~~If ~~and~~the weCompany ~~had~~is ~~received~~able ~~Loans~~to ~~totaling~~carry ~~NTD~~out ~~(New~~its ~~Taiwan~~plans ~~Dollars) 133,110,000, recorded on our books~~ as $4detailed below,~~347,159,~~ ~~from~~the ~~multiple~~Company ~~individual~~could ~~lenders~~alleviate ~~arranged by Well Thrive~~this doubt.

InThe ~~connection~~Company ~~with~~has ~~the~~taken ~~planned~~measures ~~Merger~~and is experiencing ~~with~~and ~~IXAQ,~~anticipates ~~the~~developments ~~Company~~that ~~has~~management ~~obtained~~believes ~~$35~~will ~~million~~improve inits ~~PIPE~~financial ~~investment~~position. ~~commitments~~These ~~and~~include ~~expects~~that ~~$7.415~~two ~~million~~of inthe ~~SAFE~~Company’s current ~~investments~~shareholders to(the be“Lenders”) ~~funded before~~have ~~closing~~each ofcommitted ~~the~~to ~~Merger.~~provide ~~Further,~~to the Company ~~and~~a ~~IXAQ~~$10 ~~have~~million ~~entered~~bridge ~~into~~loan a(together, ~~letter~~the “Loan ~~agreement~~Commitments” ~~with~~and ~~Benchmark~~loans ~~Company~~made ~~LLC~~under (the Loan Commitments, “~~Benchmark~~Loans”) ~~under~~ ~~which~~for ~~Benchmark~~an ~~has~~aggregate ~~agreed~~committed toprincipal ~~provide~~amount of ~~capital~~$20 ~~markets~~million, ~~advisory services~~ to bridge the Company’s ~~(including~~cash ~~attaining~~flow ~~research~~needs ~~coverage,~~prior ~~assisting in~~to ~~road-shows~~its ~~and~~obtaining ~~investor~~a ~~meetings~~mortgage ~~and~~loan ~~other~~to ~~advisory~~be ~~services)~~secured ~~and~~by toa ~~act~~parcel asof ~~placement~~land (the ~~agent~~“Land”) ~~for~~that the ~~private~~Company ~~placement~~purchased ofin ~~securities by~~Taiwan. ~~the~~The ~~Company.~~Lenders Inalso ~~connection~~agreed ~~with~~to ~~the~~an ~~arrangement~~earlier ~~with~~closing ~~Benchmark,~~of ~~the~~up ~~Company~~to is25% ~~targeting~~of the ~~raise~~principal amounts of ~~$100~~the ~~million~~Loans inupon ~~connection with~~ the ~~closing~~Company’s ofrequest ~~and~~prior ~~after~~to the ~~Merger,~~time inthat ~~addition~~title to the ~~$35~~Land ~~million~~is vested in ~~already~~the ~~committed~~Company’s ~~PIPE~~subsidiary, Aerkomm ~~investment~~Taiwan, ~~and~~to uppay the outstanding payable to ~~approximately~~the ~~$18~~Company’s vendors.~~7 million~~ ofOn ~~cash~~April ~~(net~~25, of2022, ~~transaction~~the ~~costs~~Lenders further amended the commitment and ~~depending~~agreed onto increase the ~~amount~~percentage of ~~shareholder~~earlier ~~redemptions)~~closing ~~contributed~~amount from 25% to 100%, thus making the ~~IXAQ~~full ~~side~~$20 asmillion aof the Loan Commitments ~~result~~available ofto the ~~Merger~~Company.

The Company also expects during 2025 to begin generating significant recurring revenues, including in connection with the OneWeb Distribution Partner Agreement entered into between Aerkomm Japan, as Distribution Partner, and OneWeb on October 1, 2024, pursuant to which Aerkomm Japan was appointed as a distributor for OneWeb in Japan and Taiwan and as reflected by the Company having made its first delivery of a certain classified radar system to a governmental defense customer on October 24, 2024.

With our current available cash, a balance of $15,652,841 of the $20 million in aggregate loan commitments from the two Lenders still available, $35 million in PIPE Investment commitments already signed concurrently to entering into the Merger Agreement with IXAQ and additional amounts anticipated to be raised in SAFE financings and in connection with Benchmark relationship, the amount of any cash to be brought into the merged Company by IXAQ in connection with the Merger (and depending on the amount of shareholder redemptions), the expected ramp-up of revenue generating commercial sales, synergies expected to be obtained as a result of the planned merger of Aerkomm Taiwan with its exclusive distributor for Taiwan, EJECTT, Inc., and carefully managing hiring and other investments, the Company believes its working capital will be adequate to sustain the Company’s operations for the next twelve months.

If the Merger does not close and thus the $35 million in PIPE commitments that are contingent on closing of the Merger are no longer committed, the Company expects to be able to fund operations over the next 12 months from June 30, 2024 by short-term borrowings and other loan commitments, the balance of $15,652,841 of the $20 million in above-referenced loan commitments from two shareholders, renegotiating financing arrangements with some or all of the committed PIPE investors (who are existing investors in the Company and have a strong interest in its success), slowing the pace of hiring and other investments that the Company would otherwise undertake if the Merger closes, synergies and efficiencies from the planned merger with EJECTT, and revenues received from the ramp-up of commercial sales.

In conclusion, per the non-binding term sheet agreement aforementioned, the Company will be able to fund the operations and development for the next 12 months.

~~AERKOMM~~In ~~INC~~addition to the foregoing, on March 1, 2023, the Company entered into a letter agreement with Well Thrive Limited, one of the lenders under the Loan Commitment, in which it was agreed that, to support the Company, one-half of the Loan Commitment amount of Well Thrive Limited (thus, $5,000,000) would be funded (by Well Thrive or by lenders arranged by Well Thrive) at no interest and with no fixed maturity date, with the remaining $5,000,000 of Well Thrive Limited’s Loan Commitment to be funded on the basis of the originally agreed terms. ~~AND~~As ~~SUBSIDIARIES~~of March 31, 2025, from one of the Lenders under the Loan Commitment the Company did not have any loans and the Company had received Loans totaling NT$136,371,529 (approximately $4.1 million) from multiple individual lenders arranged by Well Thrive. Therefore, the balance of $15,891,186 of the $20 million in aggregate loan commitments from the two Lenders was still available as of March 31, 2025.

~~Notes~~In connection with the planned Merger with IXAQ, the Company has obtained $35 million in private investment in public equity (“PIPE”) investment commitments and expects additional approximately $2.0 million in Simple Agreement for Future Equity (“SAFE”) investments to ~~Unaudited~~be ~~Condensed~~funded ~~Consolidated~~before ~~Financial~~closing of the Merger. ~~Statements~~Further, the Company and IXAQ have entered into a letter agreement with Benchmark Company LLC (“Benchmark”) under which Benchmark has agreed to provide capital markets advisory services to the Company (including attaining research coverage, assisting in road-shows and investor meetings and other advisory services) and to act as placement agent for the private placement of securities by the Company. In connection with the arrangement with Benchmark, the Company is targeting the raise of $100 million in connection with the closing of and after the Merger, in addition to the $35 million in already committed PIPE investment and up to approximately $19.2 million of cash (net of transaction costs and depending on the amount of shareholder redemptions) contributed from the IXAQ side as a result of the Merger.

The Company’s ability to remain solvent and settle its obligations when they come due is dependent on its ability to raise additional capital in the form of permanent equity and to successfully gain listing of its common stock on a national exchange such as the NASDAQ capital markets, so that its current investors that have invested in the form of convertible debt and convertible notes are incentivized to convert their debt holdings into common stock that could be traded in an orderly market. As of March 31, 2025, the Company expect approximately $28.8 million convertible notes and SAFE can be converted into equity upon Merger.

The Company believes it will have sufficient liquidity to fund its operations for at least the next twelve months following the issuance of these unaudited condensed consolidated financial statements. This assessment considers the Company’s current available cash, approximately $15.9 million in aggregate available loan commitments from two lenders, $35 million in PIPE investment commitments signed concurrently with entering into the Merger Agreement with IXAQ, and additional capital expected to be raised through SAFE financings and the Benchmark relationship. In addition, approximately $28.4 million of outstanding convertible notes and SAFE are expected to convert into equity upon consummation of the Merger, which would further strengthen the Company’s capital resources and reduce cash obligations. The Company also expects to benefit from the cash to be brought in by IXAQ in connection with the Merger (subject to shareholder redemptions), the anticipated ramp-up of revenue-generating commercial sales, synergies from the merger of Aerkomm Taiwan with its exclusive distributor EJECTT, Inc., and continued disciplined management of hiring and other investments. Based on these factors, the Company believes its working capital will be adequate to sustain the Company’s operations for the next twelve months.

If the Merger does not close and thus the $35 million in PIPE commitments that are contingent on closing of the Merger are no longer committed, the Company expects to be able to fund operations over the next 12 months by short-term borrowings and other loan commitments, the balance of approximately $15.9 million of the $20 million in above-referenced loan commitments from two shareholders, renegotiating financing arrangements with some or all of the committed PIPE investors (who are existing investors in the Company and have a strong interest in its success), slowing the pace of hiring and other investments that the Company would otherwise undertake if the Merger closes, synergies and efficiencies from the planned merger with EJECTT, and revenues received from the ramp-up of commercial sales. In conclusion, per the non-binding term sheet agreement aforementioned, the Company will be able to fund the operations and development for the next 12 months.

NOTE 2 - Summary of Significant Accounting Policies

Unaudited Interim Financial Information

The accompanying unaudited condensed consolidated balance sheet as of ~~September~~March 3031, ~~2024~~2025, and the condensed consolidated statements of operations and comprehensive loss and cash flows ~~for~~ for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position as of ~~September~~March 3031, ~~2024~~ 2025 and the results of operations and cash flows for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024. The financial data and other ~~information~~ information disclosed in these notes to the condensed consolidated financial statements related to these ~~nine~~three months periods are unaudited. The results of operations for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 are not necessarily indicative of the results to be expected for the year ending December 31, ~~2024~~2025 or for any other interim period or other future year. The following information should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K/A for the fiscal year ended December 31, 2023.

Principle of Consolidation

Aerkomm consolidates the accounts of its subsidiaries, Aircom, Aircom Seychelles, Aircom ~~HK, Aircom~~ Japan, Aircom Taiwan, Aerkomm Taiwan, ~~Beijing Yatai,~~ Aerkomm Malta, MEPA Labs, and Mesh Technology Taiwan. All significant intercompany accounts and transactions have been eliminated in consolidation.

Restated Unaudited Interim Financial Information

The accompanying restated condensed consolidated statements of operations and comprehensive loss for the three months and nine months ended September 30, 2023 and restated condensed consolidated statements of cash flows for the nine months ended September 30, 2023 are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s the results of operations and cash flows for the three and nine months ended September 30, 2024 and 2023. The financial data and other information disclosed in these notes to the condensed consolidated financial statements related to these nine months periods are unaudited. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any other interim period or other future year.

Restatement of Financial Statements

The Company has restated the accompanying consolidated financial statements and related disclosure for the year ended December 31, 2023 and 2022 that were previously included in the Form 10-K filed with the SEC on May 7, 2024. The restatement is related to correction to the Company’s accounting for certain debt previously characterized as long-term debt, as short-term debt instead. Also, due to the Company’s evidence indicating an intention to hold an investment for more than one year, the Company has reclassified the investment from short-term to long-term. Consequently, the valuation method has been adjusted from market value (used for short-term investments) to cost (used for long-term investments). In addition, a correction has been made to reclassify other receivable-related party loans to short-term loan-others, based on the confirmation letter. In addition, Credit Enhanced Zero Coupon Convertible Bonds are reevaluated and early redemption loss and default interest expenses are accrued. The Company determined that these changes have a material impact on the filed financial statements for the year ended December 31, 2023 and 2022 (the “Relevant Period”), and as a result, the restatement of the Relevant Periods is required.

Impact of the Restatement

The impact of the restatement on the balance sheets, statements of operations and statements of cash flows for the Relevant Period is presented below. The restatement had no impact on the Company’s reported operating revenues or reported operating costs and expenses.

The following table summarized the effect of the financial statement adjustments related to the restatement on each financial statement line items as of and for the years ended December 31, 2023.

Due to the company’s evidence indicating an intention to hold the investment for more than one year, we have reclassified the investment from short-term to long-term. Consequently, the valuation method has been adjusted from market value (used for short-term investments) to cost (used for long-term investments). In addition, a correction to reclassify other receivable-related party to short-term loan-others, based on the confirmation letter.

The restatement is related to correction to the Company’s accounting for certain debt previously characterized as long-term debt, as short-term debt instead. Also, due to the Company’s evidence indicating an intention to hold an investment for more than one year, the Company has reclassified the investment from short-term to long-term. Consequently, the valuation method has been adjusted from market value (used for short-term investments) to cost (used for long-term investments). In addition, a correction has been made to reclassify other receivable-related party loans to short-term loan-others, based on the confirmation letter, In addition, Credit Enhanced Zero Coupon Convertible Bond has early redemption option, resulting in the accrual of early redemption losses and 5% default interest payable.

Due to the different evaluations of long-term and short-term investments, the reclassification caused changes in 2023 Net Loss and Foreign currency translation adjustments.

AERKOMM INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 2 - Summary of Significant Accounting Policies - Continued

Consolidated Balance Sheets (Restated)

	As of December 31, 2023
	As previously Reported			Adjustment			As restated
Assets
Current Assets
Cash	$	4,202,797		$			$	4,202,797
Short-term investment		3,804,850			(2,647,975	)		1,156,875
Account receivable – related parties		41,088						41,088
Inventories, net		170,892						170,892
Prepaid expenses		158,171						158,171
Other receivable – related parties		1,167,749			979,752			2,147,501
Other receivable		122,024						122,024
Other current assets		65,937						65,937
Total Current Assets		9,733,508			(1,668,223	)		8,065,285
Long-term investment		4,261,920			751,894			5,013,814
Property and Equipment, net
Cost		5,436,657						5,436,657
Accumulated depreciation		(3,085,789	)					(3,085,789	)
		2,350,868						2,350,868
Prepayment for land		40,114,286						40,114,286
Prepayment for equipment – internal use		324,866						324,866
Net Property and Equipment		42,790,020						42,790,020
Other Assets
Prepayment for equipment and intangible assets – customer projects – related party		2,076,138			-			2,076,138
Prepayment for equipment and intangible assets – customer projects		8,326,017						8,326,017
Restricted cash		3,225,905						3,225,905
Intangible asset, net		13,024,692						13,024,692
Goodwill		4,573,819						4,573,819
Right-of-use assets, net		221,417						221,417
Deposits		534,515						534,515
Total Other Assets		31,982,503						31,982,503
Total Assets	$	88,767,951		$	(916,329	)	$	87,851,622
Liabilities and Stockholders’ Equity
Current Liabilities
Short-term loan – related parties	$	-		$	-		$	-
Short-term loan		132,257			5,579,987			5,712,244
Convertible long-term bonds payable – current		-			10,303,775			10,303,775
Convertible long-term note payable – current		-			23,173,200			23,173,200
Accounts payable		1,900,317						1,900,317
Accrued expenses		5,995,972						5,995,972
Other payable – related parties		726,802						726,802
Other payable		12,617,277			(4,560,165	)		8,057,112
Prepayment from customer – related parties		6,534,908						6,534,908
Long-term loan – current		5,045						5,045
Lease liability – current		168,433						168,433
Total Current Liabilities		28,081,011			34,496,797			62,577,808
Long-term Liabilities
Convertible long-term bonds payable		9,648,155			(9,448,155	)		200,000
Convertible long-term note payable		23,173,200			(23,173,200	)		-
Long-term loan		-			-			-
Prepayments from customer – non-current		762,000						762,000
Lease liability – non-current		120,932						120,932
Restricted stock deposit liability		1,000						1,000
Total Long-term Liabilities		33,705,287			(32,621,355	)		1,083,932
Total Liabilities		61,786,298			1,875,442			63,661,740
Commitments and Contingencies
Stockholders’ Equity
Preferred stock, $0.001 par value, 50,000,000 shares authorized, 0 shares issued and outstanding as of December 31, 2023 and 2022		-			-			-
Common stock, $0.001 par value, 90,000,000 shares authorized, 16,720,451 shares (excluding 149,162 unvested restricted shares) issued and outstanding as of December 31, 2023 and 9,720,003 shares (excluding 149,162 unvested restricted shares) issued and outstanding as of December 31, 2022		16,720						16,720
Additional paid in capital		97,015,470						97,015,470
Subscribed capital		5,004,000			-			5,004,000
Accumulated deficits		(74,719,954	)		(2,759,750	)		(77,479,704	)
Accumulated other comprehensive loss		(334,583	)		(32,021	)		(366,604	)
Total Stockholders’ Equity		26,981,653			(2,791,771	)		24,189,882
Total Liabilities and Stockholders’ Equity	$	88,767,951		$	(916,329	)	$	87,851,622

AERKOMM INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 2 - Summary of Significant Accounting Policies - Continued

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss (Restated)

	For the Three Months Ended
	September 30, 2023
	As previously Reported			Adjustment			As restated
	(Unaudited)						(Unaudited)
Net Sales – Related Party	$	-					$	-
Service Income – Related Party		61,582						61,582
Total Revenue		61,582						61,582
Cost of Sales		26,666						26,666
Gross Profit		34,916						34,916
Operating Expenses		4,303,845						4,303,845
Loss from Operations		(4,268,929	)					(4,268,929	)
Non-Operating Income (Loss)
Foreign currency exchange (loss) gain		(806,619	)					(806,619	)
Bond issuance cost		(128,663	)		128,663			-
Interest expenses		-			(369,859	)		(369,859	)
Unrealized gain (loss) on investments		(1,320,206	)		1,317,556			(2,650	)
Other income (loss), net		100,372			241,196			341,568
Net Non-Operating (Loss) Income		(2,155,116	)		1,317,556			(837,560	)
Loss before Income Taxes		(6,424,045	)		1,317,556			(5,106,489	)
Income Tax Expense		-			-			-
Net Loss		(6,424,045	)		1,317,556			(5,106,489	)
Other Comprehensive Income (Loss)
Change in foreign currency translation adjustments		(569,911	)		15,791			(554,120	)
Total Comprehensive Loss	$	(6,993,956	)		1,333,347		$	(5,660,609	)
Net Loss Per Common Share:
Basic	$	(0.64	)				$	(0.51	)
Diluted	$	(0.64	)				$	(0.51	)
Weighted Average Shares Outstanding - Basic		10,021,349						10,021,349
Weighted Average Shares Outstanding - Diluted		10,021,349						10,021,349

AERKOMM INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 2 - Summary of Significant Accounting Policies - Continued

	For the Nine Months Ended
	September 30, 2023
	As
	previously
	Reported			Adjustment			As restated
	(Unaudited)						(Unaudited)
Net Sales – Related Party	$	446,367					$	446,367
Service Income – Related Party		61,582						61,582
Total Revenue		507,949						507,949
Cost of Sales		472,115						472,115
Gross Profit		35,834						35,834
Operating Expenses		11,577,414						11,577,414
Loss from Operations		(11,541,580	)					(11,541,580	)
Non-Operating Income (Loss)
Foreign currency exchange (loss) gain		(1,126,762	)					(1,126,762	)
Bond issuance cost		(380,684	)		380,684			-
Interest expenses		-			(1,096,509	)		(1,096,509	)
Unrealized gain (loss) on investments		1,770,888			(1,877,053	)		(106,165	)
Other income (loss), net		(264,850	)		715,825			450,975
Net Non-Operating (Loss) Income		(1,408	)		(1,877,053	)		(1,878,461	)
Loss before Income Taxes		(11,542,988	)		(1,877,053	)		(13,420,041	)
Income Tax Expense		2,400			-			2,400
Net Loss		(11,545,388	)		(1,877,053	)		(13,422,441	)
Other Comprehensive Income (Loss)
Change in foreign currency translation adjustments		(852,301	)		76,247			(776,054	)
Total Comprehensive Loss	$	(12,397,689	)		(1,800,806	)	$	(14,198,495	)
Net Loss Per Common Share:
Basic	$	(1.16	)				$	(1.35	)
Diluted	$	(1.16	)				$	(1.35	)
Weighted Average Shares Outstanding - Basic		9,920,450						9,920,450
Weighted Average Shares Outstanding - Diluted		9,920,450						9,920,450

AERKOMM INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 2 - Summary of Significant Accounting Policies - Continued

Unaudited Condensed Consolidated Statements of Cash Flows (Restated)

	For the Nine Months Ended
	September 30, 2023
	As
	previously
	Reported			Adjustment			As restated
	(Unaudited)						(Unaudited)
Cash Flows from Operating Activities
Net loss	$	(11,545,388	)	$	(1,877,053	)	$	(13,422,441	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		897,046						897,046
Amortization of Right of Use Assets		75,899						75,899
Stock-based compensation		847,738						847,738
Unrealized (gain) loss on investments		(1,770,888	)		1,877,053			106,165
Amortization of bonds issuance costs		380,684						380,684
Changes in operating assets and liabilities:
Prepaid expenses		(4,134,587	)					(4,134,587	)
Other current assets		(1,129,394	)					(1,129,394	)
Deposits		(223,550	)					(223,550	)
Accounts payable		(386,312	)					(386,312	)
Accrued expenses and other current liabilities		9,622,337						9,622,337
Operating lease liability		(5,902	)					(5,902	)
Net Cash Used for Operating Activities		(7,372,317	)		-			(7,372,317	)
Cash Flows from Investing Activities
Proceeds from disposal of short-term investment		-						-
Proceeds from disposal of long-term investment		325,578						325,578
Purchase of property and equipment		(379,128	)					(379,128	)
Net Cash (Used) Provided by Investing Activities		(53,550	)					(53,550	)
Cash Flows from Financing Activities
Proceeds from issuance of common stock		7,000						7,000
Repayment of short-term loan		(384,189	)					(384,189	)
Repayment of long-term loan		(8,723	)					(8,723	)
Payment on finance lease liability		(8,619	)					(8,619	)
Net Cash Provided by Financing Activities		(394,531	)					(394,531	)
Net Decrease in Cash and Restricted Cash		(7,820,398	)					(7,820,398	)
Cash and Restricted Cash, Beginning of Period		10,101,920						10,101,920
Foreign Currency Translation Effect on Cash		1,196,111						1,196,111
Cash and Restricted Cash, End of Period	$	3,477,633					$	3,477,633
Supplemental disclosures of cash flow information:
Cash paid during the period for income taxes	$	2,400					$	2,400
Cash and Restricted Cash:
Cash	$	253,278					$	253,278
Restricted cash		3,224,355						3,224,355
Total	$	3,477,633					$	3,477,633

Reclassifications of Prior Year Presentation

Certain reclassifications have ~~prior~~been made to the prior year consolidated ~~balance~~financial ~~sheet,~~statements ~~and cash~~to ~~flow~~conform ~~statement~~to ~~amounts~~the ~~have~~unaudited ~~been~~condensed ~~reclassified~~consolidated ~~for~~financial ~~consistency~~statement presentation. Such reclassifications did ~~with~~not ~~the~~affect ~~current~~total ~~year~~revenues, ~~presentation.~~operating ~~These~~income ~~reclassifications~~or ~~had~~net ~~no effect~~income onor ~~the~~cash ~~reported~~flows ~~results~~as ofpreviously ~~operations~~reported.

Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Actual results may differ from these estimates.

AERKOMM INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 2 - Summary of Significant Accounting Policies - Continued

Concentrations of Credit Risk

Financial instruments that potentially ~~subject~~ subject the Company to significant concentrations of credit risk consist primarily of cash in banks. As of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, the ~~total~~Company’s ~~balance~~cash ofbalances ~~cash~~held in ~~bank~~U.S. ~~exceeding~~banking institutions did not exceed the amount insured by the Federal Deposit Insurance Corporation (FDIC) ~~for the Company was approximately $0 and $0, respectively~~. The balance of cash deposited in foreign financial institutions exceeding the amount insured by local insurance is approximately $354,~~000~~700 ~~and $7,246,000~~ as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, respectively.

The Company performs ongoing credit ~~evaluation~~ evaluation of its customers and requires no collateral. An allowance for credit loss and doubtful ~~accounts~~account is provided based on a review of the collectability of accounts receivable, and other receivable, respectively. The Company determines the amount of allowance for ~~doubtful~~credit ~~accounts~~loss and doubtful account by examining its historical collection experience and current trends in the credit quality of its customers as well as its internal credit policies. Actual credit losses may differ from management’s estimates.

Investment in Equity Securities

According to FASB issued Accounting Standards Updates 2016-01 (ASU 2016-01), it requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value being recorded in current period earnings, impacting the net income. For the investments in equity securities without readily determinable fair values, the investments may be recorded at cost, subject to impairment, and adjusted through net income for observable price changes.

Holdings of marketable equity securities with no significant influence over the investee are accounted for using cost method. Marketable equity security costs are initially recognized at fair value plus transaction costs which are directly attributable to the acquisition. The cost of the securities sold is based on the weighted average cost method. Stock dividends from the investment are included to recalculate the cost basis of the investment based on the total number of shares.

Cost method investment is evaluated for impairment when facts or circumstances indicate that the fair value of the long-term investments is less than its carrying value. An impairment is recognized when a decline in fair value is determined to be other-than-temporary. The Company reviews several factors to determine whether a loss is other-than-temporary. These factors include, but are not limited to, the: (i) nature of the investment; (ii) cause and duration of the impairment; (iii) extent to which fair value is less than cost; (iv) financial condition and near-term prospects of the investments; and (v) ability to hold the security Cost method investment is evaluated for impairment when facts or circumstances indicate that the fair value of the long-term investments is less than its carrying value. An impairment is recognized when a decline in fair value is determined to be other-than-temporary. The Company reviews several factors to determine whether a loss is other-than-temporary. These factors include, but are not limited to, the: (i) nature of the investment; (ii) cause and duration of the impairment; (iii) extent to which fair value is less than cost; (iv) financial condition and near-term prospects of the investments; and (v) ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. During the three months ended March 31, 2025 and 2024, the Company recorded $0 impairment charges for its investments, respectively.

Accounts receivable

The Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), which requires the Company to estimate all expected credit losses for financial assets measured at amortized cost basis, including trade receivables, based on historical experience, current market conditions and supportable forecasts. The Company’s accounts receivable are carried at the amounts invoiced to the customer. The risk of credit loss is mitigated by the Company’s credit evaluation process. Receivables are presented as net of an allowance for credit losses. Allowances for expected credit losses are determined based on an assessment of historical experience, the current economic conditions, future expectations of economic conditions, future expectation regarding customer solvency, and other collection factors. The Company will apply adjustments for specific factors and current economic conditions as needed at each reporting date. As of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, the Company had $0 ~~and $41,088~~Accounts ~~Account~~ Receivable~~. Therefore~~, ~~allowances~~respectively. ~~for~~Allowances for expected credit losses were $0 as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024.

Inventories

Inventories are recorded at the lower of weighted-average cost or net realizable value. The Company assesses the impact of changing technology on its inventory ~~on hand~~ and writes off inventories that are considered obsolete.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. When value impairment is determined, the related assets are stated at the lower of fair value or book value. Significant additions, renewals and betterments are capitalized. Maintenance and repairs are expensed as incurred.

Depreciation is computed by using the straight-line ~~and double declining~~ methods over the following estimated service lives: ground station equipment - 5 years, computer equipment - 3 to 5 years, furniture and fixtures - 5 years, satellite equipment - 5 years, vehicles - 5 to 6 years and lease improvement - 5 years or remaining lease term, whichever is shorter.

Upon sale or disposal of property and equipment, the related cost and accumulated depreciation are removed from the corresponding accounts, with any gain or loss credited or charged to income in the period of sale or disposal.

The Company reviews the carrying amount of property and equipment for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. It determined that there was no impairment loss for the ~~nine~~three months ended ~~September~~March 3031, 2025 and 2024.

AERKOMM INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 2 - Summary of Significant Accounting Policies - Continued

Right-of-Use Asset and Lease Liability

In February 2016, the FASB issued ASU No. 2016-02, “Leases” (Topic 842) (“ASU 2016-02”), which modifies lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases and finance leases under previous accounting standards and disclosing key information about leasing arrangements.

A lessee should recognize the lease ~~liability~~ liability to make lease payments and the right-of-use asset representing its right to use the underlying asset for the lease term. For ~~operating~~ operating leases and finance leases, a right-of-use asset and a lease liability are initially measured at the present value of the lease ~~payments~~ payments by discount rates. The Company’s lease discount rates are generally based on its incremental borrowing rate, as the discount ~~rates~~ rates implicit in the Company’s leases is readily determinable. Operating leases are included in operating lease right-of-use assets ~~and~~ and lease liabilities in the ~~unaudited condensed~~ consolidated balance sheets. Finance leases are included in property and equipment and lease liability in our ~~unaudited condensed~~ consolidated balance sheets. Lease expense for operating expense payments is recognized on a straight-line basis over the lease term. Interest and amortization expenses are recognized for finance leases on a straight-line basis over the lease term.

For the leases with a term of twelve months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term.

Goodwill and Purchased Intangible Assets

The Company’s goodwill represents the amount by which the total purchase price paid exceeded the estimated fair value of net assets acquired from acquisition of subsidiaries. The Company tests goodwill for impairment on an annual basis, or more often if events or circumstances indicate that there may be impairment.

As Aerkomm is currently still in the ~~development~~ development stage and ~~will~~has not ~~start~~yet commenced generating recurring revenue ~~until~~as ~~after~~of ~~late~~March ~~2024~~31 ,2025. Management has evaluated ~~that~~ the potential benefits of the acquisitions ~~before~~after the year 2023 ~~are limited~~ and ~~uncertain,~~decided ~~and~~that ~~due~~there towas ~~this~~no ~~reason,~~impairment ~~management~~on ~~has decided to impair~~ goodwill for ~~that generated~~the ~~from~~three ~~2022~~months ~~and~~ended ~~prior~~March ~~periods~~31, ~~with~~2025. As ~~total~~ of $4March 31,~~561,037~~ in2025 ~~2023.~~and ~~After~~December ~~the~~31, ~~impair measurement~~2024, ~~the~~goodwill net ~~goodwill~~of isimpairment was $4,573,819.

Purchased intangible assets with finite life are amortized on the straight-line basis over the estimated useful lives of respective assets. Purchased intangible assets with indefinite life are evaluated for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Purchased intangible asset consists of satellite system software and is amortized over 10 years.

SAFE Liabilities

In connection with the Simple Agreement for Future Equity (“SAFE”) agreements that the Company entered into with four third parties set forth in Note 17, the Company determined that the SAFE liabilities should classified as a derivative liability in accordance with ASC 815-40 “Derivatives and Hedging”. As a result, the SAFE liabilities shall be measured initially, and subsequently at fair value on each reporting date. The Company will continue to adjust the carrying value of the SAFE liabilities until contingencies are finally determined. Any changes in fair value will be recorded as a gain or loss in the statements of operations and comprehensive loss.

Fair Value of Financial Instruments

The Company utilizes the three-level valuation hierarchy for the recognition and disclosure of fair value measurements. The categorization of assets and liabilities within this hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy consist of the following:

Level 1 - Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 - Inputs to the valuation methodology are quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active or inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument.

Level 3 - Inputs to the valuation methodology are unobservable inputs based upon management’s best estimate of inputs market participants could use in pricing the asset or liability at the measurement date, including assumptions.

The carrying amounts of ~~our~~the Company’s cash and restricted cash, accounts receivable, other receivable, prepaid expenses, accounts payable, short-term loan, accrued expense, accrued unpaid salaries, prepayment from customer, and other payable approximated their fair value due to the short-term nature of these financial instruments. The Company’s ~~short-term investment is classified within Level 1 of the fair value hierarchy on September 30, 2024. The Company’s~~ long-term bonds payable, long-term note payable and lease payable approximated the carrying amount as its interest rate is considered as approximate to the current rate for comparable loans and leases, respectively. The ~~Our~~Company believes that the fair value of its long-term investment ~~approximated~~ approximates its carrying amount based ~~upon~~on management’s best estimate, ~~due~~given tothe ~~its~~investment’s restricted nature. ~~There were no outstanding derivative financial instruments as of September 30, 2024 and December 31, 2023.~~

1411

~~AERKOMM~~The ~~INC.~~following table ~~AND~~sets ~~SUBSIDIARIES~~forth by level within the fair value hierarchy our financial liability that were accounted for at fair value on a recurring basis as of March 31, 2025 and December 31, 2024:

Notes to Unaudited Condensed Consolidated Financial Statements

	Carrying Value at March 31,		Fair Value Measurement at March 31, 2025
	2025		Level 1		Level 2		Level 3
	(Unaudited)		(Unaudited)
Short-term investment	$	107	$	107	$	-	$	-
SAFE liability	$	5,460,000	$	-	$	-	$	5,460,000

NOTE 2 - Summary of Significant Accounting Policies - Continued

	Carrying Value at December 31,		Fair Value Measurement at December 31, 2024
	2024		Level 1		Level 2		Level 3
Short-term investment	$	107	$	107	$	-	$	-
SAFE liability	$	5,410,000	$	-	$	-	$	5,410,000

The following is a reconciliation of the beginning and ending balance of the financial liability measured at fair value on a recurring basis for the three months ended March 31, 2025 and December 31, 2024 :

	SAFE liability

Ending balance as of December 31, 2023	$	-
Issuance of SAFE notes		4,997,200
Change in fair value of contingent consideration for acquisition		412,800
Ending balance as of December 31, 2024	$	5,410,000
Change in fair value		50,000
Ending balance as of March 31, 2025 (Unaudited)	$	5,460,000

Segment Reporting

Operating segments are components of an enterprise about which separate financial information is available and is evaluated quarterly, by management, namely the Chief Operating Decision Maker (“CODM”) of an organization, in order to determine operating and resource allocation decisions. The Company operates and reports in one segment (“Defense and Aerospace Systems”) related to the delivery of sale of communications and sensing equipment and systems and the provision of technical support services for defense and aerospace applications to public and private sector. The Company generates revenues, earnings, net income, and cash flows through the single segment. The Company believes that this structure reflects its current operational and financial management, and that it provides the best structure for the Company to focus on growth opportunities while maintaining financial responsibility. The results of the reportable segment is derived directly from the Company’s management reporting system. The results are based on the Company’s method of internal reporting and are in conformity with accounting principles generally accepted in the United States. Management measures the performance of the segment on several metrics, including contribution income (loss). Segment contribution income (loss) includes all product line segment revenue less the related costs of sales, research and development and sales and marketing costs. Contribution income (loss) is used, in part, to evaluate the performance of, and allocate resources to, the segment. The CODM assesses performance for Defense and Aerospace Systems segment and decides how to better allocate resources based on the segment strategy and net income (losses) that are reported on the Statements of Operations. The Company’s objective in making resource allocation decisions is to optimize the financial results.

Revenue Recognition

The Company recognizes revenue when ~~performance~~ performance obligations identified under the terms of contracts with its customers are satisfied, which generally occurs upon the transfer of control in accordance with the contractual terms and conditions of the sale. The Company’s revenue ~~for~~is ~~the nine months ended September 30, 2024~~ composed of the sales of ground antenna units ~~unit~~and provision of data connectivity service, and ~~test~~technical support services to third party and a related party. ~~The~~Revenue ~~majority~~from ~~of the Company’s~~product ~~revenue~~sales is recognized at a point in time, ~~when~~typically upon the product isbeing ~~shipped~~picked up by the customer, orwhen control transfers to the customer. For technical support services, if the service results in the customer receiving and consuming the benefits as the service is ~~provided~~performed—such as toongoing support is recognized over time. Otherwise, if the ~~customer~~benefit of the service is only transferred upon completion, revenue is recognized at a point in time. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods, which includes estimates for variable consideration. The Company adopted the provisions of ASU 2014-09 Revenue from Contracts with Customers (Topic 606) and the principal versus agent guidance within the new revenue standard. As such, the Company identifies a contract with a customer, identifies the performance obligations in the contract, determines the transaction price, allocates the transaction price to each performance obligation in the contract and recognizes revenue when (or as) the Company satisfies a performance obligation. Customers may make payments to the Company either in advance or in arrears. If payment is made in advance, the Company will recognize a contract liability under prepayments from customers until which point the Company has satisfied the requisite performance obligations to recognize revenue.

In evaluating whether the Company is acting as a principal or an agent, management assesses whether the Company controls the specified goods or services before transferring them to the customer. This assessment considers whether the Company is primarily responsible for fulfilling the promise to provide the goods or services, has discretion in establishing pricing, and bears inventory or performance risk. Based on these factors, the Company has concluded that it acts as the principal in all of its sales and service arrangements and therefore recognizes revenue on a gross basis.

Disaggregated information of revenues by products/services are as follows:

	For the three months ended March 31,
	2025		2024
	(Unaudited)		(Unaudited)
Sales of ground antenna units (1)	$	-	$	18,480
Technical support service (1) (2)		-		34,775
Total	$	-	$	53,255

	(1)	Revenue recognized at a point in time.
	(2)	Revenue recognized over time

Disaggregated information of revenues by regions are as follows:

	For the three months ended March 31,
	2025		2024
	(Unaudited)		(Unaudited)
Japan	$	-	$	-
Taiwan		-		53,255
Total	$	-	$	53,255

The Company recognized advance payments from its customers prior to revenue recognition as contract liability or prepayment from customer-related party until the revenue recognition performance obligation are met.

As of March 31, 2025 and December 31, 2024, the Company did not have any contract assets.

Research and Development cost

The Company expenses research and development costs as incurred. Research and development activities primarily include the design, development, and testing of new products, technologies, or significant improvements to existing products. Costs incurred in connection with these activities, including third-party development costs, mainly in product development, are charged to expenses as incurred. Research and development costs for the three months ended March 31, 2025 and 2024 were $0.

Stock-based Compensation

The Company adopted the modified prospective method to measure stock-based compensation expense. Under the modified prospective method, stock-based compensation expense recognized during the period is based on the portion of the share-based payment awards granted after the effective date and ultimately expected to vest during the period. Stock-based compensation expense recognized in the Company’s statement of income is based on the vesting terms and the estimated fair value of the award at grant date. As stock-based compensation expense recognized in the statement of income is based on awards ultimately expected to vest, it is reduced for estimated forfeiture. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The Company uses the Black-Scholes option pricing model in its determination of fair value of share-based payment awards on the date of grant. Such option pricing model is affected by assumptions based on a number of highly complex and subjective variables.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. Adjustments to prior period’s income tax liabilities are added to or deducted from the current period’s tax provision.

The Company follows FASB guidance on uncertain tax positions and has analyzed Its filing positions in all the federal, state and foreign jurisdictions where it is required to file income tax returns, as well as all open tax years in those jurisdictions. The Company files income tax returns in the US federal, state and foreign jurisdictions where it conducts business. It is not subject to income tax examinations by US federal, state and local tax authorities for years before 2018. The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on its unaudited condensed consolidated financial position, results of operations, or cash flows. Therefore, no reserves for uncertain tax positions have been recorded. The Company does not expect its unrecognized tax benefits to change significantly over the next twelve months.

The Company’s policy for recording ~~interest~~ interest and penalties associated with any uncertain tax positions is to record such items as a component of income before taxes. Penalties ~~and~~ and interest paid or received, if any, are recorded as part of other operating expenses in the ~~unaudited condensed~~ consolidated statement of operations.

Foreign Currency Transactions

Foreign currency transactions are recorded in in U.S. dollars at the exchange rates in effect when the transactions occur. Exchange gains or losses derived from foreign currency transactions or monetary assets and liabilities denominated in foreign currencies are recognized in current income. At the end of each period, assets and liabilities denominated in foreign currencies are revalued at the prevailing exchange rates with the resulting gains or losses recognized in ~~income~~statements of operations for the period.

1514

AERKOMM INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 2 - Summary of Significant Accounting Policies - Continued

Translation Adjustments

If a foreign subsidiary’s functional currency is the local currency, translation adjustments will result from the process of translating the subsidiary’s financial statements into the reporting currency of the Company. Such adjustments are accumulated and reported under other comprehensive loss as a separate component of stockholders’ equity.

Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by by dividing income available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing income available to common shareholders by the weighted-average number of shares of common outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include stock warrants and outstanding stock options, shares to be purchased by employees under the Company’s employee stock purchase plan. The Company had 6,~~522~~613,~~299~~927 and 6,~~279~~500,~~400~~900 common stock equivalents, primarily stock options and warrants, for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, respectively. For the ~~fiscal~~ ~~nine~~ three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, the assumed exercise of the Company’s common stock equivalents were not included in the calculation as the effect would be anti-dilutive.

NOTE 3 - Recent Accounting Pronouncements

~~Simplifying the~~ Accounting ~~for~~Pronouncements ~~Debt with~~Not ~~Conversion~~Yet ~~and Other Options.~~Effective

In ~~June~~November ~~2020~~2024, the FASB issued ASU ~~2020~~2024-0603, Income toStatement ~~simplify~~— ~~the~~Reporting ~~accounting~~Comprehensive inIncome ~~ASC~~— ~~470,~~Expense ~~Debt~~Disaggregation ~~with~~Disclosures ~~Conversion~~(Subtopic ~~and~~220-40): ~~Other~~Disaggregation ~~Options~~of ~~and~~Income Statement ~~ASC 815~~Expenses, ~~Contracts~~which inrequires ~~Equity’s~~incremental ~~Own~~disclosures ~~Entity.~~about ~~The guidance~~specific ~~simplifies~~expense ~~the~~categories, ~~current~~including ~~guidance~~but ~~for~~not ~~convertible~~limited ~~instruments~~to, ~~and~~purchases of ~~the~~inventory, ~~derivatives~~employee ~~scope~~compensation, ~~exception~~depreciation, ~~for~~amortization ~~contracts~~and inselling ~~an entity’s own equity~~expenses. ~~Additionally,~~The ~~the~~ amendments ~~affect~~are ~~the~~effective ~~diluted EPS calculation~~ for ~~instruments~~fiscal ~~that~~years ~~may~~beginning after beDecember ~~settled~~15, in2026, ~~cash or shares~~ and for ~~convertible~~interim ~~instruments.~~periods ~~This~~within ~~ASU~~fiscal ~~became~~years ~~effective~~ beginning inafter ~~the~~December ~~first~~15, ~~quarter~~2027. ofEarly ~~the~~adoption ~~Company’s~~is ~~fiscal~~permitted ~~year~~and the ~~2023. The~~ amendments in ~~this~~may ~~update must~~ be applied on either ~~full~~prospectively ~~retrospective basis~~ or ~~modified~~retrospectively. ~~retrospective~~Management ~~basis~~is ~~through~~currently aevaluating ~~cumulative-effect~~this ~~adjustment to retained earnings/(deficit) in the period of adoption. The adoption of~~ ASU ~~2020-06~~to ~~does~~determine ~~not~~its ~~have a significant~~ impact on the Company’s ~~unaudited~~ ~~condensed consolidated financial statements as of and for the nine months ended September 30, 2024~~disclosures.

~~Financial~~In ~~Instruments~~January 2025, the FASB issued ASU 2025-01 Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40). The FASB issued ASU 2024-03 on November 4, 2024. ASU 2024-03 states that the amendments are effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Following the issuance of ASU 2024-03, the FASB was asked to clarify the initial effective date for entities that do not have an annual reporting period that ends on December 31 (referred to as non-calendar year-end entities). Because of how the effective date guidance was written, a non-calendar year-end entity may have concluded that it would be required to initially adopt the disclosure requirements in ASU 2024-03 in an interim reporting period, rather than in an annual reporting period. The FASB’s intent in the basis for conclusions of ASU 2024-03 is clear that all public business entities should initially adopt the disclosure requirements in the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Management is currently evaluating this ASU to determine its impact on the Company’s disclosures.

InExcept ~~June~~as ~~2016~~mentioned above, the ~~FASB~~Company ~~issued~~does ~~ASU 2016-13,~~not ~~“Financial~~believe ~~Instruments~~other -recently ~~Credit~~issued ~~Losses~~but ~~(Topic~~not ~~326):~~yet ~~Measurement~~effective ofaccounting ~~Credit~~standards, ~~Losses~~if oncurrently ~~Financial Instruments” (“ASU 2016-13”)~~adopted, ~~which~~ ~~modifies~~would ~~the~~have ~~measurement~~a ofmaterial ~~expected~~effect ~~credit~~on ~~losses of certain financial instruments. In February 2020,~~ the ~~FASB issued ASU 2020-02~~Company’s ~~and~~consolidated ~~delayed~~balance ~~the~~sheet, ~~effective~~statements ~~date~~ of ~~ASU~~(loss) ~~2016-13~~income ~~until~~and ~~fiscal~~comprehensive ~~year~~(loss) ~~beginning~~income ~~after December 15, 2022. In March 2022, the FASB issued ASU 2022-02~~ and ~~eliminate~~statements ~~the~~of ~~Troubled~~cash ~~Debt Restructuring recognition and measurement guidance~~flows.

~~The~~NOTE ~~Company~~4 ~~adopted~~– ~~the~~Deconsolidation ~~ASU~~of onAerkomm ~~January 1,~~HK ~~2023~~ and ~~the~~Beijing ~~adoption of this standard did not have a material effect on the Company’s operating results.~~Yatai

~~Segment~~Due ~~Reporting~~to sanctions imposed by China (see Note 1), on January 4, 2025, the Company lost operational control over its subsidiaries, Aerkomm HK and Beijing Yatai, whose operations and assets are located in China. Since that date, the Company has been unable to access the bank accounts or obtain updated financial information from these subsidiaries. Accordingly, Aerkomm HK and Beijing Yatai were deconsolidated from the Company’s consolidated financial statements, and the related investments in these subsidiaries were written off. Upon deconsolidation, the Company recognized a loss of $234,454. The deconsolidation of Aerkomm HK and Beijing Yatai did not have a material impact on the Company’s overall operations.

InNOTE ~~November~~5 ~~2023, the FASB issued ASU 2023~~-~~07,~~ which included Topic 280 “Segment Reporting”. This guidance improves reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The ASU 2023Short-07term is effective for all entities for fiscal years beginning after December 15, 2023. The Company is currently evaluating the impact of adopting ASU 2023-07 on its unaudited condensed consolidated financial statements.Investment

16On September 9, 2019, the Company entered into a liquidity agreement with a security company (“the Liquidity Provider”) in France, which is consistent with customary practice in the French securities market. The liquidity agreement complies with applicable laws and regulations in France and authorizes the Liquidity Provider to carry out market purchases and sales of shares of the Company’s common stock on the Euronext Paris market. To enable the Liquidity Provider to carry out the interventions provided for in the contract, the Company contributed approximately $225,500 (200,000 euros) into the account. The transaction was initiated in the beginning of 2020, and the Company pays annual compensation of 20,000 euros to the Liquidity Provider in advance by semi-annual installments at the beginning of each semi-annual period under the agreement. The liquidity agreement had an initial term of one year and has been renewed automatically until terminated as indicated below. As of March 31, 2025, the Company had purchased 5,361 shares of its common stock with the fair value of $107. The securities were recorded as short-term investment with an accumulated unrealized loss of $19,297. In January 2022, the Liquidity Provider terminated the agreement and the Company is determining whether to continue a similar program with a different provider.

~~AERKOMM INC. AND SUBSIDIARIES~~15

~~Notes~~On September 30, 2022, the Company entered into a stock purchase agreement to ~~Unaudited~~purchase ~~Condensed~~common ~~Consolidated~~stock ~~Financial~~of Shinbao in a total amount of NT$35,000,000 (approximately $1.1 million as ~~Statements~~of March 31 ,2025). Shinbao is a privately-held company in Taiwan. As of March 31, 2025, the stock title transfer is still under process. Given the Company’s intention to hold the investment in Shinbao for a period exceeding twelve months, the investment was reclassified from short-term investment to long-term investment.

~~NOTE~~As 3of -March ~~Recent~~31, ~~Accounting~~2025 ~~Pronouncements~~and -December ~~Continued~~31, 2024, the fair value of the investment was $107. For the three months ended March 31, 2025 and 2024, the Company recorded unrealized losses on trading securities amounted to $0 and $672, respectively.

~~Income~~NOTE ~~Taxes~~6 - Inventories, net

InAs ~~December~~of ~~2023,~~March ~~the FASB issued ASU 2023-09~~31, ~~which~~2025 ~~included~~and Topic 740 “Income Taxes”. This guidance requires business entities to disclose additional information related to the income taxes. The ASU 2023-09 is effective for all entities for fiscal years beginning after December 1531, 2024. ~~The~~, ~~Company~~inventories isconsisted ~~currently~~of ~~evaluating~~ the ~~impact of adopting ASU 2023-09 on its unaudited condensed consolidated financial statements~~following:

NOTE 4 - Short-term Investment

	March 31, 2025		December 31, 2024
	(Unaudited)
Satellite equipment for sale under development	$	1,008,449	$	1,007,461

OnThe ~~September~~write-down 9,of ~~2019,~~potential ~~the~~obsolete ~~Company entered~~inventories ~~into a liquidity agreement with a security company (“the Liquidity Provider”) in France, which~~ is ~~consistent~~recorded ~~with~~based ~~customary practice~~on in the French securities market. The liquidity agreement complies with applicable laws and regulations in France and authorizes the Liquidity Provider to carry out market purchases and sales of shares of the Companymanagement’s ~~common~~assumptions ~~stock~~about onfuture ~~the~~demands ~~Euronext~~and ~~Paris~~ market~~. To~~ ~~enable the Liquidity Provider to carry out the interventions provided for in the contract, the Company contributed approximately $225,500 (200,000 euros) into the account~~conditions. ~~The~~For ~~transaction was initiated in~~ the ~~beginning~~three ofmonths ~~2020,~~ended ~~and~~March ~~the Company pays annual compensation of 20~~31,~~000~~ ~~euros to the Liquidity Provider in advance by semi-annual installments at the beginning of each semi-annual period under the agreement.~~2025 ~~The liquidity agreement had an initial term of one year~~ and ~~has been renewed automatically until terminated as indicated below. As of September 30,~~ 2024, the Company ~~had~~did ~~purchased~~not ~~5,361~~record ~~shares~~any ~~of its common stock with the fair value of $13,831. The securities were recorded as short~~write-~~term~~down ~~investment with an accumulated unrealized loss~~ of ~~$20,370.~~obsolete ~~In January 2022, the Liquidity Provider terminated the agreement and the Company is determining whether to continue a similar program with a different provider~~inventory.

OnNOTE ~~September~~7 ~~30,~~- ~~2022,~~Prepaid ~~the~~Expenses ~~Company entered into a stock purchase agreement to purchase common stock of Shinbao in a total amount of NT$35,000,000 (approximately $1,105,846~~ and ~~$1,143,044, as~~Prepayments offor ~~September~~Equipment ~~30, 2024~~ and ~~December 31, 2023, respectively). Shinbao is a privately-held company in Taiwan. As of November *, 2024,~~Intangible ~~the stock title transfer is still under process.~~Assets

As of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, ~~the~~prepaid ~~fair~~expenses ~~value~~ consisted of the ~~investment was as follows~~following:

	September 30, 2024		December 31, 2023
	March 31, 2025		December 31, 2024
	(Unaudited)		~~As restated~~
Investment - Liquidity	$	13,831	$	13,831
Prepaid professional expense	$	108,257	$	108,844
Prepaid investment		1,105,846		1,143,044
Others		112,757		86,789
Total Investment		1,119,677		1,156,875
Prepaid expenses total	$	221,014	$	195,633
Prepayment for equipment and intangible assets – customer projects – related parties	$	736,027	$	2,146,807
Prepayment for equipment and intangible assets – customer projects	$	279,710	$	279,710

NOTE 5 - Inventories, net

As of September 30, 2024 and December 31, 2023, inventories consisted of the following:

	September 30, 2024		December 31, 2023
	(Unaudited)		As restated
Satellite equipment for sale under construction	$	190,392	$	170,892

The write-down of potential obsolete inventories is recorded based on management’s assumptions about future demands and market conditions. For the nine months ended September 30, 2024, the Company did not record any write-down of obsolete inventory. For the year ended December 31, 2023, the Company wrote-down $1,327,788 of obsolete inventory. The inventory write-down is included in “Cost of Goods Sold” in the consolidated statement of operations.

AERKOMM INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 6 - Prepaid Expenses and Prepayments for Equipment and Intangible Assets

As of September 30, 2024 and December 31, 2023, prepaid expenses consisted of the following:

	September 30, 2024		December 31, 2023
	(Unaudited)		As restated
Prepaid professional expense	$	120,143	$	110,043
Others		171,525		48,128
Prepaid expenses total	$	291,668	$	158,171
Prepayment for equipment and intangible assets – customer projects – related parties		2,083,650		2,076,138
Prepayment for equipment and intangible assets – customer projects	$	9,175,533	$	8,326,017

These prepayments for equipment and intangible assets are related to ongoing projects.

NOTE 78 - Property and Equipment, Net

As of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, the balances of property and equipment were as follows:

	September 30, 2024			December 31, 2023
	March 31, 2025			December 31, 2024
	(Unaudited)			~~As restated~~
Ground station equipment	$	1,~~854~~568,~~027~~926		$	1,~~854~~611,~~027~~192
Computer software and equipment		2,~~874~~913,~~474~~710			2,~~847~~915,~~119~~256
Satellite equipment		275,410			275,410
Vehicle		~~327~~333,~~702~~418			~~337~~332,~~637~~616
Leasehold improvement		8360,~~953~~297			83,~~827~~959
Furniture and fixture		3830,~~606~~573			38,~~637~~532
		5,454,172			5,436,657
Subtotal		5,182,334			5,256,965
Accumulated depreciation		(3,~~292~~629,~~976~~415	)		(3,~~085~~528,~~789~~738	)
Net		21,~~161~~552,~~196~~919			21,~~350~~728,~~868~~227
Prepayments - land		39,315,937			40,114,286
Construction in progress		3,750,000			3,750,000
Prepaid equipment		325,668			324,866
Prepayments - land		40,169,413			40,223,001
Total	$	4145,~~802~~472,~~801~~332		$	4245,~~790~~701,~~020~~228

On July 10, 2018, the Company and Aerkomm Taiwan entered into a real estate sale contract (the “Land Purchase Contract”) with Tsai Ming-Yin (the “Seller”) with respect to the acquisition by Aerkomm Taiwan of a parcel of land located in Taiwan. The land is expected to be used to build a satellite ground station and data center. Pursuant to the terms of the Land Purchase Contract, and subsequent amendments on July 30, 2018, September 4, 2018, November 2, 2018 and January 3, 2019, the Company paid to the seller in installments refundable prepayments of NT$1,098,549,407 (approximately $34,709,302 as of September 30, 2024 and $35,876,859 as of December 31, 2023) in total. The estimated commission payable for the land purchase in the amount of NT$42,251,900 (approximately $1,334,973 as of September 30, 2024 and 1,379,879 as of December 31, 2023) was recorded to the cost of land. The company is also under the discussion of extending the commission payable to December 31,2023. According to the amended Land Purchase Contract dated on November 10, 2020, the transaction may be terminated at any time by both the buyer and the seller and agreed by all parties if the Company is unable to obtain the qualified satellite license issued by Taiwan authority before July 31, 2021. As of November 8, 2024, the qualified license applications are still in progress. 16

On ~~November~~July 1510, ~~2022~~2018, the Company ~~entered~~and Aerkomm Taiwan entered into ~~another~~a real estate sale contract (the “Land Purchase Contract 2”) with ~~Hsu~~Tsai ~~Rong~~Ming-~~Tang~~Yin (the “Seller 2”) with respect to the acquisition by ~~Aircom~~Aerkomm ~~Telecom~~Taiwan of a parcel of land located in Taiwan. The land is expected to be used ~~for~~to ~~Aerkomm’s~~build a satellite ~~future~~ground ~~projects~~station and data center. AsPursuant to the terms of ~~September~~the Land Purchase Contract, and subsequent amendments on July 30, ~~2024~~2018, September 4, 2018, November 2, 2018 and January 3, 2019, the Company paid to the ~~Seller~~seller 2in installments, prepayments of $34,474,462 (NT$~~145~~1,~~800~~056,~~000~~297,507) in total. The estimated commission payable for the land purchase in the amount of NT$42,251,900 (approximately $41,~~606~~273,~~635~~031 as of ~~September~~March 31, 302025 and 1,302,062 as of December 31, 2024) was recorded to the cost of land. The company is also under the discussion of extending the commission payable to December 31,2023. According to the amended Land Purchase Contract dated on November 10, 2020, the transaction may be terminated at any time by both the buyer and the seller and agreed by all parties if the Company is unable to obtain the qualified satellite license issued by Taiwan authority before July 31, 2021. As of March 31, 2025, the title of the land has not transfer to the Company as the qualified license applications are still in ~~total~~progress from Taiwan National Communications Commission (“NCC”). As of the date of the issuance of these unaudited condensed consolidated financial statements, the Company is in the stage of applying for approval of its operation plan and network plan with NCC before proceeding to final stage of network installation, public telecommunications reporting, and obtaining the frequency usage certificate

~~Depreciation~~On ~~expense~~November ~~was~~15, ~~$213~~2022,~~408~~ the Company entered into another real estate sale contracts (the “Land Purchase Contracts 2”) with Hsu Rong-Tang (the “Seller 2”) with respect to the acquisition by Aircom Telecom of a parcel of land and property located in Taiwan. The land is expected to be used for Aerkomm’s ~~$525~~future projects. As of March 31,~~796~~ ~~for~~2025, the ~~nine~~Company ~~months~~paid ~~periods~~to ~~ended~~the ~~September~~Seller 302 installments refundable prepayments of NT$145,800,000 ~~2024~~(approximately $4,392,889 ~~and~~as ~~2023~~of March 31, ~~respectively~~2025) in total.

18Depreciation expense was $133,974 and $72,051 for the three months ended March 31, 2025 and 2024, respectively.

~~AERKOMM~~NOTE ~~INC.~~9 ~~AND~~- ~~SUBSIDIARIES~~Long-term Investment, net

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 8 - Long-term Investment

On December 3, 2020, the Company entered into three separate stock purchase agreements from three individuals to purchase an aggregate of 6,000,000 shares of one of the Company’s related parties, YuanJiu Inc. (“YuanJiu”) in a total amount of NT$141,175,000 (approximately US$5,027,600 as of December 31, 2020). YuanJiu was then a listed company on the Taiwan Exchange. Albert Hsu, a member of the Company’s board of directors, is the Chairman of YuanJiu. On July 19, 2021, YuanJiu Inc. changed its name to “EJECTT INC” (“Ejectt”).

As of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, 6,000,000 shares of Ejectt’s common stock were pledged as collateral for debt obligations of the Company and booked under long-term investment, respectively. These shares are pledged to Bank of Panhsin and Hsiao, Chia-Sung. Bank of Panhsin provides collateral for the issuance of of convertible bonds by U.S.-based Aerkomm Inc. Since the Company sold 5,000,000 shares of the 6,000,000 pledged shares and then later ~~acquired~~ acquired 5,000,000 Ejectt shares once again, the Company used the average acquisition cost of NT$25.58 per share or NT$153,523,000 to determine the value of long-term investments as of ~~September~~December 3031, 2023. During the year ended December 31, 2024, the Company reviews several factors and determined that the decline in value of investment in Ejectt was other-than-temporary and recognized an impairment of NT$101,123,141 (approximately US$3.1 million). As of March 31, 2025 and December 31, 2024, the value of investment in Ejectt was NT$52,399,859 (approximately US$1.6 million).

On July 20, 2023, the Taipei Exchange (the “Exchange”) announced that the securities of Ejectt Inc. would be suspended from trading on the Exchange as of that date, in accordance with Article 12-1 of the Business Rules of the Exchange due to significant changes in the scope of Ejectt’s business within a certain period before and after a change in control, that Ejectt’s new business accounted for more than 51% of its operations and due to the dismissal of independent director, Lin Yi-Bin, due to issues of independence. The Company’s management believes the suspension will have no impact on the value of its investment in the Ejectt stock. The management understood that the Ejectt’s management intended to modify Ejectt’s business such that its new business activities would constitute no more than 49% of the business of Ejectt, thereby enabling the resumption of trading in Ejectt conducting substantially the same business, as when its trading was suspended. However, Ejectt’s stock did not resume trading on the Exchange.

On July 28, 2023, the Company and Ejectt signed a non-binding letter of intent with respect to a possible merger between Aerkomm Taiwan Inc. and Ejectt. At a January 30, 2024 meeting of the shareholders of Aerkomm Taiwan, the shareholders approved pursuing a merger with Ejectt, under which Aerkomm Taiwan would be the surviving company, and an offer of merger was delivered to Ejectt on February 1, 2024. On March 4, 2024, Ejectt was officially delisted.

Aerkomm Taiwan Inc. held a shareholders’ meeting on May 23, 2024 to approve the merger with Ejectt. On the same day, the Ejectt shareholders also approved the merger and the merger agreement became effective as of that date. On May 27, 2024, Aerkomm Taiwan Inc. amended its articles of incorporation to increase its capital. Aerkomm Taiwan and Ejectt agreed in the merger agreement to merge on June 27, 2024. However, for the merger to become legally effective under Taiwanese law, it must be approved by the Department of Investment Review in Taiwan. An application for approval was submitted on July 10, 2024. Aerkomm expects that the review process may require approximately 4-6 months. Aerkomm cannot assure whether the Department of Investment Review will approve the transaction. As of the date of the report, the review is still ongoing. During the year ended December 31, 2024, the Company recorded impairment of $3,149,625 against investment in Ejectt. For the three months ended March 31, 2025 and 2024, the Company recorded impairment of $0 against investment in Ejectt.

As of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, 6,000,000 shares of Ejectt’s common stock were restricted.

As of ~~September~~March 3031, 2025 and December 31, 2024, through Aerkomm Taiwan and Aircom Telecom the Company held approximately 9.22% of the issued and outstanding shares of Ejectt.

In connection with the planned merger with Ejectt, Aerkomm Taiwan retained an independent specialist firm that, in a report published to Aerkomm Taiwan dated April 29, 2024, valued Ejectt’s shares at between NT$25.62 to NT$27.17 per share. This valuation supports the value of the Company’s investment in Ejectt as of June 30, 2024 as well as the terms of merger agreed with Ejectt and approved by the board and shareholders of Aerkomm Taiwan. The merger with Ejectt is a structured as a one-for-one stock exchange with Aerkomm Taiwan being the surviving company. As a result of the merger, the shareholders of Aerkomm Taiwan will own approximately 48.65% of the merged entity.

~~Also~~On on September 2930, 2022, the Company entered into a stock purchase agreement ~~(or “Stock Purchase Agreement”)~~ to purchase ~~2,670,000~~common ~~shares~~stock of ~~common~~Shinbao ~~stock~~in a total amount of ~~AnaNaviTek Corp.~~NT$95,000,000 (~~AnaNaviTek~~approximately $2,897,225) infor aShinbao’s 7,500,000 ~~total~~shares ~~amount~~(25% of total shares). The Company paid NT$4035,~~050~~000,000 (approximately $1,~~303~~054,~~287~~535 and $1,067,399, as of March 31, 2025 and December 31, ~~2022~~2024, respectively) as downpayment. ~~AnaNaviTek~~Shinbao is a privately-held company in Taiwan. AsDuring ofthe ~~November~~year ~~21,~~ended ~~2022,~~December 31,2024, the Company ~~had~~reviews ~~paid~~several factors and determined that the decline in value of the prepaid investment in Shinbao was other-than-temporary and recognized an impairment of NT$1017,~~005~~647,~~000~~368 (approximately US$~~325,578~~0.5 asmillion). As of ~~December~~March 31, ~~2022)~~2025, ~~for~~the ~~667,000 shares~~value of ~~AnaNaviTek~~prepaid ~~stock~~investment ~~and~~in Shinbao was NT$17,352,632 (approximately US$0.5 million). For the ~~stock~~three ~~title~~months ~~transfer~~ended ~~for~~March ~~these~~31, ~~shares~~2025, ~~has~~the ~~been~~Company ~~completed~~recorded impairments of $0 against prepaid investment in Shinbao.

InAs Q1of ~~2023~~March 31, ~~the~~2025 ~~Company~~and ~~disposed~~December ~~of the~~31, ~~AnaNaviTek~~2024, ~~stock~~the long-term ~~for~~investment ~~amount~~was ofas ~~$325,578.~~follows:

As of September 30, 2024 and December 31, 2023, the fair value of the long-term investment was as follows:

	Investment in Ejectt			Investment in Shinbao			Total
January 1, 2024	$	5,013,814		$	-		$	5,013,814
Reclassified from short-term investment		-			1,143,044			1,143,044
Impairment		(3,149,625	)		(549,653	)		(3,699,278	)
Exchange rate adjustment		(266,145	)		(64,186	)		(330,331	)
December 31, 2024		1,598,044			529,205			2,127,249
Exchange rate adjustment		(19,259	)		(6,378	)		(25,637	)
March 31, 2025 (Unaudited)	$	1,578,785		$	522,827		$	2,101,612

	September 30, 2024		December 31, 2023
	(Unaudited)		As restated
Investment at cost - Ejectt - long-term	$	4,850,648	$	5,013,814
Net	$	4,850,648	$	5,013,814

19NOTE 10 - Intangible Asset, Net

~~AERKOMM~~As ~~INC.~~of ~~AND~~March ~~SUBSIDIARIES~~31, 2025 and December 31, 2024, the cost and accumulated amortization for intangible asset were as follows:

Notes to Unaudited Condensed Consolidated Financial Statements

	Satellite System Software			Accumulated Amortization			Net
January 1, 2024	$	17,406,469		$	(4,381,777	)	$	13,024,692
Addition		15,134			(1,753,435	)		(1,738,301	)
Exchange rate adjustment		(23,458	)		16,960			(6,498	)
December 31, 2024		17,398,145			(6,118,252	)		11,279,893
Addition		-			(439,828	)		(439,828	)
Exchange rate adjustment		(4,172	)		710			(3,462	)
March 31, 2025 (Unaudited)	$	17,393,973		$	(6,557,370	)	$	10,836,603

~~NOTE~~Amortization 9expense -was ~~Intangible~~$439,118 ~~Asset~~and $434,929 ~~Net~~for each of the three months ended March 31, 2025 and 2024.

AsThe offollowing ~~September~~table ~~30,~~sets ~~2024~~forth ~~and December 31, 2023,~~ the ~~cost and accumulated~~ Company’s amortization expense for ~~intangible~~the ~~asset~~next ~~were~~five asyears ~~follows~~ending:

	Satellite System Software			Accumulated Amortization			Net
	Amortization
December 31, 2023	$	17,406,469		$	(4,381,777	)	$	13,024,692
	expenses
Addition		-			(1,318,045	)		(1,318,045	)
Twelve months ending March 31, 2026	$	1,531,904
CTA		(11,535	)		14,323			2,788
Twelve months ending March 31, 2027		1,244,397
September 30, 2024 (Unaudited)	$	17,394,934		$	(5,685,499	)	$	11,709,435
Twelve months ending March 31, 2028		1,244,397
Twelve months ending March 31, 2029		1,244,397
Twelve months ending March 31, 2030 and thereafter		5,571,508
Total	$	10,836,603

~~Amortization expense was $1,318,045~~Note ~~and~~11 ~~$371,250~~- ~~for each of the nine months periods ended September 30, 2024 and 2023.~~Goodwill

Note 10 - Goodwill

As of September 30, 2024 and December 31, 2023, the goodwill were as follows.

	Gross Goodwill			Accumulated Impairment			Net
January 1, 2023	$	4,561,037		$	-		$	4,561,037
Addition		4,573,819						4,573,819
Impairment loss		(4,561,037	)		(4,561,037	)
December 31, 2023	$	9,134,856		$	(4,561,037	)	$	4,573,819
Addition		-			-			-
September 30, 2024 (Unaudited)	$	9,134,856		$	(4,561,037	)	$	4,573,819

There is $0 and $4,561,037 impairment loss on goodwill was recognized for nine-month period ended September 30, 2024 and the year ended December 31, 2023 for all past merger activities.

As Aerkomm is currently still in the development stage and will not start generating revenue until after late 2024. Management has evaluated that the potential benefits of the acquisitions before year 2023 is limited and uncertain. Due to this reason, management has decided to impair goodwill that generated from 2022 and prior periods with total of $4,561,037 by performing the two-step goodwill impairment test.

On September 28, 2023, the Company acquired 100% of the ownership of Mixnet Technology Limited (Mixnet) and its subsidiary Mesh Technology Taiwan Limited (Mesh) with total consideration of $16,500,000 by issuing 7,000,448 shares of the Company’s common stock valued at approximately $2.36 per share. The fair value of Mixnet and Mesh at acquisition date was $11,926,181. The excess of the purchase price over the tangible assets, identifiable intangible assets and assumed liabilities was $4,573,819, which is recorded as goodwill.

20There is no impairment loss on goodwill that was recognized for the three months ended March 31, 2025 and 2024 for all past merger activities.

~~AERKOMM~~NOTE ~~INC.~~12 ~~AND~~- ~~SUBSIDIARIES~~Other Payable and Accrued Expenses

Notes to Unaudited Condensed Consolidated Financial Statements

Nature	March 31, 2025		December 31, 2024
	(Unaudited)
Outside service, professional, and consultant fee	$	4,207,759	$	3,947,677
Land commission payable		1,288,561		1,288,561
Interest payable		2,353,439		2,086,390
Bonus, health insurance, and payroll taxes		1,276,607		1,049,191
R&D supplies		673,567		673,567
Employee reimbursement		281,106		281,106
Office expense		55,429		63,354
Others		1,153,380		1,045,182
Total	$	11,289,848	$	10,435,028

~~Note 10 - Goodwill - Continued~~19

The ~~following~~Company ~~table~~also ~~summarizes~~notes that $7,233,801 from the total ~~fair~~accrued expenses balance of $8,311,810 as of March 31, 2025 was related to unpaid salaries due to substantially all of the Company’s ~~values~~employees (including those of the ~~assets~~Company’s ~~acquired~~wholly owned subsidiaries) continuing to perform their duties despite salary deferrals that began for substantially all of the employees in 2023. As of December 31, 2024, approximately $3.1 million accrued unpaid salaries have been settled pursuant to a form of letter outlining Aerkomm employee’s stock option exercise forms., Employees signing such agreements have agreed to the accelerated vesting and ~~liabilities~~exercise ~~assumed~~of atoptions to acquire an aggregate of 1,176,956 shares of the ~~date~~Company’s common stock in return for waiving the right to receive an aggregate of ~~acquisition~~approximately $3.1 million in unpaid salary.

~~Goodwill~~NOTE as13 a- ~~result~~Operating ~~of the acquisition of Mixnet~~ and ~~its~~Finance ~~subsidiary is calculated as follows;~~Leases

Total purchase considerations	$	16,500,000
Fair Value of tangible assets acquired:
Cash		66,278
Other receivable		3,513
Prepaid expenses and other current assets		2,872
Intangible assets		12,102,000
Total identifiable assets acquired		12,174,663
Fair value of liabilities assumed:
Loan payable - current		(50,403	)
Prepayment from customer		(94,634	)
Other payable		(24,203	)
Loan from stockholder - non-current		(79,242	)
Total liabilities assumed		(248,482	)
Net identifiable liabilities assumed		11,926,181
Goodwill as a result of the acquisition	$	4,573,819

As of March 31, 2025, the Company had four operating leases for office usage remaining.

NOTE 11 - Other Payable and Accrued Expenses

Nature	September 30, 2024		December 31, 2023
	(Unaudited)		As restated
Outside service, professional, and consultant fee	$	4,013,996	$	3,553,169
Land commission		1,334,973		1,379,879
Equity Financing		2,585,200		-
Interest payable		1,817,544		1,037,126
Bonus, health insurance, and payroll taxes		1,178,524		716,786
Investment payable		454,592		469,884
R&D supplies		438,834		448,996
Employee reimbursement		315,764		348,308
Office expense		183,593		58,014
Others		30,165		44,950
Total	$	12,353,185	$	8,057,112

The Company also notes that $6,786,462 of our Accrued Expenses of $7,956,269 as of September 30, 2024 was our accrual for unpaid salaries due to substantially all of our employees (including those of our wholly owned subsidiaries) continuing to perform their duties despite salary deferrals that began for substantially all of our employees in 2023. As of September 19, 2024, approximately $2.9 million accrued unpaid salaries have been settled pursuant to a form of letter outlining Aerkomm employee’s stock option exercise forms. Employees signing such agreements have agreed to the accelerated vesting and exercise of options to acquire an aggregate of 1,176,956 shares of the Company’s common stock in return for waiving the right to receive an aggregate of $3,051,000 in unpaid salary.

As of September 30, 2024, the total Equity Financing amounted to $2,585,200, made up of SAFE investments by Hsiao Chia-Sung SAFE, Liu Ya Ting, and Luk Fook Securities (HK) Ltd. Under the terms of the SAFE agreements, their invested amounts automatically convert into shares of the common stock of IXAQ upon the closing of the Merger at $11.50 per share and the SAFE investors are eligible for additional incentive shares that will be issued by the merged company if certain performance metrics are met in the five years following the closing of the Merger. Under each SAFE, if the Merger has not occurred within two years from the issuance date of the SAFE, then upon a vote of a majority (based on the face amounts of the SAFEs) of the holders of SAFEs, the SAFEs will convert into equity at a price of $5.00 per share. If the Company experiences a dissolution event before conversion of the SAFEs, the holders of SAFEs will be treated like holders of standard non-participating preferred stock.

AERKOMM INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 12 - Operating and Finance Leases

Lease term and discount rate:

The weighted-average remaining lease term and discount rate related to the leases were as follows:

	2024			2023
	March 31, 2025			December 31, 2024
Weighted-average remaining lease term	(Unaudited)
	(Unaudited)
Operating lease		1.69 Year			1.97 Years
Weighted-average remaining lease term
Finance lease		0.10 Years			0.85 Years
Operating lease		1.19 Years			1.44 Years
Finance lease		- Years			- Years
Weighted-average discount rate
Operating lease		6.00	%		6.00	%
Finance lease		~~3.82~~-	%		~~3.82~~-	%

The ~~components~~ ofsupplemental ~~lease~~balance ~~expense~~sheet ~~are~~information asrelated to ~~follows~~leases ~~within the unaudited condensed consolidated statements of operations and comprehensive loss~~ for the ~~nine~~period ~~months~~is ~~periods~~as ~~ended September 30, 2024 and 2023~~follows:

	March 31, 2025		December 31, 2024
	(Unaudited)
Operating leases
Right of use assets		149,379		176,406

Lease Liability – current portion		138,602		168,251
Lease Liability – net of current portion		25,654		56,303
Total operating lease liabilities	$	164,256	$	224,554

The components of lease expense are as follows within the consolidated statements of operations and comprehensive loss for the three months ended March 31, 2025 and 2024:

Operating Leases

	September 30, 2024			September 30, 2023
	March 31, 2025			March 31, 2024
	(Unaudited)			(Unaudited)
Lease expense	$	9532,~~919~~167		$	7532,~~899~~001
Sublease rental income		(51,~~954~~969	)		(62,~~519~~019	)
Net lease expense	$	8930,~~964~~198		$	6929,~~380~~982

2220

AERKOMM INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 12 - Operating and Finance Leases - Continued

Finance Leases

	September 30, 2024		September 30, 2023
	March 31, 2025		March 31, 2024
	(Unaudited)		(Unaudited)
Amortization of right-of-use asset	$	~~7,952~~-	$	82,~~235~~700
Interest on lease liabilities		~~245~~-		~~567~~109
Total finance lease cost	$	~~8,196~~-	$	82,~~801~~809

~~Maturity of~~The following table sets forth the Company’s minimum lease ~~liabilities~~payments in future periods:

Operating Leases

	Operating lease payments

Twelve months ending March 31, 2026	$	144,200
Twelve months ending March 31, 2027		25,883
Total lease payments	$	170,083
Less: Imputed interest		(5,827	)
Present value of lease liabilities	$	164,256
Current portion		(138,602	)
Non-current portion	$	25,654

	Others			Total
	(Unaudited)			(Unaudited)
October 1, 2024 – September 30, 2025	$	131,183		$	131,183
October 1, 2025 – September 30, 2026		91,986			91,986
Total lease payments	$	223,169		$	223,169
Less: Imputed interest		(11,525	)		(11,525	)
Present value of lease liabilities	$	211,644		$	211,644
Current portion		(121,797	)		(121,797	)
Non-current portion	$	89,847		$	89,847

NOTE 14 - Short-term Loan

23In June 2021, the Company entered into a loan agreement in the amount of $1,263,823 (NT $40,000,000) with a non-related party. This loan, which carries no interest, was originally set to mature on July 16, 2021, and further renewed the maturity date to March 16, 2023 with update the loan amount to $914,913 (NTD 30,000,000) with no interest. As of March 31, 2025 and December 31, 2024, the outstanding loan balance was $903,887 (NTD 30,000,000) and $914,913 (NTD 30,000,000), respectively. This loan is collateralized by 3,500,000 shares of Ejectt stock owned by the Company.

~~AERKOMM~~The temporary fundings as of March 31, 2025 and ~~INC~~December 31, 2024, were $4,108,814 (NTD 136,371,529) and $4,149,787 (NTD 136,071,529), respectively. ~~AND~~These ~~SUBSIDIARIES~~loans were made by multiple individual lenders arranged by Well Thrive Limited, a shareholder of the Company that entered into an agreement with the Company (and another lender) pursuant to which Well Thrive Limited agreed to provide $10 million in lending to the Company (the “Loan Commitment”). The terms of Well Thrive Limited’s commitment under the Loan Commitment were amended on March 1, 2023 to provide that, to support the Company, Well Thrive Limited would fulfill one-half of its Loan Commitment (thus, $5 million) by making itself, or by arranging from others, loans on an interest free, no fixed maturity date basis. All of the above temporary fundings that has been loaned to the Company by induvial lenders arranged by Well Thrive Limited has been on such basis. The Company plans to repay the temporary fundings as promptly as feasible given its overall obligations and in light of its repayment plans made in light of managing its working capital. The Company is also in discussion with Well Thrive about possible debt equity swaps for the Loans following closing of the planned Merger with IXAQ.

~~Notes~~On November 29, 2021, the Company entered into a credit loan agreement (the “Credit Loan Agreement”) with Mega International Commercial Bank Co., Ltd. (“Mega”). Pursuant to ~~Unaudited~~the ~~Condensed~~Credit ~~Consolidated~~Loan ~~Financial~~Agreement, ~~Statements~~Mega agreed to provide a facility of NTD 2,000,000 (approximately USD 62,500). The facility bears interest at an annual rate of 2.9% and is repayable in 48 monthly installments. The agreement includes a one-year grace period during which no payments were required, with repayments commencing in 2022 and scheduled to conclude in 2026. As of March 31, 2025 and December 31, 2024, the outstanding balance under the Credit Loan Agreement was $25,108 and $29,226, respectively.

~~NOTE~~During the year ended December 31, 2023, the entire 12balance -of ~~Operating~~Zero Coupon Bond (see Note 15) was tendered for redemption. Therefore, the related conversion feature was paused and ~~Finance~~forfeited until ~~Leases~~the payment of the redemption is fully settled or upon the expiration of the agreement, while the amount owed to the Zero Coupon Bond holder is reclassified as an ordinary short-term ~~Continued~~loan, and continued to accrued interest until full repayment. As of December 31, 2024 and March 31, 2025, the outstanding principal is $1,683,667 and the accrued interest is $163,526 (Note 12) pertained to above mentioned Zero Coupon Bond.

~~Finance Leases~~21

	Total
	(Unaudited)
October 1, 2024 – September, 2025	$	4,095
October 1, 2025 – September, 2026		-
Total lease payments	$	4,095
Less: Imputed interest		(13	)
Present value of lease liabilities	$	4,082
Current portion		4,082
Non-current portion	$	-

On April 23, 2024, the Company entered into a premium finance agreement with First Insurance Funding to finance its annual directors and officers insurance. Pursuant to the agreement, First Insurance Funding agreed to the unpaid balance of $93,500 of the total premiums, taxes and fees of $110,000. The loan bears interest at an annual rate of 9.45% and is payable in ten monthly installments of $9,760. As of March 31, 2025 and December 31, 2024, the outstanding balance under this agreement was $0 and $29,126, respectively.

~~NOTE~~On March 4, 2025, the Company entered into a loan 13agreement -in ~~Short~~the amount of NT $17,663,728 (approximately $0.5 million) with a non-~~term~~related ~~Loan~~party. This loan, which carried no interest, was set to mature on September 21, 2025. As of March 31, 2025, the outstanding loan balance was $532,200 (NT$ 17,663,728).

InOther ~~June~~than ~~2021,~~ the ~~Company~~short-term ~~entered into a~~ loan ~~agreement~~mentioned in above, the ~~amount~~Company ofhad ~~$1,263,823~~additional ~~(NT~~borrowings ~~$40,000,000)~~from ~~with~~several athird ~~non-related~~parties ~~party.~~totaling ~~This loan~~$57,600 ~~which~~and ~~carries no interest~~$47,600 ~~was~~as ~~originally set~~of toMarch ~~mature on July 16~~31, ~~2021.~~2025 Asand ofDecember ~~September 30~~31, 2024, respectively. ~~the~~These ~~outstanding~~loans ~~loan~~are ~~balance was $947,867 (NTD 30,000,000) which is an~~ interest -free and nopayable ~~fixed~~on ~~maturity date basis loan~~demand. ~~This loan is collateralized by 3,500,000 shares of Ejectt stock owned by the Company.~~

The temporary fundings as of September 30, 2024 and December 31, 2023, were $4,214,275 (NTD 133,381,800) and $4,347,159 (NTD 133,110,000), respectively., These loans were made by multiple individual lenders arranged by Well Thrive Limited, a shareholder of the Company that entered into an agreement with the Company (and another lender) pursuant to which Well Thrive Limited agreed to provide $10 million in lending to the Company (the “Loan Commitment”). The terms of Well Thrive Limited’s commitment under the Loan Commitment were amended on March 1, 2023 to provide that, to support the Company, Well Thrive Limited would fulfill one-half of its Loan Commitment (thus, $5 million) by making itself, or by arranging from others, loans on an interest free, no fixed maturity date basis. All of the above temporary fundings that has been loaned to the Company by induvial lenders arranged by Well Thrive Limited has been on such basis. The Company plans to repay the temporary fundings as promptly as feasible given its overall obligations and in light of its repayment plans made in light of managing its working capital. The Company is also in discussion with Well Thrive about possible debt equity swaps for the Loans following closing of the planned Merger with IXAQ.

NOTE 14 - Long-term Loan

The Company has a car loan credit line of NT$1,500,000 (approximately US$46,978 as of March 31, 2024 and US$48,988 as of December 31, 2023), which matures on May 21, 2024, from a Taiwan financing company with annual interest rate of 9.7%. The installment payment plan is 60 months to pay off the balance on the 21st of each month. As of September 30, 2024, the long-term loan has been paid off.

AERKOMM INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 15 - Convertible Long-term Bonds Payable and Restricted Cash

On December 3, 2020, the Company closed a private placement offering consisting of US$10,000,000 in aggregate principal amount of its Credit Enhanced Zero Coupon Convertible Bonds (the “Zero Coupon Bonds”) and US$200,000 in aggregate principal amount of its 7.5% convertible bonds (the “Coupon Bonds”), both due on December 2, 2025 (collectively the “Bonds”). Unless previously redeemed, converted or repurchased and cancelled, the Zero-Coupon Bonds will be redeemed on December 2, 2025 at 105.11% of their principal amount and the Coupon Bonds will be redeemed on December 2, 2025 at 100% of their principal amount plus any accrued and unpaid interest. The Coupon Bonds will bear interest from and including December 2, 2020 at the rate of 7.5% per annum. Interest on the Coupon Bonds is payable semi-annually in arrears on June 1 and December 1 each year, commencing on June 1, 2021.

The Company has the option to redeem the Bonds at a redemption amount equal to the Early Redemption Amount, as defined in the Offering Memorandum, at any time on or after December 2, 2023 and prior to the Maturity Date, if the Closing Price of the Company’s Common Stock listed on the Euronext Paris for 20 trading days in any period of 30 consecutive trading days, the last day of which occurs not more than fifteen trading days prior to the date on which notice of such redemption is given, is greater than 130% of the Conversion Price on each applicable trading day or (ii) in whole or in part of the Bonds on the second anniversary of the issue date or (iii) where 90% or more in principal amount of the Bonds issued have been redeemed, converted or repurchased and cancelled.

Unless previously redeemed, converted or repurchased and cancelled, the Bonds may be converted at any time on or after December 3, 2020 up to November 20, 2025 into shares of Common Stock of the Company with a par value of $0.001 each. The initial conversion price for the Bonds is $13.30 per share and is subject to adjustment in specified circumstances.

Holders of the Bonds may also require the Company to repurchase all or part of the Bonds on the third anniversary of the Issue Date, at the Early Redemption Amount. Unless the Bonds have been previously redeemed, converted or repurchased and cancelled, Holders of the Bonds will also have the right to require the Company to repurchase the Bonds for cash at the Early Redemption Amount if an event of delisting or a change of control occurs.

Pursuant to the agreements of Bonds, Bank of Panhsin Co., Ltd. (the “BG Bank”) committed to issue a bank guarantee for the benefit of the holders of the Bonds. The Bank Guarantee is intended to provide a source of funds for the principal, premium, interest (if any) and any other payment obligations of the Company which shall include the default interest under the Bonds upon the Company’s failure to pay amounts pursuant to the Indenture or upon the Bonds being declared due and payable on the occurrence of an Event of Default pursuant to this Indenture. In order to obtain the guarantee from BG Bank, the Company entered into a line of credit in the amount of $10,700,000 with BG Bank on December 1, 2020. The line of credit will be expired on December 2, 2025. The annual fee is based on 1% of the line of credit amount and due quarterly. The line of credit is guaranteed by one of the Company’s shareholders with his personal property, and the Company’s time deposit of $3,210,000 (the “Deposit”) at BG Bank and Ejectt stock 2,500,000 shares is pledged as ~~collateral~~ as ~~of September 30~~collateral, ~~2024,~~ and the Deposit was recorded as restricted cash.

Management has accounted for the convertible bonds by assuming that they will be repaid and redeemed at maturity; accordingly, the Company has included the redemption premium as part of the accretion tables and calculation of interest and issuance cost to be amortized over the life of the bond. Any value borne from the conversion feature of the bond and or issuance costs related to the origination and distribution of these bonds have been accounted for as debt discounts to be amortized using the effective interest method over the life of the bond.

On October 27, 2023, Citicorp International Limited, as Trustee with respect to the Bonds, submitted to the Company a request for redemption of the Bonds in full. AsDuring ofthe ~~September~~year 30ended December 31, 2024, the ~~Company~~entire ~~had~~balance ~~repaid~~of $8Zero Coupon Bond was tendered for redemption. Therefore,~~062,247~~ ~~out~~the related conversion feature was paused and forfeited until the payment of athe ~~total~~redemption is fully settled or upon the expiration of the agreement, while the amount owed to the Zero Coupon Bond holder is reclassified as an ordinary short-term loan, and continued to accrued interest until full repayment. As of March 31, 2025 and December 31, 2024, the Company had repaid $108,~~358~~330,~~024~~160 of principal and interest due on the Bonds as of that date. We expect to repay the remaining balance of the amount of $2,~~391~~178,~~092~~324 owed on the bonds, plus any additional accrued interest, within the next few months.

25As of March 31, 2025 and December 31, 2024, the long-term bonds payable consisted of the following:

AERKOMM INC. AND SUBSIDIARIES

	March 31, 2025		December 31, 2024
	(Unaudited)
Current:
Zero Coupon Bonds*	$	-	$	-
Coupon Bond	$	200,000	$	200,000

~~Notes to~~* ~~Unaudited~~The ~~Condensed~~Zero ~~Consolidated~~Coupon ~~Financial~~Bonds ~~Statements~~net carrying value are calculated as following:

NOTE 15 - Convertible Long-term Bonds Payable and Restricted Cash - Continued

	Net Carrying Value
Balance as of January 1, 2024		10,303,775
Repayment		(8,330,160	)
Accrued interest		204,709
Tender for redemption		(2,178,324	)
Balance as of December 31, 2024 and March 31, 2025 (Unaudited)	$	-

~~As of~~The ~~September~~Company ~~30,~~has ~~2024~~been ~~and~~charged with 5% default interest since December 314, 2023,. ~~the~~The ~~long-term~~total ~~bonds~~default interest payable ~~consisted~~as of ~~the~~March ~~following:~~31, 2025 and December 31, 2024, were $163,526 and $131,957, respectively.

	September 30, 2024		December 31, 2023
	(Unaudited)		As restated
Current:
Early redemption convertible bonds payable- default	$	2,287,349	$	10,303,775
Non-current:
Coupon Bond	$	200,000	$	200,000

The Company has been charged with 5% default interest since December 4, 2023. The total default interest payable as of September 30, 2024 and December 31, 2023, were $103,743 and $40,070, respectively.

NOTE 16 - Convertible Long-term Notes Payable

On December 7, 2022, Aerkomm Inc. (the “Company”) entered into an investment conversion and note purchase agreement (the “Agreement”) with World Praise Limited, a Samoa registered company (“WPL”). Pursuant to the terms of this Agreement, (i) a subscription for the common stock of the Company in the amount of $3,175,200, which was entered into between WPL and the Company on June 28, 2022 and funded (the “June Subscription”), (ii) a subscription for the common stock of the Company in the amount of $5,674,000, which was entered into between WPL and the Company on September 15, 2022 and funded (the “September Subscription”), and (iii) a subscription for the capital stock of MEPA Labs, Inc. (“MEPA”), a wholly owned subsidiary of the Company, in the amount of $4,324,000, which was entered into between MEPA and the Company on June 28, 2022 and funded (the “MEPA Subscription,” and together with the June Subscription and the September Subscription, the “WPL Subscriptions”), the WPL Subscriptions in the aggregate totaling $13,173,200, were converted into loans to the Company evidenced by that certain convertible bond of the Company in favor of WPL and dated December 7, 2022 (the “Convertible Bond”)

In addition, and as indicated in the Agreement, WPL agreed to lend an additional $10,000,000 to the Company under the Convertible Note (the “New Loan”) and to cap the aggregate amount of loans to the Company under the Convertible Note, including the New Loan, the WPL Subscriptions and any future advances under the Convertible Note, at $30,000,000.23

~~The~~In ~~Convertible~~addition, ~~Note~~and ~~allows~~as ~~for~~indicated ~~loans to~~in the ~~Company~~Agreement, WPL upagreed to lend an ~~aggregate~~additional ~~principal amount of~~ $3010,000,000 ~~and~~to ~~acknowledges~~the anCompany ~~aggregate principal amount of $23,173,200 in loans~~ under the Convertible Note ~~outstanding~~(the as“New ofLoan”) ~~September 30, 2024~~ and ~~December~~to ~~31,~~cap ~~2023.~~the ~~The Convertible Note carries an annual interest~~aggregate ~~rate~~amount of ~~four~~loans ~~percent~~to ~~(4%) which is due and payable, along with~~ the ~~then~~Company ~~principal~~under ~~amount outstanding, on~~ the Convertible Note ~~maturity date~~, ~~December~~including 7,the ~~2024.~~New ~~The~~Loan, ~~Convertible~~the ~~Note~~WPL isSubscriptions ~~pre-payable~~and ~~in whole or in part at~~ any ~~time~~future ~~without~~advances ~~penalty, on five days’ prior~~under ~~written notice to WPL. In~~ the ~~event of a change of control of the Company (as that term is defined in the~~ Convertible Note), ~~the~~at ~~Convertible Note shall become immediately payable in full. The Convertible Note along with accrued interest~~ $~~1,693,759 as of September~~ 30, ~~2024~~000,000. ~~is convertible~~The inloan ~~whole~~matures oron insecond ~~part~~anniversary ~~by WPL at any time into shares~~ of ~~common stock of~~ the ~~Company~~date ~~at a conversion price~~ of ~~$6.00~~this ~~per~~convertible ~~share~~note.

26The Convertible Note allows for loans to the Company up to an aggregate principal amount of $30,000,000 and acknowledges an aggregate principal amount of $23,173,200 in loans under the Convertible Note outstanding as of March 31, 2025 and December 31, 2024. The Convertible Note carries an annual interest rate of four percent (4%) which was due and payable, along with the then principal amount outstanding, on the Convertible Note maturity date, December 7, 2024. The Convertible Note is pre-payable in whole or in part at any time without penalty, on five days’ prior written notice to WPL. In the event of a change of control of the Company (as that term is defined in the Convertible Note), the Convertible Note shall become immediately payable in full. The Convertible Note along with accrued interest of $2,162,373 as of March 31, 2025, is convertible in whole or in part by WPL at any time into shares of common stock of the Company at a conversion price of $6.00 per share.

~~AERKOMM INC.~~NOTE ~~AND~~17 ~~SUBSIDIARIES~~- SAFE Liabilities

~~Notes~~In June and November, 2024, the Company entered tointo ~~Unaudited~~four ~~Condensed~~Simple ~~Consolidated~~Agreement ~~Financial~~for ~~Statements~~Future Equity (“SAFE”) agreements with Hsiao Chia-Sung, Liu Ya Ting, Luk Fook Securities (HK) Ltd., and G-Tech Optoelectronics Corp. for a total of $4,997,200. The SAFE Agreements convert upon closing of the merger at $11.50 (“redemption price”) per share of common stock of IXAQ and the SAFE investors are eligible for additional incentive shares that will be issued by the merged company if following performance metrics are met in the five years following the closing of the Merger.

~~NOTE~~Under each SAFE, if the Merger has not occurred 17within two years from the issuance date of the SAFE, then upon a vote of a majority (based on the face amounts of the SAFEs) of the holders of SAFEs, the SAFEs will convert into equity of the Company at a price of $5.00 per share. If the Company experiences a dissolution event before conversion of the SAFEs, the holders of SAFEs will be treated like holders of standard non-participating ~~Contract~~preferred ~~Liability~~stock.

On As of March 931, ~~2015~~2025 and December 31, 2024, based on the ~~Company~~Fair ~~entered~~Value ~~into~~Analysis aof ~~10-year~~SAFE ~~purchase~~prepared ~~agreement~~by ~~with~~an ~~Klingon~~independent ~~Aerospace~~valuation specialist, ~~Inc.~~the ~~(“Klingon”),~~fair ~~which~~value ~~was formerly~~of ~~named~~the asSAFEs ~~Luxe~~was ~~Electronic~~estimated ~~Co.~~at $5,460,000 and ~~Ltd~~$5,410,000, respectively. InThe ~~accordance~~valuation ~~with~~was ~~the~~determined ~~terms~~using ofa ~~this~~Monte ~~agreement,~~Carlo ~~Klingon~~simulation ~~agreed~~reflecting toa ~~purchase~~probability-weighted ~~from~~outcome ~~the Company~~of anmultiple ~~initial~~scenarios, ~~order~~including ofequity ~~onboard~~financing, ~~equipment~~optional ~~comprising~~conversion, anand ~~onboard~~dissolution. ~~system~~Key ~~for~~assumptions aused ~~purchase~~in ~~price~~the simulation as of ~~$909~~March 31,~~000,~~2025 ~~with~~and ~~payments~~December to31, be2024, ~~made~~included inan ~~accordance with~~IXAQ astock ~~specific~~price ~~milestones~~of ~~schedule~~$11.86 Asand of$11.55, ~~September 30~~respectively, ~~2024~~a ~~and~~risk-free ~~December~~rate 31of 4.01% and 4.43%, ~~2023~~respectively, and ~~the~~an annualized volatility of 48.1%. The Company has received aggregate proceeds of $~~762~~4,~~000~~997,200 from ~~Klingon~~SAFE inholders ~~milestone payments~~on ~~towards~~ the ~~equipment~~respective ~~purchase price~~issuance dates. AsThe ofresulting ~~September~~change ~~30,~~in ~~2024,~~fair ~~Aerkomm~~value isof ~~talking about~~ the ~~renewal~~derivative ofliability ~~this~~recognized ~~project~~for ~~and~~the ~~has reclassified~~three itmonths asended ~~short-term~~March ~~prepayment~~31, at2025, ~~this~~was ~~time~~$50,000.

NOTE 18 - ~~Income~~Contract ~~Taxes~~ Liability

~~Income~~On ~~tax~~March ~~expense~~9, ~~for~~2015, the ~~nine~~Company ~~months~~entered into a 10-year purchase agreement ~~periods~~with ~~ended~~Klingon ~~September~~Aerospace, 30Inc. (“Klingon”), ~~2024~~which was formerly named as Luxe Electronic Co., Ltd. In accordance with the terms of this agreement, Klingon agreed to purchase from the Company an initial order of onboard equipment comprising an onboard system for a purchase price of $909,000, with payments to be made in accordance with a specific milestones schedule. As of March 31, 2025 and ~~2023~~December 31, ~~consisted~~2024, the Company received $762,000 from Klingon in milestone payments towards the equipment purchase price. As of March 31, 2025, Aerkomm is in discussion about the ~~following:~~renewal of this project and has reclassified it as contract liability at this time. The project remains ongoing, and since the related performance obligations have not yet been fully satisfied, the balance continues to be classified as a contract liability until Klingon’s acceptance.

	Three Months Ended September 30,				Nine months Ended September 30,
	2024		2023		2024		2023
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Current:
Federal	$	-	$	-	$		$	-
State		-		-		2,400		2,400
Foreign		-		-		-		-
Total	$	-	$	-	$	2,400	$	2,400

~~The~~NOTE ~~following~~19 ~~table~~- ~~presents~~Income ~~a reconciliation of the Company’s income tax at statutory tax rate and income tax at effective tax rate for the nine months periods ended September 30, 2024 and 2023.~~Taxes

	Three Months Ended September 30,						Nine months Ended September 30,
	2024			2023			2024			2023
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Tax benefit at statutory rate	$	(741,700	)	$	(702,089	)	$	(3,530,085	)	$	(2,409,671	)
Net operating loss carryforwards (NOLs)		466,842			747,003			1,842,994			2,306,417
Foreign investment losses (gains)		30,484			(497,670	)		305,321			(341,500	)
Stock-based compensation expense		127,000			139,800			976,300			179,500
Amortization expense		(48,000	)		65,500			20,400			151,200
Accrued payroll		79,700			99,700			193,400			214,000
Unrealized exchange losses (gains)		(926	)		144,156			97,770			(92,846	)
Others		86,600			3,600			96,300			(4,700	)
Tax expense at effective tax rate	$	-		$	-		$	2,400		$	2,400

Income tax expense for the three months ended March 31, 2025 and 2024 consisted of the following:

	For the Three Months Ended March 31,
	2025		2024
	(Unaudited)		(Unaudited)
Current:
Federal	$	-	$	-
State		-		2,400
Total	$	-	$	2,400

~~AERKOMM~~Deferred ~~INC.~~tax ~~AND~~assets ~~SUBSIDIARIES~~(liability) as of March 31, 2025 and December 31, 2024 consist approximately of:

Notes to Unaudited Condensed Consolidated Financial Statements

	March 31, 2025			December 31, 2024
	(Unaudited)
Net operating loss carryforwards (NOLs)	$	17,871,000		$	17,047,000
Stock-based compensation expense		5,186,000			5,021,000
Accrued expenses and unpaid expenses payable		1,454,000			1,416,000
Tax credit carryforwards		68,000			68,000
Unrealized exchange losses (gain)		-			(358,000	)
Excess of tax amortization over book amortization		(76,000	)		(112,000	)
Others		(75,000	)		(48,000	)
Gross		24,428,000			23,034,000
Valuation allowance		(24,428,000	)		(23,034,000	)
Net	$	-		$	-

~~NOTE~~Management 18does -not ~~Income~~believe ~~Taxes~~the -deferred ~~Continued~~tax assets will be utilized in the near future; therefore, a full valuation allowance is provided. The net change in deferred tax assets valuation allowance was an increase of approximately $1.4 million for the three months ended March 31, 2025.

~~Deferred~~As ~~tax~~of ~~assets~~March ~~(liability)~~31, as2025 and December 31, 2024, the Company had federal NOLs of approximately $8.2 million available to reduce future federal taxable income, expiring in 2037, and additional ~~September~~federal 30NOLs of approximately $41.5 million and $33.3 million, ~~2024~~respectively, were generated and will be carried forward indefinitely to reduce future federal taxable income. As of March 31, 2025 and December 31, ~~2023~~2024, ~~consist~~the ~~approximately~~Company had State NOLs of: approximately $30.4 million, available to reduce future state taxable income, expiring in 2042.

	September 30, 2024			December 31, 2023
	(Unaudited)			As restated
Net operating loss carryforwards (NOLs)	$	18,356,000		$	14,831,000
Stock-based compensation expense		4,804,000			3,502,000
Accrued expenses and unpaid expenses payable		1,273,000			889,000
Tax credit carryforwards		68,000			68,000
Unrealized exchange losses (gain)		62,000			20,000
Excess of tax amortization over book amortization		(146,000	)		(285,000	)
Others		(134,000	)		27,000
Gross		24,283,000			19,052,000
Valuation allowance		(24,283,000	)		(19,052,000	)
Net	$	-		$	-

As of March 31, 2025 and December 31, 2024, the Company has Japan NOLs of approximately $0.4 million and $1.1 million, respectively, available to reduce future Japan taxable income, expiring in 2031.

~~Management does~~As ~~not~~of ~~believe~~March ~~the~~31, ~~deferred~~2025 ~~tax~~and ~~assets~~December ~~will~~31, be2024, ~~utilized in~~ the Company ~~near~~has ~~future;~~Taiwan ~~therefore,~~NOLs aof ~~full~~approximately ~~valuation~~$3.8 ~~allowance~~million isand ~~provided~~$4.5 ~~The net~~million, ~~change~~respectively, inavailable ~~deferred~~to ~~tax~~reduce ~~assets~~future ~~valuation~~Taiwan ~~allowance~~taxable ~~was an increase of approximately $5~~income,~~231,000 for~~ ~~the~~expiring ~~nine~~in ~~months ended September 30, 2024~~2031.

As of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, the Company had ~~federal NOLs of~~ approximately $837,~~243,~~000 ~~available~~of ~~to reduce future~~ federal ~~taxable~~research ~~income, expiring in 2037,~~ and ~~additional~~development ~~federal~~tax ~~NOLs of approximately $36~~credit,~~703,000~~ ~~and~~available ~~$30,009,000,~~to ~~respectively,~~offset ~~were~~future ~~generated~~federal ~~and~~income ~~will~~tax. beThe ~~carried forward indefinitely~~credit begins to ~~reduce~~expire ~~future~~in ~~federal~~2034 ~~taxable~~if ~~income~~not utilized. As of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, the Company had ~~State NOLs of~~ approximately $3539,~~643,~~000 of California state research and ~~$46,427,000~~development ~~respectively,~~tax credit available to ~~reduce~~offset future California state ~~taxable~~ income, ~~expiring~~tax. inThe ~~2042~~credit can be carried forward indefinitely.

As of September 30, 2024 and December 31, 2023, the Company has Japan NOLs of approximately $299,000 and $260,000, respectively, available to reduce future Japan taxable income, expiring in 2031.

As of September 30, 2024 and December 31, 2023, the Company has Taiwan NOLs of approximately 6,185,000 and $6,173,000, respectively, available to reduce future Taiwan taxable income, expiring in 2031.

As of September 30, 2024 and December 31, 2023, the Company had approximately $37,000 and $37,000 of federal research and development tax credit, available to offset future federal income tax. The credit begins to expire in 2034 if not utilized. As of September 30, 2024 and December 31, 2023, the Company had approximately $39,000 and $39,000 of California state research and development tax credit available to offset future California state income tax. The credit can be carried forward indefinitely.

The Company’s ability to utilize its federal and state NOLs to offset future income taxes is subject to restrictions resulting from its prior change in ownership as defined by Internal Revenue Code Section 382. The Company does not expect to incur the limitation on NOLs utilization in future annual usage.

2825

~~AERKOMM INC.~~NOTE ~~AND~~20 ~~SUBSIDIARIES~~- Capital Stock

~~Notes to~~(1) ~~Unaudited~~Preferred ~~Condensed Consolidated Financial Statements~~Stock:

~~NOTE~~The Company is authorized to issue 50,000,000 19shares -of ~~Capital~~preferred ~~Stock~~stock, with par value of $0.001. As of March 31, 2025 and December 31, 2024, there were no preferred stock shares outstanding. The Board of Directors has the authority to issue preferred stock in one or more series, and in connection with the creation of any such series, by resolutions providing for the issuance of the shares thereof, to determine dividends, voting rights, conversion rights, redemption privileges and liquidation preferences.

1(2) ~~Preferred~~Common Stock:

The Company is authorized to issue 5090,000,000 shares of ~~preferred~~common stock, ~~with~~as ~~par value~~ of ~~$0.001.~~March ~~As of September 30~~31, ~~2024~~2025 and December 31, ~~2023, there were no preferred stock shares outstanding~~2024. The Board of Directors has the authority to issue preferred stock in one or more series, and in connection with the creation of any such series, by resolutions providing for the issuance of the shares thereof, to determine dividends, voting rights, conversion rights, redemption privileges and liquidation preferences.

2) Common Stock:

	March 31, 2025		December 31, 2024
	(Unaudited)
Restricted stock – vested		5,133,696		5,133,696
Total restricted stock		5,133,696		5,133,696

The Company is authorized to issue 90,000,000 shares of common stock as of September 30, 2024 and December 31, 2023.

	September 30, 2024		December 31, 2023
	(Unaudited)
Restricted stock - vested		1,802,373		1,802,373
Restricted stock - unvested		149,162		149,162
Total restricted stock		1,951,535		1,951,535

The unvested shares of restricted stock were recorded under a deposit liability account awaiting future conversion to common stock when they become vested.

On June 16, 2022, the Company issued 4,114 shares of common stock to Bevilaqua PLLC for the legal services rendered.

On September 28, 2023, the Company issued 7,000,448 shares of common stock to Kevin Wong to acquire Mixnet Technology Limited and its subsidiary (Mixnet).

On December 13, 2023, two new subscribers subscribed for 834,000 shares of common stock of the Company, for a capital injection of $5,004,000 and for which the shares were issued to the two new shareholders in March 2024.

On February 2, 2024, the Company issued 175,000 shares of common stock to one new subscriber for a total of $1,050,000 capital injection.

On March 8, 2024, the Company issued 84,000 shares of common stock to one new subscriber for a total of $504,000 capital injection.

On April 24, 2024, the Company issued 390,000 shares of common stock to one new subscriber for a total of $2,340,000 capital injection.

3)In ~~Stock~~March ~~Warrant:~~2025, the Company issued an aggregate of 109,280 shares of its common stock to new shareholders in connection with the share subscription proceeds of $527,782 received from April to May 2024.

In March 2025, the Company issued an aggregate of 1,176,956 shares of its common stock to employees in connection with the exercise of stock options. These issuances were made pursuant to the accelerated vesting and exercise provisions agreed to by the employees in exchange for waiving their rights to receive an aggregate of approximately $3.1 million in unpaid salaries.

On June 6, 2017, the Company issued 149,162 shares of common stock to Jeffrey Wun, the Company’s Chief Technology Officer, pursuant to a service agreement. The shares were subject to a performance-based vesting condition and were classified as restricted stock until the fulfillment of the specified condition. The shares were not considered outstanding until the vesting condition was met. On December 3, 2024, the performance condition was satisfied upon the occurrence of a specified triggering event, and the shares fully vested on that date.

(3)

Stock Warrant

On October 31, 2021, following approval by the Board of Directors, the Company issued a warrant to Mr. Sheng-Chun Chang for the purchase of up to 751,879 shares of the Company’s common stock, exercisable at a price of $2.60 per share, the closing price of the common stock on the OTC Markets, Inc. QX tier on October 21, 2021. The issuance of the warrant is (i) in recognition of Mr. Chang’s support of the Company through his previous personal guarantee of the Company’s $10,000,000 line of credit with the Panhsin Bank (the “Bank”) in relation to the private placement offering of $10,000,000 credit enhanced zero coupon convertible bonds and (ii) in exchange for Mr. Chang’s agreement to renew his guarantee with the Bank for so long as the guarantee would be required by the Bank. The warrant will vest 20% on issuance. On each anniversary of the issue date, beginning with December 3, 2021 and ending with December 3, 2025, the warrant will vest with respect to 20% of the number of shares of the Company’s common stock issuable upon conversion of the principal amount of the credit enhanced bonds still required to be guaranteed by the Panhsin Bank.

For the year ended December 31, 2022, the Company recorded an increase of $1,252,029 in additional paid-in capital as adjustment for the issuance costs of these stock warrants.

2926

~~AERKOMM INC.~~NOTE ~~AND~~21 ~~SUBSIDIARIES~~- Significant Related Party Transactions

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 20 - Significant Related Party Transactions

In addition to the information disclosed in other notes, the Company has significant related party transactions as follows:

Name of related parties and relationships with the Company:

Related Party		Relationship
Well Thrive Limited (“WTL”)		Major stockholder
Ejectt Inc. (“Ejectt”)		Stockholder; Albert Hsu, a Director of Aerkomm, is the Chairman
STAR JEC INC. (“StarJec”)		Stockholder; Albert Hsu, a Director of Aerkomm, is the Chairman
AA Twin Associates Ltd. (“AATWIN”)		Georges Caldironi, COO of Aerkomm, is sole owner
EESquare Japan (“EESquare JP”)		Yih Lieh (Giretsu) Shih, President Aircom Japan, is the Director
Kevin Wong		Stockholder of Mixnet

Significant related party transactions:

The Company has extensive transactions with its related parties. It is possible that the terms of these transactions are ~~not~~different ~~the~~from ~~same as~~ those which would result from transactions among wholly unrelated parties.

a. As of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024:

	September 30, 2024		December 31, 2023
	March 31, 2025		December 31, 2024
	(Unaudited)		~~As restated~~
Other receivable from:
- Loan:
EESquare JP 1	$	~~173~~78,~~124~~719	$	~~154~~196,~~698~~988
WTL4		3,~~693~~946,~~935~~077		13,~~936~~879,~~587~~683
- Others:
EESquare JP 1		1820,~~848~~013		19,~~160~~063
Ejectt3		~~569~~544		~~15,983~~518
Kevin Wong6		1436,~~518~~859		-37,288
Others7		1227,~~140~~102		21,~~073~~971
Total	$	34,~~913~~109,~~134~~314	$	24,~~147~~155,~~501~~511
Prepaid expenses to Ejectt3	$	2736,~~083,650~~027	$	2,~~076~~146,~~138~~807
Prepayment from Ejectt3	$	65,~~607~~470,~~717~~435		65,~~534~~323,~~908~~044
Other payable to:
AATWIN5	$	~~19,047~~-	$	19,047
Interest payable to WTL4		5754,~~101~~451		5955,~~021~~116
StarJec2		109,884		111,702
Ejectt3		342,028		353,004
Kevin Wong6		173,839		75,327
StarJec2		84,151		100,025
Others7		471,058		461,705
Kevin Wong6		182,947		172,675
Total	$	830,929	$	726,802
Others7		574,908		468,730
Total	$	1,238,485	$	1,168,597

Aircom Japan entered into a sublease agreement with EESquare JP for the period between March 5, 2019 and March 4, 2023 and extended another 2 years to March 4, 2025. Pursuant to the terms of this lease agreement, EESquare JP pays Aircom Japan a rental fee of approximately $662 per month as of September 30, 2024. $173,124 represents other receivable loans from EESquare JP as of September 30, 2024. These loans are interest free and have no maturity dates.

Aircom Japan entered into a housing service order on December 14, 2021 and a satellite service order on January 22, 2022 for one year period till January 21, 2023. On June 20, 2022, Aircom Japan also entered a teleport service order with StarJec for a half year period from June 1, 2022 to January 14, 2023. The amount represents receivable from StarJec for monthly service provided due to the service agreements. The monthly service charge is approximately ￥6,820,000 (approximately $51,800 as of December 31, 2022). Other payable represents deposits should be returned to Ejectt after service contracts ended as of September 30, 2024.

Aircom Japan entered into a sublease agreement with EESquare JP for the period between March 5, 2019 and March 4, 2023 and extended another 2 years to March 4, 2025. Pursuant to the terms of this lease agreement, EESquare JP pays Aircom Japan a rental fee of approximately $662 per month as of March 31, 2025. $78,719 represents other receivable loans from EESquare JP as of March 31, 2025. These loans are interest free and have no maturity dates.

3027

~~AERKOMM INC~~2. ~~AND~~Aircom ~~SUBSIDIARIES~~Japan entered into a housing service order on December 14, 2021 and a satellite service order on January 22, 2022 for one year period till January 21, 2023. On June 20, 2022, Aircom Japan also entered a teleport service order with StarJec for a half year period from June 1, 2022 to January 14, 2023. The amount represents receivable from StarJec for monthly service provided due to the service agreements. The monthly service charge is approximately ￥6,820,000 (approximately $51,800 as of December 31, 2022). Other payable represents deposits should be returned to Ejectt after service contracts ended as of March 31, 2025.

~~Notes~~ 3. Represents prepayment paid by Ejectt to ~~Unaudited~~order ~~Condensed~~6 ~~Consolidated~~sets ~~Financial~~of ~~Statements~~antennas from Aircom Telecom with prepayment of $2,144,595 as of December 31, 2024 and $2,144,595 as of March 31, 2025. As of June 17, 2023, Aerkomm Taiwan entered into an agreement with Ejectt to appoints Ejectt as its exclusive sales agent in Taiwan with NTD 20,000,000 security deposit (approximately $609,942 as of December 31, 2024 and $602,591 as of March 31, 2025). In 4th quarter of 2023, Ejectt also entered into 3 orders with Aerkomm Japan to purchase 5 sets of equipment with approximately $4,330,592 as of December 31, 2023 and $3,877,912 as of December 31, 2024. Besides, 6 months service ordered in October 2023 for NTD 5,333,333 (approximately $174,178 as of December 31, 2023 and $168,510 as of December 31, 2024) with the Company. The number also includes the equipment purchased with Aerkomm for about $133,722 in October, 2023. The prepaid expenses of $2,076,138 as of December 31, 2023 and $2,146,807 as of December 31, 2024 which represents 3 new agreements signed with AKOM different entities for AirCinema Cube orders in year 2023.

~~NOTE 20~~4. -The ~~Significant~~Company ~~Related~~had ~~Party~~loans ~~Transactions~~from Well Thrive Limited (“WTL”) and paid off during 2023. The Company has interest payable balance of $54,451 as of March 31, 2025 and $55,116 as of December 31, 2024 (approximately NTD 1,807,000) from the past loans. The Company has other receivable of $3,946,077 and $3,879,683 from WTL due to operational needs as of March 31, 2025 and December 31, 2024. These other receivable loans do not have any stated interest rates or maturity dates. 5. Represents payable to AATWIN due to consulting agreement on January 1, 2019. The monthly consulting fee is €15,120 (approximately $17,000) and expired on December 31, 2021. 6. Represents long-term ~~Continued~~loan that Mixnet borrowed from its stockholder for business operating needs for $182,947 (approximately NTD 6,072,000) as of March 31, 2025 and $172,675 (approximately NTD 5,322,000) as of December 31, 2024. 7. Represents receivable/payable from/to management levels as a result of regular operating activities.

3b. ~~Represents~~For ~~prepayment~~the ~~paid~~three by Ejectt to order [6] sets of antennas from Aircom Telecom with prepayment of $1,243,247 as of December 31, 2023 and $1,202,788 as of September 30, 2024. As of June 17, 2023, Aerkomm Taiwan entered into an agreement with Ejectt to appoints Ejectt as its exclusive sales agent in Taiwan with NTD 20,000,000 security deposit (approximately $653,168 as of December 31, 2023 and $631,912 as of September 30, 2024). In 4th quarter of 2023, Ejectt also entered into 3 orders with Aerkomm Japan to purchase 5 sets of equipment with approximately $4,330,592 as of December 31, 2023 and $4,423,852 as of September 30, 2024. Besides, 6 months ~~service~~ended ~~ordered~~March ~~in October 2023 for NTD 5,333,333 (approximately $174,178 as of December~~ 31, ~~2023~~2025 and ~~$168,510 as of September 30,~~ 2024) with the Company. The number also includes the equipment purchased with Aerkomm for about $133,722 in October, 2023. The prepaid expenses of $2,076,138 as of December 31, 2023 and $2,083,650 as of September 30, 2024 which represents 3 new agreements signed with AKOM different entities for AirCinema Cube orders in year 2023.

4. The Company had loans from Well Thrive Limited (“WTL”) and paid off during 2023. The Company has interest payable balance of $59,021 as of December 31, 2023 and $57,101 as of September 30, 2024 (approximately NTD 1,807,000) from the past loans. The Company has other receivable of $3,693,935 and $1,936,587 from WTL due to operational needs as of September 30, 2024 and December 31, 2023. These other receivable loans do not have any stated interest rates or maturity dates. 5. Represents payable to AATWIN due to consulting agreement on January 1, 2019. The monthly consulting fee is €15,120 (approximately $17,000) and was expired on December 31, 2021. 6. Represents long-term loan that Mixnet borrowed from its stockholder for business operating needs for $75,326 (approximately NTD 2,306,000) as of December 31, 2023 and $173,839 (approximately NTD) as of September 30, 2024. 7. Represents receivable/payable from/to management levels as a result of regular operating activities.

	For the Three Months Ended March 31,
	2025		2024
	(Unaudited)		(Unaudited)
Purchase from Ejectt¹	$	-	$	53,255
Rental income charged from EESquare JP⁵		1,969		2,019

b. For the nine months periods ended September 30, 2024 and 2023:

1.	Represents 2 sets of antennas sold to Ejectt on January 30, 2023 and service income and handling fee charged to Ejectt for consultant service provided in 2023 per the exclusive agent agreement signed as of June 17, 2023.

2.	Aircom Japan entered into a sublease agreement with EESquare JP for the period between March 5, 2019 and March 4, 2023 and it has been renewed to March 4, 2025. Pursuant to the terms of this lease agreement, EESquare JP pays Aircom Japan a rental fee of approximately $710 (JPY 100,000) per month.

	Nine Months Ended September 30,
	2024		2023
	(Unaudited)		(Unaudited)
Sales to Ejectt1	$	53,255	$	446,367
Service income from Ejectt1		-		98,395
Service income from Star Jec4		-		2,805
Rental income from EESqaure JP 2		5,954		6,519
Rental income from WTL3		-		10,865

1.NOTE ~~Represents~~22 2- ~~sets~~Stock ofBased antennas sold to Ejectt on January 30, 2023 and antenna related equipment and testing support sold to Ejectt in 2024 Q1. Service income charged to Ejectt for consultant service provided in Q3, 2023 per the exclusive agent agreement signed as of June 17, 2023.Compensation

2. Aircom Japan entered into a sublease agreement with EESquare JP for the period between March 5, 2021 and March 4, 2023. Pursuant to the terms of this lease agreement, EESquare JP pays Aircom Japan a rental fee of approximately $662 per month in 2024 Q3. 3. Aerkomm Japan has other income of $10,865, other product sale to WTL, in August 2023 in associated with selling antenna. 4. On December 14, 2021, Aerkomm Japan and Star Jet, a Taiwan limited liability company, signed a Housing Service Order. Further on January 22, 2022, Aerkomm Japan and Star Jet signed a Satellite Service Order. Under the two orders, Aerkomm Japan agreed to provide satellite services and housing services to Star Jec.

NOTE 21 - Stock Based Compensation

In March 2014, Aircom’s Board of Directors adopted the 2014 Stock Option Plan (the “Aircom 2014 Plan”). The Aircom 2014 Plan provided for the granting of incentive stock options and non-statutory stock options to employees, consultants and outside directors of Aircom. On February 13, 2017, pursuant to the Exchange Agreement, Aerkomm assumed the options of Aircom 2014 Plan and agreed to issue options for an aggregate of 1,088,882 shares to Aircom’s stock option holders.

One-third of stock option shares will be vested as of the first anniversary of the time the option shares are granted or the employee’s acceptance to serve the Company, and 1/36th of the shares will be vested each month thereafter. Option price is determined by the Board of Directors. The Aircom 2014 Plan became effective upon its adoption by the Board and shall continue in effect for a term of 10 years unless sooner terminated under the terms of Aircom 2014 Plan.

AERKOMM INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 21 - Stock Based Compensation - Continued

On May 5, 2017, the Board of Directors of Aerkomm adopted the Aerkomm Inc. 2017 Equity Incentive Plan (the “Aerkomm 2017 Plan” and together with the Aircom 2014 Plan, the “Plans”) and the reservation of 1,000,000 shares of common stock for issuance under the Aerkomm 2017 Plan. The Aerkomm 2017 Plan has been adopted by the Board and shall continue in effect for a term of 10 years unless sooner terminated under the terms. On June 23, 2017, the Board of Directors voted to increase the number of shares of common stock reserved for issuance under the Aerkomm 2017 Plan to 2,000,000 shares. The Aerkomm 2017 Plan provides for the granting of incentive stock options and non-statutory stock options to employees, consultants and outside directors of the Company, as determined by the Compensation Committee of the Board of Directors (or, prior to the establishment of the Compensation Committee on January 23, 2018, the Board of Directors). The Aerkomm 2017 Plan was approved by the Company’s stockholders on March 28, 2018. On October 21, 2021, the Board of Directors voted to increase the number of shares of common stock reserved for issuance under the Aerkomm 2017 Plan to 2,400,000 shares.

On June 23, 2017, the Board of Directors agreed to issue options for an aggregate of 291,000 shares under the Aerkomm 2017 Plan to certain officers and directors of the Company. The option agreements are classified into three types of vesting schedule, which includes, 1) 1/6 of the shares subject to the option shall be vested commencing on the vesting start date and the remaining shares shall be vested at the rate of 1/60 for the next 60 months on the same day of the month as the vesting start date; 2) 1/4 of the shares subject to the option shall be vested commencing on the vesting start date and the remaining shares shall be vested at the rate of 1/36 for the next 36 months on the same day of the month as the vesting start date; 3) 1/3 of the shares subject to the option shall be vested commencing on the first anniversary of vesting start date and the remaining shares shall vest at the rate of 50% each year for the next two years on the same day of the month as the vesting start date.

On July 31, 2017, the Board of Directors approved to issue options for an aggregate of 109,000 shares under the Aerkomm 2017 Plan to 11 of its employees. One third (1/3) of these shares subject to the option shall vest commencing on the first anniversary of vesting start date and the remaining shares shall vest at the rate of 50% each year for the next two years on the same day of the month as the vesting start date.

On December 29, 2017, the Board of Directors approved to issue options for an aggregate of 12,000 shares under the Aerkomm 2017 Plan to three of the Company’s independent directors, 4,000 shares each. All of these options were vested immediately upon issuance.

On June 19, 2018, the Compensation Committee approved to issue options for 32,000 and 30,000 shares under the Aerkomm 2017 Plan to two of the Company executives. One-fourth of the 32,000 shares subject to the option shall vest on May 1, 2019, 2020, 2021 and 2022, respectively. One-third of the 30,000 shares subject to the option shall vest on May 29, 2019, 2020 and 2021, respectively.

On September 16, 2018, the Compensation Committee approved to issue options for 4,000 shares under the Aerkomm 2017 Plan to one of the Company’s independent directors. These options shall be vested immediately.

On December 29, 2018, the Compensation Committee approved to issue options for an aggregate of 12,000 shares under the Aerkomm 2017 Plan to three of the Company’s independent directors, 4,000 shares each. All of these options were vested immediately upon issuance.

On July 2, 2019, the Board of Directors approved the grant of options to purchase an aggregate of 339,000 shares under the Aerkomm 2017 Plan to 22 of its directors, officers and employees. 25% of the shares vested on the grant date, 25% of the shares vested on July 17, 2019, 25% of the shares shall be vested on the first anniversary of the grant date, and 25% of the shares will vest upon the second anniversary of the grant date.

On October 4, 2019, the Board of Directors approved the grant of options to purchase an aggregate of 85,400 shares under the Aerkomm 2017 Plan to three (3) of its employees. 25% of the shares are vested on the grant date, and 25% of the shares shall be vested on each of October 4, 2020, October 4, 2021 and October 4, 2022, respectively.

On December 29, 2019, the Board of Directors approved to issue options for an aggregate of 12,000 shares under the Aerkomm 2017 Plan to three of the Company’s independent directors, 4,000 shares each. All of these options shall be vested at the date of 1/12th each month for the next 12 months on the same day of December 2019.

On February 19, 2020, the Board of Directors approved to issue options for 2,000 shares under the Aerkomm 2017 Plan to one of the Company’s consultants for service provided in 2019. These options shall be vested immediately.

On September 17, 2020, the Board of Directors approved to issue options for 4,000 shares under the Aerkomm 2017 Plan to one of the Company’s independent directors. These options shall be vested at the date of 1/12th each month for the next 12 months on the same day of September 2020.

AERKOMM INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 21 - Stock Based Compensation - Continued

On December 11, 2020, the Board of Directors approved the grant of options to purchase an aggregate of 284,997 shares under the Aerkomm 2017 Plan to 37 of its directors, officers, employees and consultants. Shares shall be vested in full on the earlier of the filing date of the Company’s Form 10-K for the year ended December 31, 2020 or March 31, 2021.

On January 23, 2021, the Board of Directors approved to issue options for an aggregate of 12,000 shares under the Aerkomm 2017 Plan to three of the Company’s independent directors, 4,000 shares each. All of these options shall vest 1/12th each month for the next 12 months at the end of each month up to December 2021. On January 23, 2021, the Board of Directors approved to issue options for 2,000 shares under the Aerkomm 2017 Plan to one of the Company’s consultants for service provided in 2020. These options vested immediately.

On September 1, 2021, the Board of Directors approved to issue options for 18,750 shares under the Aerkomm 2017 Plan to one of the Company’s officers. These options shall be vested immediately.

On September 17, 2021, the Board of Directors approved to issue options for 4,000 shares under the Aerkomm 2017 Plan to one of the Company’s independent directors. These options shall be vested at the rate of 1/12th each month for the next 12 months on the same day of September 2021.

On October 21, 2021, the Board of Directors approved to issue options for 150,000 shares under the Aerkomm 2017 Plan to one of the Company’s officers. These options shall be vested immediately.

On December 1, 2021, the Board of Directors approved to issue options for 18,750 shares under the Aerkomm 2017 Plan to one of the Company’s officers. These options shall be vested immediately.

On December 29, 2021, the Board of Directors approved to issue options for an aggregate of 8,000 shares under the Aerkomm 2017 Plan to two of the Company’s independent directors, 4,000 shares each. All of these options shall be vested at the date of 1/12th each month for the next 12 months on the same day of December 2021.

On December 31, 2021, the Board of Directors approved to issue options for 2,000 shares under the Aerkomm 2017 Plan to one of the Company’s consultants for service provided in 2020. These options vested immediately.

On March 1, 2022, the Board of Directors approved to issue options for 18,750 shares under the Aerkomm 2017 Plan to one of the Company’s officers. These options shall be vested immediately.

On June 1, 2022, the Board of Directors approved to issue options for 18,750 and 75,000 shares under the Aerkomm 2017 Plan to two of the Company’s officers, respectfully. These options shall be vested immediately.

On September 1, 2022, the Board of Directors approved to issue options for 18,750 shares under the Aerkomm 2017 Plan to one of the Company’s officers. These options shall be vested immediately.

On September 17, 2022, the Board of Directors approved to issue options for 4,000 shares under the Aerkomm 2017 Plan to one of the Company’s independent directors. These options shall be vested at the rate of 1/12th each month for the next 12 months on the same day of September 2022.

On December 1, 2022, the Board of Directors approved to issue options for 18,750 shares under the Aerkomm 2017 Plan to one of the Company’s officers. These options shall be vested immediately.

On December 29, 2022, the Board of Directors approved to issue options for an aggregate of 8,000 shares under the Aerkomm 2017 Plan to two of the Company’s independent directors, 4,000 shares each. All of these options shall be vested at the date of 1/12th each month for the next 12 months on the same day of December 2022.

On March 1, 2023, the Board of Directors approved to issue options for 18,750 shares under the Aerkomm 2017 Plan to one of the Company’s officers. These options shall be vested immediately.

On May 5, 2023, the Board of Directors of Aerkomm adopted the Aerkomm Inc. 2023 Equity Incentive Plan (the “Aerkomm 2023 Plan” and together with the Aerkomm 2017 Plan, and Aircom 2014 Plan, the “Plans”) and the reservation of 3,683,929 shares of common stock for issuance under the Aerkomm 2023 Plan. The Aerkomm 2023 Plan has been adopted by the Board and shall continue in effect for a term of 10 years unless sooner terminated under the terms.

AERKOMM INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 21 - Stock Based Compensation - Continued

On June 1, 2023, the Board of Directors approved to issue options for 18,750 shares under the Aerkomm 2023 Plan to one of the Company’s officers. These options shall be vested immediately.

On June 13, 2023, the Board of Directors agreed to issue options for an aggregate 3,627,677 shares under the Aerkomm 2023 Plan to certain company’s employees. The shares subject to the option shall be vested commencing on the vesting start date and the remaining shares shall be vested at the rate of 1/48 for the next 48 months on the same day of the month as the vesting start date.

On September 1, 2023, the Board of Directors approved to issue options for 18,750 shares under the Aerkomm 2023 Plan to one of the Company’s officers. These options shall be vested immediately.

On December 1, 2023, the Board of Directors approved to issue options for 18,750 shares under the Aerkomm 2023 Plan to one of the Company’s officers. These options shall be vested immediately.

On March 1, 2024, the Board of Directors approved to issue options for 18,750 shares under the Aerkomm 2017 Plan to one of the Company’s officers. These options shall be vested immediately.

On March 4, 2024, the Board of Directors approved to issue options for 7,064 shares under the Aerkomm 2017 Plan to one of the Company’s consultants. These options shall be vested immediately.

On June 1, 2024, the Board of Directors approved to issue options for 18,750 shares under the Aerkomm 2017 Plan to one of the Company’s officers. These options shall be vested immediately.

On June 6, 2024, the Board of Directors approved to issue options for 7,064 shares under the Aerkomm 2017 Plan to one of the Company’s consultants. These options shall be vested immediately.

On September 1, 2024, the Board of Directors approved to issue options for 18,750 shares under the Aerkomm 2017 Plan to one of the Company’s officers. These options shall be vested immediately.

On September 6, 2024, the Board of Directors approved to issue options for 7,064 shares under the Aerkomm 2017 Plan to one of the Company’s consultants. These options shall be vested immediately.

On December 1, 2024, the Board of Directors approved to issue options for 18,750 shares under the Aerkomm 2017 Plan to one of the Company’s officers. These options shall be vested immediately.

On December 6, 2024, the Board of Directors approved to issue options for 7,064 shares under the Aerkomm 2017 Plan to one of the Company’s consultants. These options shall be vested immediately.

On March 1, 2025, the Board of Directors approved to issue options for 18,750 shares under the Aerkomm 2017 Plan to one of the Company’s officers. These options shall be vested immediately.

On March 6, 2025, the Board of Directors approved to issue options for 7,064 shares under the Aerkomm 2017 Plan to one of the Company’s consultants. These options shall be vested on April 6, 2025.

Valuation and Expense Information

Measurement and recognition of compensation expense based on estimated fair values is required for all share-based payment awards made to its employees and directors including employee stock options. The Company recognized compensation expense of $4591,~~599,472~~ 575 and $~~854~~642,~~739~~374 for the ~~nine~~three months ~~periods~~ ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, respectively, related to such employee stock options.

Determining Fair Value

Valuation and amortization method

The Company uses the Black-Scholes option-pricing-model to estimate the fair value of stock options granted on the date of grant or modification and amortizes the fair value of stock-based compensation at the date of grant on a straight-line basis for recognizing stock compensation expense over the vesting period of the option.

Expected term

The expected term is the period of time that granted options are expected to be outstanding. The Company uses the SEC’s simplified method for determining the option expected term based on the Company’s historical data to estimate employee termination and options exercised.

AERKOMM INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 21 - Stock Based Compensation - Continued

Expected dividends

The Company does not plan to pay cash dividends before the options are expired. Therefore, the expected dividend yield used in the Black-Scholes option valuation model is zero.

Expected volatility

Since the Company has no historical volatility, it used the calculated value method which substitutes the historical volatility of a public company in the same industry to estimate the expected volatility of the Company’s share price to measure the fair value of options granted under the Plans.

Risk-free interest rate

The Company based the risk-free interest rate used in the Black-Scholes option valuation model on the market yield in effect at the time of option grant provided in the Federal Reserve Board’s Statistical Releases and historical publications on the Treasury constant maturities rates for the equivalent remaining terms for the Plans.

Forfeitures

The Company is required to estimate forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate option forfeitures and records share-based compensation expense only for those awards that are expected to vest.

The Company used the following assumptions to estimate the fair value of options granted in ~~nine~~the three months ~~period~~ ended ~~September~~March 3031, ~~2024~~2025 and ~~year~~ ~~ended~~2024 ~~December 31, 2023~~ under the Plans as follows:

Assumptions
Expected term	5-10 years
Expected volatility	45.79% - 72.81	%
Expected dividends	0	%
Risk-free interest rate	0.69% - 4.41	%
Forfeiture rate	0% - 5	%

AERKOMM INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 21 - Stock Based Compensation - Continued

Aircom 2014 Plan

Activities related to options for the Aircom 2014 Plan for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and the year ended December 31, ~~2023~~2024 are as follows:

	Number of Shares		Weighted Average Exercise Price Per Share		Weighted Average Fair Value Per Share
Options outstanding at January 1, 2023		111,871	$	3.3521	$	1.0539
Options outstanding at January 1, 2024		74,580		3.3521		1.0539
Granted		-		-		-
Exercised		-		-		-
Forfeited/Cancelled		~~37,291~~-		~~3.3521~~-		~~1.0539~~-
Options outstanding at December 31, 2023		74,580		3.3521		1.0539
Options outstanding at December 31, 2024		74,580		3.3521		1.0539
Granted		-		-		-
Exercised		-		-		-
Forfeited/Cancelled		-		-		-
Options outstanding at September 30, 2024 (unaudited)		74,580		3.3521		1.0539
Options outstanding at March 31, 2025 (Unaudited)		74,580		3.3521		1.0539

There are no unvested stock awards under Aircom 2014 Plan for the ~~nine~~three months ~~period~~ ended ~~September~~March 3031, ~~2024~~2025 and the year ended December 31, ~~2023~~ 2024.

Of the shares covered by options outstanding as of ~~September~~March 3031, ~~2024~~2025, 74,580 are now exercisable. Information related to stock options outstanding and exercisable at ~~September~~March 3031, ~~2024~~2025, is as follows:

		Options Outstanding (Unaudited)						Options Exercisable (Unaudited)
Range of Exercise Prices		Shares Outstanding at 93/3031/~~2024~~2025		Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price		Shares Exercisable at 93/3031/~~2024~~2025		Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price
$	3.3521		74,580		1.7550		3.3521		74,580		1.7550		3.3521

As of ~~September~~March 3031, ~~2024~~2025, there was no unrecognized stock-based compensation expense for the Aircom 2014 Plan. No option was exercised ~~during~~ for the ~~nine~~three months ~~periods~~ ended ~~September~~March 3031, ~~2024~~2025, and ~~2023~~the year ended December 31, 2024.

Aerkomm 2017 Plan

Activities related to options outstanding under Aerkomm 2017 Plan for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and the year ended December 31, ~~2023~~ 2024 are as follows:

	Number of Shares		Weighted Average Exercise Price Per Share		Weighted Average Fair Value Per Share
Options outstanding at January 1, 2023		1,279,688		10.8161		7.3194
Options outstanding at January 1, 2024		2,084,791		7.6279		5.2566
Granted		~~805~~143,~~103~~256		2.~~5605~~5800		1.~~9779~~9462
Exercised		-		-		-
Forfeited/Cancelled		-		-		-
Options outstanding at December 31, 2023		2,084,791		7.6279		5.2566
Options outstanding at December 31, 2024		2,228,047		7.3897		5.1155
Granted		7725,~~442~~814		2.5800		1.~~9377~~9487
Exercised		-		-		-
Forfeited/Cancelled		-		-		-
Options outstanding at September 30, 2024 (unaudited)		2,162,233		7.4471		5.1530
Options outstanding at March 31, 2025 (Unaudited)		2,253,861		7.2493		5.0229

36Activities related to unvested stock awards under Aerkomm 2017 Plan for the three months ended March 31, 2025 and the year ended December 31, 2024 are as follows:

AERKOMM INC. AND SUBSIDIARIES

	Number of Shares			Weighted Average Fair Value Per Share
Options unvested at January 1, 2024		671,677			1.9691
Granted		143,256			1.9461
Vested		(566,957	)		1.9478
Forfeited/Cancelled		-			-
Options unvested at December 31, 2024		247,976			2.0045
Granted		25,814			1.9487
Vested		(70,395	)		1.9897
Forfeited/Cancelled		-			-
Options unvested at March 31, 2025 (Unaudited)		203,395			2.0025

~~Notes~~Of the shares covered by options outstanding under the Aerkomm 2017 Plan as of March 31, 2025, 2,050,466 are now exercisable; 925,564 shares will be exercisable for the twelve-month period ending March 31, 2026. Information related to ~~Unaudited~~stock ~~Condensed~~options ~~Consolidated~~outstanding ~~Financial~~and ~~Statements~~exercisable at March 31, 2025, is as follows:

NOTE 21 - Stock Based Compensation - Continued

		Options Outstanding (Unaudited)						Options Exercisable (Unaudited)
Range of Exercise Prices		Shares Outstanding at 3/31/2025		Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price		Shares Exercisable at 3/31/2025		Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price
$	2.55 - 4.30		1,479,423		7.29	$	2.9778		1,276,028		5.79	$	3.1910
	6.00 - 10.00		419,288		6.11		8.3356		419,288		6.11		8.3356
	11.00 - 14.20		126,150		5.00		11.4688		126,150		5.00		11.4688
	20.50 - 27.50		109,000		2.53		25.4982		109,000		2.53		25.4982
	30.00 - 35.00		120,000		2.37		34.5479		120,000		2.37		34.5479
			2,253,861		6.45		7.2197		2,050,466		5.38		8.4448

~~Activities related to unvested stock awards under Aerkomm 2017 Plan for the nine months period ended September 30, 2024 and the year ended December 31, 2023 are as follows:~~34

	Number of Shares			Weighted Average Fair Value Per Share
Options unvested at January 1, 2023		11,000			3.5070
Granted		805,103			1.9779
Vested		(144,426	)		2.1351
Forfeited/Cancelled		-			-
Options unvested at December 31, 2023		671,677			1.9691
Granted		77,442			1.9377
Vested		(224,883	)		1.9857
Forfeited/Cancelled		-			-
Options unvested at September 30, 2024 (unaudited)		524,236			2.0110

As of March 31, 2025, total unrecognized stock-based compensation expense related to stock options was approximately $407,294, which is expected to be recognized on a straight-line basis over a weighted average period of approximately 2.21 years. No options was exercised during the three months ended March 31, 2025 and the year ended December 31, 2024, respectively.

Of the shares covered by options outstanding under the Aerkomm 2017 Plan as of September 30, 2024, 1,637,997 are now exercisable; 196,593 shares will be exercisable for the twelve-month period ending September 30, 2025. Information related to stock options outstanding and exercisable at September 30, 2024, is as follows:

		Options Outstanding (Unaudited)						Options Exercisable (Unaudited)
Range of Exercise Prices		Shares Outstanding at 9/30/2024		Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price		Shares Exercisable at 9/30/2024		Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price
$	2.55 - 4.30		1,387,795		7.64	$	3.0041		863,559		7.06	$	3.3568
	6.00 - 10.00		419,288		6.61		8.3356		419,288		6.61		8.3356
	11.00 - 14.20		126,150		5.50		11.4688		126,150		5.50		11.4688
	20.50 - 27.50		109,000		3.03		25.4982		109,000		3.03		25.4982
	30.00 - 35.00		120,000		2.85		34.5479		120,000		2.85		34.5479
			2,162,233		6.82		7.4163		1,637,997		6.25		9.0145

As of September 30, 2024, total unrecognized stock-based compensation expense related to stock options was approximately $1,003,000, which is expected to be recognized on a straight-line basis over a weighted average period of approximately 2.60 years. No option was exercised during the nine months period ended September 30, 2024 and the year ended December 31, 2023.

Aerkomm 2023 Plan

Activities related to options outstanding under Aerkomm 2023 Plan for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and the year ended December 31, ~~2023~~ 2024 are as follows:

	Number of Shares		Weighted Average Exercise Price Per Share		Weighted Average Fair Value Per Share
Options outstanding at December 31, 2022	-		-		-
Options outstanding at January 1, 20234		-		-		-
Granted		3,683,929		2.5914		2.0420
Exercised		-		-		-
Forfeited/Cancelled		-		-		-
Options outstanding at December 31, 2023		3,683,929		2.5914		2.0420
Options outstanding at December 31, 2024		3,683,929		2.5914		2.0420
Granted		-		-		-
Exercised		-		-		-
Forfeited/Cancelled		-		-		-
Options unvested at September 30, 2024 (unaudited)		3,683,929		2.5914		2.0420
Options unvested at March 31, 2025 (Unaudited)		3,683,929		2.5914		2.0420

Activities related to unvested stock awards under Aerkomm 2023 Plan for the three months ended March 31, 2025 and the year ended December 31, 2024 are as follows:

	Number of Shares			Weighted Average Fair Value Per Share
Options unvested at January 1, 2024		3,083,533			2.0415
Granted		-			-
Vested*		(2,117,747	)		2.0415
Forfeited/Cancelled		-			-
Options unvested at December 31, 2024		965,786			2.0415
Granted		-			-
Vested		(221,110	)		2.0420
Forfeited/Cancelled		-			-
Options unvested at March 31, 2025 (Unaudited)		744,676			2.0413

including accelerated vesting an aggregate of 1,176,956 shares for the year ended December 31, 2024 to settled approximately $3.1 million accrued unpaid salaries pursuant to a form of letter outlining Aerkomm employee’s stock option exercise forms. (See Note 12)

Of the shares covered by options outstanding as of March 31, 2025, 2,939,253 shares are now exercisable. Information related to stock options outstanding and exercisable at March 31, 2025, is as follows:

		Options Outstanding (Unaudited)						Options Exercisable (Unaudited)
Range of Exercise Prices		Shares Outstanding at 3/31/2025		Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price		Shares Exercisable at 3/31/2025		Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price
$	2.58-2.89		3,683,929		8.24		2.5914		2,939,253		7.00		2.5918

As of March 31, 2025, total unrecognized stock-based compensation expense related to stock options was approximately $1,520,143, which is expected to be recognized on a straight-line basis over a weighted average period of approximately 2.25 years. 1,176,956 and 0 options were exercised for the three months ended March 31, 2025 and the year ended December 31, 2024.

NOTE 23 - Commitments and contingencies

As of March 31, 2025, the Company’s significant commitment is summarized as follows:

Contingencies

Legal

From time to time, the Company is party to certain legal proceedings, as well as certain asserted and un-asserted claims.

Commitment

Airbus SAS Agreement: On November 30, 2018, in furtherance of a memorandum of understanding signed in March 2018, the Company entered into an agreement with Airbus SAS (“Airbus”), pursuant to which Airbus will develop and certify a complete retrofit solution allowing the installation of the Company’s “AERKOMM K++” system on Airbus’ single aisle aircraft family including the Airbus A319/320/321, for both Current Engine Option (CEO) and New Engine Option (NEO) models. Airbus will also apply for and obtain on the Company’s behalf a Supplemental Type Certificate (“STC”) from the European Aviation Safety Agency (“EASA”), as well as from the U.S. Federal Aviation Administration (“FAA”), for the retrofit AERKOMM K++ system. The EU-China Bilateral Aviation Safety Agreement, or BASA, went into effect on September 3, 2020, giving a boost to the regions’ aviation manufacturers by simplifying the process of gaining product approvals from the European Union Aviation Safety Agency, or EASA, and the Civil Aviation Administration of China, or CAAC, while also ensuring high safety and environment standards will continue to be met. Pursuant to the terms of our Airbus agreement, Airbus agreed to provide the Company with a retrofit solution which will include the Service Bulletin and the material kits including the update of technical and operating manuals pertaining to the aircraft and provision of aircraft configuration control. The timeframe for the completion and testing of this retrofit solution, including the certification, is expected to be in the fourth quarter of 2024, although there is no guarantee that the project will be successfully completed in the projected timeframe.

Shenzhen Yihe: On June 20, 2018, the Company entered into that certain Cooperation Framework Agreement, as supplemented on July 19, 2019, with Shenzhen Yihe Culture Media Co., Ltd., or Yihe, the authorized agent of Guangdong Tengnan Internet, or Tencent Group, pursuant to which Yihe agreed to assist the Company with public relations, advertising, market and brand promotion, as well as with the development of a working application of the Tencent Group WeChat Pay payment solution and WeChat applets applicable for Chinese users and relating to cell phone and WiFi connectivity on airplanes. As compensation under this Yihe agreement, the Company paid Yihe RMB 8 million (approximately US$1.2 million). On October 16, 2020, in accordance with the provisions of the agreement with Yihe, as supplemented, the Company filed an arbitration action with the Shenzhen International Arbitration Court, or the Arbitration Court, claiming that Yihe failed to perform under the terms of the supplemented agreement and seeking a complete refund of its RMB 8 million payment to Yihe. The Company received notice from the Arbitration Court on October 16, 2020 of receipt of its arbitration filing and the requirement to pay the Arbitration Court RMB 190,000 in fees relating to the arbitration. These fees were paid on October 28, 2020. The Company intends to aggressively pursue this matter. As of September 30, 2021, the prepayment was reclassified to other receivable and full allowance was reserved. On March 25, 2022, the Shenzhen International Arbitration Court issued a judgment in our favor. The Court deemed the Company’s agreement with Yihe terminated as of November 24, 2020, the date of the Company’s filing with the Court, and held that Yihe is required to promptly repay us RMB 7.5 million and reimburse the Company RMB 178,125 in court costs. The Company will make every effort to collect these amounts from Yihe.

Equity Contract: On December 29, 2022, Aerkomm Inc. (the “Company” or the “Seller”) and dMobile System Co., Ltd. (the “Buyer”) entered into an equity sales contract (the “Equity Sales Agreement”), pursuant to which the Company agreed to sell 25,500,000 shares (the “Subject Shares”) of Aerkomm Taiwan Inc., representing 51% of the issued and outstanding shares of Aerkomm Taiwan, to the “Buyer for NT$255,000,000 (approximately $8,300,000). Although as a result of the share transfer transaction under the Equity Sales Agreement 51% of the shares of Aerkomm Taiwan are held in the name of the Buyer, Aerkomm treats Aerkomm Taiwan as a consolidated subsidiary because Aerkomm has de facto voting, governance and economic control of Aerkomm Taiwan as: (i) Aerkomm continues to hold 49% of the shares of Aerkomm Taiwan, (ii) the sole director of Aerkomm Taiwan, Albert Hsu, is a member of the board of the Company, (iii) the Buyer has not yet paid the amount due for purchase of the Subject Shares, and, under the Equity Sales Agreement, the Company has the right to demand return of the Subject Shares if payment for them has not been made within 180 days of the date of the Equity Sales Agreement, which such period has elapsed, (iv) concurrently with the Company and the Buyer entering into the Equity Sales Agreement, the Buyer and Mr. Hsu entered into an equity pledge pursuant to which the Buyer pledged the Subject Shares to Mr. Hsu and Mr. Hsu was granted the right to exercise all rights in respect of the Subject Shares pending the Buyer’s payment to the Company for the Subject Shares, and the Company and Mr. Hsu entered into an entrustment agreement pursuant to which the Company entrusted Mr. Hsu and Mr. Hsu agreed to be entrusted as the pledgee of the Subject Shares, and (v) the sole shareholder of the Buyer, is a founder of Aerkomm and a holder of more than 10% of the voting equity of Aerkomm.

NOTE 24 - Segment Information

The Company conducts business as a single operating segment which is based upon the Company’s organizational and management structure, as well as information used by the CODM to allocate resources and other factors. The accounting policies of the segment are the same as those described in Note 2. The key measure of segment profitability that the CODM, which is the Company’s CEO, uses to allocate resources and assess performance is consolidated net income (loss), as reported on the consolidated statements of operations. The following table presents the significant revenue and expense categories of the Company’s single operating segment

	For the Three Months Ended March 31,
	2025			2024
	(Unaudited)			(Unaudited)
Revenues	$	-		$	53,255
Less:
Cost of revenues		-			38,116
Other operating expense		461,975			148,335
Salaries expenses		1,091,685			2,987,731
Professional fee		360,319			768,274
Amortization and depreciation expense		573,922			515,165
Foreign currency exchange loss		50,614			687,923
Interest expense		267,229			286,631
Change in SAFE liabilities		50,000			-
Stock based compensation		591,575			688,596
Loss on disposal of subsidiaries		234,454			-
Other (income) loss, net		(3,041	)		12,657
Loss before income tax		(3,678,732	)		(6,080,173	)

Income tax expense		-			2,400
Net loss	$	(3,678,732	)	$	(6,082,573	)

~~AERKOMM INC.~~NOTE ~~AND~~25 ~~SUBSIDIARIES~~- Subsequent Events

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 21 - Stock Based Compensation - Continued

Activities related to unvested stock awards under Aerkomm 2023 Plan for the nine months period ended September 30, 2024 is as follows:

	Number of Shares			Weighted Average Fair Value Per Share
Options unvested at January 1, 2023		-			-
Granted		3,683,927			2.0420
Vested		(600,394	)		2.0448
Forfeited/Cancelled		-			-
Options unvested at December 31, 2023		3,083,533			2.0415
Granted		-			-
Vested		(1,896,642	)		2.0414
Forfeited/Cancelled		-			-
Options unvested at September 30, 2024 (unaudited)		1,186,891			2.0416

Of the shares covered by options outstanding as of September 30, 2024, 2,497,036 shares are now exercisable. Information related to stock options outstanding and exercisable at September 30, 2024, is as follows:

		Options Outstanding (Unaudited)						Options Exercisable (Unaudited)
Range of Exercise Prices		Shares Outstanding at 9/30/2024		Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price		Shares Exercisable at 9/30/2024		Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price
$	2.58-2.89		3,683,927		8.74		2.5914		2,497,036		8.74		2.5921

As of September 30, 2024, total unrecognized stock-based compensation expense related to stock options was approximately $2,710,000, which is expected to be recognized on a straight-line basis over a weighted average period of approximately 1.29 years. No option was exercised during the year ended September 30, 2024.

AERKOMM INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 22 - Commitments

As of September 30, 2024, the Company’s significant commitment is summarized as follows:

Airbus SAS Agreement: On November 30, 2018, in furtherance of a memorandum of understanding signed in March 2018, the Company entered into an agreement with Airbus SAS (“Airbus”), pursuant to which Airbus will develop and certify a complete retrofit solution allowing the installation of the Company’s “AERKOMM K++” system on Airbus’ single aisle aircraft family including the Airbus A319/320/321, for both Current Engine Option (CEO) and New Engine Option (NEO) models. Airbus will also apply for and obtain on the Company’s behalf a Supplemental Type Certificate (STC) from the European Aviation Safety Agency, or EASA, as well as from the U.S. Federal Aviation Administration or FAA, for the retrofit AERKOMM K++ system. The EU-China Bilateral Aviation Safety Agreement, or BASA, went into effect on September 3, 2020, giving a boost to the regions’ aviation manufacturers by simplifying the process of gaining product approvals from the European Union Aviation Safety Agency, or EASA, and the Civil Aviation Administration of China, or CAAC, while also ensuring high safety and environment standards will continue to be met. Pursuant to the terms of our Airbus agreement, Airbus agreed to provides the Company with the retrofit solution which will include the Service Bulletin and the material kits including the update of technical and operating manuals pertaining to the aircraft and provision of aircraft configuration control. The timeframe for the completion and testing of this retrofit solution, including the certification, is expected to be in the fourth quarter of 2024, although there is no guarantee that the project will be successfully completed in the projected timeframe. Airbus Interior Service Agreement: On July 24, 2020, Aerkomm Malta, entered into an agreement with Airbus Interior Services, a wholly-owned subsidiary of Airbus. This new agreement follows the agreement that Aircom signed with Airbus on November 30, 2018 pursuant to which Airbus agreed to develop, install and certify the Aerkomm K++ System on a prototype A320 aircraft to EASA and FAA certification standards. Hong Kong Airlines Agreement: On January 30, 2020, Aircom signed an agreement with Hong Kong Airlines Ltd. (HKA) to provide to Hong Kong Airlines both of its Aerkomm AirCinema and AERKOMM K++ IFEC solutions. Under the terms of this new agreement, Aircom will provide HKA its Ka-band AERKOMM K++ IFEC system and its AERKOMM AirCinema system. HKA will become the first commercial airliner launch customer for Aircom. Vietjet Air: On October 25, 2021, the Company signed an agreement with Vietjet Air (“Vietjet”) to provide them with our Aerkomm AirCinema In-Flight Entertainment and Connectivity (“IFEC”) solutions. Under the terms of the agreement, the Company will provide to Vietjet our Aerkomm AirCinema Cube IFEC system for installation on Vietjet’s fleet of Airbus A320, A321 and Airbus A330-300 aircraft. Republic Engineers Complaint: On October 15, 2018, Aircom Telecom entered into a product purchase agreement, or the October 15th PPA, with Republic Engineers Maldives Pte. Ltd., a company affiliated with Republic Engineers Pte. Ltd., or Republic Engineers, a Singapore based, private construction and contracting company. On November 30, 2018, the October 15th PPA was re-executed with Republic Engineers Pte. Ltd. as the signing party. The Company refers to this new agreement as the November 30th PPA and, together with the October 15th PPA, the PPA. Under the terms of the PPA, Republic Engineers committed to the purchase of a minimum of 10 shipsets of the AERKOMM K++ system at an aggregate purchase price of $10 million. Additionally, under the terms of the PPA, the Executive Director of Republic Engineers, C. A. Raja, agreed to sign an agreement, or the Guarantee, to guarantee all of the obligations of Republic Engineers under the PPA. Republic Engineers had submitted a purchase order, or PO, dated October 15, 2018 for the 10 shipsets and was supposed to have made payments to Aircom Telecom against the purchase order shortly thereafter. Republic Engineers made no payments against the purchase order and the Company did not begin any work on the ordered shipsets. On July 7, 2020, Republic Engineers and Mr. Raja filed a complaint against Aerkomm, Aircom and Aircom Telecom (the “Aircom Parties”) in the Superior Court of the State of California for the County of Almeda, or the Court, seeking declaratory relief only and no money damages, alleging that the PPA and the PO were not executed or authorized by Republic Engineers and that the Guarantee was not executed or authorized by Mr. Raja. Republic Engineers and C. A. Raja requested from the Court (i) orders that the PPA, the PO and the Guarantee be declared null and void and (ii) the payment of their reasonable attorney’s fees. On July 29, 2020, Aircom Telecom provided notice to Republic Engineers that the PPA and the PO was terminated according to their terms as a result of the non-performance of Republic Engineers and the Failure of Mr. Raja to provide the Guarantee. The Aircom Parties filed a motion for judgment on the pleadings in August 2021, asking the Court to find the Complaint for Declaratory Relief to be moot, because the contracts that are the subject of the Complaint have been terminated. On September 22, 2021, the Court granted that motion, and dismissed the complaint. At the request of Republic Engineers, the Court granted Republic Engineers leave to amend its complaint to attempt to allege a viable claim. On May 10, 2022, Republic Engineers and Aircom Parties entered into a settlement and mutual release agreement, which included, among other things, a denial of wrongdoing by both parties, a requirement that Republic Engineering file a motion with the Court to dismiss its lawsuit against the Aircom Parties and a mutual release by each party of any and all claims against the other party relating to this dispute. On May 17, 2022, Republic Engineers filed with the Court a motion to dismiss with prejudice, its lawsuit against the Aircom Parties and on that same day the Court officially dismissed the lawsuit.

AERKOMM INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 22 - Commitments - Continued

Shenzhen Yihe: On June 20, 2018, the Company entered into that certain Cooperation Framework Agreement, as supplemented on July 19, 2019, with Shenzhen Yihe Culture Media Co., Ltd., or Yihe, the authorized agent of Guangdong Tengnan Internet, or Tencent Group, pursuant to which Yihe agreed to assist the Company with public relations, advertising, market and brand promotion, as well as with the development of a working application of the Tencent Group WeChat Pay payment solution and WeChat applets applicable for Chinese users and relating to cell phone and WiFi connectivity on airplanes. As compensation under this Yihe agreement, the Company paid Yihe RMB 8 million (approximately US$1.2 million). On October 16, 2020, in accordance with the provisions of the agreement with Yihe, as supplemented, the Company filed an arbitration action with the Shenzhen International Arbitration Court, or the Arbitration Court, claiming that Yihe failed to perform under the terms of the supplemented agreement and seeking a complete refund of its RMB 8 million payment to Yihe. The Company received notice from the Arbitration Court on October 16, 2020 of receipt of its arbitration filing and the requirement to pay the Arbitration Court RMB 190,000 in fees relating to the arbitration. These fees were paid on October 28, 2020. The Company intends to aggressively pursue this matter. As of September 30, 2021, the prepayment was reclassified to other receivable and full allowance was reserved. On March 25, 2022, the Shenzhen International Arbitration Court issued a judgment in our favor. The Court deemed the Company’s agreement with Yihe terminated as of November 24, 2020, the date of the Company’s filing with the Court, and held that Yihe is required to promptly repay us RMB 7.5 million and reimburse the Company RMB 178,125 in court costs. The Company will make every effort to collect these amounts from Yihe. US trademark: On December 1, 2020, the United States Patent and Trademark Office (the “USPTO”) issued a Final Office Action relating to Aerkomm Inc. indicating that the Company’s US trademark application (Serial No. 88464588) for the name “AERKOMM,” which was originally filed with the USPTO on June 7, 2019, was being rejected because of a likelihood of confusion with a similarly sounding name trademarked at, and in use from, an earlier date. The Company successfully appealed this USPTO action and the USPTO issued to the Company a trademark registration for the service mark AERKOMM under Trademark Class 38 (telecommunications) on November 2, 2021 and Trademark Class 41 (entertainment services) on November 23, 2021. Equity Contract: On December 29, 2022, Aerkomm Inc. (the “Company” or the “Seller”) and dMobile System Co., Ltd. (the “Buyer”) entered into an equity sales contract (the “Equity Sales Agreement”), pursuant to which the Company agreed to sell 25,500,000 shares (the “Subject Shares”) of Aerkomm Taiwan Inc., representing 51% of the issued and outstanding shares of Aerkomm Taiwan, to the “Buyer for NT$255,000,000 (approximately $8,300,000). Although as a result of the share transfer transaction under the Equity Sales Agreement 51% of the shares of Aerkomm Taiwan are held in the name of the Buyer, Aerkomm treats Aerkomm Taiwan as a consolidated subsidiary because Aerkomm has de facto voting, governance and economic control of Aerkomm Taiwan as: (i) Aerkomm continues to hold 49% of the shares of Aerkomm Taiwan, (ii) the sole director of Aerkomm Taiwan, Albert Hsu, is a member of the board of the Company, (iii) the Buyer has not yet paid the amount due for purchase of the Subject Shares, and, under the Equity Sales Agreement, the Company has the right to demand return of the Subject Shares if payment for them has not been made within 180 days of the date of the Equity Sales Agreement, which such period has elapsed, (iv) concurrently with the Company and the Buyer entering into the Equity Sales Agreement, the Buyer and Mr. Hsu entered into an equity pledge pursuant to which the Buyer pledged the Subject Shares to Mr. Hsu and Mr. Hsu was granted the right to exercise all rights in respect of the Subject Shares pending the Buyer’s payment to the Company for the Subject Shares, and the Company and Mr. Hsu entered into an entrustment agreement pursuant to which the Company entrusted Mr. Hsu and Mr. Hsu agreed to be entrusted as the pledgee of the Subject Shares, and (v) the sole shareholder of the Buyer, is a founder of Aerkomm and a holder of more than 10% of the voting equity of Aerkomm.

NOTE 23 - Subsequent Events

The Company has evaluated subsequent events through the filing of this Form 10-Q, and determined that, other than as indicated below, there have been no events that have occurred that would require adjustments to our disclosures in the unaudited condensed consolidated financial statements.

~~Between~~On ~~October~~June 159, ~~2024~~2025 and ~~October 30~~July 23, ~~2024~~2025, ~~Well~~the ~~Thrive~~Company entered ~~Limited~~into ~~(the~~two Simple Agreements for Future Equity (“~~Borrower~~SAFEs”) ~~entered~~with ~~into~~G-Tech ~~three~~Global ~~loan~~Pte. ~~agreements~~Ltd., ~~with~~a third-party investor. Under the terms of the SAFEs, the Company ~~(as~~received aggregated gross proceeds of approximately $2.0 million. The SAFEs are non-interest-bearing. They remain outstanding until the ~~Lender~~occurrence of certain triggering events, including (i) an equity financing, ~~totaling~~(ii) a liquidity event such ~~NTD~~as 11a merger,~~660~~ acquisition,~~800~~ ~~(USD~~or ~~368~~other business combination,~~430~~ or (iii) a dissolution event. ~~These~~Upon ~~agreements~~an ~~are~~equity ~~set~~financing, tothe ~~expire~~SAFEs onwill ~~December~~automatically convert ~~31,~~into ~~2025.~~preferred ~~The~~shares ~~loans~~at ~~carry~~the anlower ~~annual~~of ~~interest~~(a) the price per share of the new preferred stock multiplied by a discount rate of 580%~~. However~~, or if(b) ~~the~~a ~~Borrower~~price ~~repays~~per share based on a valuation cap. In a liquidity event prior to conversion, the ~~loan~~investor ~~within~~may ~~six~~elect ~~months~~to ~~from~~receive either a cash repayment equal to the ~~borrowing~~SAFE ~~start~~purchase ~~date,~~amount noor ~~interest~~to ~~will~~convert beinto ~~charged~~common stock at a price per share based on the valuation cap.

On ~~October~~July 118, ~~2024~~2025, the Company’s ~~subsidiary~~and inInvest ~~Japan,~~Securities ~~Aerkomm~~SA ~~Japan~~(Paris) ~~Inc.~~(“Invest Securities”), entered into a ~~Distribution~~Liquidity ~~Partnership~~Agreement (the “Agreement”), pursuant to which, the Company appointed Invest Securities as its liquidity provider in connection with ~~Network~~the ~~Access~~Company’s ~~Associates~~common ~~Ltd.,~~stock a(the ~~member~~“Shares”) traded on the Professional Segment of the ~~EUTELSAT~~regulated ~~group~~ market of Euronext Paris (“~~OneWeb~~Euronext Paris”). ~~dated~~The asservices of ~~September~~Invest 26Security is expected to enhance the liquidity of the Shares, ~~2024~~improve (the ~~“DPA”)~~regularity of trading, ~~pursuant~~and prevent volatility that is not warranted by the current market trends. To enable Invest Securities to ~~which~~carry ~~OneWeb~~out ~~appointed~~the ~~Aerkomm~~interventions ~~Japan~~provided asfor ain ~~distribution~~this Agreement, the Company ~~partner~~shall ~~for~~credit ~~Japan~~the ~~and~~liquidity ~~Taiwan~~account ~~for~~with ~~OneWeb’s~~the ~~satellite~~sum ~~communications~~of ~~products~~€80,000 (Eighty Thousand Euro) and ~~services~~28,500 Shares at the rate of €2.8 (Two point Eight Euro).

4038

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

~~The Management’s~~Use ~~Discussion and Analysis~~ of Financial Condition and Results of Operations set forth in this Item 2 has been revised to reflect the restatement occurring subsequent to the filing of the Original Form 10-Q, as well as to incorporate certain conforming changes.Terms

~~The~~Except ~~Company~~as ~~has~~otherwise ~~restated,~~indicated by ~~means~~the ofcontext ~~its Annual~~and ~~Report~~for onthe ~~Form~~purposes ~~10-K/A~~of ~~for~~this ~~the~~report ~~year~~only, ~~ended~~references ~~December~~in ~~31,~~this ~~2023~~report ~~(the~~to “~~2023~~we,” ~~Form 10-K~~“us,”) “our,” ~~its~~or ~~consolidated balance sheet at December~~“our ~~31,~~company” ~~2023.~~are ~~For~~to ~~information on~~ the ~~impact~~combined business of ~~the~~Aerkomm ~~restatement~~Inc., ~~reference~~a isNevada ~~made~~corporation, toand ~~the~~its ~~Company’s~~consolidated ~~2023~~subsidiaries, ~~Form~~including ~~10-K/A~~Aircom Pacific, ~~(i) Part I~~Inc., ~~Item~~a ~~1A.~~California ~~Risk~~corporation ~~Factors;~~and ~~(ii) Part~~wholly-owned IIsubsidiary, ~~Item~~or 7.Aircom; ~~Management’s~~Aircom ~~Discussion~~Pacific ~~and~~Ltd., ~~Analysis~~a Republic of ~~Financial~~Seychelles ~~Condition~~ company and ~~Results~~wholly-owned subsidiary of ~~Operations~~ Aircom; ~~and~~Aerkomm ~~(iii)~~Pacific ~~Part II~~Limited, ~~Item~~a ~~9A.~~Malta ~~Controls~~company and ~~Procedures~~wholly owned subsidiary of Aircom Pacific Ltd.; InAircom Pacific ~~addition~~Inc. Limited, ~~the~~a ~~restatement~~Hong ~~impacts~~Kong ~~the~~company ~~first~~and ~~quarter~~wholly-owned subsidiary of ~~2024.~~Aircom; ~~The restated~~Aircom ~~amounts~~Japan, ~~for~~Inc., ~~the~~a ~~first~~Japanese ~~quarter~~company ofand ~~2024~~wholly-owned subsidiary ~~are~~of ~~presented~~Aircom; inand ~~the~~Aircom ~~Company’s~~Telecom ~~Quarterly~~LLC, ~~Reports~~a onTaiwanese ~~Form~~company 10and wholly-~~Q/A~~owned ~~for~~subsidiary ~~the~~of ~~quarterly period~~Aircom, ~~ended~~Aircom ~~March 31~~Taiwan, ~~2024~~or Aircom Beijing.

InSpecial ~~the~~Note ~~course~~Regarding ofForward ~~preparing~~Looking its financial statements for quarter ended September 30, 2024, our management and our audit committee concluded that it was appropriate to restate our previously issued audited financial statements as of and for the period ended December 31, 2023. The restatement is to reflect a correction to the Company’s accounting for certain debt previously characterized as long-term debt, as short-term debt; due to the Company’s records indicating an intention to hold a certain investment for more than one year, the Company has reclassified that investment from short-term to long-term and, consequently, the valuation method for this investment has been adjusted from market value (used for short-term investments) to cost (used for long-term investments); a correction has been made to reclassify the account “other receivable-related party loans” to “short-term loan-others; the early redemption by our bond holders of our Credit Enhanced Zero Coupon Convertible Bonds resulted in an early redemption loss and accrued default interest expenses. Although these changes are non-cash items and do not change the Company’s reported operating revenues or reported operating costs and expenses, the Company determined that these changes have a material impact on the as filed financial statements for the year ended December 31, 2023 and for the nine months period ended September 30, 2024 (the “Relevant Period”), and as a result, the restatement of the Relevant Periods is required. Statements

~~Throughout~~Certain information contained in this report includes ~~the~~forward-looking ~~following~~statements. ~~Management’s~~The ~~Discussion~~statements ~~and~~herein ~~Analysis~~which ofare ~~Financial~~not ~~Condition~~historical reflect our current expectations and ~~Result~~projections ofabout ~~Operations~~our future results, ~~all~~performance, ~~referenced~~liquidity, ~~amounts~~financial ~~for prior~~condition, ~~periods~~prospects and ~~prior~~opportunities ~~period~~and ~~comparisons~~are ~~reflect~~based ~~the~~upon ~~balances~~information currently available to us and ~~amounts~~our oninterpretation aof ~~restated~~what ~~basis~~is believed to be significant factors affecting the businesses, including many assumptions regarding future events. The following factors, among others, may affect our forward-looking statements:

~~Use of~~● ~~Terms~~our future financial and operating results;

~~Except~~● ~~as otherwise indicated by the context and for the purposes of this report only, references in this report to “we,” “us,” “~~our,” ~~or “our company” are to the combined business of Aerkomm Inc.~~intentions, aexpectations ~~Nevada corporation,~~ and ~~its~~beliefs ~~consolidated~~regarding ~~subsidiaries,~~anticipated ~~including Aircom Pacific~~growth, ~~Inc.,~~market apenetration ~~California corporation~~ and ~~wholly-owned~~trends ~~subsidiary,~~in orour ~~Aircom~~business; Aircom Pacific Ltd., a Republic of Seychelles company and wholly-owned subsidiary of Aircom; Aerkomm Pacific Limited, a Malta company and wholly owned subsidiary of Aircom Pacific Ltd.; Aircom Pacific Inc. Limited, a Hong Kong company and wholly-owned subsidiary of Aircom; Aircom Japan, Inc., a Japanese company and wholly-owned subsidiary of Aircom; and Aircom Telecom LLC, a Taiwanese company and wholly-owned subsidiary of Aircom, Aircom Taiwan, or Aircom Beijing; MEPA Labs Inc., a California corporation and wholly-owned subsidiary; and Mesh Technology Limited, a Taiwan company and wholly-owned subsidiary.

~~Special Note~~● ~~Regarding~~our ~~Forward~~ability ~~Looking~~to ~~Statements~~attract and retain customers;

~~Certain information~~● ~~contained in this report includes forward-looking statements. The statements herein which are not historical reflect~~ our ~~current~~ ~~expectations~~dependence ~~and~~on ~~projections~~growth ~~about~~in our ~~future~~customers’ results, performance, liquidity, financial condition, prospects and opportunities and are based upon information currently available to us and our interpretation of what is believed to be significant factors affecting the businesses~~, including many assumptions regarding future events. The following factors, among others, may affect our forward-looking statements:~~;

● ~~our~~the ~~future~~effects ~~financial~~of ~~and~~changing ~~operating~~customer ~~results~~needs in our market;

● ~~our~~the ~~intentions,~~effects ~~expectations~~of ~~and~~market ~~beliefs~~conditions ~~regarding~~on ~~anticipated~~our ~~growth,~~stock ~~market~~price ~~penetration~~ and ~~trends~~operating ~~in our business~~results;

● ~~the~~our ~~impact~~ability ~~and~~to ~~effects~~successfully ofcomplete the ~~global outbreak of the coronavirus (COVID-19) pandemic~~development, testing and ~~other~~initial ~~potential~~implementation ~~pandemics or contagious diseases or fear~~ of ~~such~~our ~~outbreaks,~~product ~~on the global airline and tourist industries, especially in the Asia Pacific region~~offerings;

● our ability to ~~attract~~maintain ~~and~~our ~~retain~~competitive ~~customers~~advantages against competitors in our industry;

● our ~~dependence~~ability onto ~~growth~~timely inand effectively adapt our ~~customers’~~existing ~~businesses~~technology and have our technology solutions gain market acceptance;

● ~~the~~our ~~effects~~ability ofto ~~changing~~introduce ~~customer~~new ~~needs~~product inofferings ~~our~~and bring them to market in a timely manner;

● ~~the~~our ~~effects~~ability ofto ~~market~~obtain ~~conditions~~required ontelecommunications, ~~our~~aviation ~~stock~~and ~~price~~other licenses and ~~operating~~approvals ~~results~~necessary for our operations;

● our ability to ~~successfully complete the development~~maintain, ~~testing~~protect and ~~initial~~enhance ~~implementation of~~ our ~~product~~intellectual ~~offerings~~property;

● ~~our~~the ~~ability~~effects toof ~~maintain~~increased competition in our ~~competitive~~market ~~advantages~~and ~~against~~our ~~competitors~~ability into ~~our~~compete ~~industry~~effectively;

● our ~~ability~~expectations toconcerning ~~timely~~relationship ~~and~~with ~~effectively~~customers ~~adapt our existing technology~~ and ~~have~~other ~~our~~third ~~technology solutions gain market acceptance~~parties;

● ~~our~~the ~~ability~~attraction toand ~~introduce~~retention ~~new~~of ~~product~~qualified ~~offerings~~employees and ~~bring~~key ~~them to market in a timely manner~~personnel;

41● future acquisitions of our investments in complementary companies or technologies; and

● our ability to ~~obtain~~comply ~~required~~with ~~telecommunications,~~evolving ~~aviation~~legal ~~and~~standards ~~other licenses~~ and ~~approvals necessary for our operations~~regulations.

~~● our ability to maintain, protect and enhance our intellectual property;~~Overview

●Aerkomm ~~the~~Inc. ~~effects~~is ofan ~~increased~~advanced ~~competition~~defense inand ~~our~~aerospace communications ~~market~~company entering early-stage revenue generation, with products tailored for deployment in contested, infrastructure-limited, and ~~our~~multi-domain ~~ability~~environments. Our platform integrates software-defined modems, multi-orbit satellite terminals, and over-the-horizon systems to ~~compete~~support ~~effectively;~~unmanned, autonomous, and ISR platforms. Our near-term commercial trajectory focuses on converting strategic defense engagements into long-term contracts, while leveraging dual-use technologies for commercial aviation and telecom markets.

~~● our expectations concerning relationship with customers and other third parties;~~39

●Our platform is built on a carrier-neutral, software-defined architecture that enables seamless integration of satellite communications, over-the-horizon ~~attraction~~(OTH) radio and ~~retention~~radar ofsystems, ~~qualified~~terrestrial networks, ~~employees~~and hybrid connectivity pathways. This multi-layered design supports interoperability, modular scalability, and ~~key~~persistent ~~personnel;~~resiliency in dynamic and degraded operational environments.

●Recent ~~future~~global ~~acquisitions~~events have heightened concerns over the vulnerability of ~~our~~subsea ~~investments~~communications ininfrastructure. ~~complementary~~The ~~companies~~persistent threat of submarine cable tampering or ~~technologies;~~cutting – whether due to malign state actors or gray-zone conflict – has underscored the need for alternate, resilient communication pathways. As undersea cable route disruptions and targeting continue to grow, especially in critical regions such as the Indo-Pacific and Northern Europe, defense and civilian agencies are accelerating the adoption of space-based solutions. However, satellite density in high-traffic conflict zones is likely to become strained and contended during crisis events, placing additional emphasis on platforms that offer secure, intelligent, and adaptable terminal-level connectivity. Our technology addresses this challenge by offering dynamic, multi-orbit access and prioritization capabilities, enabling mission continuity even under contested or degraded satellite access conditions.

●As part of our ~~ability~~broader communications ecosystem, we have developed a carrier-neutral, software-defined platform that enables dynamic connectivity to ~~comply~~the ~~with~~most ~~evolving~~appropriate ~~legal~~satellite—regardless of ~~standards~~orbit or operator. This architecture is built around a suite of multi-orbit antennas, including both proprietary and ~~regulations~~partner-developed systems. Among these is our advanced electronically steered antenna (ESA), which leverages a proprietary glass semiconductor substrate to deliver over 50% higher throughput per square inch than conventional designs. These antennas are engineered to operate seamlessly across GEO, MEO, and LEO networks, ensuring persistent, resilient performance in dynamic and contested environments.

~~Forward-looking statements,~~These ~~which~~hardware ~~involve~~components ~~assumptions~~are ~~and~~tightly ~~describe~~integrated with our ~~future plans~~software-defined, ~~strategies,~~carrier-neutral ~~and expectations~~modem, ~~are~~which ~~generally~~supports ~~identifiable~~real-time bysatellite ~~use of the words “may~~selection,” ~~“should,”~~waveform ~~“expect~~agility,” ~~“anticipate,”~~and ~~“estimate,”~~military-grade ~~“believe,”~~security. ~~“intend,”~~The orsystem ~~“project”~~is orfurther ~~the~~enhanced ~~negative~~by ofcustom-developed ~~these~~RF ~~words or other variations on these words or comparable terminology. Actual results~~chipsets, ~~performance,~~beamforming ~~liquidity~~ASICs, ~~financial condition, prospects~~ and ~~opportunities~~high-speed ~~could~~analog-to-digital ~~differ~~converters ~~materially~~(ADCs) currently ~~from~~in ~~those~~development. ~~expressed in~~Together, orthis ~~implied by~~modular, ~~these forward~~end-~~looking~~to-end ~~statements~~ecosystem asdelivers ~~a result of various risks~~secure, ~~uncertainties~~high-throughput ~~and~~connectivity ~~other~~optimized ~~factors,~~for ~~including the ability to raise sufficient capital to continue our operations. Actual events or results may differ materially from those discussed in forward~~edge-~~looking~~deployed ~~statements as a result of various factors~~platforms, including, ~~without~~unmanned ~~limitation~~systems, ~~the~~ISR ~~risks outlined under “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31~~aircraft, ~~2023,~~ and ~~matters~~other ~~described in this report generally. In light of these risks and uncertainties, there can be no assurance that the forward~~mission-~~looking~~critical ~~statements~~assets ~~contained~~operating in ~~this~~denied ~~report~~or ~~will~~infrastructure-limited ~~in fact occur~~environments.

~~Potential~~Our value as a full systems integrator lies in ~~investors~~our ~~should~~ability ~~not~~to ~~place~~bring ~~undue~~together ~~reliance~~proprietary ontechnologies ~~any~~and ~~forward~~third-~~looking~~party ~~statements~~components into cohesive, mission-ready solutions. ~~Except~~Leveraging asour software-defined ~~expressly~~architecture, ~~required~~we byenable ~~the~~network-level ~~federal~~virtualization, ~~securities~~modular ~~laws~~scalability, and rapid deployment across a wide spectrum ~~there~~of isoperational norequirements. ~~undertaking~~From unmanned platforms to ~~publicly~~manned ~~update~~defense orsystems, ~~revise~~we ~~any~~deliver ~~forward~~end-~~looking~~to-end ~~statements,~~communications ~~whether~~and assensing acapabilities that ~~result~~are oftailored, ~~new information~~adaptable, ~~future~~and ~~events~~operationally resilient, ~~changed~~ ~~circumstances~~supporting orthe ~~any~~full ~~other~~spectrum ~~reason~~of mission demands in multi-domain environments.

~~The specific~~Complementing ~~discussions herein about~~ our ~~company~~communications ~~include~~suite, ~~financial~~we ~~projections~~offer advanced ~~and~~OTH ~~future~~radar ~~estimates~~systems ~~and~~that ~~expectations~~provide ~~about~~long-range ~~our~~surveillance, ~~business. The~~early ~~projections~~warning, ~~estimates~~ and ~~expectations~~persistent ~~are~~situational ~~presented~~awareness inacross ~~this~~maritime ~~report only as a guide about future possibilities~~ and ~~do not represent~~ ~~actual~~terrestrial ~~amounts~~domains. orWe ~~assured~~have ~~events.~~also ~~All~~successfully ~~the~~fielded ~~projections~~a ~~and~~compact ~~estimates~~electronic ~~are~~warfare ~~based~~(EW) ~~exclusively~~solution, onan ~~our~~integrated ~~management’s~~ESM/ELINT ~~own~~system ~~assessment of~~for ~~our business~~UAVs, ~~the~~designed ~~industry~~to indetect, ~~which~~track, ~~we work~~ and ~~the~~analyze ~~economy~~electromagnetic atsignals ~~large~~in ~~and~~real ~~other~~time ~~operational~~to ~~factors,~~support ~~including~~tactical ~~capital~~ISR ~~resources~~missions and ~~liquidity, financial~~platform ~~condition, fulfillment of contracts and opportunities~~survivability. ~~The actual results may differ significantly from the projections.~~

~~Potential~~We have also developed and partnered to support ~~investors~~purpose-built ~~should~~communication ~~not~~modalities ~~make~~beyond ansatellite, ~~investment~~including ~~decision~~line-of-sight, ~~based~~obstructed ~~solely~~line-of-sight, onand ~~our~~over-the-horizon ~~company’s~~solutions. This ~~projections~~multi-layered architecture ensures resilient, ~~estimates~~end-to-end orconnectivity ~~expectations~~across diverse operational theaters, providing redundancy, seamless network handoffs, and sustained communications in high-risk and rapidly evolving scenarios.

~~Overview~~We operate under an asset-light model. While we do not own or manage satellite constellations, we maintain regional satellite licensing and act as a value-added reseller of satellite bandwidth. This enables cost-effective, scalable offerings and creates new revenue opportunities for both the Company and our satellite operator partners.

WeOn ~~are~~April ~~a development~~27, ~~stage~~2023, ~~innovative~~we ~~satellite~~were ~~communication~~awarded ~~technology~~a ~~company~~regional satellite ~~providing~~service ~~carrier-neutral~~spectrum ~~and~~usage ~~software-defined infrastructure~~permit, toauthorizing ~~deliver~~the ~~mission-critical,~~provision ~~multi-orbit~~of ~~satellite~~ broadband ~~connectivity~~satellite ~~for~~services ~~the~~across ~~public~~mobile ~~and~~backhaul, ~~private sectors. For~~enterprise ~~the~~communications, ~~nine~~maritime, ~~months~~aviation, ~~ended~~and ~~September~~tactical ~~30,~~defense ~~2024~~markets. ~~and~~This ~~2023,~~regulatory ~~AERKOMM~~achievement ~~had~~strengthens ~~$149,563~~our ~~and~~role ~~$507,949~~ in ~~revenues~~critical communications infrastructure and ~~net~~resiliency ~~losses~~programs, ofparticularly ~~$16,686,644~~in ~~and $13,422,441~~the Indo-Pacific region.

We offer a range of next-generation technologies that bring high-throughput performance, interoperability and virtualization to provide high performance and resilient end-to-end broadband connectivity to our customers in collaboration with satellite or constellation partners and mobile network operators.40

~~Because we~~As doa ~~not~~satellite ~~operate,~~service ortelecom ~~intend~~provider toin ~~operate~~Japan and Taiwan, ~~our~~we ~~own~~are ~~satellites~~positioned ornot ~~constellations,~~only ~~our~~as ~~business~~a ~~model~~hardware ~~remains asset-light~~ and ~~far~~systems ~~less capital intensive than most companies operating in the space industry. Instead~~integrator, webut ~~are~~also as a value-added ~~reseller~~services ofprovider. ~~bandwidth~~This ~~where we provide value~~expands ~~both to~~ our ~~customers~~addressable markets and toenhances our ~~partners~~ability beto ~~unlocking~~support orstrategic ~~otherwise expanding new use-cases for satellite~~ communications, ~~which~~infrastructure ~~also means~~throughout ~~bringing~~the ~~new~~Indo-Pacific ~~revenue~~and ~~streams to our satellite operator partners whose bandwidth we resell~~beyond.

~~While we~~We ~~design~~remain ~~and~~committed ~~develop proprietary technologies, due~~ to ~~the~~enabling ~~complexity~~a ~~of the satellite communications industry~~hyper-connected, ~~in order to deliver or~~ ~~to architect end-to-end solutions~~secure, ~~we also strategically source~~ and ~~integrate~~adaptive ~~partner~~user ~~technologies~~ecosystem. toWith ~~create~~a ~~robust~~technology ~~and~~portfolio ~~reliable satellite networks~~ that ~~can~~spans besatellite ~~tailored to meet the demands of public~~ and ~~private sector clients. In order to enable resiliency and scalability, we aim to be at~~ over-the-horizon ~~forefront of implementing virtualization for satellite~~ communications, ~~through~~radar ~~our software-defined approach~~sensing, ~~which~~ ~~enhances~~electronic ~~flexibility~~warfare, ~~scalability~~virtualized networking, and ~~efficiency,~~fully ~~allowing~~integrated ~~for~~platform ~~dynamic adaptation to evolving communication needs. By orchestrating a comprehensive system of technologies~~deployment, we ~~endeavor~~are well-positioned to ~~revolutionize~~address ~~satellite~~the ~~communication~~complex ~~alongside~~and evolving ~~our~~demands ~~industry~~of ~~partners,~~modern ~~delivering unparalleled~~defense ~~capabilities~~and tocommercial ~~empower~~operations ~~industries~~in ~~and~~multi-domain ~~individuals worldwide~~environments.

42Key Trends and Uncertainties

~~Our key~~The ~~proprietary~~following ~~cutting-edge~~key ~~technology~~trends ~~is a universal terminal that we develop, which provides carrier-neutral satellite broadband access. These terminals are designed to meet the diverse needs of users across various sectors,~~ and ~~connecting~~uncertainties ~~those users to the right satellite~~may inmaterially ~~the~~impact ~~sky,~~our ~~independent~~operational ~~of which orbit it is located in, ensuring seamless connectivity and unparalleled~~ performance~~. Our universal terminals consist of both a multi-orbit flat panel antenna (FPA)~~, orfinancial ~~electronically steered array (ESA)~~condition, as well as a carrier-neutral, software-defined modem. Our groundbreaking glass semiconductor ESA antenna technology enhances performance by more than 50% in terms of throughput per square inch, compared to other antenna designs and constructions. Our work on custom beamformer chips, or application specific integrated circuits (ASICs), and on custom radiofrequency (RF) chipsets aims to optimize power and performance, enabling seamless connectivity across multiple orbits. Within our modem, the softwarelong-~~defined~~term radio (SDR) technology provides secure and agile signal transmission with military-grade security features. Our work on a custom high-speed analog-to-digital (ADC) chipset aims to unlock hybrid-orbit links and to enable advanced signal intelligence capabilities.outlook:

~~As of~~● ~~April 27, 2023, the Company has been awarded a regional satellite service spectrum usage permit~~U.S. ~~With~~defense ~~this~~appropriations ~~permit and our proprietary technology~~uncertainty, wedue ~~believe that we will be able~~ to ~~develop~~recurring ~~and~~Continuing ~~expand our revenue stream from satellite services. This positions us as not only a hardware and system supplier~~Resolutions, ~~but~~restricts ~~also~~new aprogram ~~value-added~~starts ~~service~~ and ~~satellite~~delays ~~service~~contract ~~provider, and expands the markets in which we can participate~~finalization.

~~As a~~● ~~satellite~~Geopolitical ~~service~~instability ~~provider~~ in ~~Taiwan, we will be authorized to provide satellite services in~~ the ~~Civilian~~Indo-Pacific ~~Telecommunications~~region ~~market, such~~is asincreasing ~~for~~demand ~~mobile backhaul, and Aerospace & Defense markets, such as~~ for ~~both~~resilient ~~aviation~~satellite and ~~maritime~~OTH ~~applications.~~communications Webut ~~expect~~may ~~these capabilities~~delay ~~also~~procurement ~~to enable us to secure network resiliency contracts~~timelines.

~~Moving forward,~~● ~~the~~Supply ~~Company~~chain ~~intends~~pressures ~~to pursue initiatives~~ in ~~the~~semiconductors ~~Aerospace & Defense~~ and ~~Civilian~~RF ~~Telecommunications~~components ~~markets~~continue to ~~establish a~~impact ~~leading~~production ~~position~~scalability asand ~~innovators~~lead ~~at the forefront of the booming satellite communications industry. We are primed to capitalize on the opportunities presented by the rapidly evolving satellite communication landscape~~times, ~~driving innovation~~ and ~~delivering~~recently ~~value~~announced ~~to customers and stakeholders~~tariffs.

~~U.S. Budget~~● ~~Environment~~Early-stage commercialization: As we transition from development to revenue generation, our results will remain volatile, and timing of contract execution remains a critical variable.

~~With the largest defense budget in the world,~~ U.S. ~~Government~~Budget spending levels, particularly defense spending, and timely funding thereof can affect our business prospects in the long term. While we do not yet have any contracts related to the U.S. Government’s defense spending at this time, to the extent that we can secure potential customers and contracts related to U.S. Government defense spending, the U.S. Government defense budget, spending and timeline funding thereof may affect our business prospects in the medium term, as well.Environment

The ~~President’s~~ ~~Fiscal~~U.S. ~~Year~~Government ~~(FY)~~continues ~~2024~~to ~~budget~~maintain ~~request~~the largest ~~was~~defense ~~submitted~~budget toglobally, ~~Congress~~and onU.S. ~~March~~defense 9spending levels, ~~2023~~along with the timing and structure of appropriations, ~~initiating~~may significantly influence our business prospects over the FYmedium ~~2024~~to ~~defense~~long ~~authorization~~term. While we do not currently generate revenue from contracts funded by the U.S. Government, we are actively engaged in discussions with potential partners and ~~appropriations~~customers ~~legislative~~regarding ~~process~~participation in programs that may be supported by U.S. ~~The~~Government ~~request~~defense ~~included~~funding. ~~$886~~Our ~~billion~~ability ~~for~~to ~~National~~enter ~~Defense,~~into ofsuch ~~which~~programs ~~$842~~may ~~billion~~be isaffected ~~for~~by the ~~Department~~availability, prioritization, ofand ~~Defense~~allocation ~~(DoD)~~of ~~base~~federal ~~budget~~defense spending.

~~On June~~Then ~~3, 2023, the~~ President ~~signed~~Biden’s ~~H.R. 3746 “The~~ Fiscal ~~Responsibility~~Year ~~Act”~~ (~~FRA~~FY) 2025 ~~into~~budget ~~law.~~request, ~~The~~released ~~legislation~~in ~~suspended~~March ~~the debt~~2024, ~~ceiling~~included ~~until~~$895 ~~January~~billion 1,in ~~2025,~~total ~~and,~~national ~~among~~defense ~~other provisions~~funding, ~~capped~~consistent ~~national~~with ~~defense~~the spending atcaps established ~~$886~~by ~~billion~~the ~~for~~Fiscal FYResponsibility ~~2024~~Act (~~President’s Budget~~FRA). ~~Request~~Of ~~level)~~this ~~and~~amount, $~~895~~842 billion ~~for~~was FYdesignated ~~2025.~~for ~~Supplemental~~the ~~funding~~Department ~~legislation~~of isDefense ~~not~~(DoD) ~~subject to the~~ base budget ~~caps~~. IfThe aSenate ~~continuing resolution~~Appropriations isCommittee’s ~~enacted~~draft ~~and~~FY ~~still~~2025 inDefense ~~effect~~Appropriations ~~and~~Bill ~~Congress~~proposed ~~does~~$852.2 ~~not~~billion ~~pass~~in ~~all~~total ~~twelve~~funding, representing ~~defense~~a ~~and~~$27.2 ~~non-defense~~billion ~~discretionary~~(3.3%) ~~appropriations bills~~increase byover ~~April~~FY ~~30,~~ 2024, ~~the~~enacted ~~FRA~~levels. ~~will~~This ~~result~~funding inis aintended ~~decrease~~to insupport ~~government~~modernization, ~~spending~~readiness, force ~~for~~structure, FYand ~~2024~~strategic bydeterrence ~~one~~objectives ~~percent~~in ~~from~~alignment FYwith ~~2023~~the ~~enacted~~2022 ~~levels~~National Defense Strategy.

~~The~~A key focus area within the DoD’s modernization ~~House~~strategy is the development and ~~Senate~~fielding ~~continue~~of ~~the~~Collaborative ~~legislative~~Combat ~~process~~Aircraft on(CCA) under the FYU.S. ~~2024~~Air ~~budget~~Force’s Next Generation Air Dominance (NGAD) initiative. OnThe ~~December~~CCA 22program is expected to drive significant investment in unmanned aerial systems, ~~2023~~autonomy, ~~the~~and ~~President~~resilient ~~signed~~communications infrastructure. ~~the~~Since FY ~~2024~~2023, ~~National Defense~~Congress ~~Authorization~~has ~~Act~~appropriated ~~(NDAA)~~more ~~into~~than ~~law~~$1.7 billion for CCA-related research, development, and prototyping. The ~~NDAA~~FY ~~authorizes~~2025 ~~funding~~budget request includes an additional $559 million to continue CCA development efforts. According to recent U.S. Air Force estimates, procurement of at least 1,000 CCA units is anticipated over the ~~FRA~~coming ~~cap~~decade, ofwith ~~$886~~early ~~billion~~production ~~for~~beginning ~~National~~mid-to-late decade. ~~Defense~~These aircraft will require highly integrated, secure, and low-latency communications systems—particularly those that can perform in denied or contested electromagnetic environments—aligning directly with our core competencies in multi-orbit satellite, over-the-horizon, and software-defined networking technologies.

On January 19, 2024, the President signed a continuing resolution that extends funding of four appropriations bills to March 1, 2024 and the remaining eight to March 8, 2024. This will provide Congress additional time to enact all twelve FY 2024 appropriations bills based on the overarching U.S. Government spending agreement reached by House and Senate leaders on January 7, 2024 which comports with the FRA cap of $886 billion for National Defense in FY 2024. Overall, congressional sentiment remains strong for supporting the National Defense Strategy and defense spending. However, the logistical and political challenges, especially in the U.S. House of Representatives, are complex and add funding risk.41

43In parallel, the Department of Defense is advancing the Next Generation Air Dominance (NGAD) program, which includes the development of the F-47, a sixth-generation fighter jet expected to replace the F-22 Raptor. In March 2025, Boeing was awarded a multibillion-dollar contract to lead F-47 development, with the Air Force targeting at least 200 manned NGAD aircraft supported by CCA systems. The NGAD program is projected to receive approximately $28.5 billion in funding over the next five years. The F-47’s operational design emphasizes survivability, advanced autonomy, and the ability to operate seamlessly alongside unmanned CCA platforms—creating an ecosystem of networked assets dependent on secure, high-throughput, and resilient communications systems. These program requirements directly align with our integrated terminal systems, over-the-horizon communications technologies, and platform-level integration expertise for unmanned and autonomous systems.

~~Under the~~As ~~continuing~~of ~~resolution,~~the ~~funding~~date atof ~~amounts~~this ~~consistent~~filing, ~~with~~the ~~appropriated~~federal ~~levels~~government continues ~~for~~to FYoperate ~~2023~~under ~~are~~a ~~available,~~Continuing ~~subject~~Resolution to(CR) ~~certain~~extending ~~restrictions, but~~prior-year ~~new~~funding. ~~contract~~While ~~and~~stopgap ~~program~~funding ~~starts~~allows ~~are~~for ~~not~~ongoing ~~authorized.~~operations, it Werestricts ~~expect~~new ~~our~~program ~~technologies~~starts and ~~solutions~~contract ~~are relevant both to current programs~~awards, which may ~~continue~~delay toor belimit ~~supported~~opportunities ~~and~~for ~~funded~~us ~~under~~to ~~the~~participate ~~continuing~~in ~~resolution,~~newly asfunded ~~well~~initiatives or asintegration toefforts ~~new~~with ~~programs,~~potential ~~which~~prime ~~are~~contractors. ~~not~~If ~~yet~~a ~~authorized. Regardless,~~full-year ~~during~~CR ~~periods~~or ~~covered~~a bygovernment ~~continuing~~shutdown ~~resolutions~~occurs, wethese restrictions may ~~experience challenges in securing contracts with prime contractors~~continue toor ~~incorporate~~intensify, ~~our~~potentially ~~products~~resulting ~~and~~in ~~services~~further delays in ~~their~~procurement ~~current~~activity, ~~programs~~program execution, ~~and~~or ~~those~~technology ~~delays~~adoption—especially for ~~may~~new ~~adversely~~or ~~affect~~emerging ~~our~~systems ~~ability~~that toalign ~~generate~~with ~~revenue from~~future ~~new~~modernization ~~contracts~~objectives.

~~On October~~As ~~20, 2023,~~ the ~~President~~defense ~~submitted~~industry arapidly ~~$106~~incorporates ~~billion~~artificial intelligence ~~supplemental~~(AI) ~~funding~~into ~~request~~command, tocontrol, ~~Congress~~surveillance, ~~for~~targeting, ~~assistance~~and toautonomous ~~Ukraine~~systems, ~~Israel~~it ~~and the~~is ~~IndoPacific;~~increasingly ~~related~~evident ~~U.S.~~that ~~restock~~AI’s ofoperational effectiveness ~~capacity~~is ~~transfers~~heavily todependent ~~Ukraine~~on ~~and~~secure, ~~Israel;~~low-latency, and ~~U.S.~~persistent ~~border~~communications ~~security~~infrastructure. ~~Congress~~Without ~~has~~access ~~not~~to ~~yet acted~~resilient, onhigh-performance ~~this~~communications—particularly ~~request~~satellite, ~~which~~over-the-horizon, isand ~~part~~software-defined ofnetworking—AI-enabled ~~the~~systems may ~~broader~~be ~~debate~~degraded onor FYrendered ~~2024~~inoperable ~~U.S.~~in ~~Government~~contested ~~funding~~or ~~and~~disconnected ~~border security policy~~environments. ~~Supplemental~~As ~~and emergency~~a ~~funding~~result, ~~are~~we ~~not~~believe ~~subject~~that toadvanced ~~the~~communications technologies ~~FRA~~are ~~cap.~~not Ifonly ~~enacted~~enablers, ~~this~~but ~~would~~essential ~~provide~~infrastructure ~~a partial relief valve~~ for ~~DoD funding limits under~~ the ~~FRA~~successful ordeployment ~~other~~and ~~limiting~~scalability ~~scenarios~~of ~~such~~AI asin adefense ~~prolonged continuing resolution~~operations.

~~If Congress~~Future ~~is not able to enact FY 2024 appropriations bills or extend the continuing resolution, the~~ U.S. Government funding will ~~enter~~continue ~~a whole~~to orbe ~~partial~~shaped ~~shutdown.~~by ~~The~~political ~~impact~~negotiations, ofeconomic ~~any~~conditions, ~~government~~and ~~shutdown~~shifting isnational ~~uncertain~~security priorities. ~~However,~~While ifwe acannot ~~government~~provide ~~shutdown~~any ~~were~~assurance that toour ~~occur~~ongoing ~~and~~engagements ~~were~~will ~~to continue~~result ~~for~~in anbinding ~~extended~~agreements ~~period~~or revenue, we ~~could~~believe bethat atour ~~risk~~secure ofsatellite ~~reduced opportunities to bid for~~ and ~~compete for, as~~ over-the-horizon ~~potential partners we~~connectivity, ~~would~~software-defined ~~be working with may experience reduce orders~~modems, ~~program~~integrated ~~cancellations,~~terminal ~~schedule delays~~systems, ~~production halts~~ and ~~other~~support ~~disruptions~~for ~~and nonpayment,~~unmanned ~~which~~platforms ~~could~~position ~~adversely~~us ~~affect~~well ~~our~~to ~~potential~~address ~~partners’ results of operations. Further, if any one of~~ the 12evolving ~~appropriations~~needs ~~bills is under a continuing resolution as~~ of ~~April~~DoD ~~30,~~modernization ~~2024,~~and ~~USG~~resilience ~~funding~~efforts. ~~levels~~We will ~~reset~~continue to FYmonitor ~~2023~~developments ~~enacted~~in ~~levels~~the ~~minus~~federal 1%budget ~~for~~process ~~the remainder~~and ofassess FYpotential impacts ~~2024~~on orour ~~until~~strategic ~~all~~positioning 12and ~~appropriations~~business ~~are enacted~~outlook.

~~We anticipate~~Geopolitical ~~the federal budget will continue to be subject to debate~~ and ~~compromise~~Economic shaped by, among other things, heightened political tensions, the global security environment, inflationary pressures, and macroeconomic conditions. The result may be shifting funding priorities, which could have material impacts on defense spending broadly and our potential partners’ programs.Environment

~~While we~~We dooperate ~~not~~in ~~yet~~a ~~generate~~dynamic ~~revenue from programs funded by the U.S. Government, we aim to initiate~~ and toincreasingly ~~continue discussions with our potential~~complex ~~partners~~geopolitical and ~~our~~macroeconomic ~~potential~~environment ~~customers~~that todirectly ~~participate~~impacts inour ~~contracts~~strategic ~~and in programs funded~~outlook, inmarket ~~whole or in part~~opportunities, byand ~~the~~potential ~~U.S.~~demand ~~Government.~~for Weour ~~cannot~~technologies ~~give~~and ~~any~~services. ~~assurances~~The atfollowing ~~this~~discussion ~~time,~~includes ~~however,~~forward-looking statements that weare ~~will~~subject ~~be able~~ to ~~successfully~~risks ~~complete~~and ~~any~~uncertainties. Actual ofresults ~~these~~may ~~discussions,~~differ ormaterially ~~that we~~due ~~will~~to ~~generate~~a ~~revenue~~number ~~from~~of ~~contracts or programs funded~~factors, inincluding ~~whole~~those ordiscussed inunder ~~part,~~“Risk byFactors” ~~the~~and ~~U.S. Government~~ elsewhere in ~~the~~this ~~future~~report.

Geopolitical tensions in the Asia-Pacific region – particularly involving China, Taiwan, and ~~Economic~~Japan ~~Environment~~– and concerns about the direction of the Trump Administration in the United States and anticipated increasing pressure on countries to fund defense spending have led to elevated concerns around regional security, operational resiliency, and defense modernization. In particular, increased Chinese military activity around Taiwan and the broader Indo-Pacific has prompted governments and defense organizations across the region to reevaluate strategic readiness and accelerate investments in command, control, communications, and intelligence capabilities. These developments may create longer-term opportunities for the Company’s solutions, particularly in the areas of over-the-horizon connectivity, radar, unmanned systems integration, and secure multi-network communications infrastructure.

~~We operate~~In inthis aconnection, ~~complex~~the ~~and~~Company ~~evolving~~notes ~~global~~that ~~security~~on December ~~environment~~27, ~~and~~2024 ~~our~~the ~~business~~Foreign isMinistry ~~affected~~of bythe ~~geopolitical issues. Russia~~People’s ~~invasion~~ Republic of ~~Ukraine~~China ~~significantly~~(PRC) ~~elevated~~announced ~~global~~that ~~geopolitical tensions and security concerns resulting~~ in ~~increased~~response ~~interest~~to ~~for~~United ~~certain~~States ~~of our~~announcements ~~products~~about ~~and~~arms ~~services~~sales asand ~~countries~~military ~~seek~~assistance to ~~improve~~Taiwan ~~their~~and ~~security~~related ~~posture.~~negative Instatements ~~addition,~~the ~~security~~PRC ~~assistance~~considered ~~provided~~objectionable, by the ~~U.S.~~PRC ~~Government~~had decided ~~and~~to ~~its~~take ~~allies~~countermeasures toagainst ~~Ukraine~~seven ~~has~~companies ~~created~~including ~~U.S.~~Aerkomm ~~Government~~(the ~~and~~six ~~allied~~in ~~demand~~addition to ~~replenish~~Aerkomm ~~U.S.~~are ~~stockpiles~~Insitu, ~~resulting~~Inc., inHudson ~~additional and potential~~Technologies ~~future~~Co., ~~orders~~Saronic ~~for~~Technologies, ~~our~~Inc., ~~potential~~Raytheon ~~partners’ products~~Canada, ~~including~~Raytheon ~~for~~Australia, ~~the~~and ~~ramp-up~~Oceaneering inInternational, ~~production~~Inc.). ~~capacity~~For ~~for~~these ~~certain~~companies, ~~products.~~the ~~Although~~PRC ~~many~~Foreign ofMinistry ~~our~~announced ~~potential~~that ~~partners~~their ~~received~~movable ~~new~~and ~~orders~~immovable inproperties, ~~2024~~and ~~attributable~~other tokinds aof ~~response~~assets towithin ~~the~~China ~~conflict~~were frozen and ~~continue~~that ~~to expect to receive~~all ~~them~~organizations ~~over~~and ~~the~~individuals ~~next~~within ~~several~~China ~~years,~~were ~~given~~prohibited ~~the~~from ~~long-cycle~~engaging ~~nature~~in oftransactions, ~~our~~cooperation ~~business~~ and ~~current~~other ~~industry~~activities ~~capacity,~~with ~~the orders did not result~~them. inAerkomm adoes ~~significant increase in 2024 sales as we do~~ not ~~yet~~ have ~~binding~~commercial ~~contracts~~operations ~~with~~in ~~these~~the ~~potential~~PRC ~~partners.~~nor Weplans ~~aim~~ to ~~continue~~develop ~~to work~~business ~~with~~in ~~our~~the ~~potential~~PRC ~~partners~~ and ~~their~~Aerkomm ~~supply~~is ~~chains~~not toaware ~~evaluate~~of ~~increases~~any ~~anticipated~~concrete measures ~~potential~~that ~~demand~~may ~~and~~have ~~enable~~been ustaken tofollowing ~~position our~~the ~~products~~PRC ~~and~~Foreign ~~services~~Ministry’s toannouncement. ~~deliver~~However, ~~critical~~the ~~capabilities~~announcement tounderscores ~~our~~the ~~potential~~inherent geopolitical ~~partners~~risk ~~and~~associated towith ~~their~~involvement ~~customers~~ in ~~the~~defense Uindustries.~~S. Government.~~

Our business and financial performance is also affected by general economic conditions. Supply chain disruptions persist, and although we continue working to minimize the impact of supply chain challenges, many of these challenges are industry wide or caused by geopolitical events that are outside of our control. In addition, heightened levels of inflation and the potential worsening of macro-economic conditions present risks for our potential partners, our suppliers and the stability of the broader defense industrial base. Certain costs, including rising labor rates and supplier costs, may increase as a result of inflation, and may put pressure on achieving our expected margins in the future. If we continue to experience high rates of inflation, and we are unable to successfully mitigate the impact, our future profits, margins and cash flows, may be adversely affected. Inflation and higher interest rates can also constrain the overall purchasing power of our potential partners and their customers for our products and services potentially impacting future orders we aim to secure.42

44The ongoing conflict in Ukraine has further underscored the global need for adaptable and resilient defense systems. One key trend that has emerged from this conflict is the demonstrated operational effectiveness and strategic value of unmanned systems—including UAVs, UUVs, and remotely operated assets—over traditional manned platforms in contested and dynamic environments. This shift aligns with our technology roadmap and systems integration strategy. Our platform is specifically designed to support high-value unmanned and autonomous systems through lightweight, low-power, software-defined communication terminals, over-the-horizon (OTH) radar solutions, and integrated C4ISR components that enable persistent situational awareness and command flexibility.

~~International~~While the Company does not currently have binding ~~Business~~contracts related to these strategic developments, we continue to engage with potential partners – including prime contractors and government entities – to align our offering with anticipated procurement priorities and to account for the effects of changes in tariff rates and policies. We believe our integrated, software-defined architecture and asset-light model position us to respond effectively to emerging demand across both public and private sector markets.

~~A key~~Macroeconomic ~~component~~and ofgeopolitical ~~our~~conditions ~~strategic~~remain challenging ~~plan~~and ispresent tocontinued ~~grow~~risks ~~our international sales. To accomplish this growth, we continue~~ to ~~focus on strengthening~~ our ~~relationships~~potential ~~internationally~~partners, ~~through~~suppliers, ~~partnerships~~ and ~~joint technology efforts~~customers. ~~Our~~Global ~~international~~supply ~~business~~chains is– ~~primarily conducted~~particularly bythose ~~direct~~involving ~~commercial~~semiconductors, ~~sales~~advanced ~~(DCS) to international customers~~materials, ~~but~~and inRF ~~the~~components ~~future,~~– weremain ~~aim~~subject to ~~engage~~disruptions, itextended ~~foreign~~lead ~~military~~times, ~~sales (FMS) contracted~~and ~~through~~price ~~the U~~volatility.S. ~~Government,~~These assupply ~~well.~~chain ~~In 2023~~pressures, ~~approximately~~exacerbated ~~100%~~by ofongoing ~~our~~trade ~~sales were DCS. Additionally~~tensions, changes in ~~2023~~tariff policies, ~~substantially~~and ~~all~~export ofcontrols ~~our sales were~~ in ~~Aerospace~~the &region, ~~Defense~~may ~~business~~impact ~~segment~~our ability to ~~one~~meet ~~international~~future ~~customer.~~production ~~Civilian~~or ~~Telecommunications’~~integration ~~sales~~timelines, ~~from international~~particularly ~~customers~~if ~~were~~current ~~not~~constraints ~~material in 2023~~persist.

In ~~2023~~ addition, ~~international~~inflationary ~~customers~~pressures ~~accounted~~and ~~for~~elevated interest ~~approximately~~rates ~~100% of the sales~~ in ~~the~~key ~~Aerospace~~markets &such ~~Defense business segment~~ as ~~part~~Taiwan, ~~of a~~Japan, ~~development~~and ~~contract~~the weUnited ~~have~~States ~~been~~may ~~engaged~~constrain ~~with~~defense ~~since~~budgets ~~2021~~or todelay ~~develop~~funding acycles. ~~first-of-its-kind satellite communications architecture for~~Rising ~~unmanned~~labor ~~aerial~~and ~~vehicles~~input ~~(UAVs)~~costs ~~engaged~~could inalso ~~intelligence,~~put ~~surveillance,~~pressure ~~and~~on ~~reconnaissance~~margins ~~(ISR)~~in ~~missions~~future ~~with~~periods. ~~our~~While ~~development~~we ~~partner and~~continue ~~customer.~~to Byimplement ~~late~~strategies ~~2023,~~to ~~our~~mitigate ~~technology~~the impact ~~was~~of ~~tested~~inflation and ~~achieved~~supply ~~positive~~chain ~~results~~risk—including inthrough ~~operational~~strategic ~~environments.~~sourcing, Weinventory ~~anticipate~~management, ~~starting~~and cost control—there tocan ~~deliver~~be onno ~~our~~assurance ~~first~~that ~~major~~these ~~contract~~measures ~~for~~will ~~this~~fully ~~same~~offset ~~customer~~external ineconomic ~~2024~~pressures.

~~Commercial~~We remain focused on collaborating with potential ~~Aviation~~partners, ~~Business~~their ~~Environment~~supply chains, and ~~Trends~~end customers to evaluate projected demand and ensure our solutions are aligned with both near- and long-term operational requirements. As global and regional defense priorities evolve, we believe our integrated approach to communications, sensing, and unmanned systems enablement positions the Company to contribute meaningfully to the development of resilient, next-generation capabilities in Asia-Pacific and beyond.

~~In 2023, global air traffic largely recovered to 2019 levels with domestic travel continuing to be the most robust and the single-aisle market following closely.~~ International travel has mostly recovered and the wide-body market continues to be paced by the international travel recovery. The transition in the international commercial market from recovery to normal market conditions is progressing slowly as China international travel remains below 2019 levels. Our potential aircraft manufacturing partners are experiencing strong demand from their airline customers globally.Business

~~Airline financial~~A ~~performance,~~key ~~which~~component ~~influences~~of ~~demand~~our ~~for~~strategic ~~new~~growth ~~capacity,~~plan ~~has benefited from~~ is the ~~resilient~~expansion ~~demand for travel. The International Air Transport Association (IATA) is estimating 2023 industry-wide profit~~ of ~~$23.3~~international ~~billion~~sales, upparticularly ~~from~~within ~~its~~defense-focused ~~forecast~~markets ofin ~~$4.6 billion a year ago, primarily driven by North America,~~ Europe and the ~~Middle~~Asia-Pacific ~~East~~region. ~~For~~Our ~~2024, IATA is forecasting $25.7 billion in profits for the industry~~international ~~globally.~~efforts ~~The~~are ~~overall~~centered ~~outlook~~on ~~continues~~building ~~to stabilize as we face uncertainties in the environment in the near~~long- ~~to medium-~~term asrelationships ~~airlines are~~with ~~facing~~defense ~~persistently~~agencies, ~~high~~integrators, and ~~volatile~~government ~~cost~~partners ofthrough ~~fuel~~both ~~and~~Direct Commercial ~~tight~~Sales ~~labor~~(DCS) ~~conditions. The global economy is expecting an easing of inflation~~ and ~~interest rates~~, ~~with~~in ~~regional~~the ~~economic~~future, ~~and~~Foreign ~~geopolitical~~Military ~~difficulties~~Sales ~~adding~~(FMS) ~~uncertainty~~executed tothrough the ~~outlook~~U.S. ~~and the financial viability of some airlines and regions~~Government.

~~The long-term~~We ~~outlook~~continue ~~for~~to ~~the~~pursue ~~commercial~~international ~~aviation~~opportunities aligned ~~industry~~with ~~remains~~our ~~positive~~core ~~due~~product toportfolio—spanning ~~the~~satellite ~~fundamental~~connectivity, ~~drivers~~over-the-horizon of(OTH) ~~air~~communications, ~~travel~~radar ~~demand:~~systems, ~~economic~~virtualized ~~growth~~modems, ~~increasing~~RF ~~propensity~~chipsets, toand ~~travel~~integration ~~due~~of tothese ~~increased~~technologies ~~trade,~~into ~~globalization~~high-value ~~and~~platforms ~~improved~~including ~~airline~~unmanned ~~services~~aerial ~~driven~~vehicles by(UAVs), ~~liberalization~~unmanned ofunderwater ~~air~~vehicles ~~traffic~~(UUVs), ~~rights~~unmanned ~~between~~surface ~~countries.~~vessels ~~The~~(USVs), ~~commercial~~and ~~aviation~~manned ~~industry~~military ~~remains~~systems. ~~vulnerable~~Our tomodular, ~~exogenous~~carrier-neutral ~~developments~~architecture ~~including fuel~~is ~~price~~designed ~~spikes,~~to ~~credit~~meet ~~market~~modern ~~shocks,~~requirements ~~acts~~for ofnetwork ~~terrorism~~resilience, ~~natural~~secure ~~disasters~~communications, ~~conflicts, epidemics, pandemics~~ and ~~increased~~autonomy ~~global~~across ~~environmental regulations~~mission domains.

While we do not yet generate revenue from contracts in the commercial aviation industry, we aim to initiate and to continue discussions with our potential partners and our potential customers in the commercial aviation industry to provide our products and our services to such potential partners and potential customers under binding and definitive contracts. We cannot give any assurances at this time, however, that we will be able to successfully complete any of these discussions, or that we will generate revenue from contracts in the commercial aviation industry in the future.Europe

45The European defense landscape has undergone significant transformation, with defense spending reaching unprecedented levels. In March 2025, European Commission President Ursula von der Leyen introduced the “ReArm Europe” initiative, a sweeping plan to mobilize up to €800 billion in defense investments across EU member states by 2030. This includes suspending EU fiscal rules to enable greater national defense spending, allocating €150 billion in EU-backed defense loans, and redirecting EU funds toward procurement, infrastructure, and technology development. The goal is to reduce Europe’s reliance on non-EU defense providers and accelerate internal capability development.

~~Civilian Telecommunications Business Environment and Trends~~43

~~According to~~In ~~GSMA’s~~2024, ~~report~~European ~~“The~~Union ~~Mobile~~(EU) ~~Economy~~defense ~~2023”,~~expenditure reached ~~mobile~~€326 ~~connectivity~~billion, ~~continues~~with toprocurement bespending aprojected ~~lifeline~~to ~~for~~exceed ~~society,~~€90 ~~helping~~billion. ~~the most~~Research ~~vulnerable~~and ~~people~~technology in(R&T) ~~areas~~investments rose ~~affected~~to by€5 ~~conflict~~billion, and ~~natural~~defense ~~disasters~~investment tooverall ~~stay~~accounted ~~connected.~~for Ita isrecord ~~also~~31% ~~enabling~~of ~~advanced~~total ~~connectivity capabilities~~spending. ~~needed~~These byincreases ~~verticals~~reflect tothe ~~innovate~~EU’s long-term ~~amid~~commitment ~~diverse~~to ~~political,~~strategic ~~social~~autonomy and ~~macroeconomic~~regional ~~headwinds~~deterrence.

ByAmid this shift, member states are reassessing ~~the~~their ~~end~~reliance ofon ~~2022~~non-European communications infrastructure. Italy suspended talks with SpaceX on Starlink, ~~over~~and 5Poland has publicly explored alternative satellite providers for defense communications.4 ~~billion~~In ~~people~~parallel, ~~globally~~the ~~subscribed~~EU tolaunched athe ~~mobile~~IRIS² ~~service~~(Infrastructure for Resilience, Interconnectivity ~~including~~and 4Security by Satellite) initiative – a €10.46 billion ~~people~~program ~~who~~to ~~also~~deploy ~~used~~a ~~the~~sovereign, ~~mobile~~multi-orbit satellite ~~internet~~constellation aimed at serving both government and commercial users. The ~~mobile~~initial ~~internet~~constellation, ~~usage~~expected ~~gap~~to ~~has~~include ~~narrowed~~approximately ~~markedly~~290 satellites, inis ~~the~~targeting ~~last~~partial ~~five~~operational ~~years~~capability -by ~~from~~2027, ~~50%~~with infull ~~2017~~deployment toexpected ~~41%~~by in2030. ~~2022~~IRIS² onis ~~average~~backed -by ~~but~~a mix ~~still~~of ~~remains~~public ~~significant~~funding and ~~demands~~private ~~urgent~~investment ~~attention~~via ~~from~~the ~~all~~SpaceRISE ~~stakeholders~~consortium.

~~In 2022,~~These ~~mobile~~developments ~~technologies~~present ~~and~~a ~~services~~significant ~~generated~~opportunity for 5%us ofto ~~global~~offer ~~GDP~~sovereign, asecure ~~contribution~~satellite ~~that~~communications ~~amounted~~solutions toacross ~~$5.2~~European ~~trillion~~defense ofprograms. ~~economic~~Our ~~value~~multi-orbit ~~added~~terminals, software-defined ~~and~~radios, ~~supported~~over-the-horizon 28systems, ~~million~~and ~~jobs~~virtualized ~~across~~network ~~the~~infrastructure ~~wider~~directly ~~mobile~~align ~~ecosystem.~~with 5GEU ~~will~~objectives ~~underpin~~to ~~future~~create ~~mobile~~resilient, ~~innovation~~autonomous communications ~~and~~networks ~~services,~~that ~~building~~can ~~on ongoing~~perform ~~deployments~~in ~~and~~contested ~~adoption~~environments.

~~5G adoption~~We ~~was~~are ~~projected~~actively toengaged ~~reach~~in ~~17%~~discussions inwith ~~2023~~European-based integrators, ~~rising~~prime contractors, and government stakeholders to ~~54%~~support ~~(equivalent~~initiatives related to ~~5.3~~ISR ~~billion~~modernization, ~~connections)~~tactical bycommunications, and ~~2030~~secure network integration across manned and unmanned defense platforms. ~~The~~These ~~technology~~engagements ~~will~~are ~~add~~expected ~~almost~~to support both Direct Commercial $1Sales ~~trillion~~(DCS) toand ~~the~~future ~~global~~Foreign ~~economy~~Military inSales ~~2030,~~(FMS) ~~with~~as ~~benefits~~European ~~spread~~allies ~~across~~diversify ~~all~~their ~~industries~~defense architecture and increase regional independence.

While we do not yet generate revenue from contracts in the civilian telecommunications industry, we aim to initiate and to continue discussions with our potential partners and our potential customers in the civilian telecommunications industry to provide our products and our services to such potential partners and potential customers under binding and definitive contracts. We cannot give any assurances at this time, however, that we will be able to successfully complete any of these discussions, or that we will generate revenue from contracts in the civilian telecommunications industry in the future.Asia-Pacific

~~Principal~~The Asia-Pacific region continues to experience ~~Factors~~robust ~~Affecting~~growth ~~Financial~~in ~~Performance~~defense spending, driven by geopolitical tensions and the need to enhance national security infrastructures. China’s defense budget has seen a 7.2% increase in 2025, reflecting its ongoing efforts to modernize and expand its military capabilities.

~~We believe~~In ~~that~~response, ~~our~~neighboring ~~operating~~countries ~~and~~are ~~business~~significantly boosting ~~performance~~their ~~will~~defense beinvestments. ~~driven~~Japan, byfor ~~various~~instance, ~~factors~~has ~~that~~approved ~~affect~~a ~~the~~record ~~Aerospace~~defense &budget ~~Defense and Civilian Telecommunications segments including the magnitude~~ of ~~defense~~8.7 ~~spending~~trillion byyen ~~the~~(approximately U$55.S.1 billion) ~~and~~for ~~its~~the ~~allies,~~fiscal ~~trends~~year instarting ~~air~~April ~~travel~~1, ~~affecting the commercial airline industry~~2025, ~~and~~marking ~~trends~~a in9.4% ~~the~~increase ~~evolution~~from of the ~~digital~~previous ~~infrastructure~~year. ~~and~~Similarly, ~~technologies~~Australia ~~deployed~~has byunveiled plans ~~mobile~~to ~~network~~reach ~~operators, which~~an ~~collectively~~annual ~~constitute~~defense ~~the~~budget ~~customer~~exceeding ~~bases~~AU$100 ~~that~~billion weby ~~target~~2033-2034, asequating ~~well~~to ~~as general macroeconomic factors~~2.4% ~~Key~~of ~~factors~~its ~~that~~gross ~~may~~domestic ~~affect our future performance include:~~product.

●As ~~our~~part ~~ability~~of toJapan’s ~~enter~~broader ~~into~~defense ~~and~~posture shift, ~~maintain~~the ~~long~~Japan Self-~~term~~Defense ~~business~~Forces ~~arrangements~~(JSDF) ~~with~~are ~~potential~~undergoing ~~partners~~rapid ~~that~~modernization, ~~are~~with ~~defense~~a ~~contractors~~strategic ~~and~~emphasis ~~other~~on ~~potential~~unmanned ~~military~~systems and ~~government~~drone warfare ~~customers,~~capabilities. ~~which~~Recent ~~depends~~public onreporting ~~numerous~~highlights ~~factors~~that ~~including~~UAVs ~~the~~are ~~real~~now orcentral ~~perceived~~to ~~availability,~~Japan’s ~~quality~~defense ~~and~~transformation, ~~price~~supporting surveillance, ofstrike, ~~our services~~ and ~~product~~rapid-response ~~offerings~~operations. asThe ~~compared~~JSDF tois ~~those~~actively ~~offered~~investing byin ~~our~~both ~~competitors;~~domestically ●produced ~~our ability to enter into~~ and ~~maintain long~~allied-~~term~~developed unmanned ~~business~~platforms ~~arrangements~~capable ~~with~~of ~~potential~~operating ~~partners~~ in ~~the~~contested ~~commercial aviation~~ and ~~airline~~GPS-denied ~~industries~~environments. ~~and~~This ~~other~~includes ~~potential aerospace customers, which depends on numerous factors including~~ the ~~real~~integration orof ~~perceived availability~~AI, ~~quality~~autonomous operations, and ~~price~~long-range, ofsurvivable ~~our~~communications ~~services~~infrastructure—key ~~and~~areas ~~product~~of ~~offerings~~alignment aswith ~~compared~~our toexisting ~~those~~technology ~~offered by our competitors;~~roadmap.

●In ~~our~~parallel, ~~ability~~growing toconcern ~~enter~~over ~~into~~a ~~and maintain long-term business arrangements with~~ potential conflict ~~partners~~ in ~~civilian~~the ~~telecommunications~~Taiwan ~~industries~~Strait ~~and~~has ~~other~~prompted ~~potential telecommunications customers, which depends on numerous factors including~~ the ~~real~~U.S. orDepartment ~~perceived availability, quality and price~~ of ~~our~~Defense ~~services~~ and ~~product~~Indo-Pacific ~~offerings~~partners ~~as compared~~ to ~~those~~prioritize ~~offered~~the byrapid ~~our~~fielding ~~competitors;~~of autonomous ●systems ~~our~~and ~~ability~~resilient tocommunications ~~enter~~infrastructure. ~~into~~The ~~and~~Pentagon ~~maintain~~has ~~long-term~~described ~~business~~the ~~arrangements with~~ potential ~~partners~~battlespace inas ~~satellite~~a ~~communications industries~~“drone hellscape,” ~~including~~calling ~~satellite~~for ~~and~~thousands ~~constellation~~of ~~operators~~low-cost, ~~with~~survivable ~~satellites~~unmanned inassets ~~various~~capable ~~orbits~~of ~~such~~operating asin ~~LEO~~denied, ~~MEO~~degraded, ~~GEO~~ and ~~HEO,~~disconnected environments. ~~which~~These ~~depends~~scenarios onfurther ~~numerous~~underscore ~~factors including~~ the ~~technical~~urgent ~~integration~~need offor ~~our~~adaptable ~~technology~~ISR architectures and ~~services~~reliable ~~with~~communications ~~their~~at ~~satellites~~the ~~and core networks;~~tactical edge.

●We ~~our~~are ~~ability~~fully toengaged ~~secure~~in ~~and~~supporting ~~maintain~~this ~~the~~regional shift. ~~relevant~~We ~~licenses~~are ~~and~~actively ~~regulatory~~accelerating ~~approvals~~engagement towith ~~operate~~regional asgovernments aand ~~distribution~~partners ~~partner~~and ofstand ~~satellite~~firm ~~bandwidth~~in ~~from~~ our ~~current~~commitment ~~and~~to ~~potential~~enhance ~~satellite~~defense resiliency and ~~constellation~~safeguard ~~partners~~U.S. inallies ~~our~~and ~~potential~~partners ~~target~~throughout ~~countries~~the ~~and~~Asia-Pacific. ~~regions~~Our secure, ~~which~~over-the-horizon ~~depends~~(OTH) oncommunications ~~numerous~~systems, multi-orbit ~~factors~~satellite ~~including~~terminals, ~~the~~software-defined ~~navigation~~radios, ofOTH ~~both~~radar, ~~national~~EW/ESM, and ~~international~~modular ~~regulatory~~integration ~~regimes~~capabilities ~~and~~offer ~~coordination~~operational ~~with~~advantages in ~~ministries~~environments where continuity of communications orand ~~their~~autonomous ~~equivalent;~~operations are paramount.

4644

	●	our ability to secure and maintain the relevant type approvals, as necessary, to install our universal terminals on airborne, maritime and land-based vehicles and platforms, such as the DO-160 certification for installation of our systems on aircraft, which depends on numerous factors including the navigation of both governmental and third-party regulatory regimes and coordination with key stakeholders;
	●	the extent of the adoption of our products and services by potential Aerospace & Defense and Civilian Telecommunications partners and customers;

We are currently engaged in advanced discussions with prospective customers and partners in the Asia-Pacific region regarding the integration of our technologies into unmanned systems and airborne ISR platforms, and next-generation defense systems. These efforts are focused on delivering interoperable, AI-enabled, and mission-adaptable communications networks that address the evolving operational needs of Indo-Pacific allies and support regional deterrence and resilience initiatives.

●Near-Term ~~costs~~International ~~associated~~Delivery ~~with implementing, and our ability to implement on a timely basis, our technology, upgrades and installation technologies;~~Plans

●In ~~costs~~2024, ~~associated~~international ~~with~~customers ~~and~~accounted ~~our~~for 100% ~~ability~~of toAerospace ~~execute~~& ~~our~~Defense ~~expansion~~segment revenue, ~~including~~derived ~~modification~~from toa ~~our~~development ~~network~~contract toinitiated ~~accommodate~~in ~~satellite~~2021 ~~technology,~~with ~~development~~a ~~and~~non-U.S. ~~implementation~~customer ofto ~~new~~build and test a satellite~~-based~~ ~~technologies,~~communications ~~the~~architecture ~~availability~~for ofUAVs ~~satellite~~conducting ~~capacity,~~ISR ~~costs~~missions. ofFollowing ~~satellite~~successful ~~capacity~~testing toin ~~which~~late 2024 under operational conditions, we ~~may~~anticipate ~~have~~initial todeliveries ~~commit~~and ~~well~~revenue inrecognition ~~advance,~~from ~~and~~the ~~compliance~~first major contract associated with ~~regulations;~~this project to commence in 2025.

●We ~~costs~~intend ~~associated~~to ~~with~~expand ~~managing~~our ainternational ~~rapidly~~engagement through both DCS and FMS channels, leveraging our software-defined, hardware-integrated solutions to meet growing ~~company;~~global demand for resilient defense communications and unmanned platform capabilities. While we cannot guarantee the successful conversion of discussions into binding agreements or revenue, we believe ongoing shifts in the global defense landscape and increased allied spending present a strategic opportunity for long-term growth.

●Across ~~the~~these ~~number~~efforts, ofwe ~~manned~~are ~~and~~pursuing ~~unmanned~~revenue opportunities ~~defense~~through ~~platforms~~strategic inpartnerships, ~~service~~licensing, inand ~~our~~terminal ~~markets,~~sales. ~~including~~As ~~changes~~of inthe ~~fleet~~date ~~size~~of bythis ~~one~~filing, orwe ~~more~~are ofactively ~~our~~engaged ~~potential~~with over ~~military~~25 or government ~~customers;~~agencies, ●defense ~~the~~integrators, ~~geopolitical environment~~ and ~~other~~commercial ~~trends~~primes ~~that~~across ~~affect~~the ~~defense~~U.S., ~~spending;~~Japan, ●EU, ~~continued~~and ~~demand~~Indo-Pacific. ~~for~~These ~~connectivity~~engagements span ~~and~~stages ~~proliferation~~from ofearly ~~manned~~requests ~~and~~for ~~unmanned~~information ~~defense~~(RFI) ~~platforms,~~to ~~including~~pilot ~~UAVs~~testing and ~~drones;~~integration ●evaluations. ~~the~~The ~~number~~indicative value of ~~aircraft~~our inaggregate opportunity ~~service~~pipeline inexceeds ~~our~~$150 ~~markets~~million, ~~including~~though ~~consolidation~~no ofassurance ~~the~~can ~~airline~~be ~~industry~~given orthat ~~changes~~these inengagements ~~fleet~~will ~~size~~convert byto ~~one~~binding oragreements. We ~~more~~anticipate initial award decisions on a subset of ~~our~~these ~~commercial~~opportunities ~~airline~~during ~~partners;~~2025.

●Commercial ~~the~~Aviation ~~economic~~Business ~~environment~~Environment and ~~other trends that affect both business and leisure travel;~~ Trends

	●	the number of cell towers, base stations and antennas deployed by mobile network operators and digital infrastructure developers in our markets, including consolidation of the telecommunications industry or changes in network topology due to transitions from 4G to 5G and, eventually to 6G mobile networks by one or more of our potential civilian telecommunications partners;
	●	continued demand for connectivity and proliferation of Wi-Fi enabled devices, including smartphones, tablets and laptops;

In 2024, global air traffic continued its strong recovery from the COVID pandemic, with both domestic and international travel showing sustained growth, surpassing pre-pandemic levels. International travel has mostly recovered and the wide-body market continues to be paced by the international travel recovery. Notably, outbound international air travel from China has gained momentum throughout 2024, helping to normalize global capacity and demand dynamics. Aircraft manufacturers are reporting strong order books as airlines seek to modernize fleets and expand capacity to meet sustained demand.

●Airline ~~our~~financial ~~ability~~performance, which influences demand for new capacity, has benefited from the resilient demand for travel. In 2025, the International Air Transport Association (IATA) projects the airline industry to ~~obtain~~achieve ~~required~~a ~~licenses~~combined net profit of $36 billion. This profit is based on an expected revenue of $979 billion, with a net profit margin of 3.7%, according to Business Traveler USA. While this signifies a strong and ~~approvals~~resilient ~~necessary~~industry, IATA ~~for~~points ~~our~~out ~~operations;~~that the margin remains relatively thin, especially when considering the vast number of passengers and the industry’s contribution to the global economy.

●A ~~changes~~major indevelopment ~~laws,~~reshaping ~~regulations~~the ~~and~~in-flight ~~interpretations~~connectivity (IFC) ~~affecting~~space ~~telecommunications~~is ~~services~~Starlink’s ~~and~~expansion into commercial aviation. In 2024, Starlink secured multiple agreements with global carriers – including, inUnited ~~particular,~~Airlines ~~changes~~and ~~that~~Air ~~impact~~France ~~the~~– ~~design~~with plans to equip hundreds of ~~our~~aircraft ~~equipment~~beginning ~~and~~in ~~our~~2025. ~~ability~~These developments signal an intensifying competitive landscape in aviation broadband services, as airlines seek to ~~obtain~~meet ~~required~~passenger ~~certifications~~expectations for ~~our~~seamless, high-speed ~~equipment~~connectivity across fleets.

47In light of these shifts, we are positioning our solutions to deliver differentiated value in the IFC market. Specifically, our proprietary ultra-low-profile antenna system is designed for seamless fuselage integration—offering airlines aerodynamic advantages that reduce drag and fuel consumption, while simplifying maintenance and preserving aircraft aesthetics. Our software-defined modem architecture complements this by enabling carrier neutrality and cross-orbit connectivity, making it well-suited for both commercial and government aviation use cases.

~~Ground-based Satellite System Sales~~45

~~Since~~The ~~our~~long-term ~~acquisition~~outlook offor ~~Aircom~~the ~~Taiwan~~commercial ~~in December~~aviation ~~2017,~~industry ~~this~~remains ~~wholly~~positive ~~owned~~due ~~subsidiary~~to ~~has~~the ~~been~~fundamental ~~developing~~drivers ~~ground-based~~of ~~satellite~~air ~~connectivity~~travel ~~components~~demand: ~~which~~economic ~~have an application in remote regions that lack regular affordable ground-based communications. In September 2018~~growth, ~~Aircom~~increasing ~~Taiwan~~propensity ~~consummated~~to ~~its~~travel ~~first~~due ~~sale of such~~to aincreased ~~component~~trade, aglobalization ~~small~~and ~~cell~~improved ~~server~~airline ~~terminal,~~services indriven ~~the~~by ~~amount~~liberalization of ~~$1,730,000. This~~air ~~server~~traffic ~~terminal~~rights ~~will~~between becountries. ~~utilized~~The ~~by the purchaser in~~commercial ~~the~~aviation ~~construction~~industry ofremains avulnerable ~~satellite-based~~to ~~ground~~exogenous ~~communication~~developments ~~system~~including ~~which~~fuel ~~will~~price ~~act~~spikes, ascredit amarket ~~multicast~~shocks, ~~service~~acts ~~extension~~ of ~~existing~~terrorism, ~~networks.~~natural ~~The system is designed to extend local existing networks~~disasters, ~~such as ISPs and mobile operators~~conflicts, ~~into rural areas and create better coverage and affordable connectivity in these areas. Aircom Taiwan expects to sell additional satellite connectivity components~~epidemics, ~~systems~~pandemics and ~~services to~~increased beglobal ~~used~~environmental ~~in ground mobile units in the future, although there can be no assurances that it will be successful in these endeavors~~regulations.

InWhile ~~addition,~~we indo ~~September~~not ~~2018,~~yet ~~Aircom~~generate ~~Taiwan provided~~revenue ~~installation~~from ~~and~~contracts in ~~testing~~the ~~services~~commercial ofaviation aindustry, ~~satellite-based~~we ~~ground~~aim ~~connectivity system~~ to ainitiate ~~remote island resort~~ and ~~received~~to ~~service income~~continue ~~related~~discussions towith ~~this~~our ~~project~~potential inpartners ~~the~~and ~~amount~~our ofpotential ~~$15,000.~~customers in ~~Upon~~ the ~~completion~~commercial ofaviation ~~this~~industry ~~system’s~~to ~~testing~~provide ~~phase,~~our products and ~~assuming~~our ~~that~~services ~~the system operates satisfactorily, Aircom Taiwan expects~~ to ~~begin~~such topotential ~~sell~~partners ~~this~~and ~~system~~potential tocustomers ~~multiple,~~under binding ~~remotely~~and ~~located~~definitive ~~resorts~~contracts. We ~~can~~cannot ~~make no~~give any assurances at this time, however, that ~~this system will operate satisfactorily, that~~ we will be ~~successful~~able into ~~introducing~~successfully ~~this~~complete ~~system~~any asof athese ~~viable~~discussions, ~~product offering~~ or that we will ~~be able to~~ generate ~~any additional~~ revenue from contracts in the ~~sale~~commercial ~~and~~aviation ~~deployment~~industry ofin ~~this~~the ~~system~~future.

~~Recent~~Civilian ~~Events~~Telecommunications Business Environment and Trends

~~Merger~~The civilian telecommunications industry is experiencing a rapid transformation, driven by advancements in mobile infrastructure, growing data demands, and an increasing need for secure and resilient connectivity across both public and private sectors. These trends are especially pronounced in the Asia-Pacific region, which stands as one of the fastest-growing markets for mobile and broadband services. Despite this growth, the region is also grappling with IXemerging challenges, ~~Acquisition~~including ~~Corp~~infrastructure vulnerabilities and geopolitical risks that threaten the stability of digital communications.

OnGrowth ~~March 29,~~in ~~2024,~~Mobile ~~we entered into a merger agreement the “Merger Agreement”) with IX Acquisition Corp. (“IXAQ”), a Cayman Islands exempted company (which will re-domicile from being a Cayman Islands company~~ and ~~become~~Broadband ~~a Delaware corporation), and AKOM Merger Sub Inc., a Nevada corporation and a wholly owned subsidiary of IQAC (“Merger Sub”).~~Connectivity

The ~~Merger~~global ~~Agreement~~adoption ~~provides~~of ~~that,~~5G ~~among~~is ~~other things~~projected ~~and upon the terms and subject~~ to ~~the~~exceed 2 ~~conditions~~billion ~~thereof,~~connections ~~following~~by the ~~domestication~~end ~~to Delaware~~ of ~~IXAQ~~2024, ~~Merger~~with ~~Sub~~significant ~~will~~growth ~~merge with~~led ~~and~~by ~~into~~nations ~~the~~such ~~Company~~as ~~(the~~Japan, ~~“Merger”)~~South Korea, ~~after~~China, ~~which~~and ~~the~~India. ~~Company~~This ~~will~~adoption is bepaving the ~~surviving~~way ~~corporation~~for ~~and~~the adevelopment ~~wholly-owned subsidiary~~ of ~~IXAQ.~~6G Intechnologies, ~~connection~~ with ~~the~~government ~~Merger,~~and ~~IXAQ~~private ~~will~~sector beinvestments ~~renamed~~already ~~“AKOM~~underway ~~Inc.”~~in ~~The~~research, standardization, ~~Merger~~and ~~will~~early-stage ~~become~~development. ~~effective~~Alongside ~~upon~~5G, ~~the~~there ~~filing of~~is ~~the~~an ~~certificate~~accelerating ofdemand ~~merger~~for ~~with~~enterprise ~~the~~and ~~Secretary~~industrial ofconnectivity solutions, ~~State~~particularly ofin the ~~State~~form of ~~Delaware~~private or5G atnetworks ~~such~~and ~~later~~satellite-enabled ~~time~~backhaul asservices. isThese ~~agreed~~developments toreflect by the ~~parties~~growing toneed ~~the~~for ~~Merger~~robust, ~~Agreement~~scalable, and ~~specified~~flexible innetworks ~~the~~that ~~articles~~can ofmeet ~~merger.~~the ~~The~~demands ~~Merger~~of isa ~~expected~~rapidly toevolving ~~close~~digital ~~prior to October 12, 2025~~landscape.

~~The~~Infrastructure ~~Amendment~~Vulnerabilities ~~provides that any lock-up period applicable to the Sponsor or any officers, directors or affiliates of Parent will terminate at the Closing of the Merger~~ and ~~changes~~Geopolitical the percentage of the Founder Shares being treated as Escrowed Sponsor Shares from 50% to 25%, adds a provision providing for the Company to pay certain amounts to Parent to cover its working capital and extension expenses, and adds a provision that Parent may terminate the Merger Agreement at any time prior to the Closing Date if the Company or any Subsidiary of the Company enters into voluntary bankruptcy or fails to remove within 60 days any petition in bankruptcy filed against it prior to Closing.Risks

~~Additional~~However, ~~information~~as ~~relating~~telecommunications toinfrastructure expands, the ~~Merger~~Asia-Pacific region is witnessing a rise in threats to its digital backbone. In 2023 and 2024, multiple subsea and terrestrial ~~along~~fiber ~~with~~optic ~~the~~cables ~~Merger~~were ~~Agreement~~damaged ~~can~~or besevered ~~found~~due to natural causes, maritime activities, and suspected deliberate interference. These incidents resulted in ~~our~~disrupted ~~Current~~internet ~~Report~~connectivity, onparticularly ~~Form~~affecting ~~8-K~~island ~~filed~~nations ~~with~~and remote areas. This highlights the ~~SEC~~urgent onneed ~~April~~for resilient, 4redundant, ~~2024~~and automatically restorable network architectures, especially in regions where connectivity is essential for emergency response, financial transactions, and national infrastructure.

InThe ~~connection~~security ~~with~~of ~~the~~critical ~~transaction~~infrastructure ~~described~~has ~~herein,~~become a growing concern globally. Over the ~~Company~~past ~~filed~~months, ~~relevant~~there ~~materials~~have ~~with~~been ~~the~~multiple ~~SEC~~incidents involving deep-sea cable sabotage, ~~including~~raising alarms about the ~~Registration~~vulnerability ~~Statement~~of onglobal ~~Form~~communications Ssystems. For instance, China recently unveiled an advanced deep-4sea cable cutter, escalating geopolitical and economic risks to network stability. Additionally, in December 2024, authorities intercepted a ~~proxy~~Russian ~~statement/prospectus~~oil tanker suspected of carrying espionage equipment involved in deep-sea cable disruption activities. In Taiwan, Chinese vessels have been repeatedly suspected of severing internet cables, further contributing to tensions and potential national security threats.

~~Additional~~The ~~information~~most ~~relating~~recent todevelopment ~~the~~occurred ~~S-4~~in ~~can~~February be2025, ~~found~~when inTaiwan’s ~~our~~coast ~~Current~~guard ~~Report~~detained ona ~~Form~~Chinese ~~8-K~~cargo ~~filed~~vessel ~~with~~suspected ~~the~~of ~~SEC~~intentionally oncutting ~~May~~undersea 16cables. This prompted an investigation into potential sabotage, ~~2024~~underscoring the need for enhanced cybersecurity measures and resilient network architectures to safeguard communications in an increasingly complex geopolitical environment.

~~Planned Merger with Ejectt~~46

OnAddressing ~~July 28, 2023, we and Ejectt, Inc. signed a non-binding letter of intent with respect to a possible merger between Aerkomm Taiwan and Ejectt. At a January 30, 2024 meeting of~~ the ~~shareholders~~Digital ofDivide ~~Aerkomm Taiwan, the shareholders approved pursuing a merger with Ejectt, under which Aerkomm Taiwan would be the surviving company,~~ and ~~delivery of a notice and merger contract to Ejectt, which were delivered to Ejectt on February 1, 2024. At a May~~Expanding ~~23,~~Connectivity 2024 meeting of the shareholders of Aerkomm Taiwan, the shareholders approved the terms of the merger plan and agreement and its being signed by the chairperson of Aerkomm Taiwan. On the same day, the shareholders of Ejectt approved the proposed merger and the merger agreement was then signed by the parties on May 23, 2024. Under the merger agreement and contingent only on the merger’s receiving necessary governmental approvals, the merger will be consummated and the surviving company of the merger will be Aerkomm Taiwan.Solutions

~~Because~~Alongside ~~Aerkomm~~these ~~Taiwan~~challenges, ~~has~~the ~~foreign~~persistent digital ~~(non-Taiwanese)~~divide ~~shareholders~~remains ~~(Aerkomm~~a ~~holds~~significant ~~49%~~issue, ofparticularly ~~the~~in ~~outstanding~~underserved ~~shares~~regions ofwhere ~~Aerkomm~~access ~~Taiwan) for the merger~~ to ~~become~~mobile ~~legally effective~~broadband ~~under~~is ~~Taiwanese~~hindered ~~law, it must be approved~~ by ~~the~~factors ~~Taiwan~~such ~~Department~~as affordability, ofcoverage ~~Investment~~gaps, ~~Review. Aerkomm~~ and ~~Ejectt~~limited ~~submitted an application to the Department of Investment Review on July 10, 2024~~infrastructure. ~~Reviews~~These bygaps ~~the~~present ~~Department~~significant ofopportunities ~~Investment~~for ~~Review~~hybrid ~~often~~connectivity ~~take four~~models, tosuch ~~six~~as ~~months~~carrier-neutral and ~~possibly~~satellite-integrated ~~longer~~solutions, ~~may~~which ~~require~~can ~~extensive~~extend ~~inquiries~~coverage and ~~requests~~provide ~~for~~resilient ~~further~~communications ~~information~~in ~~by the Department of~~hard-to-reach ~~Investment~~or ~~Review,~~high-risk ~~and~~areas. ~~sometimes~~These ~~result~~solutions inare ~~denial~~critical offor ~~approval.~~ensuring ~~Consequently,~~reliable ~~Aerkomm~~connectivity ~~cannot~~in ~~assure~~both ~~that~~rural ~~the~~and ~~merger~~vulnerable ~~will be approved or~~regions, ifwhere ~~approved, when~~ the ~~approval~~risk of ~~may~~service bedisruptions ~~granted~~is high.

48Economic Impact and Future Innovations

~~Principal~~Mobile ~~Factors~~technologies ~~Affecting~~and ~~Financial~~services ~~Performance~~continue to play a crucial role in global economic development, contributing an estimated 5.8% of global GDP in 2024, which represents over $6.5 trillion in economic value. Looking to the future, innovations in AI-driven network optimization, edge computing, and secure mobile backhaul are expected to further drive the adoption of mobile services across various critical sectors, including energy, transportation, and disaster response. These advancements will be pivotal in ensuring the continued resilience and growth of global telecommunications infrastructure.

WeGlobal ~~believe~~Network ~~that~~Resilience ~~our~~Overview ~~operating~~ and ~~business performance~~Budget will be driven by various factors that affect the commercial airline industry, including trends affecting the travel industry and trends affecting the customer bases that we target, as well as factors that affect wireless Internet service providers and general macroeconomic factors. Key factors that may affect our future performance include:Environment

●As ~~our~~cyber ~~ability to enter into~~ and ~~maintain~~physical ~~long-term~~threats ~~business arrangements with airline partners, which depends on numerous factors including the real or perceived availability, quality and price of our services and product offerings as compared~~ to ~~those~~communication systems ~~offered~~escalate ~~by our competitors; ● the extent of the adoption of our products and services by airline partners and customers; ● costs associated with implementing~~worldwide, ~~and~~several ~~our~~nations ~~ability~~have tolaunched ~~implement~~substantial oninitiatives ~~a timely basis, our technology, upgrades and installation technologies; ● costs associated with and our ability~~ to ~~execute~~enhance ~~our expansion, including modification to our~~ network ~~to accommodate satellite technology~~resilience, ~~development~~with ~~and implementation of new~~ satellite~~-based~~ ~~technologies,~~communications emerging ~~the~~as ~~availability of satellite capacity, costs of satellite capacity to which we may have to commit well in advance, and compliance with regulations; ● costs associated with managing~~ a ~~rapidly~~central ~~growing~~component ~~company; ● the impact and aftereffects~~ of ~~the~~these global coronavirus (COVID-19) pandemic, and other potential pandemics or contagious diseases or fear of such outbreaks, on the global airline and tourist industries, especially in the Asia Pacific region; ● the number of aircraft in service in our markets, including consolidation of the airline industry or changes in fleet size by one or more of our commercial airline partners; ● the economic environment and other trends that affect both business and leisure travel; ● continued demand for connectivity and proliferation of Wi-Fi enabled devices, including smartphones, tablets and laptops; ● our ability to obtain required telecommunications, aviation and other licenses and approvals necessary for our operations; and ● changes in laws, regulations and interpretations affecting telecommunications services and aviation, including, in particular, changes that impact the design of our equipment and our ability to obtain required certifications for our equipmentefforts.

49● United States: The U.S. has committed over $1.6 billion through the Secure and Trusted Communications Networks Reimbursement Program and DOD SATCOM modernization plans, focusing on 5G and multi-orbit satellite redundancy.

~~Smaller~~● ~~Reporting~~European ~~Company~~Union: The EU’s IRIS² initiative plans to invest €6 billion in a sovereign satellite constellation to ensure secure governmental and emergency communications.

~~Although~~● weIndia: noThrough ~~longer qualify as an Emerging Growth Company, or EGC, we continue to qualify as a smaller reporting company, which allows us to take advantage of many of~~ the ~~same~~Digital ~~exemptions from~~India ~~disclosure~~program ~~requirements,~~and ~~including~~ISRO’s ~~reduced~~collaboration ~~disclosure~~with ~~obligations regarding executive compensation that are available to an EGC. In addition~~OneWeb, asIndia ahas ~~smaller~~allocated ~~reporting~~over ~~company with less than~~ $~~100~~1 ~~million~~billion ~~in annual revenue, we are not required~~ to ~~comply~~deliver ~~with~~satellite ~~the~~connectivity ~~auditor attestation~~for ~~requirements~~rural ~~of Section 404 of the Sarbanes-Oxley Act of 2002~~resilience. ~~In reliance on these exemptions, we have taken advantage of reduced reporting obligations in this quarterly report on Form 10-Q.~~

~~Recent~~● ~~Market~~South ~~Information~~Korea: Under its Digital New Deal 2.0, South Korea is investing ₩2.6 trillion (~US$2B) through 2026 in quantum communications, SATCOM ground stations, and AI-based network monitoring.

~~The~~Satellite-Based ~~IATA~~Business ~~(International~~Continuity ~~Air Transport Association)~~Planning in(BCP) ~~August 2023 issued the report entitled Passenger~~ Market ~~Analysis.~~and Services

●Business ~~Industry-wide~~Continuity ~~revenue~~Planning ~~passenger-kilometers~~ (~~RPKs~~BCP) ~~increased~~is ~~28.4%~~a ~~year-on-year~~strategic framework ~~(YoY)~~designed into ~~August~~ensure the continuity of essential operations during or after a crisis, disaster, or disruption. ~~Compared~~As toorganizations prioritize ~~2019~~operational ~~levels~~resilience, ~~passenger~~BCP ~~traffic~~investments ~~recovered~~have toexpanded 95globally, with satellite-based solutions emerging as a critical component of modern resilience strategies.~~7%.~~

●The ~~Available~~increasing ~~seat~~commercialization of satellite technology has enabled Satellite-~~kilometers~~Based ~~(ASKs)~~BCP ~~rose~~to atprovide a ~~slower~~robust ~~annual~~network ~~pace~~resilience ~~of 24.9%~~framework, ~~lifting~~ensuring ~~passenger~~uninterrupted ~~load~~operations ~~factors~~in ~~(PLFs)~~the event ~~close~~of toterrestrial ~~pre-pandemic~~infrastructure ~~levels~~failures. ~~The~~While ~~PLF~~precise inglobal ~~August~~expenditure ~~was~~figures ~~84.6%,~~remain ~~1.1~~difficult ~~ppts~~to ~~lower~~quantify, ~~than~~market analyses highlight the ~~PLF~~growing demand for ~~the~~BCP ~~same~~solutions ~~month~~across ~~in 2019~~industries.

~~● Domestic passenger traffic grew 9.2% over pre~~Satellite-~~pandemic~~Based ~~levels.~~BCP ~~Most~~encompasses ~~monitored~~key ~~markets saw stable growth in domestic traffic~~resilience measures, ~~while Japan experienced disruptions due to Typhoon Khanun.~~including:

● ~~The~~Data ~~recovery~~Backup ofand ~~international~~Disaster ~~RPKs~~Recovery ~~remained~~– atEnsuring ~~88.5%~~secure ofdata ~~2019~~storage ~~levels.~~and ~~Regions~~rapid ~~experienced~~restoration ~~different~~of ~~outcomes~~critical ~~while Asia Pacific carriers continued to restore international traffic~~systems.

● ~~Ticket~~Alternate ~~sales~~Communication ~~data~~and ~~signaled~~IT ~~unwinding~~Infrastructure ~~domestic~~– ~~demand~~Providing ~~while~~redundancy ~~international~~in ~~bookings~~cases ~~remained~~of onnetwork ~~the same positive trend~~failure.

~~Passenger~~● ~~traffic~~Mobile ~~expanded~~and ~~further in August 2023, with industry~~Off-~~wide~~Grid ~~revenue~~Communication ~~passenger~~Systems ~~kilometers~~– ~~(RPKs)~~Supporting ~~growing~~operations ~~28.4%~~in ~~year-on0year~~remote ~~(YoY)~~or ~~and reaching 95.7% of August 2019 levels. In seasonally~~disaster-~~adjusted terms,~~affected ~~passenger traffic increased 1~~areas.~~0% month-on-month (MoM), indicating a slowing but still positive trend globally.~~

~~Results~~● ofEmergency ~~Operations~~Access to Cloud Services and Applications – Enabling secure and continuous cloud connectivity.

~~Comparison of Three Months Ended September 30, 2024 and 2023~~47

~~The~~A ~~following~~well-structured ~~table~~BCP ~~sets~~minimizes ~~forth~~operational ~~key components~~downtime, ofsafeguards ~~our~~critical ~~restated~~assets, ~~results~~and ofsustains ~~operations~~service ~~during~~delivery ~~the~~for ~~three~~enterprises ~~months~~and ~~periods~~public ~~ended~~sector ~~September~~entities. ~~30,~~As ~~2024~~disruptions become more frequent and ~~2023~~severe, demand for satellite-based continuity solutions continues to expand across multiple industries.

	Three Months Ended September 30,						Change
	(Unaudited)2024			Restated 2023			$			%
Revenue	$	96,308		$	61,582		$	34,726			56.4	%
Cost of sales		285			26,666			(26,381	)		(98.9	)%
Operating expenses		3,686,838			4,303,845			(617,007	)		(14.3	)%
Loss from operations		(3,590,815	)		(4,268,929	)		678,114			(15.9	)%
Net non-operating gain(loss)		(101,577	)		(837,560	)		735,983			(87.9	)%
Loss before income taxes		(3,692,392	)		(5,106,489	)		1,414,097			(27.7	)%
Income tax expense		-			-			-			-	%
Net Loss		(3,692,392	)		(5,106,489	)		1,414,097			(27.7	)%
Other comprehensive income		260,941			(554,120	)		815,061			(147.1	)%
Total comprehensive loss	$	(3,431,451	)	$	(5,660,609	)	$	2,229,158			(39.4	)%

Key Suppliers for Satellite-Based BCP and Network Resilience Solutions

50The following are some of the leading technology providers and integrators supporting BCP and satellite-based resilience worldwide:

~~Revenue. We~~● ~~have~~Eutelsat ~~$96,308 of~~OneWeb ~~net~~– ~~sales~~LEO ~~for~~satellite ~~the~~constellation ~~three-month~~provider ~~period~~delivering ~~ended~~global ~~September~~broadband 30, 2024 and $61,582 of net sales for the three-month period ended September 30, 2023, respectively. Our revenue for the three months ended September 30, 2024 was $96,308 as we are still developing our core business in in-flight entertainment and connectivity and there was few non-recurring services provided to one related party and one non-related party during the period.coverage

~~Operating~~● ~~expenses.~~Viasat ~~Our~~/ ~~operating expenses~~Inmarsat ~~consist~~– primarily of compensation and benefits, professional advisor fees, research and development expenses, cost of promotion, business development, business travel, transportation costs, and other expenses incurred in connection with general operations. Our operating expenses decreased by $617,007, or 14.3% to $3,686,838 for the threeGovernment-~~month~~grade ~~period~~secure ~~ended~~satellite September 30, 2024, from $4,303,845 for the three-month period ended September 30, 2023. Such decrease was mainly due to decreases in salary expenses and professional fees of $462,311 and $881,617, respectively, which was offset by the increases in legal fees, amortization expenses, and R & D expenses of $329,171, $312,184, and $295,306.communications

~~Net~~● ~~non-operating~~SES ~~expense.~~– WeGEO ~~had $101,577~~and inMEO ~~net~~satellite ~~non-operating~~services ~~loss~~ for ~~the~~enterprise three-month period ended September 30, 2024, as compared to net non-operating expense of $837,560 for the three-month period ended September 30, 2023. Net non-operating expense in the three-month period ended September 30, 2024 represents loss on foreign exchange translation of $190,811, unrealized loss from the transactions of our liquidity contract and ~~prepaid~~defense investment of $21,150, interest expense of $272,197 and other income, net of $959. Net non-operating expense in the three-month period ended September 30, 2023 represents loss on foreign exchange translation of $806,619, unrealized loss from the transactions of our liquidity contract and prepaid investment of $2,650, interest expenses of $369,859 and other income, net of $341,568. networks

~~Loss~~● ~~before~~Starlink ~~income~~(SpaceX) ~~taxes. Our loss~~– ~~before~~Real-time ~~income taxes decreased by $1,414,097, or 27.7%, to $3,692,392 for the three~~high-~~month~~throughput ~~period~~LEO ~~ended~~connectivity ~~September 30, 2024, from a loss of $5,106,489~~ for ~~the~~backup ~~three-month period ended September 30, 2023, as a result of the factors described above.~~comms

~~Income~~● ~~tax~~Cisco ~~expense. Income tax~~Systems ~~expense~~– ~~was~~Redundant $0networking, ~~for the three~~SD-~~month period ended September 30~~WAN, ~~2024,~~and asedge ~~compared to the income tax expense of $0 for the three-month period ended September 30, 2023.~~infrastructure

~~Total~~● ~~comprehensive~~Palo ~~loss. As a~~Alto ~~result~~Networks of/ ~~the~~Fortinet ~~cumulative~~– ~~effect~~Cybersecurity ofand ~~the~~network factors described above, our total comprehensive loss decreased by $2,229,158, or 39.4%, to $3,431,451 for the three-month period ended September 30, 2024, from $5,660,609 for the three-month period ended September 30, 2023.protection

~~Comparison~~● ofThales ~~Nine~~Group ~~Months~~– ~~Ended~~BCP ~~September 30,~~and ~~2024~~emergency communications for defense and ~~2023~~aviation

~~The~~● ~~following~~Aerkomm ~~table~~– ~~sets~~Integrated ~~forth~~SATCOM ~~key~~distribution, ~~components of~~mobile ~~our~~BCP ~~results~~deployment, ofserver ~~operations~~load ~~during~~balancing, ~~the~~and ~~nine-month~~localized ~~periods~~disaster ~~ended~~response ~~September~~capabilities ~~30,~~via ~~2024~~mobile units and ~~2023.~~hybrid network design

	Nine Months Ended September 30,						Change
	(Unaudited)2024			Restated 2023			$			%
Net Sales	$	48,843		$	-		$	48,843			100.0	%
Net Sales– related party		65,945			446,367			(380,422	)		(85.2	)%
Service income – related party		34,775			61,582			(26,807	)		(43.5	)%
Cost of sales		61,128			472,115			(410,987	)		(87.1	)%
Operating expenses		15,241,275			11,577,414			3,663,861			31.6	%
Loss from operations		(15,152,840	)		(11,541,580	)		(3,611,260	)		31.3	%
Net non-operating loss		(1,531,404	)		(1,878,461	)		347,057			(18.5	)%
Loss before income taxes		(16,684,244	)		(13,420,041	)		(3,264,203	)		24.3	%
Income tax expense		2,400			2,400			-			-
Net Loss		(16,686,644	)		(13,422,441	)		(3,264,203	)		24.3	%
Other comprehensive loss		(590,284	)		(776,054	)		185,770			(23.9	)%
Total comprehensive loss	$	(17,276,928	)	$	(14,198,495	)	$	(3,078,433	)		21.7	%

Global Business Continuity Management (BCM) Market Overview

51Business Continuity Management (BCM) remains a critical investment priority as organizations seek to enhance operational resilience against disruptions. While precise global expenditure figures are not readily available, market analyses indicate sustained growth in BCM solutions, driven by regulatory compliance, risk mitigation, and the increasing frequency of natural disasters and cyber threats.

~~Revenue.~~Investment ~~Our~~in ~~total~~Business ~~revenue~~Continuity ~~was~~Planning ~~$149~~(BCP),~~563~~ ~~and~~a ~~$507,949~~core ~~for~~component ~~the~~of ~~nine~~BCM, ~~months~~continues ~~periods~~to ~~ended~~expand ~~September~~as ~~30,~~businesses ~~2024~~ and ~~2023,~~government ~~respectively.~~entities Asprioritize weinfrastructure ~~are~~resilience ~~still~~and ~~developing~~disaster ~~our core business~~recovery instrategies. ~~in-flight~~The ~~entertainment~~demand ~~and~~for ~~connectivity~~BCM ~~and~~solutions ~~there~~is ~~were~~further ~~non-recurring~~supported ~~sale~~by ofevolving ~~equipment~~regulatory ~~and~~frameworks ~~service provided to related parties~~ and ~~service~~ ~~provided to one non-related party during~~ the ~~period.~~need ~~Our total revenue was $507,949~~ for ~~the~~robust ~~nine~~contingency ~~months~~planning across ~~periods~~key ~~ended September 30~~industries, ~~2023~~including ~~represents~~finance, ahealthcare, ~~non-recurring~~energy, ~~sale~~and ~~of equipment to one of our related parties~~telecommunications.

~~Cost~~As oforganizations ~~Sales.~~adapt ~~Our~~to ~~cost~~an ofincreasingly ~~sales~~complex ~~was~~risk ~~$61~~environment,~~128~~ ~~and $472,115 for~~ the ~~nine-month~~BCM ~~periods~~market ~~ended~~is ~~September~~expected ~~30,~~to ~~2024~~experience ~~and~~continued ~~2023~~growth, ~~respectively.~~with ~~The~~investments ~~cost~~focusing ofon ~~sales~~advanced ~~for the nine months ended September 30~~technologies, ~~2024 was $61,128 as the cost directly associated with equipment that we sold to one of our related parties. The cost~~cloud-based ofrecovery ~~sales for the nine months ended September 30~~solutions, ~~2023~~and ~~was~~satellite-enabled ~~$472,115~~continuity ~~as the cost directly associated with equipment that we sold to one of our related parties~~strategies.

~~Operating~~Market ~~expenses.~~Size ~~Our operating expenses consist primarily of compensation~~ and benefits, professional advisor fees, research and development expenses, cost of promotion, business development, business travel, transportation costs, and other expenses incurred in connection with general operations. Our operating expenses increased by $3,663,861, or 31.6%, to $15,241,275 for the nine months ended September 30, 2024, from $11,577,414 for the nine months ended September 30, 2023. This increase was mainly due to the increase in non-cash stock-based compensation expense, amortization expense, and salaries of $3,794,343, $946,795, and $871,849 which was offset by the decrease in R&D expenses and depreciation expense of $1,259,437 and $312,388, respectively.Growth

~~Net~~The ~~non-operating~~global ~~loss.~~BCM Wemarket ~~had~~was ~~$1,531,404 in~~valued ~~net~~at ~~non-operating loss for the nine months ended September 30, 2024, as compared to net non-operating loss of $1,878,461 for the nine~~approximately ~~months ended September 30, 2023~~$6.28 ~~Net~~billion ~~non-operating income~~ in ~~the~~2025 and ~~nine~~is ~~months~~projected ~~ended~~to ~~September~~reach ~~30,~~a ~~2024~~CAGR ~~represents loss on foreign exchange translation~~ of ~~$639,448,~~16.33% ~~interest~~from ~~expenses~~2025 ofto ~~$864,822,~~2032 ~~unrealized~~(P&S ~~loss~~Intelligence). onMarket ~~investment~~expansion ofis ~~$20,370 and other loss, net of $6,764. Net non-operating~~led ~~income~~by inheightened ~~the~~awareness ~~nine months ended September 30, 2023 represents loss on foreign exchange translation~~ of ~~$1,126,762,~~business ~~interest~~continuity ~~expenses~~risks ~~of $1,096,509, unrealized loss on investment of $106,165~~ and ~~net~~increasing ~~other~~regulatory ~~income~~pressures ofacross ~~$450,975~~key industries.

~~Loss~~The ~~before~~Asia-Pacific ~~income~~region ~~taxes. Our loss~~– ~~before~~including ~~income taxes increased by $3~~Japan,~~264~~ India,~~203,~~ orSouth ~~24.3%~~Korea, ~~to $16~~Australia,~~684,244~~ ~~for~~and ~~the~~Southeast ~~nine~~Asia ~~months~~– ~~ended~~represents ~~September~~a ~~30,~~significant ~~2024~~driver of growth, ~~from~~as aorganizations ~~loss~~enhance resilience ofstrategies ~~$13~~to address regional vulnerabilities. North America,~~420,041~~ ~~for~~led by the ~~nine~~United ~~months~~States, ~~ended~~remains ~~September~~a ~~30,~~critical ~~2023~~contributor, aswith aenterprises investing ~~result~~in ofBCM ~~the~~solutions ~~factors~~to ~~described~~mitigate ~~above~~cybersecurity threats, natural disasters, and infrastructure disruptions.

Income tax expense. Income tax expense was $2,400 and $2,400 for the nine-month periods ended September 30, 2024 and 2023, respectively, mainly due to a California franchise tax and foreign subsidiary’s income tax expenses.48

~~Total~~Regional comprehensive loss. As a result of the cumulative effect of the factors described above, our total comprehensive loss increased by $3,078,433, or 21.7%, to $17,276,928 for the nine months ended September 30, 2024, from $14,198,495 for the nine months ended September 30, 2023.Insights

~~Liquidity~~North ~~and Capital Resources~~ America

As● ~~of September 30,~~ 2024, weMarket ~~had~~Contribution: ~~cash~~North ~~and~~America ~~cash equivalents~~accounted offor ~~$56,952~~approximately ~~and~~38% ~~restricted~~to ~~cash~~41% of ~~$20,077.~~the Wetotal ~~have~~revenue ~~financed~~in ~~our operations primarily through cash proceeds from financing activities, including from our 2020 Offering,~~ the ~~issuance~~BCM ofsolutions ~~convertible~~market ~~bonds,~~(Verified ~~short-term~~Market ~~borrowings and equity contributions by our stockholders~~Reports).

52● 2030 Market Projection: The market is expected to reach $2.39 billion by 2033, reflecting a CAGR of 14.6% from 2023 to 2033.

~~The~~Asia-Pacific ~~following table provides detailed information about our net cash flow:~~Region

~~Cash~~● ~~Flow~~2024 Market Size: The Asia-Pacific BCM market was valued at $806.7 million in 2024 and is projected to grow at a CAGR of 17.2% through 2030. The market is expected to reach approximately $2,086.6 million by 2030 (grandviewresearch.com). Growth is primarily driven by increasing awareness of business resilience and the region’s susceptibility to natural disasters.

	Nine Months Ended September 30,
	(Unaudited) 2024			(Unaudited) 2023
Net cash used for operating activities	$	(4,816,397	)	$	(7,372,317	)
Net cash used in investing activity		(2,184,391	)		(53,550	)
Net cash used by financing activity		(1,011,584	)		(394,531	)
Net decrease in cash and cash equivalents		(8,012,372	)		(7,820,398	)
Cash and Restricted Cash, at beginning of year		7,428,702			10,101,920
Foreign currency translation effect on cash		660,699			1,196,111
Cash and Restricted Cash, at end of year	$	77,029		$	3,477,633

Country-Specific Projections (2023-2030) (2024 data not available)

~~Operating~~● ~~Activities~~ Japan

~~Net cash used for operating activities was $4,816,397 for the nine months ended September 30, 2024, as compared to $7,372,317 for the nine months ended September 30,~~ 2023~~. In~~ ~~addition~~Market toSize: ~~the net loss of~~ $16,686,644, the decrease in net cash used for operating activities during the nine months period ended September 30, 2024 was mainly due to the decrease in accrued expenses and other current liabilities and deposits of $6,799,449 and $129,697, offset by the increase in prepaid expenses and other current assets of $1,148,502 and 259,04299.19 In addition to the net loss of $13,422,441, the increase in net cash used for operating activities during the nine-month period ended September 30, 2023 was mainly due to increase in prepaid expenses, other current assets, deposits, and accounts payable, of $4,134,587, $1,129,394, $223,550, and $386,312, respectively, offset by the increase in accrued expenses and other current liabilities of $9,622,337.million

~~Investing~~2030 ~~Activities~~ Market Size: $370 million (CAGR of 17.3%)

~~Net~~● cash used in investing activities for the nine months ended September 30, 2024 was $2,184,391 as compared to net cash used in investing activities of $53,550 for the nine months ended September 30, 2023. The net cash used in investing activities for the nine months ended September 30, 2024 was mainly prepayment for land and disbursement for other receivable - related parties of $349,131 and $1,790,291. The net cash provided by investing activities for the nine months ended September 30, 2023 was mainly for the proceeds from disposal of long-term investment of $325,578, which was offset by the purchase of property and equipment of $379,128.India

~~Financing~~2023 ~~Activities~~ Market Size: $86.26 million

~~Net~~2030 ~~cash~~Market ~~used~~Size: ~~by financing activities for the nine months ended September 30, 2024 and 2023 was~~ $~~1,011,584~~370 ~~and~~million ~~$394,531,~~(CAGR ~~respectively. Net cash used in financing activities for the nine months ended September 30, 2024 were mainly attributable to repayment~~ of ~~convertible long-term bond payable in the amount of $8,016,426 offset by proceeds from equity financing and capital injection of $2,585,200 and $4,421,782~~20. ~~Net cash used by financing activities for the nine months ended September 30, 2023 were mainly attributable to repayment of short-term loans in the amount of $384,189.~~6%)

On● December 3, 2020, the Company closed a private placement offering (the “Bond Offering”) consisting of US$10,000,000 in aggregate principal amount of its Credit Enhanced Zero Coupon Convertible Bond due 2025 (the “Credit Enhanced Bonds”) and US$200,000 in aggregate principal amount of its 7.5% convertible bonds due 2025 (the “Coupon Bonds,” and together with the Credited Enhanced Bonds, the “Bonds”). On October 27, 2023, Citicorp International Limited, as Trustee with respect to the Bonds, submitted to us a request for redemption of the Bonds in full. As of September 30, 2024, the Company had repaid $8,062,247 out of a total of $10,358,024 of principal and interest due on the Bonds as of that date. We expect to repay the remaining balance of the amount of $2,391,092 owed on the bonds, plus any additional accrued interest, within the next few months. Australia

532023 Market Size: $37.38 million

~~Capital~~2030 ~~Expenditures~~Market Size: $150 million (CAGR of 18.5%)

~~Our~~● ~~operations~~South continue to require significant capital expenditures primarily for technology development, equipment and capacity expansion. Capital expenditures are associated with the supply of airborne equipment to our prospective airline partners, which correlates directly to the roll out and/or upgrade of service to our prospective airline partners’ fleets. Capital spending is also associated with the expansion of our network, ground stations and data centers and includes design, permitting, network equipment and installation costs.Korea

~~Capital expenditures for the nine months ended September 30, 2024 and~~ 2023 ~~were~~Market ~~$394,100~~Size: ~~and~~ $~~379,128, respectively~~71.88 million

We2030 ~~anticipate~~Market anSize: ~~increase in capital spending in fiscal year 2024 and estimate that capital expenditures will range from~~ $3300 million to(CAGR ~~$10~~of ~~million as we will continue to advance our semiconductor designs, our software-defined platforms and continue to execute our network expansion strategy~~17. ~~We expect to be able to raise these required funds in connection with our planned Merger with IXAQ although we cannot provide assurance that we will be successful in this effort.~~9%)

~~Inflation~~● Southeast Asia

~~Inflation~~2023 ~~and~~Market ~~changing~~Size: ~~prices have not had a material effect on our business, and we do not expect that inflation or changing prices will materially affect our business in the foreseeable future~~$49.60 ~~However, our management will closely monitor price changes in our industry and continually maintain effective cost control in operations.~~million

~~Off~~2030 ~~Balance~~Market ~~Sheet~~Size: ~~Arrangements~~$230 million (CAGR of 19.8%)

WeThe dobudget ~~not~~focuses ~~have~~on ~~any~~improving ~~off-balance~~resilience ~~sheet arrangements~~across ~~that~~various ~~have or are reasonably likely to have a current or future effect on our financial condition~~sectors, ~~changes~~particularly in ~~financial~~the ~~condition,~~face ~~revenues or expenses, results~~ of ~~operations,~~potential ~~liquidity~~disruptions orto ~~capital~~communication ~~expenditures~~systems orand ~~capital~~includes ~~resources~~initiatives ~~that~~for isstrengthening satellite ~~material~~communications toand another ~~investor~~technological ~~in our securities~~infrastructure.

~~Seasonality~~Key Drivers of BCM Market Growth

~~Our~~● ~~operating~~Increasing ~~results~~Frequency ~~and~~of ~~operating~~Disruptions: ~~cash~~The ~~flows historically~~rise ~~have~~in ~~not~~natural ~~been~~disasters ~~subject~~and tocyber-attacks ~~significant~~has ~~seasonal~~heightened ~~variations.~~the ~~This~~demand ~~pattern~~for ~~may~~robust ~~change,~~BCM ~~however,~~solutions asto aensure ~~result~~operational ~~of new market opportunities or new product introductions~~resilience.

5449

~~Critical~~● ~~Accounting~~Regulatory ~~Policies~~Compliance: Stringent regulations across industries mandate the implementation of comprehensive BCM strategies to mitigate risks and ensure business continuity.

~~The~~● ~~preparation~~Growing ofAwareness financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of ~~commitments~~Operational ~~and~~Risks: ~~contingencies,~~Organizations ~~if any. We have identified certain accounting policies that~~ are ~~significant~~investing toin ~~the~~BCM ~~preparation~~solutions of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to ~~the~~safeguard ~~portrayal of our financial condition and results of~~ operations ~~and require management’s difficult~~, ~~subjective, or~~enhance ~~complex judgment~~resilience, ~~often as a result of the need to make estimates about the effect of matters that are inherently uncertain~~ and ~~may change~~protect inreputational ~~subsequent periods~~value. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our financial statements:

Concentrations of Credit Risk. Financial instruments that potentially subject to significant concentrations of credit risk consist primarily of cash in banks. As of September 30, 2024 and December 31, 2023, the total balance of cash in bank exceeding the amount insured by the Federal Deposit Insurance Corporation (~~FDIC)~~Source: ~~for the Company was approximately $0 and $0, respectively~~imarcgroup. The balance of cash deposited in foreign financial institutions exceeding the amount insured by local insurance is approximately $35,000 and $7,246,000 as of September 30, 2024 and December 31, 2023, respectively. We perform ongoing credit evaluation of its customers and requires no collateral. An allowance for doubtful accounts is provided based on a review of the collectability of accounts receivable. We determine the amount of allowance for doubtful accounts by examining its historical collection experience and current trends in the credit quality of its customers as well as its internal credit policies. Actual credit losses may differ from our estimates.com)

~~Inventories.~~BCP ~~Inventories~~Investments ~~are~~in ~~recorded at~~Key ~~the lower of weighted-average cost or net realizable value. We assess the impact of changing technology on our inventory on hand and writes off inventories that are considered obsolete.~~Markets

~~Research~~Business ~~and~~Continuity ~~Development~~Planning ~~Costs. Research~~(BCP) ~~and development costs~~ investments are ~~charged~~critical tofor ~~operating~~ensuring ~~expenses~~operational asresilience, ~~incurred.~~disaster ~~For the nine months periods ended September 30~~recovery, ~~2024~~ and ~~2023,~~ werisk ~~incurred~~mitigation. ~~approximately~~Below ~~$12,213~~is ~~and~~an ~~$1,271,651~~overview of ~~research~~key ~~and~~markets ~~development~~investing in ~~costs,~~BCP ~~respectively.~~solutions:

~~Property~~United and Equipment. Property and equipment are stated at cost less accumulated depreciation. When value impairment is determined, the related assets are stated at the lower of fair value or book value. Significant additions, renewals and betterments are capitalized. Maintenance and repairs are expensed as incurred. Depreciation is computed by using the straight-line and double declining method over the following estimated service lives: computer equipment - 3 to 5 years, furniture and fixtures - 5 years, satellite equipment - 5 years, vehicles – 5 to 6 years and lease improvement - 5 years. Construction costs for on-flight entertainment equipment not yet in service are recorded under construction in progress. Upon sale or disposal of property and equipment, the related cost and accumulated depreciation are removed from the corresponding accounts, with any gain or loss credited or charged to income in the period of sale or disposal. We review the carrying amount of property and equipment for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. We determined that there was no impairment loss for the nine-month periods ended September 30, 2024 and 2023.States

55The U.S. remains a leader in BCP investments, with the market estimated at $2.8 billion in 2020 (Enterprise Storage Forum). Investments in business continuity and disaster recovery solutions continue to expand across industries, including finance, healthcare, and energy.

~~Right-of-Use~~● ~~Asset~~Market ~~and~~Growth ~~Lease~~Projection: ~~Liability. In~~The ~~February 2016, the FASB issued ASU No~~U. 2016-02, “Leases” (Topic 842) (“ASU 2016-02”), which modifies lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases and finance leases under previous accounting standards and disclosing key information about leasing arrangementsS. ABCP ~~lessee~~market ~~should~~is ~~recognize~~expected ~~the lease liability~~ to ~~make~~grow ~~lease~~from ~~payments~~$7 ~~and~~billion ~~the~~in ~~right-of-use~~2021 ~~asset representing its right~~ to ~~use~~$15 ~~the~~billion ~~underlying asset for the lease term. For operating leases and finance leases, a right-of-use asset and a lease liability are initially measured at the present value of the lease payments~~ by ~~discount rates. The Company’s lease discount rates are generally based on its incremental borrowing rate~~2030, asreflecting ~~the~~sustained ~~discount~~investment ~~rates implicit~~ in ~~the Company’s leases is readily determinable. Operating leases are included in operating lease right~~resilience-~~of-use~~enhancing ~~assets and lease liabilities in the unaudited condensed consolidated balance sheets~~solutions. Finance leases are included in property and equipment and lease liability in our unaudited condensed consolidated balance sheets. Lease expense for operating expense payments is recognized on a straight-line basis over the lease term. Interest and amortization expenses are recognized for finance leases on a straight-line basis over the lease term. For the leases with a term of twelve months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. We adopted ASU 2016-02 effective January 1, 2019.

~~Goodwill~~Japan and Purchased Intangible Assets. Goodwill represents the amount by which the total purchase price paid exceeded the estimated fair value of net assets acquired from acquisition of subsidiaries. We test goodwill for impairment on an annual basis, or more often if events or circumstances indicate that there may be impairment.Canada

AsBoth ~~Aerkomm~~Japan ~~is currently still in the development stage~~ and ~~will~~Canada ~~not start generating revenue until after late 2024. Management has evaluated that the potential benefits of the acquisitions before the year 2023~~ are ~~limited~~experiencing ~~and uncertain, and due to this reason, management has decided to impair goodwill that generated from~~steady ~~2022~~growth ~~and prior periods with total of $4,561,037~~ in ~~2023.~~BCM ~~After the impair measurement, the net goodwill is $4,573,819~~investments.

~~Purchased~~● ~~intangible~~Japan: ~~assets~~The ~~with~~market ~~finite~~is ~~life~~projected ~~are amortized~~to ongrow ~~the~~at ~~straight-line~~a ~~basis~~CAGR ~~over the estimated useful lives~~ of ~~respective assets~~6.1%, ~~Purchased~~driven ~~intangible~~by ~~assets~~increasing ~~with~~regulatory ~~indefinite life~~requirements are evaluated for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Purchased intangible asset consists of satellite system software and isresilience ~~amortized over 10 years~~initiatives.

~~Fair~~● ~~Value~~Canada: ofThe ~~Financial~~BCM ~~Instruments. We~~market ~~utilize~~in ~~the~~Canada ~~three-level~~is ~~valuation~~expected ~~hierarchy~~to ~~for~~expand ~~the~~at ~~recognition~~a ~~and~~CAGR ~~disclosure~~ of ~~fair value measurements~~7.8%, ~~The~~reflecting ~~categorization~~a ofgrowing ~~assets and~~emphasis ~~liabilities~~on ~~within~~business ~~this~~continuity ~~hierarchy is based upon the lowest level of input that is significant to the measurement of fair value~~strategies. ~~The three~~(Source: ~~levels~~Enterprise ofStorage ~~the hierarchy consist of the following:~~Forum)

~~Level 1 - Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date.~~Taiwan

~~Level~~Taiwan 2has -prioritized ~~Inputs~~business tocontinuity ~~the valuation methodology~~investments, ~~are~~particularly ~~quoted prices for similar assets and liabilities~~ in ~~active markets~~telecommunications, ~~quoted~~semiconductor ~~prices~~manufacturing, inand ~~markets~~public ~~that~~sector ~~are~~infrastructure. ~~not~~Given ~~active~~its orstrategic ~~inputs~~position ~~that~~in ~~are~~the ~~observable~~global ~~for~~semiconductor ~~the~~industry ~~asset~~and orsusceptibility ~~liability,~~to ~~either~~natural ~~directly or indirectly~~disasters, ~~for~~Taiwan ~~substantially~~continues ~~the~~to ~~full~~strengthen ~~term~~its ofresilience ~~the instrument~~measures.

~~Level~~● 3Investment -in ~~Inputs~~Resilient toInfrastructure: ~~the~~The ~~valuation~~government ~~methodology are~~has ~~unobservable~~allocated ~~inputs~~$790 ~~based~~million ~~upon~~under ~~management’s~~a ~~best~~10-year ~~estimate~~plan ofto ~~inputs~~enhance ~~market~~communication ~~participants~~infrastructure, ~~could~~including ~~use~~satellite inservices ~~pricing~~and ~~the~~other ~~asset~~resilient orsystems ~~liability at~~(Enterprise ~~the~~Storage ~~measurement date, including assumptions~~Forum).

~~The~~● ~~carrying~~Disaster ~~amounts~~Recovery ~~of the Company’s cash~~ and ~~restricted~~Preparedness: ~~cash,~~Estimates ~~accounts~~suggest ~~payable, short-term loan and other payable approximated their fair value due to the short-term nature of these financial instruments. The Company~~Taiwan’s ~~short-term~~total investment ~~and~~in ~~long-term~~disaster ~~investment~~recovery ~~are~~and ~~classified~~infrastructure ~~within~~resilience ~~Level~~could 1range offrom ~~the~~$500 ~~fair value~~million ~~hierarchy~~to on$1 ~~March~~billion ~~31,~~over ~~2024. The Company’s long-term bonds payable, long-term loan and lease payable approximated~~ the ~~carrying amount~~next as5 ~~its interest rate is considered as approximate~~ to ~~the~~10 ~~current~~years, ~~rate~~focusing ~~for~~on ~~comparable~~technological ~~loans and leases~~enhancements, ~~respectively.~~particularly ~~There~~in ~~were no~~satellite ~~outstanding~~communications ~~derivative~~and ~~financial~~disaster ~~instruments~~recovery ~~as of September 30, 2024~~solutions.

~~Revenue~~These ~~Recognition. We~~investments ~~recognize revenue~~underscore ~~when~~Taiwan’s ~~performance obligations identified under the terms of contracts with our customers are satisfied, which generally occurs~~commitment ~~upon~~to ~~the~~strengthening ~~transfer~~critical ofinfrastructure ~~control in accordance with the contractual terms~~ and ~~conditions~~ensuring ofcontinuity ~~the sale. Our revenue for the nine months ended September 30, 2024 composed of the service income to one of our related parties. The majority of our revenue is recognized at a point~~ in ~~time when product is shipped or service is provided to~~ the ~~customer.~~face ~~Revenue is measured as the amount~~ of ~~consideration~~potential ~~we expect to receive in exchange for transferring goods, which includes estimates for variable consideration~~disruptions. We adopted the provisions of ASU 2014-09 Revenue from Contract with Customers (Topic 606) and the principal versus agent guidance within the new revenue standard. As such, the Company identifies a contract with a customer, identifies the performance obligations in the contract, determines the transaction price, allocates the transaction price to each performance obligation in the contract and recognizes revenue when (or as) we satisfy a performance obligation. Customers may make payments to the Company either in advance or in arrears. If payment is made in advance, the Company will recognize a contract liability under prepayments from customers until which point the Company has satisfied the requisite performance obligations to recognize revenue.

56Our Business Potential

~~Income~~The ~~Taxes. Income~~Company ~~taxes are~~is ~~accounted~~strategically ~~for~~positioned ~~under~~at the forefront ~~asset~~of ~~and liability method. Deferred tax assets and liabilities are computed for differences between~~ the ~~financial statement~~rapidly ~~and~~growing ~~tax~~satellite ~~bases~~communications ofsector. ~~assets~~In ~~and~~addition ~~liabilities~~to ~~that~~being ~~will~~licensed ~~result~~as ina ~~taxable~~Telecom oroperator ~~deductible amounts~~ in ~~the~~Japan ~~future based on enacted tax laws~~ and ~~rates applicable to~~ Taiwan, the ~~periods~~Company insecured ~~which~~a ~~the~~regional ~~differences~~satellite ~~are~~service ~~expected~~spectrum tousage ~~affect~~permit ~~taxable~~in ~~income.~~Taiwan ~~Valuation~~on ~~allowances~~April ~~are~~27, ~~established when necessary to reduce deferred tax assets to the amount expected to be realized~~2023. ~~Income~~Furthermore, ~~tax~~as ~~expense~~a isdistribution ~~the tax payable or refundable~~partner for ~~the~~Eutelsat ~~period~~OneWeb’s ~~plus~~Low orEarth ~~minus~~Orbit ~~the~~(LEO) ~~change~~satellite ~~during~~services ~~the~~– ~~period~~granted in ~~deferred~~September ~~tax~~2024 ~~assets~~– ~~and~~the ~~liabilities.~~Company ~~Adjustments~~is well-equipped to ~~prior~~support ~~period’s income~~national ~~tax~~and ~~liabilities~~enterprise-level ~~are~~initiatives ~~added~~aimed toat orstrengthening ~~deducted~~SATCOM ~~from~~communication ~~the current period’s tax provision~~resilience.

The Company follows FASB guidance on uncertain tax positions and has analyzed its filing positions in all the federal, state and foreign jurisdictions where it is required to file income tax returns, as well as all open tax years in those jurisdictions. The Company files income tax returns in the US federal, state and foreign jurisdictions where it conducts business. It is not subject to income tax examinations by US federal, state and local tax authorities for years before 2017. The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on its unaudited condensed consolidated financial position, results of operations, or cash flows. Therefore, no reserves for uncertain tax positions have been recorded. The Company does not expect its unrecognized tax benefits to change significantly over the next twelve months.50

~~The~~This ~~Company’s~~authorization ~~policy~~allows ~~for~~us ~~recording~~to ~~interest~~provide broadband ~~and~~satellite ~~penalties~~services ~~associated~~across ~~with~~key ~~any~~sectors, ~~uncertain~~including ~~tax~~mobile ~~positions~~backhaul, isenterprise tocommunications, ~~record~~maritime, ~~such~~aviation, ~~items~~and astactical adefense. With ~~component~~the ofglobal ~~income~~rise ~~before~~in ~~taxes.~~demand ~~Penalties~~for ~~and interest~~resilient ~~paid~~infrastructure, orthe ~~received,~~Company ifoffers ~~any,~~SATCOM ~~are~~Business ~~recorded~~Continuity asPlanning ~~part~~(BCP) ofand ~~other~~Network Resilience ~~operating~~Solutions, ~~expenses~~initially infocusing on the ~~unaudited~~high-growth ~~condensed~~Asia-Pacific ~~consolidated~~region. ~~statement~~Japan and Taiwan, given their strategic importance amid rising geopolitical tensions, are at the core of ~~operations~~these efforts.

~~Foreign~~Strategic ~~Currency~~Investment ~~Transactions. Foreign currency transactions are recorded~~ in ~~U.S.~~Network ~~dollars at the exchange rates in effect when the transactions occur. Exchange gains or losses~~Resilience: ~~derived~~Japan ~~from foreign currency transactions or monetary assets~~ and ~~liabilities~~Taiwan’s ~~denominated~~Response into ~~foreign~~Emerging currencies are recognized in current income. At the end of each period, assets and liabilities denominated in foreign currencies are revalued at the prevailing exchange rates with the resulting gains or losses recognized in income for the period. Threats

~~Translation~~In ~~Adjustments. If a~~response ~~foreign~~to ~~subsidiary’s~~escalating ~~functional~~geopolitical ~~currency~~tensions and isvulnerabilities ~~the~~in ~~local~~undersea ~~currency~~communication infrastructure, ~~translation~~both ~~adjustments~~Taiwan ~~will~~and ~~result~~Japan ~~from~~have ~~the~~significantly ~~process~~increased oftheir ~~translating~~investments in ~~the~~network ~~subsidiary’s~~resilience. ~~financial~~These ~~statements~~investments ~~into~~reflect ~~the~~a ~~reporting~~broader ~~currency~~commitment ofto ~~our~~strengthening ~~company.~~national ~~Such~~security ~~adjustments~~and ~~are~~implementing ~~accumulated~~advanced ~~and reported~~technologies ~~under~~to ~~other~~mitigate ~~comprehensive~~risks ~~income~~from ~~(loss)~~sabotage, ascyberattacks, aand ~~separate~~natural ~~component of stockholders’ equity~~disasters.

~~Earnings~~As ~~(Loss)~~a ~~Per~~distribution ~~Share. Basic earnings~~partner ~~(loss)~~of ~~per~~Eutelsat ~~share~~OneWeb’s Low isEarth ~~computed~~Orbit by(LEO) ~~dividing~~satellite ~~income~~services, ~~available to common shareholders by~~ the ~~weighted~~Company ~~average~~is ~~number~~aligned ofwith ~~shares~~these ~~of common~~national ~~stock~~resilience ~~outstanding~~strategies. ~~during~~Our ~~the~~solutions ~~period.~~include ~~Diluted~~enterprise network ~~earnings~~redundancy, ~~per~~server ~~share~~load isbalancing, ~~computed~~and bydisaster ~~dividing~~recovery ~~income~~infrastructure—each ~~available~~tailored to ~~common~~support ~~shareholders by~~ the ~~weighted-average~~security ~~number~~and continuity goals of ~~shares~~Taiwan, ofJapan, ~~common~~and ~~outstanding~~allied ~~during~~regional ~~the~~partners. ~~period~~Additionally, ~~increased~~the toCompany’s ~~include~~SATCOM ~~the~~Business ~~number~~Continuity ofPlanning ~~additional~~(BCP) ~~shares~~solutions ofserve ~~common~~both ~~stock~~enterprise ~~that~~and ~~would~~consumer ~~have~~markets. ~~been~~By ~~outstanding~~deploying ifmobile, ~~the~~vehicle-based ~~potentially~~SATCOM ~~dilutive~~systems, ~~securities~~we ~~had~~provide ~~been~~critical ~~issued.~~connectivity ~~Potentially~~for ~~dilutive securities~~disaster ~~include~~recovery ~~stock warrants~~ and ~~outstanding~~wartime ~~stock options~~scenarios, ~~shares~~ensuring tooperational becontinuity ~~purchased~~when byterrestrial ~~employees~~networks ~~under~~are ~~the Company’s employee stock purchase plan~~disrupted.

~~Subsequent Events. The~~Rising ~~Company~~Threats ~~has evaluated events and transactions after the reported period up~~ to ~~November~~Global ~~12,~~Communication 2024, the date on which these unaudited condensed consolidated financial statements were available to be issued. All subsequent events requiring recognition as of September 30, 2024, have been included in these unaudited condensed consolidated financial statements.Infrastructure

57The global reliance on undersea cables for internet and data connectivity has reached unprecedented levels, with over 95% of international data traffic passing through these submarine networks. Recent incidents of sabotage and suspected grey-zone activities, particularly in the Asia-Pacific region, have prompted governments to re-assess and strengthen their communication systems. In response to these growing vulnerabilities, both Taiwan and Japan have taken decisive action by investing in alternative communication systems, particularly satellite-based networks, while reinforcing their existing infrastructure. This strategic shift not only addresses military and national security concerns but also ensures business continuity, guarantees civilian access to essential services, and enhances resilience in the face of natural disasters.

~~Recent~~1. ~~Accounting~~Japan’s ~~Pronouncements~~Network Resilience and SATCOM BCP and Strategy

~~Simplifying~~1.1 ~~the~~Strategic ~~Accounting~~Imperatives ~~for Debt with Conversion and Other Options.~~

~~In June 2020~~Japan, ~~the~~located ~~FASB issued ASU 2020-06 to simplify the accounting~~ in ~~ASC~~a ~~470,~~highly ~~Debt~~seismic ~~with~~zone ~~Conversion~~ and ~~Other Options and ASC 815, Contracts in Equity’s Own Entity. The guidance simplifies~~facing ~~the~~growing ~~current~~regional ~~guidance~~security ~~for convertible instruments and the derivatives scope exception for contracts in an entity’s own equity. Additionally~~concerns, ~~the~~ ~~amendments~~has ~~affect~~integrated ~~the~~network ~~diluted~~resilience ~~EPS~~into ~~calculation~~both ~~for~~its ~~instruments~~national ~~that~~defense ~~may be settled in cash or shares~~ and ~~for~~disaster ~~convertible~~recovery ~~instruments~~planning. ~~This~~ ~~ASU became effective beginning in the first quarter of the Company’s fiscal year 2023.~~ The ~~amendments in this update must be~~ ~~applied~~2024 onNoto ~~either~~earthquake, ~~full~~along ~~retrospective~~with ~~basis~~increasing orcyber ~~modified~~threats ~~retrospective~~from ~~basis~~regional ~~through~~adversaries, ahas ~~cumulative-effect~~reinforced ~~adjustment to retained earnings/(deficit) in~~ the ~~period~~need offor ~~adoption.~~robust, ~~Adoption~~flexible ~~of this standard did not have a material effect on the Company’s operating results~~communication systems.

~~Financial~~1.2 ~~Instruments~~Budget -and ~~Credit~~Program ~~Losses~~Highlights

● In ~~June 2016~~FY2025, ~~the~~Japan ~~FASB~~earmarked ~~issued~~123.8 ~~ASU~~billion ~~2016-13,~~yen ~~“Financial Instruments - Credit Losses~~ (~~Topic~~~US$784 ~~326~~million): ~~Measurement~~for ~~of Credit Losses on Financial Instruments” (“ASU 2016-13”), which modifies~~ the ~~measurement~~development of ~~expected~~a ~~credit~~next-generation ~~losses~~military ofcommunication ~~certain~~satellite ~~financial~~to ~~instruments.~~support ~~In March 2022,~~ the ~~FASB~~Japan ~~issued ASU 2022~~Self-02Defense ~~and~~Forces ~~eliminate the Troubled Debt Restructuring recognition and measurement guidance~~(JSDF).

~~The~~● ~~Company~~Japan’s ~~adopted~~Ministry ~~the~~of ~~ASU~~Defense onis ~~January~~integrating 1hardened, ~~2023 and~~jamming-resistant ~~the~~satellite ~~adoption~~systems ofto ~~this~~ensure ~~standard~~secure, ~~did~~real-time ~~not~~battlefield ~~have a material effect on the Company’s operating results~~communications.

~~Simplifying~~● ~~the~~A ~~Accounting~~new supplementary budget (post-election) will include additional funds for ~~Income~~civilian ~~Taxes~~disaster resilience, including communications.

In December 2019, the FASB issued ASU 2019-12 to simplify the accounting in ASC 740, Income Taxes. This guidance removes certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. This guidance also clarifies and simplifies other areas of ASC 740. This ASU will be effective beginning in the first quarter of the Company’s fiscal year 2021. Early adoption is permitted. Certain amendments in this update must be applied on a prospective basis, certain amendments must be applied on a retrospective basis, and certain amendments must be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings/(deficit) in the period of adoption. The adoption of ASU 2019-12 did not have a significant impact on our unaudited condensed consolidated financial statements as of and for the nine months period ended September 30, 2024.51

~~Earnings~~1.3 ~~Per~~National Research ~~Share~~Infrastructure

~~In April 2021, the FASB issued ASU 2021-04, which included Topic 260 “Earnings Per Share”. This guidance clarifies and reduces diversity in an issuer~~Japan’s ~~accounting for modifications or exchanges~~National ofResearch ~~freestanding~~Institute ~~equity-classified written call options due to a lack of explicit guidance in the FASB Codification. The ASU 2021-04 is effective~~ for ~~all~~Earth ~~entities~~Science ~~for~~and ~~fiscal~~Disaster ~~years~~Resilience ~~beginning~~(NIED) ~~after~~operates ~~December~~on ~~15,~~a ~~2021. The adoption of ASU 2021~~14-04billion-yen ~~did~~annual ~~not~~budget ~~have a significant impact on the Company’s unaudited condensed consolidated financial statements as of~~ and ~~for~~leads ~~the~~R&D ~~nine~~in ~~months~~backup communication ~~ended September 30~~technologies, ~~2024.~~ including:

~~Segment~~● ~~Reporting~~Severe weather and seismic communication protocols.

In● ~~November~~Emergency ~~2023,~~satellite ~~the~~deployment ~~FASB issued ASU 2023-07, which included Topic 280 “Segment Reporting”~~mechanisms. This guidance improves reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The ASU 2023-07 is effective for all entities for fiscal years beginning after December 15, 2023. The Company is currently evaluating the impact of adopting ASU 2023-07 on its unaudited condensed consolidated financial statements.

~~Income~~● ~~Taxes~~Real-time disaster data transmission systems.

~~In December 2023, the FASB issued ASU 2023-09, which included Topic 740 “Income Taxes”~~1.4 ~~This guidance requires business entities to disclose additional information related~~Integration towith ~~the~~Civilian ~~income~~Systems ~~taxes.~~and ~~The~~Subsidy ~~ASU~~Programs 2023-09 is effective for all entities for fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact of adopting ASU 2023-09 on its unaudited condensed consolidated financial statements

58Japan is pursuing a dual-use approach, where military-grade satellite infrastructure supports civilian disaster communication and emergency response systems. Nationwide drills and inter-agency coordination are regularly conducted to test resilience frameworks.

In addition, Japan’s Ministry of Internal Affairs and Communications has allocated over 25 billion yen (approx. US$170 million) in fiscal support between 2024 and 2026 to accelerate adoption of BCP-related technologies, including satellite phones, mobile communication hubs, and transportable SATCOM vehicles for municipalities and critical infrastructure operators.

2. Taiwan’s Network Resilience and SATCCOM BCP and Strategy

2.1 Context and Geopolitical Risk

Taiwan faces continuous threats from China, including cyberattacks and the physical disruption of its undersea cable network. In 2023–2024 alone, multiple incidents involving the severing of undersea cables connecting Taiwan’s outer islands occurred, with at least one case involving a Chinese vessel detained for suspected sabotage.

2.2 Satellite Communication Initiatives

To address these threats, Taiwan has launched a comprehensive 10-year plan to establish an independent, resilient satellite internet system. The plan includes:

●

Initial budget of US$790 million, focused on developing Taiwan’s own low Earth orbit (LEO) satellite constellation.

●

Strategic collaboration with Eutelsat OneWeb to provide immediate coverage for emergency communications and internet access.

●

Development of over 700 satellite ground stations across Taiwan to support seamless integration and redundancy.

●

Launch of Taiwan-made LEO satellites, with the first deployment expected by 2026–2027.

2.3 Backup Infrastructure and Microwave Networks

In parallel, Taiwan is enhancing terrestrial microwave communication systems, retrofitting existing mountain facilities for secure line-of-sight communication to outlying islands. This ensures at least partial functionality if submarine cables are compromised.

2.4 Government SATCOM BCP Subsidies

The Taiwanese government is also launching a targeted NT$2.5 billion (approx. US$80 million) subsidy program between 2024 and 2027 to support BCP (Business Continuity Planning) deployments. These funds will help enterprises and local governments invest in mobile SATCOM units, off-grid power systems, and hybrid backup communication solutions.

The company plays a critical role in this ecosystem as a trusted distribution partner of Eutelsat OneWeb, offering resilient LEO connectivity combined with value-added services such as:

●

Enterprise network redundancy to ensure uninterrupted operations.

●

Server load balancing to optimize system performance and stability.

●

Disaster recovery solutions to maintain business continuity under extreme scenarios.

SATCOM BCP systems mounted on vehicles to deliver emergency broadband access during disasters or conflicts, designed for both enterprise and public use.

National Budget for SATCOM BCP

Category	Taiwan	Japan
Budget Allocation	US$790M (10-year plan)	US$784M (FY2025 defense satellite only)
BCP Subsidies	US$80M (2024–2027)	US$170M (2024–2026)
Timeline	First satellite by 2026–2027	Satellite launch timeline TBD
Civil-Military Integration	High (Foxconn, private sector)	Very High (JSDF + NIED + civilian use)
International Partners	Eutelsat OneWeb, U.S. (partial)	U.S., domestic R&D focus

A Shared Vision for a Secure, Connected Future

The rising threats to digital infrastructure have made network resilience a top priority for governments and enterprises worldwide. Taiwan and Japan stand as leading examples in Asia, proactively investing in satellite communication, integrating civil-military response systems, and future-proofing their networks against cyber threats, geopolitical instability, and natural disasters. Their efforts reflect a broader global shift, as nations recognize the urgent need to safeguard critical connectivity. As a distribution partner of Eutelsat OneWeb, our company plays a pivotal role in this transformation, delivering mission-critical solutions such as enterprise network redundancy, server load balancing, disaster recovery systems, and SATCOM BCP solutions for disaster and wartime scenarios. These capabilities are essential for governments, critical infrastructure providers, and private enterprises seeking to ensure uninterrupted operations in an unpredictable world.

With geopolitical and environmental risks on the rise, network resilience is no longer just a technical consideration – it is a strategic imperative. By embedding this vision in national planning, Taiwan and Japan not only secure their digital futures but also set a global benchmark for allied democracies striving for a more secure and connected world. While the Company does not currently generate revenue from contracts in the civilian telecommunications sector, we are actively engaged in discussions with prospective partners – including governments, enterprises, mobile network operators, satellite providers, and infrastructure stakeholders – about using our solutions to support hybrid, resilient communications. Our platform, which is software-defined and carrier-neutral, is specifically designed to enable automatic recovery, satellite-based failover, and dynamic traffic routing in the event of fiber disruptions or terrestrial infrastructure loss.

We believe our technology is well-positioned to support the growing demand for resilient connectivity across mobile backhaul, disaster response, rural access, business continuity, and critical infrastructure markets. However, there can be no assurance that these discussions will result in binding agreements or generate revenue in the near term.

Principal Factors Affecting Financial Performance

We believe that our operating and business performance will be driven by various factors that affect the Aerospace & Defense and Civilian Telecommunications segments including the magnitude of defense spending by the U.S. and its allies, trends in air travel affecting the commercial airline industry, and trends in the evolution of the digital infrastructure and technologies deployed by mobile network operators, which collectively constitute the customer bases that we target, as well as general macroeconomic factors. Key factors that may affect our future performance include:

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our ability to enter into and maintain long-term business arrangements with potential partners that are defense contractors and other potential military and government customers, which depends on numerous factors including the real or perceived availability, quality and price of our services and product offerings as compared to those offered by our competitors;

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our ability to enter into and maintain long-term business arrangements with potential partners in the commercial aviation and airline industries and other potential aerospace customers, which depends on numerous factors including the real or perceived availability, quality and price of our services and product offerings as compared to those offered by our competitors;

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our ability to enter into and maintain long-term business arrangements with potential partners in civilian telecommunications industries and other potential telecommunications customers, which depends on numerous factors including the real or perceived availability, quality and price of our services and product offerings as compared to those offered by our competitors;

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our ability to enter into and maintain long-term business arrangements with potential partners in satellite communications industries, including satellite and constellation operators with satellites in various orbits such as LEO, MEO, GEO and HEO, which depends on numerous factors including the technical integration of our technology and services with their satellites and core networks;

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our ability to secure and maintain the relevant licenses and regulatory approvals to operate as a distribution partner of satellite bandwidth from our current and potential satellite and constellation partners in our potential target countries and regions, which depends on numerous factors including the navigation of both national and international regulatory regimes and coordination with ministries of communications or their equivalent;

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our ability to secure and maintain the relevant type approvals, as necessary, to install our universal terminals on airborne, maritime and land-based vehicles and platforms, such as the DO-160 certification for installation of our systems on aircraft, which depends on numerous factors including the navigation of both governmental and third-party regulatory regimes and coordination with key stakeholders;

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the extent of the adoption of our products and services by potential Aerospace & Defense and Civilian Telecommunications partners and customers;

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costs associated with implementing, and our ability to implement on a timely basis, our technology, upgrades and installation technologies;

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costs associated with and our ability to execute our expansion, including modification to our network to accommodate satellite technology, development and implementation of new satellite-based technologies, the availability of satellite capacity, costs of satellite capacity to which we may have to commit well in advance, and compliance with regulations;

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costs associated with managing a rapidly growing company;

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the number of manned and unmanned defense platforms in service in our markets, including changes in fleet size by one or more of our potential military or government customers;

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the geopolitical environment and other trends that affect defense spending;

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continued demand for connectivity and proliferation of manned and unmanned defense platforms, including UAVs and drones;

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the number of aircraft in service in our markets, including consolidation of the airline industry or changes in fleet size by one or more of our commercial airline partners;

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the economic environment and other trends that affect both business and leisure travel;

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the number of cell towers, base stations and antennas deployed by mobile network operators and digital infrastructure developers in our markets, including consolidation of the telecommunications industry or changes in network topology due to transitions from 4G to 5G and, eventually to 6G mobile networks by one or more of our potential civilian telecommunications partners;

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continued demand for connectivity and proliferation of Wi-Fi enabled devices, including smartphones, tablets and laptops;

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our ability to obtain required licenses and approvals necessary for our operations; and

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changes in laws, regulations and interpretations affecting telecommunications services and aviation, including, in particular, changes that impact the design of our equipment and our ability to obtain required certifications for our equipment.

Recent Events

Merger with IX Acquisition Corp.

On March 29, 2024, we entered into a merger agreement the “Merger Agreement”) with IX Acquisition Corp. (“IXAQ”), a Cayman Islands exempted company (which will re-domicile from being a Cayman Islands company and become a Delaware corporation), and AKOM Merger Sub Inc., a Nevada corporation and a wholly owned subsidiary of IQAC (“Merger Sub”).

The Merger is intended to provide Aerkomm with enhanced access to public capital markets, institutional investors, and strategic partners. If consummated, we expect this transaction to improve our liquidity position and support the scale-up of defense and telecom commercialization initiatives.

The Merger Agreement provides that, among other things and upon the terms and subject to the conditions thereof, following the domestication to Delaware of IXAQ, Merger Sub will merge with and into the Company (the “Merger”), after which the Company will be the surviving corporation and a wholly-owned subsidiary of IXAQ. In connection with the Merger, IXAQ will be renamed “AKOM Inc.” The Merger will become effective upon the filing of the certificate of merger with the Secretary of State of the State of Delaware or at such later time as is agreed to by the parties to the Merger Agreement and specified in the articles of merger. The Merger is expected to close prior to October 12, 2025.

The Amendment provides that any lock-up period applicable to the Sponsor or any officers, directors or affiliates of Parent will terminate at the Closing of the Merger and changes the percentage of the Founder Shares being treated as Escrowed Sponsor Shares from 50% to 25%, adds a provision providing for the Company to pay certain amounts to Parent to cover its working capital and extension expenses, and adds a provision that Parent may terminate the Merger Agreement at any time prior to the Closing Date if the Company or any Subsidiary of the Company enters into voluntary bankruptcy or fails to remove within 60 days any petition in bankruptcy filed against it prior to Closing.

Additional information relating to the Merger along with the Merger Agreement can be found in our Current Report on Form 8-K filed with the SEC on April 4, 2024. In connection with the transaction described herein, the Company filed relevant materials with the SEC, including the Registration Statement on Form S-4 and a proxy statement/prospectus. Additional information relating to the S-4 can be found in our Current Report on Form 8-K filed with the SEC on May 16, 2024.

Planned Merger with Ejectt

On July 28, 2023, we and Ejectt, Inc. signed a non-binding letter of intent with respect to a possible merger between Aerkomm Taiwan and Ejectt. At a January 30, 2024 meeting of the shareholders of Aerkomm Taiwan, the shareholders approved pursuing a merger with Ejectt, under which Aerkomm Taiwan would be the surviving company, and delivery of a notice and merger contract to Ejectt, which were delivered to Ejectt on February 1, 2024. At a May 23, 2024 meeting of the shareholders of Aerkomm Taiwan, the shareholders approved the terms of the merger plan and agreement and its being signed by the chairperson of Aerkomm Taiwan. On the same day, the shareholders of Ejectt approved the proposed merger and the merger agreement was then signed by the parties on May 23, 2024. Under the merger agreement and contingent only on the merger’s receiving necessary governmental approvals, the merger will be consummated and the surviving company of the merger will be Aerkomm Taiwan.

Because Aerkomm Taiwan has foreign (non-Taiwanese) shareholders (Aerkomm holds 49% of the outstanding shares of Aerkomm Taiwan) for the merger to become legally effective under Taiwanese law, it must be approved by the Taiwan Department of Investment Review. Aerkomm and Ejectt submitted an application to the Department of Investment Review on July 10, 2024. Reviews by the Department of Investment Review often take four to six months and possibly longer, may require extensive inquiries and requests for further information by the Department of Investment Review, and sometimes result in denial of approval. Consequently, Aerkomm cannot assure that the merger will be approved or, if approved, when the approval may be granted.

Strategic and International Defense Pipelines

As of this filing, we are shifting from pursuing international growth through Direct Commercial Sales (DCS) to Foreign Military Sales (FMS) pathways:

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Japan: Engaged with local integrators and defense authorities regarding UAV communications terminals and software-defined modems; three ongoing pilot evaluations.

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Taiwan: Collaborating with telecom operators and disaster resilience agencies on mobile SATCOM BCP deployments; application-based discussions tied to regional contingency planning.

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European Union: In active dialogue with five EU-based primes in connection with the IRIS² satellite sovereignty initiative and C4ISR modernization programs; R&D co-development discussions underway.

Across these efforts, we are pursuing revenue opportunities through strategic partnerships, licensing, and terminal sales. As of the date of this filing, we are actively engaged with over 25 government agencies, defense integrators, and commercial primes across the U.S., Japan, EU, and Indo-Pacific. These engagements span stages from early requests for information (RFI) to pilot testing and integration evaluations. The indicative value of our aggregate opportunity pipeline exceeds $150 million, though no assurance can be given that these engagements will convert to binding agreements. We anticipate initial award decisions on a subset of these opportunities during 2025.

Smaller Reporting Company

Although we no longer qualify as an Emerging Growth Company, or EGC, we continue to qualify as a smaller reporting company, which allows us to take advantage of many of the same exemptions from disclosure requirements, including reduced disclosure obligations regarding executive compensation that are available to an EGC. In addition, as a smaller reporting company with less than $100 million in annual revenue, we are not required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002. In reliance on these exemptions, we have taken advantage of reduced reporting obligations in this quarterly report on Form 10-Q.

Recent Market Information

The IATA (International Air Transport Association) in May 2025 issued a report entitled Passenger Market Analysis.

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Industry-wide revenue passenger-kilometers (RPKs), a measure of passenger traffic volume, have shown a strong recovery in recent years, surpassing pre-pandemic (2019) levels by 3.8% in 2024.

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Available seat-kilometers (ASKs) in the airline industry experienced an 8.7% increase in 2024 compared to 2023.

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In 2024, both global and domestic passenger traffic saw significant growth, with some regions experiencing particularly strong increases. Globally, air passenger demand increased by 10.4% compared to 2023 and surpassed pre-pandemic levels by 3.8%, and domestic traffic in particular grew by 5.7%.

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In 2024, international RPKs (Revenue Passenger Kilometers) recovered strongly, with global traffic exceeding pre-pandemic levels. IATA reported that total full-year traffic rose 10.4% compared to 2023 and was 3.8% above 2019 levels. International demand specifically rose 9.5% in October 2024 compared to October 2023. Furthermore, IATA’s passenger market analysis indicates that international RPKs surpassed 2019 levels by 0.5% in 2024, with load factors reaching a record high of 83.2%. Asia Pacific airlines played a significant role in this recovery, contributing to more than half of the global growth.

Results of Operations

The discussion below relates to our two three months periods ended on March 31, 2025 and 2024.

Comparison of Three Months Ended March 31, 2025 and 2024

The following table sets forth key components of our results of operations during the three months ended March 31, 2025 and 2024.

	Three Months Ended March 31,						Change
	2025			2024			$			%
Sales	$	-		$	53,255		$	(53,255	)		(100.0	)%
Cost of sales		-			38,116			(38,116	)		(100.0	)%
Operating expenses		3,079,484			5,108,102			(2,028,618	)		(39.7	)%
Loss from operations		(3,079,484	)		(5,092,963	)		2,013,479			(38.4	)%
Net non-operating income (loss)		(599,248	)		(987,210	)		387,962			(39.3	)%
Loss before income taxes		(3,678,732	)		(6,080,173	)		2,401,441			(39.5	)%
Income tax expense		-			2,400			(2,400	)		(100.0	)%
Net loss		(3,678,732	)		(6,080,573	)		2,403,841			(39.5	)%
Other comprehensive income		(550,029	)		(669,236	)		119,207			(37.4	)%
Total comprehensive loss	$	(4,228,761	)	$	(6,751,809	)	$	2,523,048			(41.8	)%

Revenue. Our sales were $0 for the three months ended March 31, 2025, as compared to the $53,255 for the three months ended March 31, 2024 as we are still developing our core business in in-flight entertainment and connectivity and there were few sales of equipment to one of our related parties during the period.

Cost of sales. Our cost of sales includes the direct costs of our raw materials and component parts, as well as the cost of labor and overhead. Our cost of sales was $0 and $38,116 for the three months ended March 31, 2025 and 2024, respectively.

Operating expenses. Our operating expenses consist primarily of compensation and benefits, professional advisor fees, cost of promotion, business development, business travel, transportation costs, and other expenses incurred in connection with general operations. Our operating expenses decreased by $2,028,618 to $3,079,484 for the three months ended March 31, 2025, from $5,108,102 for the three months ended March 31, 2024. Such operating expense decrease was mainly due to the decrease in salaries expense, professional fee and stock-based compensation in the amount of $1,896,046, $407,956 and $97,021, respectively, which was offset by the increase in amortization and depreciation expense, and other operation expense in the amount of $58,757 and $313,640, respectively.

Net non-operating income (loss). We had $599,248 and $987,210 net non-operating loss for three months ended March 31, 2025, and 2024, respectively. Net non-operating income for the three months ended March 31, 2025, primarily consisted of foreign currency exchange loss of $50,614, interest expense of $267,229, loss from change in fair value of SAFE liabilities of $50,000, loss on disposal of subsidiaries of $234,454 and offset by other income of $3,041. Net non-operating loss for the three months ended March 31, 2024, primarily consisted of foreign exchange loss of $687,923, interest expenses of $286,631, other loss, net of $12,656 and offset by unrealized investment gain of $672.

Loss before income taxes. Our loss before income tax is $3,678,732 for the three months ended March 31, 2025 as compared to the loss of $6,080,173 for the three months ended March 31, 2024, a decrease of $2,401,441, or 39.5%, as a result of the factors described above.

Income tax expense. Income tax expense for the three months ended March 31, 2025 and 2024 were $0 and $2,400, respectively. The income tax expenses mainly consist of California franchise tax and foreign subsidiary’s income tax expenses.

Total comprehensive loss. As a result of the cumulative effect of the factors described above, our total comprehensive loss decreased by $2,824,223, or 41.8%, to $3,927,586 for the three months ended March 31, 2025, from $6,751,809 for the three months ended March 31, 2024.

Liquidity and Capital Resources

In assessing our liquidity, we monitor and analyzes its cash on-hand and its operating and capital expenditure commitments. Our liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations. Cash flow from investing and financing activities have been utilized to finance our working capital requirements. As of March 31, 2025, we had cash outflow from operating activities of $602,777 and had cash and restricted cash of $105,124. Our working capital deficit was $59,938,682 as of March 31, 2025. These conditions give rise to substantial doubt and uncertainty regarding our ability to continue as a going concern. If we are able to carry out our plans as detailed below, we could alleviate this doubt.

We have taken measures and is experiencing and anticipates developments that management believes will improve its financial position. These include that two of the our current shareholders (the “Lenders”) have each committed to provide to a $10 million bridge loan (together, the “Loan Commitments” and loans made under the Loan Commitments, “Loans”) for an aggregate committed principal amount of $20 million, to bridge the our cash flow needs prior to its obtaining a mortgage loan to be secured by a parcel of land (the “Land”) that we purchased in Taiwan. The Lenders also agreed to an earlier closing of up to 25% of the principal amounts of the Loans upon our request prior to the time that title to the Land is vested in our subsidiary, Aerkomm Taiwan, to pay the outstanding payable to our vendors. On April 25, 2022, the Lenders further amended the commitment and agreed to increase the percentage of earlier closing amount from 25% to 100%, thus making the full $20 million of the Loan Commitments available to us.

In addition to the foregoing, on March 1, 2023, we entered into a letter agreement with Well Thrive Limited, one of the lenders under the Loan Commitment, in which it was agreed that, to support us, one-half of the Loan Commitment amount of Well Thrive Limited (thus, $5,000,000) would be funded (by Well Thrive or by lenders arranged by Well Thrive) at no interest and with no fixed maturity date, with the remaining $5,000,000 of Well Thrive Limited’s Loan Commitment to be funded on the basis of the originally agreed terms. As of March 31, 2025, we had received Loans totaling NT$136,371,529 (approximately $4.1 million) from multiple individual lenders arranged by Well Thrive. Therefore, the balance of $15,891,186 of the $20 million in aggregate loan commitments from the two Lenders was still available as of March 31, 2025.

In connection with the planned Merger with IXAQ, we have obtained $35 million in private investment in public equity (“PIPE”) investment commitments and expects additional approximately $2.0 million in Simple Agreement for Future Equity (“SAFE”) investments to be funded before closing of the Merger. Further, us and IXAQ have entered into a letter agreement with Benchmark Company LLC (“Benchmark”) under which Benchmark has agreed to provide capital markets advisory services to us (including attaining research coverage, assisting in road-shows and investor meetings and other advisory services) and to act as placement agent for the private placement of securities by us. In connection with the arrangement with Benchmark, we are targeting the raise of $100 million in connection with the closing of and after the Merger, in addition to the $35 million in already committed PIPE investment and up to approximately $19.2 million of cash (net of transaction costs and depending on the amount of shareholder redemptions) contributed from the IXAQ side as a result of the Merger.

Our ability to remain solvent and settle its obligations when they come due is dependent on its ability to raise additional capital in the form of permanent equity and to successfully gain listing of its common stock on a national exchange such as the NASDAQ capital markets, so that its current investors that have invested in the form of convertible debt and convertible notes are incentivized to convert their debt holdings into common stock that could be traded in an orderly market. As of March 31, 2025, we expect approximately $28.8 million convertible notes and SAFE can be converted into equity upon Merger.

We also expects to begin generating significant recurring revenues in fourth quarter 2025, including in connection with the OneWeb Distribution Partner Agreement entered into between Aerkomm Japan, as Distribution Partner, and OneWeb on October 1, 2024, pursuant to which Aerkomm Japan was appointed as a distributor for OneWeb in Japan and Taiwan and we had made our first delivery of a certain classified radar system to a governmental defense customer on October 24, 2024.

We believe it will have sufficient liquidity to fund its operations for at least the next twelve months following the issuance of these unaudited condensed consolidated financial statements. This assessment considers our current available cash, approximately $15.9 million in aggregate available loan commitments from two lenders, $35 million in PIPE investment commitments signed concurrently with entering into the Merger Agreement with IXAQ, and additional capital expected to be raised through SAFE financings and the Benchmark relationship. In addition, approximately $28.8 million of outstanding convertible notes and SAFE are expected to convert into equity upon consummation of the Merger, which would further strengthen our capital resources and reduce cash obligations. We also expect to benefit from the cash to be brought in by IXAQ in connection with the Merger (subject to shareholder redemptions), the anticipated ramp-up of revenue-generating commercial sales, synergies from the merger of Aerkomm Taiwan with its exclusive distributor EJECTT, Inc., and continued disciplined management of hiring and other investments. Based on these factors, we believe its working capital will be adequate to sustain our operations for the next twelve months.

If the Merger does not close and thus the $35 million in PIPE commitments that are contingent on closing of the Merger are no longer committed, we expect to be able to fund operations over the next 12 months by short-term borrowings and other loan commitments, the balance of approximately $15.9 million of the $20 million in above-referenced loan commitments from two shareholders, renegotiating financing arrangements with some or all of the committed PIPE investors (who are our existing investors and have a strong interest in its success), slowing the pace of hiring and other investments that we would otherwise undertake if the Merger closes, synergies and efficiencies from the planned merger with EJECTT, and revenues received from the ramp-up of commercial sales. In conclusion, per the non-binding term sheet agreement aforementioned, we will be able to fund the operations and development for the next 12 months.

The following table provides detailed information about our net cash flow:

	Three Months Ended
	March 31,
	2025			2024
Net cash used in operating activities	$	(590,312	)	$	(3,537,498	)
Net cash provided by (used in) investing activities		5,077			(688,720	)
Net cash provided by (used in) financing activities		523,223			(4,353,154	)
Net decrease in cash and restricted cash		(62,012	)		(8,579,372	)
Cash and restricted cash at beginning of year		109,227			7,428,702
Foreign currency translation effect on cash and restricted cash		57,909			1,269,445
Cash and restricted cash at end of year	$	105,124		$	118,775

Operating Activities

Net cash used in operating activities was $602,777 for the three months ended March 31, 2025, as compared to $3,537,498 for the three months ended March 31, 2024. In addition to the net loss of $3,678,732, the decrease in net cash used in operating activities during the three months ended March 31, 2025 was mainly due to the increased in prepaid expenses of $32,811, other receivable of $1,962, other current assets of $1,035 and operating lease liability of $7,327, respectively, offset by decreased in deposits of $6,798 and non-cash items of $1,479,591 which consisted of depreciation and amortization, stock-based compensation, non-cash R&D expense, change in fair value of SAFE liabilities, and loss in disposal of subsidiaries. The decrease was also offset by increase in accrued expenses, other payable and other payable-related parties of $625,963, $942,827 and $63,908, respectively.

Net cash used for operating activities was $3,537,498 for the three months ended March 31, 2024, as compared to $5,110,931 for the three months ended March 31, 2023. In addition to the net loss of $6,082,573, the decrease in net cash used for operating activities during the three-month period ended March 31, 2024 was mainly due to the decrease in accounts receivable and the increase in accrued expenses and other current liabilities of $41,088 and $2,620,514, respectively, offset by the decrease in prepaid expenses and other current assets of $2,754,311. In addition to the net loss of $3,754,436, the increase in net cash used for operating activities during the three-month period ended March 31, 2023 was mainly due to increase in prepaid expenses, accounts payable, and other payable of $2,068,638, $353,703, and $425,562, respectively, offset by the increase in accrued payroll liability and prepayment from customer, interest payable of $152,518, $352,081, and $235,482.

Net cash used for operating activities was $2,472,529 for the three months ended March 31, 2024. In addition to the net loss of $6,595,119, the decrease in net cash used for operating activities during the three-month period ended March 31, 2024 was mainly due to the decrease in accounts receivable and the increase in accrued expenses and other current liabilities of $41,088 and $3,029,865, respectively, offset by the decrease in prepaid expenses and other current assets of $703,222. In addition to the net loss of $3,754,436, the increase in net cash used for operating activities during the three-month period ended March 31, 2023 was mainly due to increase in prepaid expenses, accounts payable, and other payable of $2,068,638, $353,703, and $425,562, respectively, offset by the increase in accrued payroll liability and prepayment from customer, interest payable of $152,518, $352,081, and $235,482.

Investing Activities

The net cash provided by and used in investing activities for the three months ended March 31, 2025 was $5,077 as compared to $688,720 for the three months ended March 31, 2024. Net cash provided by investing activities for the three months ended March 31, 2025 was mainly due to proceeds from other receivable – related parties loans, of $122,017, and offset by the disbursement for other receivable - related parties loans of $114,199 and cash outflow from disposal of subsidiaries of $2,741.

Net cash provided by investing activities for the three months ended March 31, 2024 was $688,720 as compared to net cash used in investing activities of $10,247 for the three months ended March 31, 2023. The net cash provided by investing activities for the three months ended March 31, 2024 was mainly prepayment for land of $346,070, which was offset by the cash used for the purchase of property and equipment of $11,275. The net cash provided by investing activities for the three months ended March 31, 2023 was mainly for the proceeds from disposal of long term investment of $325,578, which was offset by the purchase of property and equipment of $335,825. Net cash provided by investing activities for the three months ended March 31, 2024 was $357,345. The net cash provided by investing activities for the three months ended March 31, 2024 was mainly prepayment for land of $346,070, which was offset by the cash used for the purchase of property and equipment of $11,275. The net cash provided by investing activities for the three months ended March 31, 2023 was mainly for the proceeds from disposal of long term investment of $325,578, which was offset by the purchase of property and equipment of $335,825.

Financing Activities

Net cash provided by financing activities for the three months ended March 31, 2025 was $535,688 as compared to net cash used in financing activities of $4,353,154 for the three months ended March 31, 2024. Net cash provided by financing activities for the three months ended March 31, 2025 was mainly attributable to the proceeds from short-term loan of $556,149, and offset by repayment of short-term loan of $32,926.

Net cash used and provided by financing activities for the three months ended March 31, 2024 and 2023 was $5,749,498 and $752,910, respectively. Net cash provided by financing activities for the three months ended March 31, 2024 were mainly attributable to net proceeds from issuance of common stock in the amount of $6,558,000 offset by repayment of long term notes payable of $7,251,237. Net cash provided by financing activities for the three months ended March 31, 2023 were mainly attributable to proceeds from the increase in short-term loans in the amount of $758,439. Net cash used and provided by financing activities for the three months ended March 31, 2024 was $5,749,498. Net cash provided by financing activities for the three months ended March 31, 2024 were mainly attributable to net proceeds from issuance of common stock in the amount of $6,558,000 offset by repayment of long term note payable of $7,330,000. Net cash provided by financing activities for the three months ended March 31, 2023 were mainly attributable to proceeds from the increase in short-term loans in the amount of $758,439.

Capital Expenditures

Our operations continue to require significant capital expenditures primarily for technology development, equipment and capacity expansion. Capital expenditures are associated with the supply of airborne equipment to our prospective airline partners, which correlates directly to the roll out and/or upgrade of service to our prospective airline partners’ fleets. Capital spending is also associated with the expansion of our network, ground stations and data centers and includes design, permitting, network equipment and installation costs.

Capital expenditures for the three months ended March 31, 2025 and 2024 were $0 and $357,345, respectively.

We anticipate an increase in capital spending in fiscal year 2025 and estimate that capital expenditures will range from $6 million to $10 million as we will continue to advance our semiconductor designs, our software-defined platforms and continue to execute our network expansion strategy. We expect to be able to raise these required funds in connection with our planned Merger with IXAQ although we cannot provide assurance that we will be successful in this effort.

Inflation

Inflation and changing prices have not had a material effect on our business, and we do not expect that inflation or changing prices will materially affect our business in the foreseeable future. However, our management will closely monitor price changes in our industry and continually maintain effective cost control in operations.

Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity or capital expenditures or capital resources that is material to an investor in our securities.

Seasonality

Our operating results and operating cash flows historically have not been subject to significant seasonal variations. This pattern may change, however, as a result of new market opportunities or new product introductions.

Critical Accounting Estimates

The unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with U.S. GAAP. The preparation of these unaudited condensed financial statements and accompanying notes requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Certain accounting estimates are particularly sensitive because of our significance to unaudited condensed financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. We believe that the following accounting estimates are critical to our business operations and understanding our consolidated financial results.

SAFE Liabilities

In connection with the Simple Agreement for Future Equity (“SAFE”) agreements that we entered into with four third parties set forth in Note 17, we determined that the SAFE liabilities should classified as a derivative liability in accordance with ASC 815-40 “Derivatives and Hedging”. As a result, the SAFE liabilities shall be measured initially, and subsequently at fair value on each reporting date. We will continue to adjust the carrying value of the SAFE liabilities until contingencies are finally determined. Any changes in fair value will be recorded as a gain or loss in the statements of operations and comprehensive loss. As of March 31, 2025, based on the Fair Value Analysis of SAFE prepared by an independent valuation specialist, the fair value of the SAFEs was estimated at $5,460,000. The valuation was determined using a Monte Carlo simulation reflecting a probability-weighted outcome of multiple scenarios, including equity financing, optional conversion, and dissolution. Key assumptions used in the simulation included an IXAQ stock price of $11.86, a risk-free rate of 4.01%, and an annualized volatility of 48.1%. The Company has received aggregate proceeds of $4,997,200 from SAFE holders on the respective issuance dates. The resulting change in fair value of the derivative liability recognized for the three months ended March 31, 2025, was $50,000.

Recent Accounting Pronouncements

See Note 3 of the notes to the unaudited condensed consolidated financial statements included elsewhere in this quarterly report for a discussion of recently issued accounting standards.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rule 13a-15(e) of the Exchange Act, our management has carried out an evaluation, with the participation and under the supervision of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as of ~~September~~March 3031, ~~2024~~ 2025.

Based upon, and as of the date of this evaluation, our chief executive officer and chief financial officer determined that, because of the material weaknesses described in Item 9A “Controls and Procedures” of our Annual Report on Form 10-K/A for the fiscal year ended December 31, ~~2023~~2024, filed with the SEC on ~~September~~August 518, ~~2024, and further referenced below, which we are still in the process of remediating as of~~ ~~September 30~~2025, ~~2024 ,~~ our disclosure controls and procedures were not effective.

The Company’s ~~restated~~management ~~its~~discovered ~~consolidated balance~~errors ~~sheet~~in previously issued financial statements as of December 31, 2023, ~~(the~~and ~~“2023~~for ~~Restatement”).~~the ~~For~~year athen ~~discussion~~ended of2023, ~~the~~The ~~individual~~financial ~~restatement~~statements ~~adjustments~~should ~~and the~~no ~~impact~~longer ofbe ~~such~~relied ~~adjustments~~upon. onThe ~~the~~ Company’s ~~previously~~restated ~~issued~~its financial statements, ~~see~~as ~~“Item~~of 1.and ~~Restated~~for ~~Financial~~the ~~Statements—Note 2.~~year ~~Restatement~~ended ofDecember ~~Previously~~31, ~~Issued~~2023 ~~Financial~~(the ~~Statements,”~~“2023 ~~above~~Restatement”).

~~Financial~~For ~~Statements—Note~~a 2.discussion ~~Restatement~~ of ~~Previously~~the ~~Issued~~individual ~~Financial~~restatement adjustments ~~Statements~~and ~~for~~the ~~Year~~impact ~~Ended~~of ~~December~~such ~~31,~~adjustments ~~2023~~on ~~and 2022” in~~ the Company’s ~~2023~~previously ~~Form~~issued ~~10-K/A.~~financial ~~Accordingly~~statements, ~~the~~ ~~Company~~see is“Item ~~reporting~~1. inRestated Financial ~~this~~Statements—Note ~~Amendment No~~2. 1Restatement toof ~~its~~Previously ~~Form~~Issued ~~10-Q/A~~Financial ~~for the quarterly period ended March 31~~Statements,” ~~2024, its most recent evaluation of its disclosure controls and procedures which considered matters relating to the 2023 Restatement~~above.

As of March 31, 2024, the Company carried out an evaluation, under the supervision and with the participation of its chief executive officer and chief financial officer, pursuant to Rule 13a-15 promulgated under the Securities Exchange Act of 1934, as amended, of the effectiveness of the design and operation of its disclosure controls and procedures.62

As of March 31, 2025, the Company carried out an evaluation, under the supervision and with the participation of its chief executive officer and chief financial officer, pursuant to Rule 13a-15 promulgated under the Securities Exchange Act of 1934, as amended, of the effectiveness of the design and operation of its disclosure controls and procedures.

In making this evaluation, the Company has considered matters relating to the 2023 Restatement including actions taken by the Company within the past year to identify and enhance the effectiveness of its disclosure controls and procedures and internal controls over financial reporting.

Based on this evaluation, the Company’s chief executive officer and chief financial officer concluded that as of the evaluation date, such disclosure controls and procedures were reasonably designed to ensure that information required to be disclosed by the Company in reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.

Other than as described above, since the evaluation date by the Company’s management of its internal controls, there have not been any significant changes in the internal controls or in other factors that could significantly affect the internal controls.

Changes in Internal Control Over Financial Reporting

We regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.

During its evaluation of the effectiveness of our internal control over financial reporting as of ~~September~~March 3031, ~~2024~~2025, our management identified the following material weaknesses:

●

We do not have sufficient and skilled accounting personnel with an appropriate level of technical accounting knowledge and experience in the application of accounting principles generally accepted in the United States commensurate with our financial reporting requirements. To mitigate the current limited resources and limited employees, we rely heavily on the use of external legal and accounting professionals.

In order to cure the foregoing material weakness, we have taken or plan to take the following remediation measures:

●

As necessary, we will continue to engage consultants or outside accounting firms in order to ensure proper accounting for our consolidated financial statements.

We intend to complete the remediation of the material weakness discussed above as soon as practicable, but we can give no assurance that we will be able to do so. Designing and implementing an effective disclosure controls and procedures is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to devote significant resources to maintain a financial reporting system that adequately satisfies our reporting obligations. The remedial measures that we have taken and intend to take may not fully address the material weakness that we have identified, and material weaknesses in our disclosure controls and procedures may be identified in the future. Should we discover such conditions, we intend to remediate them as soon as practicable. We are committed to taking appropriate steps for remediation, as needed.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. 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 of compliance with the policies or procedures may deteriorate.

Other than in connection with the implementation of the remedial measures described above, there were no changes in our internal controls over financial reporting during quarter ended ~~September~~March 3031, ~~2024~~2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

6063

PART II
OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

There were no material developments during the quarter ended ~~September~~March 3031, ~~2024~~2025 to the legal proceedings previously disclosed in Item 3 “Legal Proceedings” of our Annual ~~Report~~ Report on Form 10-K/A filed on ~~September~~August 518, ~~2024~~2025.

ITEM 1A. RISK FACTORS.

For information regarding additional risk factors, please refer to our Annual Report on Form 10-K/A for the year ended December 31, ~~2023~~2024 filed with the SEC on ~~September~~August 518, ~~2024~~2025.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

We have not sold any equity securities during the quarter ended ~~September~~March 3031, ~~2024 that were not previously disclosed in a current report on Form 8-K that was filed during the quarter~~2025.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

Effective at a Board Meeting on February 15, 2025, the Board approved the appointment of Ms. Jessica Hsu, as Chairperson of the Board and Sole Director of the following companies: Mesh Technology Limited; Mesh Technology Taiwan Limited; Mesh Technology Limited; and Mesh Technology Taiwan Limited. We have no other information to disclose that was required to be in a report on Form 8-K during the quarter ended ~~September~~March 3031, ~~2024~~2025 but was not reported. There have been no material changes to ~~the~~ the procedures by which security holders may recommend nominees to our board of directors.

ITEM 6. EXHIBITS

Exhibit No.		Description
2.1		Agreement and Plan of Merger, dated September 26, 2013, between Aerkomm Inc. and Maple Tree Kids LLC (incorporated by reference to Exhibit 2.1 to the Registration Statement on Form S-1 filed on November 5, 2013)
2.2		Form of Share Exchange Agreement, dated February 13, 2017, among Aerkomm Inc., Aircom Pacific, Inc. and the shareholders of Aircom Pacific, Inc. (incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K filed on February 14, 2017)
3.1		Restated Articles of Incorporation of the registrant (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on May 4, 2017)
3.2		Certificate of Change Pursuant to NRS 78.209 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on January 16, 2019)
3.3		Amended and Restated Bylaws of the registrant (incorporated by reference to Exhibit 3.3 to the Annual Report on Form 10-K filed on March 30, 2020)
31.1*		Certifications of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certifications of Principal Financial and Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*		Certification of Principal Financial and Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Filed herewith

6264

SIGNATURES

Pursuant to the requirements 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.

Date: November 13, 2024	AERKOMM INC.
Date: October 24, 2025	AERKOMM INC.
	/s/ Louis Giordimaina
	Name:	Louis Giordimaina
	Title:	Chief Executive Officer
		(Principal Executive Officer)
	/s/ Louis Giordimaina
	Name:	Louis Giordimaina
	Title:	Interim Chief Financial Officer
		(Principal Financial and Accounting Officer)

6365

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