Press release·12/17/2025 10:11:46

Summary and Analysis

Overview

Aerkomm Inc. is an advanced defense and aerospace communications company entering early-stage revenue generation. The company’s platform integrates software-defined modems, multi-orbit satellite terminals, and over-the-horizon systems to support unmanned, autonomous, and ISR platforms. Aerkomm’s near-term focus is on converting strategic defense engagements into long-term contracts while leveraging dual-use technologies for commercial aviation and telecom markets.

Aerkomm’s technology is built on a carrier-neutral, software-defined architecture that enables seamless integration of satellite communications, over-the-horizon (OTH) radio and radar systems, terrestrial networks, and hybrid connectivity pathways. This multi-layered design supports interoperability, modular scalability, and persistent resiliency in dynamic and degraded operational environments.

Key Trends and Uncertainties

The key trends and uncertainties impacting Aerkomm’s performance include:

1. U.S. defense appropriations uncertainty due to Continuing Resolutions, which can restrict new program starts and delay contract finalization.
2. Geopolitical instability in the Indo-Pacific region, which is increasing demand for resilient satellite and OTH communications but may delay procurement timelines.
3. Supply chain pressures in semiconductors and RF components, which continue to impact production scalability and lead times.
4. Early-stage commercialization, as the company transitions from development to revenue generation, resulting in volatile results and timing of contract execution.

U.S. Budget Environment

The U.S. government maintains the largest defense budget globally, and defense spending levels may significantly influence Aerkomm’s business prospects. Key areas of focus include the Collaborative Combat Aircraft (CCA) program under the U.S. Air Force’s Next Generation Air Dominance (NGAD) initiative, as well as the development of the F-47 sixth-generation fighter jet under the NGAD program. These programs align with Aerkomm’s core competencies in multi-orbit satellite, over-the-horizon, and software-defined networking technologies.

Geopolitical and Economic Environment

Geopolitical tensions in the Asia-Pacific region, particularly involving China, Taiwan, and Japan, have led to elevated concerns around regional security and defense modernization. This has created opportunities for Aerkomm’s solutions in over-the-horizon connectivity, radar, unmanned systems integration, and secure multi-network communications infrastructure.

The ongoing conflict in Ukraine has also underscored the operational effectiveness and strategic value of unmanned systems, which aligns with Aerkomm’s technology roadmap and systems integration strategy.

Macroeconomic and geopolitical conditions, such as supply chain disruptions, trade tensions, and inflationary pressures, present continued risks and may impact Aerkomm’s ability to meet production or integration timelines.

International Business

Aerkomm is focused on expanding its international sales, particularly within defense-focused markets in Europe and the Asia-Pacific region. The company is pursuing opportunities aligned with its core product portfolio, including satellite connectivity, over-the-horizon communications, radar systems, and virtualized modems.

In Europe, the company sees opportunities arising from the EU’s “ReArm Europe” initiative and the IRIS² (Infrastructure for Resilience, Interconnectivity and Security by Satellite) program, which aim to reduce Europe’s reliance on non-EU defense providers and deploy a sovereign, multi-orbit satellite constellation.

In the Asia-Pacific region, Aerkomm is engaged with regional governments and partners to enhance defense resiliency and safeguard U.S. allies, particularly in the face of growing concerns over a potential conflict in the Taiwan Strait.

Commercial Aviation Business Environment and Trends

The commercial aviation industry has seen a strong recovery in both domestic and international travel, surpassing pre-pandemic levels. However, the in-flight connectivity (IFC) market is becoming more competitive, with the expansion of Starlink’s services into commercial aviation.

Aerkomm is positioning its proprietary ultra-low-profile antenna system and software-defined modem architecture to deliver differentiated value in the IFC market, offering aerodynamic advantages and carrier neutrality.

Civilian Telecommunications Business Environment and Trends

The civilian telecommunications industry is experiencing rapid transformation, driven by advancements in mobile infrastructure and growing data demands. However, the Asia-Pacific region is also grappling with emerging challenges, including infrastructure vulnerabilities and geopolitical risks that threaten the stability of digital communications.

Aerkomm sees opportunities in addressing the persistent digital divide and providing resilient, carrier-neutral, and satellite-integrated connectivity solutions to support business continuity and disaster recovery efforts.

Recent Events

Aerkomm has entered into a merger agreement with IX Acquisition Corp. (IXAQ), which is expected to provide the company with enhanced access to public capital markets, institutional investors, and strategic partners.

The company is also planning to merge its Taiwanese subsidiary, Aerkomm Taiwan, with Ejectt, Inc., its exclusive distributor in Taiwan, to leverage synergies and efficiencies.

Aerkomm has been actively engaged in discussions with potential partners and customers across the Aerospace & Defense and Civilian Telecommunications segments, with an indicative opportunity pipeline exceeding $150 million, though no assurance can be given that these engagements will convert to binding agreements.

Financial Performance

Aerkomm’s financial performance has been characterized by the following:

• No revenue generated during the three and nine months ended September 30, 2025, as the company is still in the development stage of its core business.
• Operating expenses decreased by $4.96 million, or 32.6%, for the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to decreases in salaries, professional fees, and stock-based compensation.
• Net non-operating loss increased by $790,460, or 51.6%, for the nine months ended September 30, 2025, compared to the same period in 2024, mainly due to foreign currency exchange losses and the change in fair value of SAFE liabilities.
• Total comprehensive loss decreased by $3.20 million, or 18.5%, for the nine months ended September 30, 2025, compared to the same period in 2024, as a result of the factors mentioned above.

Liquidity and Capital Resources

Aerkomm has a working capital deficit of $66.81 million as of September 30, 2025, which raises substantial doubt about the company’s ability to continue as a going concern. However, the company has taken several measures to improve its financial position, including:

• Obtaining $20 million in bridge loan commitments from two current shareholders, with $15.52 million still available as of September 30, 2025.
• Securing $35 million in PIPE investment commitments and up to $2 million in SAFE investments in connection with the planned merger with IXAQ.
• Targeting an additional $100 million capital raise in connection with the IXAQ merger, in addition to the $35 million PIPE and SAFE investments.
• Expecting to begin generating significant recurring revenues in the fourth quarter of 2025, including from the OneWeb Distribution Partner Agreement and a classified radar system delivery.

Based on these factors, the company believes it will have sufficient liquidity to fund its operations for at least the next twelve months. However, the successful completion of the IXAQ merger and the ability to raise the additional $100 million in capital are critical to the company’s long-term viability.

Conclusion

Aerkomm is positioned at the forefront of the rapidly growing satellite communications sector, with a focus on delivering secure, resilient, and adaptable communications solutions to the defense and civilian telecommunications markets. The company’s strategic partnerships, international expansion, and diversified product portfolio provide a solid foundation for growth, though it continues to face challenges related to early-stage commercialization, supply chain pressures, and the need for additional capital to fund its operations and development plans.