UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended: December 31, 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 No. 000-55925

AERKOMM INC.

(Exact name of registrant as specified in its charter)

44043 Fremont Blvd., Fremont, CA 94538

(Address of principal executive offices)

(877) 742-3094

(Registrant’s telephone number, including area code)

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

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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 and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted 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 and post 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 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.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of December 31, 2025, the aggregate market value of the shares of the registrant’s common stock held by non-affiliates (based upon the closing price of such shares as reported on the OTC Pink Market tier) was approximately [$50,668,230].  Shares of the registrant’s common stock held by each executive officer and director and by each person who owns 10% or more of the outstanding common stock have been excluded from the calculation in that such persons may be deemed to be affiliates of the registrant. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

There was a total of 19,653,886 shares of the registrant’s common stock outstanding as of May 28, 2026.

DOCUMENTS INCORPORATED BY REFERENCE

None.

Aerkomm Inc.

Annual Report on Form 10-K

Year Ended December 31, 2025

TABLE OF CONTENTS

Special Note Regarding Forward Looking Statements

In addition to historical information, this Annual Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. We use words such as “believe,” “expect,” “anticipate,” “project,” “target,” “plan,” “optimistic,” “intend,” “aim,” “will” or similar expressions which are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning the following:

Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. Actual results, performance, liquidity, financial condition, prospects and opportunities could differ materially from those expressed in, or implied by, these forward-looking statements as a result of various risks, uncertainties and other factors, including the ability to raise sufficient capital to continue our operations. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks outlined under “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2024, and matters described in this Annual Report generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this Annual Report will in fact occur.

Potential investors should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

The specific discussions herein about our company include financial projections and future estimates and expectations about our business. The projections, estimates and expectations are presented in this Annual Report only as a guide about future possibilities and do not represent actual amounts or assured events. All the projections and estimates are based exclusively on our management’s own assessment of our business, the industry in which we work and the economy at large and other operational factors, including capital resources and liquidity, financial condition, fulfillment of contracts and opportunities. The actual results may differ significantly from the projections.

Potential investors should not make an investment decision based solely on our company’s projections, estimates or expectations. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances described in the forward-looking statements will be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Annual Report to conform these statements to actual results or to changes in our expectations, except as required by law. 

You should read this annual report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission, or the SEC, with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect. 

Summary of Risk Factors

Our annual report should be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered by similar companies. Our ability to realize our business objectives and execute our strategies is subject to risks and uncertainties, including, among others, the following:

Risks Relating to Our Business

Risks and uncertainties related to our current and future business include, but are not limited to, the following:

Risks Relating to Our Industries

Risks and uncertainties related to our industries include, but are not limited to, the following:

Risks Relating to Our Technology and Intellectual Property

Risks and uncertainties related to our technology and intellectual property include, but are not limited to, the following:

Risks Relating to Ownership of our Common Stock

Risks and uncertainties related to our common stocks include, but are not limited to, the following:

In addition, we face other risks and uncertainties that may materially affect our business prospects, financial condition, and results of operations. You should consider the risks discussed in Item 1A. “Risk Factors” and elsewhere in this annual report before investing in our common stocks.

Use of Terms

For the purposes of this Annual Report only, references in this report to “we,” “us,” “our,” or “our company” are to the combined business of Aerkomm Inc., a Nevada corporation, and its consolidated subsidiaries, including Aircom Pacific, Inc., a California corporation and wholly-owned subsidiary, or Aircom; 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.

Except as otherwise indicated by the context and for the purposes of this report only, references in this report to:

PART I

ITEM 1. BUSINESS.

Overview

The Company is an advanced defense technology and systems integration company focused on resilient communications, autonomous systems enablement, and software-defined infrastructure for defense, aerospace, and commercial applications. Our platform is designed to support mission-critical operations across unmanned systems, multi-domain environments, and distributed operational architectures.

By leveraging next-generation technologies, we operate as a systems integrator and infrastructure enablement provider, delivering software-defined communications, integrated networking, edge compute capabilities, and interoperable mission systems designed to support resilient operations in contested and infrastructure-limited environments.

Through strategic partnerships with satellite constellation providers, unmanned platform and payload OEMs, telecommunications providers, and government-related partners, we seek to extend secure and scalable operational capabilities to the tactical edge.

Our integrated mission systems are designed to support evolving operational requirements associated with electronic warfare, distributed operations, and degraded or GPS-denied environments. Our solutions are engineered to support flexible deployment across multiple platforms and operational domains.

Our asset-light business model differentiates us within the capital-intensive defense and communications sectors. By focusing on software-defined infrastructure, orchestration capabilities, and systems integration rather than the manufacturing of every individual platform, we maintain operational flexibility, accelerate deployment timelines, and focus resources on integrating scalable technologies and value-added services aligned with evolving customer requirements.

In addition to serving as a systems integrator, the Company is developing proprietary technologies designed to support multi-domain communications and operational coordination, including its 5-Layer Autonomous Control Stack, conformal electronically steered array (“ESA”) antenna technologies, software-defined modem architectures, and edge communications infrastructure.

The Company’s technologies are designed to support interoperability across multiple operational layers, including terrestrial, airborne, maritime, and satellite-enabled environments. Our communications infrastructure is intended to support operations across Low Earth Orbit (“LEO”), Medium Earth Orbit (“MEO”), and Geostationary Earth Orbit (“GEO”) satellite architectures, as well as hybrid terrestrial and over-the-horizon (“OTH”) network environments.

We are also advancing technologies related to beamforming application-specific integrated circuits (“ASICs”), edge compute architectures, RF systems, and high-speed signal processing technologies intended to support distributed and autonomous operational environments.

Merger Agreement with IXAQ

On March 29, 2024, we entered into a business combination agreement (the “Merger Agreement”) with IX Acquisition Corp., a Cayman Islands corporation (“IXAQ”) and AKOM Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of IXAQ (“Merger Sub”). Pursuant to the terms of the Merger Agreement, we and IXAQ have agreed to effect a business combination (the “Merger”), subject to satisfaction of conditions set forth in the Merger Agreement described briefly below. 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. The Merger Agreements contemplates that:

Pursuant to the terms of the Merger Agreement, each share of common stock of the Company issued and outstanding immediately before the closing of the Merger (other than any such shares that were held by dissenters to the Merger exercising appraisal rights, the “Merger Shares”) will be converted into shares of Class A Common Stock of IXAQ based on a Closing Purchase Price (as defined in the Merger Agreement) for the Company of $200,000,000 (as may be adjusted under the Merger Agreement prior to the closing of the Merger) and a price of $11.50 per share of Class A Common Stock of IXAQ (thereby resulting in the holders of Merger Shares receiving 17,391,304 shares of Class A Common Stock of IXAQ assuming no adjustment from the $200,000,000 Closing Purchase Price). Further, if certain milestones are achieved in the five years following the Merger, those who held Merger Shares immediately before consummation of the Merger will be entitled to receive their pro rata share of up to an aggregate of an additional 17,391,304 shares of Class D Common Stock of IXAQ (as may be adjusted under the Merger Agreement prior to the closing of the Merger), representing an additional Incentive Purchase Price (as defined in the Merger Agreement) of $200,000,000 that is additional to the $200,000,000 Closing Purchase Price for the Company under the Merger Agreement.

In addition to closing conditions that are usual and customary for a transaction like the Merger, the Merger Agreement closing conditions include that at least $45,000,000 of investor PIPE (private investment in public entity) financing commitments (inclusive of SAFE (simple agreement for future equity) financing obtained by the Company before the closing of the Merger) are obtained for the combined company resulting from the Merger, unless waived by IXAQ. As of date of this filing, PIPE agreements for aggregate commitments of $35,000,000, at a price of $11.50 per share, have been signed with Investors.

As of the date of this Annual Report on Form 10-K, the Insiders of the Company (as defined in the Merger Agreement) have all signed Company Support Agreements in favor of the transaction.

Our Strategic Position

The Company is strategically positioned at the intersection of resilient communications, autonomous systems enablement, and edge computing infrastructure for defense, aerospace, and commercial applications. While satellite communications capabilities remain a foundational component of our platform, the Company has increasingly expanded its focus toward broader defense-oriented infrastructure, including software-defined orchestration systems, edge networking, AI-enabled architectures, and multi-domain communications designed for contested and infrastructure-limited operational environments.

Our core capabilities as a systems integrator and infrastructure enablement provider, combined with proprietary technologies including multi-orbit communications systems, advanced electronically steered array (“ESA”) antenna architectures, software-defined modems, virtualization technologies, and edge infrastructure platforms, position us to support evolving operational requirements across unmanned systems, ISR platforms, tactical edge deployments, aviation, maritime systems, and hybrid terrestrial-satellite environments.

Our asset-light business model remains a significant competitive advantage. By focusing on software-defined infrastructure, orchestration capabilities, and systems integration rather than ownership of satellite constellations or large communications infrastructure networks, we maintain operational flexibility, reduce capital intensity, accelerate deployment timelines, and focus resources on integrating scalable, value-added technologies and services.

Since the onset of the Russia-Ukraine conflict and the continued rise in geopolitical instability across multiple regions, demand for resilient, secure, and distributed communications and autonomous infrastructure has accelerated significantly within the defense sector. Over the past several years, defense-related opportunities and engagements have increasingly outpaced the Company’s commercial telecommunications initiatives and now represent the primary focus of the Company’s strategic direction and business development efforts.

In response to these market dynamics, the Company has strategically concentrated its engineering, operational, and business development resources toward defense and national security-related applications, including autonomous systems enablement, resilient networking, edge communications infrastructure, AI-capable processing environments, and integrated mission systems. Management believes prioritizing defense-sector opportunities provides the most effective path toward commercialization, long-term growth, and strategic market positioning given the Company’s current stage of development and finite engineering and capital resources.

Overview of our capabilities, competitive edge, markets and opportunities 

Our Capabilities

We are focused on delivering resilient communications, networking, and infrastructure enablement solutions designed to support autonomous systems, distributed operations, and mission-critical applications across defense, aerospace, maritime, and commercial markets. Our capabilities combine software-defined communications, edge networking, systems integration, and multi-domain infrastructure designed for operation in contested, degraded, and infrastructure-limited environments.

Our platform is designed to integrate communications, compute, networking, and mission-system technologies into flexible architectures capable of supporting unmanned systems, ISR platforms, tactical edge deployments, aviation, maritime systems, and hybrid terrestrial-satellite operational environments. Through a combination of proprietary technologies and strategic third-party integrations, we seek to provide secure, scalable, and interoperable solutions that support evolving operational requirements.

We provide software-defined communications and infrastructure enablement capabilities leveraging a combination of proprietary hardware, software architectures, and integrated networking technologies designed to support resilient and distributed operational environments. Our capabilities include the development of conformal electronically steered array (“ESA”) antennas, multi-orbit communications terminals, software-defined modem technologies, edge compute infrastructure, and virtualization architectures designed for flexible and scalable deployment.

Our expertise as a systems integrator enables us to deliver integrated mission networks and communications architectures tailored to the operational requirements of defense, aerospace, maritime mobility, and related sectors.

Our core platform integrates several advanced components into a unified autonomous control stack:

Aggregation of data into a Common Operating Picture (COP) and enable decentralized swarm control, allowing multiple autonomous platforms to execute complex missions with “human-on-the-loop” oversight.

Through these technologies, we deliver end-to-end autonomous orchestration solutions that are resilient, scalable, and future-ready for the next generation of conflict.

Competitive Edge

Our competitive position is derived from a combination of proprietary technologies, software-defined infrastructure capabilities, systems integration expertise, and an agile asset-light business model. We believe these capabilities position the Company to address emerging requirements across defense, aerospace, unmanned systems, and resilient communications markets.

By focusing on software-defined infrastructure, orchestration capabilities, and systems integration rather than ownership of heavy platforms or satellite constellations, we maintain operational flexibility, reduce capital intensity, and accelerate deployment timelines for new capabilities and customer requirements.

Our proprietary technologies, including conformal ESA antenna architectures, multi-orbit communications systems, software-defined networking technologies, RF systems, and edge compute infrastructure, are designed to support resilient operations in contested and infrastructure-limited environments while optimizing size, weight, and power (“SWaP”) considerations across multiple platforms.

Our ability to integrate complex, multi-domain technologies into a single, unified operational fabric enables us to provide tailored, mission-critical solutions. We bridge the gap between fragmented sensors, payloads, and networks, providing the essential coordination layer required for modern, large-scale autonomous operations.

Our technologies are designed to support interoperability across multiple network environments, orbital layers, and operational domains, enabling flexible deployment across terrestrial, airborne, maritime, and satellite-enabled architectures.

Our activities and partnerships in Japan, Taiwan, and broader Indo-Pacific markets position the Company to support growing regional demand for resilient communications, autonomous systems infrastructure, and distributed operational capabilities.

Our activities and partnerships in Japan, Taiwan, and broader Indo-Pacific markets position the Company to support growing regional demand for resilient communications, autonomous systems infrastructure, and distributed operational capabilities.

We are strategically positioned to leverage cutting-edge technology and partnerships to become a global leader in autonomous defense orchestration. With a focus on both mission-critical C2 infrastructure and agile, edge-based service delivery, we provide robust, high-performance connectivity and coordination solutions across the unmanned, aerospace, and maritime sectors. Our capabilities, competitive advantages, and market opportunities are precisely aligned to drive rapid growth, expand our global sovereign footprint, and secure the future of autonomous warfare.

We provide mission-critical autonomous orchestration services, leveraging a combination of proprietary hardware and software-defined intelligence to offer secure, scalable, and resilient command structures. Our capabilities include the development of advanced technologies, such as conformal ESA antennas, multi-orbit terminals, and edge AI compute—designed for flexible, agile, and reliable operations in the most contested environments. Furthermore, our expertise as a full-systems integrator allows us to seamlessly deliver comprehensive mission networks that meet the specific, high-stakes requirements of both sovereign defense ministries and commercial aerospace leaders.

Markets

We believe that we are at the point of monetization, poised to deliver differentiated solutions in the fast-growing market for satellite communications.

We believe there are numerous opportunities to rapidly develop the Company.

With the award of a regional satellite service spectrum usage permit on April 27, 2023, the Company has solidified its position as a licensed satellite telecommunications provider in the Asia-Pacific region. Building on this regulatory milestone, we entered into a Distribution Partner Agreement (DPA) with Eutelsat OneWeb Group in September 2024. This agreement grants our subsidiary the rights to distribute OneWeb’s Low-Earth Orbit (LEO) satellite connectivity services across targeted commercial fixed and land mobile sectors within key regional markets. In additional, the Company enter into the Master Service Agreement with a global U.S.-based satellite communications provider on September 26, 2026, to obtain service authority in Japan and Taiwan, including Maritime, Aero and Land sectors, with Ka band and Lband. I Together, these developments support the expansion of our satellite service offerings and revenue streams throughout the Asia-Pacific.

These strategic advancements have elevated our role from a hardware and systems supplier to a full-service satellite connectivity provider and distributor of multi-orbit satellite bandwidth. We are now positioned to deliver a broad range of services across the Civilian Telecommunications market—including mobile backhaul—and the Aerospace & Defense sectors, supporting both aviation and maritime applications. Our expanding footprint also strengthens our ability to compete for network resiliency contracts, contributing to long-term revenue growth.

By operating as both a systems integrator and value-added services provider, we are able to deliver end-to-end satellite-based solutions tailored to the specific needs of diverse regional markets. This dual capability broadens our addressable market and reinforces our role in supporting critical communications infrastructure. The experience gained through deployments in these markets provides a scalable foundation that we plan to extend to additional geographies through existing relationships with satellite operators and future strategic partnerships.

Opportunities

We are uniquely positioned to capitalize on several emerging opportunities, driven by geopolitical trends, technological advancements, and strategic partnerships:

With increased defense budgets and an evolving security landscape, particularly since the onset of the Ukraine conflict, demand for autonomous platforms have accelerated exponentially. This requires integrated C2 and tactical edge compute solutions to enable and expand multi-domain operations. Our solutions are specifically designed to meet the needs of modern defense operations, providing multi-layer communications, real-time sensor fusion, seamless multi-domain interoperability, and advanced edge compute to ensure resilient, end-to-end cloud enabled operations.

Our Distribution Partner Agreement (“DPA”) with Eutelsat OneWeb Group and Master Services Agreement (“MSA”) with a global U.S.-based satellite communications provider, together with our existing and future satellite operator relationships, provide access to LEO and GEO satellite networks that support the expansion of our satellite communications capabilities and commercial presence in Japan and Taiwan, while providing a foundation for potential expansion into additional markets, subject to obtaining the necessary authorizations and approvals.

The success of our projects in Japan and Taiwan provides a scalable model that can be replicated in other high-growth regions, positioning us for further market expansion. As we expand our service offerings across different sectors, our asset-light business model allows us to grow efficiently without the capital constraints of owning satellites.

Recent regulatory approvals, including regional satellite service spectrum permits in the Indo-Pacific region, have strengthened the Company’s position in key markets and enhanced its ability to deliver mission-critical connectivity services across high-demand sectors. In addition, the Distribution Partner Agreement (“DPA”) with Eutelsat OneWeb and the Master Services Agreement (“MSA”) with a global U.S.-based satellite communications provider have expanded the Company’s commercial reach and support the development of additional revenue opportunities in strategic markets.

Outlook

The Company intends to capitalize on opportunities across the defense, aerospace, autonomous systems, and resilient communications markets by leveraging software-defined infrastructure, systems integration expertise, and multi-domain networking capabilities. While satellite communications remain a foundational component of our platform, the Company has increasingly expanded its strategic focus toward autonomous systems enablement, edge communications infrastructure, and integrated mission architectures designed for contested and distributed operational environments. We believe the convergence of resilient communications, edge compute, AI-enabled systems, and autonomous operations presents significant long-term opportunities across both government and commercial sectors.

Our Technology and Product Overview

We are focused on delivering asset-light communications, networking, and infrastructure enablement solutions through a combination of proprietary technologies, software-defined architectures, and strategic partnerships with satellite operators, telecommunications providers, hardware manufacturers, and software providers. Our business model is designed to remain less capital intensive than many traditional aerospace and communications companies because we do not own or operate satellite constellations or large infrastructure networks.

We intend to support operations across multiple network environments and orbital architectures, including Low Earth Orbit (“LEO”), Medium Earth Orbit (“MEO”), Geostationary Earth Orbit (“GEO”), and Highly Elliptical Orbit (“HEO”) systems, while also supporting hybrid terrestrial, airborne, maritime, and over-the-horizon (“OTH”) operational environments. We also seek to align with evolving terrestrial wireless standards and resilient networking initiatives, including emerging 5G and future network architectures.

Through relationships with satellite service providers and strategic industry partners, we seek to provide carrier-neutral and multi-network communications capabilities that combine multiple orbital and terrestrial network layers to support resilient and flexible connectivity solutions for both government and commercial users and platforms operating on land, in the air, and at sea.

Our software-defined networking and communications architecture is intended to support dynamic and programmatically managed communications environments designed to improve flexibility, resiliency, interoperability, and operational adaptability across distributed and contested operational conditions.

We seek to integrate a broad suite of communications, networking, compute, and mission-system technologies designed to support resilient operational capabilities for customers and strategic partners across multiple domains.

We design integrated solutions that combine both proprietary technologies and third-party partner technologies, including: 

One of our key system-level advantages is built on our team’s fabless semiconductor chip and panel design and engineering expertise, which allows us to remain asset-light while also developing state-of-the-art technologies. With a focus on delivering superior connectivity and mission outcomes, we believe our universal terminals for communications are poised to set a new high bar for the industry.

Our universal terminals for satellite communications incorporate:

Our software-defined modems aim to enable flexibility, adaptability, and efficiency by providing programmable signal processing functions that can be reconfigured to support different modulation and coding schemes, as well as the latest protocols and standards. By applying a single hardware platform for multiple standards, we aim to create a unique system to be more flexible and compatible with different satellite constellation waveforms, and more easily upgraded for new waveforms via software updates. Both end users and our satellite operator partners can benefit from deploying our universal terminals with our high efficiency antennas and software-defined modems. Customers benefit because they can use a single terminal to communicate across satellites, orbits and operators, which means they do not need to invest in dedicated terminals for each satellite, orbit or operator they wish to connect with. Furthermore, our universal terminals aim to deliver high-performance in a package that takes up less size, weight and power than other systems, end users may experience additional benefits in terms of total cost of ownership when choosing our universal terminals.

For satellite operators, the high efficiency of our glass semiconductor antenna and the software-programmability of our modem, when used by their customers—on land, in the air, or at sea—can potentially reduce the maintenance and replacement schedule of satellites and constellations, which hare huge drivers of cost and capital expenditures across the satellite industry.

Our Markets

Satellite Industry

In recent years, the satellite industry has experienced continued growth driven by increasing global demand for broadband connectivity, mobility communications, Earth observation, defense applications, and advancements in satellite technologies, including Low Earth Orbit (“LEO”) and Medium Earth Orbit (“MEO”) satellite networks. As the satellite ecosystem continues to evolve, the Company is strategically focused on expanding its presence across the satellite ground equipment and satellite services markets, particularly in next-generation multi-orbit communications infrastructure and resilient connectivity solutions.

According to the 2026 State of the Satellite Industry Report released by the Satellite Industry Association (“SIA”), the global space economy expanded approximately 3% during 2025, generating approximately $429 billion in revenue, with the commercial satellite industry accounting for approximately $303 billion, or approximately 71% of the global space economy. The report highlighted continued growth across satellite manufacturing, launch services, satellite broadband, remote sensing, and ground infrastructure, supported by increasing demand for connectivity, mobility communications, defense modernization initiatives, and multi-orbit satellite communications technologies.

The 2026 SIA Report further indicated that a record 296 launches deployed approximately 4,434 satellites into Earth orbit during 2025, representing approximately 65% growth in deployed satellites compared to 2024. The report also noted that approximately 14,266 operational satellites were in orbit globally at the end of 2025. Worldwide commercial launch revenues increased to approximately $12.4 billion during 2025, representing approximately 33% year-over-year growth compared to 2024. Satellite manufacturing revenue increased to approximately $20.4 billion during 2025, while U.S. firms manufactured approximately 83% of commercially procured satellites launched during the year and accounted for approximately 47% of global manufacturing revenues.

According to the SIA Report, satellite services revenue totaled approximately $105.0 billion during 2025. Satellite broadband subscriber growth increased approximately 62% year-over-year to more than 10 million subscribers globally, while satellite broadband revenue increased approximately 16% during 2025. Remote sensing revenue also increased approximately 4% year-over-year, supported by increasing deployment of Earth observation satellites and expanding commercial applications.

The report further indicated that the satellite ground segment continued to represent the largest segment of the commercial satellite industry, generating approximately $165.2 billion in revenue during 2025, representing approximately 6% year-over-year growth. Continued annual growth in satellite ground network infrastructure and global navigation satellite services (“GNSS”) equipment revenues of approximately 8% and 6%, respectively, contributed to overall market expansion. The Company believes increasing adoption of High-Throughput Satellites (“HTS”), software-defined networking technologies, and multi-orbit communications architectures will continue supporting demand for advanced satellite ground equipment and connectivity solutions across enterprise, mobility, government, aerospace, and defense markets.

Source: https://sia.org/news-resources/state-of-the-satellite-industry-report

Revenue Breakdown

According to the SIA Report, the satellite services segment generated approximately $105.0 billion in revenue during 2025. Growth in global satellite broadband services and remote sensing applications continued to support the segment despite ongoing declines in traditional satellite television revenues. Global satellite broadband revenue increased approximately 16% year-over-year during 2025, while global broadband subscriptions increased approximately 62%, surpassing 10 million subscribers worldwide. Remote sensing revenue also increased approximately 4% during 2025, supported by growing deployment of Earth observation satellites and expanding commercial and government applications.

According to the 2026 State of the Satellite Industry Report released by the Satellite Industry Association (“SIA”), the satellite services segment generated approximately $105.0 billion in revenue during 2025. Global satellite broadband revenue increased approximately 16% year-over-year during 2025, while broadband subscriptions increased approximately 62%, surpassing 10 million subscribers worldwide. Remote sensing revenues increased approximately 4% during 2025. The report indicated that growth in broadband and remote sensing services continued during 2025 despite ongoing challenges in certain traditional satellite service markets.

The global satellite manufacturing sector generated approximately $20.4 billion in revenue during 2025. The market continued to benefit from deployment of Low Earth Orbit (“LEO”) satellite constellations, government space programs, broadband infrastructure investments, and increasing demand for Earth observation and defense-related satellite systems. U.S. firms manufactured approximately 83% of commercially procured satellites launched globally during 2025 and accounted for approximately 47% of global satellite manufacturing revenues.

According to the SIA Report, the global commercial launch services market generated approximately $12.4 billion in revenue during 2025, representing approximately 33% growth compared to 2024. The increase was supported by continued expansion in commercial launch activity, increasing deployment of LEO satellite constellations, and growing government and commercial investments in space infrastructure. During 2025, a record 296 launches deployed approximately 4,434 satellites into Earth orbit, representing approximately 65% growth in deployed satellites compared to the prior year. At the end of 2025, approximately 14,266 operational satellites were in orbit globally.

Demand for satellite broadband services continued to increase during 2025, supported by growing requirements for reliable connectivity across enterprise, mobility, government, aerospace, and defense markets. According to the 2026 State of the Satellite Industry Report released by the Satellite Industry Association (“SIA”), global satellite broadband revenue increased approximately 16% year-over-year during 2025, while broadband subscriptions increased approximately 62%, exceeding 10 million subscribers globally. Growth in broadband services was supported by increasing demand for connectivity in rural and remote areas, expansion of mobility and direct-to-device communications services, and continued deployment of High-Throughput Satellites (“HTS”) and multi-orbit satellite networks.

Commercial satellite sustainability activities generated approximately $500 million in revenue during 2025, representing estimated year-over-year growth of approximately 43%. Growth in the sector was supported by increasing industry focus on orbital sustainability, space situational awareness (“SSA”), satellite tracking, orbital debris monitoring, and long-term management of space-based infrastructure as global satellite deployment activity continued to expand.

The 2026 State of the Satellite Industry Report (“SSIR”) highlights continued expansion and increasing commercialization of the satellite industry, supported by growth in satellite broadband services, launch activity, satellite deployments, ground infrastructure, and space sustainability activities. The report noted continued increases in global satellite broadband subscribers, satellite services revenues, and commercial launch activity, reflecting growing demand for resilient communications infrastructure, mobility connectivity, Earth observation applications, and next-generation satellite technologies. In addition, ongoing investments in satellite ground equipment, multi-orbit communications architectures, and space sustainability activities indicate continued long-term growth opportunities across the global satellite ecosystem.

Market Outlook

The Company believes the long-term outlook for the satellite communications industry remains favorable due to increasing commercial and government investments in resilient communications infrastructure, autonomous systems, defense modernization initiatives, and next-generation satellite technologies. The continued deployment of HTS systems, LEO satellite constellations, software-defined networking technologies, and multi-orbit communications architectures is expected to support growing demand for secure, low-latency, and globally available connectivity solutions across enterprise, mobility, government, aerospace, and defense markets.

Asia-Pacific Market Opportunity

The Asia-Pacific region continues to represent one of the fastest-growing markets for satellite communications and connectivity services, supported by increasing investments in digital infrastructure, defense modernization initiatives, mobility connectivity, and broadband access across rural and remote regions. According to Grand View Research, the Asia Pacific satellite communication market generated approximately $23.5 billion in revenue during 2025 and is projected to reach approximately $56.8 billion by 2033, representing a compound annual growth rate (“CAGR”) of approximately 11.9% from 2026 to 2033. Grand View Research further indicated that Asia Pacific accounted for approximately 23.9% of the global satellite communication market in 2025 and is expected to be the fastest-growing regional market during the forecast period.

Industry analysts and investment banks project that the global space economy could reach $1 trillion by 2040, signaling a positive long-term outlook for the satellite industry, which is poised for continued expansion and increased market share in the broader space economy. (Source: SpaceNews)

Commercial Connectivity and Non-Terrestrial Networks (NTN)

Within civilian telecommunications, the key subset of the market we are targeting is anticipated to grow from $3 billion in 2023 to $25 billion by 2030. Market reports published by NSR indicate that “non-terrestrial networks” (NTN) will become a central feature of 5G Advanced and 6G networks, and that satellite connectivity needs of MNOs will evolve from a nice-to-have “back-up” in their 4G LTE networks into a must-have “back bone” of their 5G Advanced and 6G.

Within aerospace, one of the key subsets we are targeting is commercial aviation, which is anticipated to grow from $7 billion in 2023 to $21 billion by 2030. According to annual reports by Boeing and Airbus, commercial airlines plan to outfit approximately 70% of passenger aircraft for high-throughput inflight broadband by 2030 up from just approximately 25% in 2023, meaning that delivering a solution that is approved and qualified for both retrofit and “line-fit” installations will be necessary.

Unmanned Defense Market

The global Counter-UAS, or counter-drone, market is expected to experience continued growth driven by increasing geopolitical tensions, expanding deployment of unmanned aerial systems, and growing demand for airspace security, electronic warfare, and integrated defense capabilities. Market research published by Grand View Research estimates that the global anti-drone market generated approximately $3.18 billion in revenue during 2025 and is projected to reach approximately $19.84 billion by 2033, reflecting an estimated compound annual growth rate (“CAGR”) of approximately 25.2% from 2026 to 2033. Market expansion is being supported by increasing defense modernization initiatives, proliferation of low-cost and autonomous drone technologies, and growing government investments in surveillance, electronic support measures (“ESM”), command-and-control systems, and integrated counter-drone solutions.

The Company believes this industry trends may create additional market opportunities for resilient communications, electronic warfare integration, multi-orbit satellite connectivity, and autonomous defense networking solutions.

Source: https://www.grandviewresearch.com/industry-analysis/anti-drone-market

Separate industry analysis from Grand View Research estimates that the global unmanned systems market generated approximately $29.3 billion in revenue during 2025 and is projected to reach approximately $67.6 billion by 2033, reflecting an estimated compound annual growth rate (“CAGR”) of approximately 11.1% from 2026 to 2033. Market growth is being supported by increasing demand for autonomous and semi-autonomous platforms across defense, surveillance, logistics, industrial automation, aerospace, and commercial applications, as well as continued investment in next-generation unmanned systems and intelligent operational technologies.

Source: https://www.grandviewresearch.com/industry-analysis/unmanned-systems-market-report

Industry forecasts further indicate that the Asia Pacific region is expected to be among the fastest-growing markets for unmanned and military drone technologies, supported by defense modernization programs, increasing regional security concerns, and growing demand for advanced surveillance, reconnaissance, and autonomous systems capabilities.  

In the Asia Pacific region, the anti-drone market generated approximately $425.1 million in revenue during 2024 and is projected to grow at an estimated compound annual growth rate (“CAGR”) of approximately 29.4% from 2025 to 2033, reaching approximately $4.5 billion by 2033, based on market analysis published by Grand View Research. Regional market growth is being driven by increasing defense modernization initiatives, regional security priorities, and growing investments in counter-UAS, surveillance, and electronic warfare technologies.

Dual-use technologies continue to expand the application of satellite broadband and resilient communications infrastructure in both commercial and defense-related environments. Geopolitical conflicts, including the ongoing conflict in Ukraine, have demonstrated the operational importance of satellite-enabled connectivity when integrated with unmanned aerial vehicles (“UAVs”) and other autonomous systems. In response to increasing demand from governments and military organizations, major defense contractors in the United States, NATO member countries, and Japan are developing unmanned systems for intelligence, surveillance, and reconnaissance (“ISR”) missions, collaborative combat aircraft (“CCA”) programs, “loyal wingman” concepts, and next-generation air dominance (“NGAD”) initiatives. The Company believes its technologies are positioned to support these evolving operational requirements across manned and unmanned aerial, maritime, and land-based platforms.

Aerospace & Defense Market

In the aerospace and defense sectors, multi-network communications, including satellite, microwave, and tactical data links, play critical roles in enabling various applications, including commercial aviation, in-flight connectivity (“IFC”), and defense-related intelligence, surveillance, and reconnaissance (“ISR”) and collaborative combat aircraft (“CCA”) programs. Commercial aviation increasingly relies on satellite communications to support in-flight connectivity services, enabling passengers to access high-speed internet and other digital services during flights. The adoption of satellite-based IFC solutions is expected to increase significantly in the coming years as airlines seek to enhance passenger experience and differentiate their services in an increasingly competitive market.

The Fortune Business Insight report projects that approximately 70% of commercial aircraft will be equipped with high-throughput inflight broadband by 2030. This significant increase in adoption rates will necessitate both retrofitting and “line-fit” installations. As a result, the market for inflight broadband services is anticipated to grow from $7 billion to $21 billion, presenting lucrative opportunities for satellite communication providers. 

In the defense sector, satellite communication supports ISR and unmanned platforms programs by providing secure and reliable communication links for unmanned aerial, maritime, and land vehicles and the vast majority of military platforms. Satellite-based communication enables real-time data transmission, command and control, and situational awareness, enhancing operational efficiency and effectiveness in defense missions. Industry projections indicate an increase in market size from $12 billion in 2023 to $16 billion by 2030. In the Defense sector, we have been pioneering a first-of-its-kind satellite communications architecture for unmanned aerial, maritime, and land vehicles engaged in intelligence, surveillance, and reconnaissance (ISR) missions in collaboration with our development partner and the customer.

Defense Market

Unmanned platforms have revolutionized military operations with their versatility and agility. However, their reliance on connectivity handoffs between ground-based line-of-sight antennas, typically operating in C-band, and GEO, or GSO satellites present several challenges that limit their effectiveness in certain scenarios. Prime defense contractors in the US, NATO, Australia, and Japan are actively developing unmanned systems for ISR, and numerous other unmanned platforms to include CCA-type and NGAD applications. This strategic shift towards unmanned systems is expected to drive the demand for satellite communication technology, particularly for data transmission and remote-control capabilities, which can keep a “human-in-the-loop” (HITL).

Innovative programs such as the US Air Force’s Loyal Wingman Program, aim at enhancing collaborative combat capabilities. The program involves the deployment of 1,000 CCA with $6.2 billion budget by 2028, which we expect will require advanced satellite communication systems for real-time data sharing, over-the-horizon coordination, and mission execution. These CCA units serve as force multipliers, working in tandem with manned platforms to achieve strategic objectives and maintain battlefield superiority, but are just one example of how governments and militaries are considering how best to deploy both manned and unmanned platforms to accomplish defense objectives.

Collaborative Combat Aircraft, Concept Art (Source: Boeing Image)

Source: The Washington Post: How drones are controlled, 2014

We aim to offer unparalleled flexibility to defend unmanned platforms by enabling communication across six dimensions: domain, orbit, beam, carrier, frequency, and satellite. This innovative approach aims to allow users to establish multiple communication paths simultaneously, enhancing redundancy, resilience, and adaptability in dynamic operational environments, while also offering complementary functionality such as jamming.

We are well positioned to deliver high-value functionality that effectively balances performance with total cost of ownership. We are actively engaged in discussions with leading prime contractors to provide a differentiated satellite communications system tailored specifically for unmanned platforms across all domains to include CCA-type programs and are co-creating new concepts of employment and concepts of operation for satellite communications on these platforms. Two high profile examples from the US Air Force include planning to spend more than $6 billion on CCA drone programs over the next five years, in addition to an estimate of $16 billion on the NGAD program over the same time period.

Our company recognizes the critical role of UAVs and UAS (Unmanned Aircraft System) in contemporary defense strategies. As global military expenditures continue to rise and the demand for advanced unmanned systems grows, we are strategically positioned to capitalize on these trends. Our focus includes:

Investing in cutting-edge technologies to enhance UAV capabilities, including AI integration and advanced propulsion systems.

Collaborating with defense agencies and industry leaders to deliver innovative solutions tailored to evolving military needs.

Targeting growth opportunities in emerging markets, particularly in regions with increasing defense budgets and a focus on modernizing military infrastructure.

We remain committed to delivering high-performance, reliable, and technologically advanced UAV solutions to meet the dynamic requirements of defense operations worldwide.

Commercial Aviation Connectivity

In-Flight Entertainment and Connectivity (IFEC) Market

According to the In-Flight Internet Market report published by MarketsandMarkets, the global in-flight internet market was estimated at approximately USD 1.6 billion in 2024 and is projected to reach approximately USD 2.1 billion by 2029, representing a compound annual growth rate (“CAGR”) of approximately 5.7% during the forecast period. The market growth is primarily driven by increasing passenger demand for uninterrupted broadband connectivity, advancements in satellite communications technologies, and continued airline investments in digital aviation services and passenger experience enhancements.

Within the broader In-Flight Entertainment and Connectivity (“IFEC”) market, the in-flight internet segment continues to represent a key growth driver as airlines increasingly prioritize onboard connectivity capabilities. Modern passengers increasingly expect seamless access to internet services, streaming platforms, social media applications, and business communications while in flight. Business travelers seek continuous productivity and enterprise connectivity, while leisure travelers increasingly demand high-quality digital entertainment and real-time communications throughout their travel experience.

The continued deployment of High-Throughput Satellites (“HTS”), Low Earth Orbit (“LEO”) satellite constellations, hybrid satellite-network architectures, and next-generation onboard Wi-Fi technologies is expected to further support market expansion. In addition, advances in multi-orbit satellite communications infrastructure are enabling enhanced bandwidth capacity, lower latency performance, and broader global coverage for commercial aviation connectivity solutions.

North America is expected to maintain a significant share of the global IFEC market due to strong passenger demand, mature aviation infrastructure, and continued airline investments in connected aircraft technologies. Satellite-based connectivity systems are expected to continue dominating the IFEC market due to their ability to provide broadband connectivity across global flight routes, including remote and oceanic regions. In addition, business aviation and commercial aviation operators continue to increase adoption of advanced connectivity solutions to support operational efficiency, passenger engagement, and digital aviation services.

Source: In-Flight Internet Market Report, March 2025

Source: In-Flight Internet Market Report, May 2024

Market Projections (2025 and Beyond)

Looking ahead, the IFEC market is projected to experience robust growth:

(Sources: Credence Research, Fortune Business Insights, MarketsandMarkets, and Coherent Market Insights.)

The anticipated growth in the in-flight internet services market presents significant opportunities for stakeholders in the aerospace and telecommunications industries. Airlines are increasingly investing in advanced connectivity systems to enhance passenger experience, differentiate their services, and generate ancillary revenue streams.

We are strategically positioned to capitalize on these trends by offering innovative solutions that cater to the evolving needs of both airlines and passengers. We are committed to delivering high-quality, reliable, and scalable in-flight internet services that align with the industry’s growth trajectory.

The December 2025 “IATA (International Air Transport Association) Global Outlook for Air Transport”, report that for 2026, a 4.9% YoY growth in passenger traffic (measured in Revenue Passenger Kilometer), led by the Asia Pacific region’s expansion by 7.3%. This marginal deceleration compared to 2025 is primarily driven by persistent supply-side constraints, limited aircraft availability, and labor shortages. Supply constraints continue to keep load factors at record highs, projected at 83.8%, which in turn supports yields and profits in an otherwise turbulent operating environment. Resilient traffic growth, together with stable yields should allow the industry to top the USD 1 trillion revenues for the first time in 2025.

Record high load factors and fleet utilization, together with a rapid expansion of ancillary revenues, will allow airlines to maintain a relatively healthy profit amid the headwinds, with record high net profit of USD 41 billion in 2026, and a stable net margin of 3.9%. This impressive achievement should be possible despite softening fares and continuous cost pressure.

Growth of Aviation Industry

Immediately prior to the onset of the COVID-19 pandemic, there were, according to Airbus and Boeing, more than 23,000 commercial aircraft flying globally, a number that was expected to more than double in the next 20 years.

Airbus, in their 2025 Global Market Report, highlights the following forecast for the next 20 years 2025 – 2044:

https://www.airbus.com/en/products-services/commercial-aircraft/global-market-forecast

Global Market Forecast (GMF) 2025-44 Summary

Drivers ofTtraffic Growth

The Growth Rates

Satisfying Global Traffic Growth

Emerging Traffic Flows and New Markets

Sustainability. A duty

Fleet Renewal is One Lever for Decarbonization

The GMF Modeling

Boeing, in their Commercial Market Outlook, issued in June 2025, also predict that airlines will need over 43,000 new airplanes over the next 20 years.

https://www.boeing.com/content/dam/boeing/boeingdotcom/market/assets/downloads/2025-commercial-market-outlook.pdf?update=1225

Growth of Private Aircraft (Business Jets / VIP)

In 2022, Airbus Corporate Jets (ACJ) conducted a survey among senior executives of U.S. businesses with an annual revenue of over $500 million. The study showed that 89% of those surveyed expected their organizations to increase their use of business jet aviation in 2023, with 25% predicting it would increase by more than half. Such customers can be expected to consider inflight connectivity to be essential.

Rapidly Growing In-Flight Internet Markets

The International Air Transport Association (IATA) expects overall traveler numbers to reach 4.0 billion in 2024 spread across 23,000 airplanes. Only about 25% of these airplanes are equipped to offer some form of onboard connectivity, and that connectively is often marked by erratic quality, slow speeds and low broadband. Less than 25% of the world’s airline companies are providing some form of in-flight Wi-Fi services. We believe that there is a huge market potential among the many unconnected airlines.

According to the Boeing Report titled “Commercial Market Outlook 2019 – 2038”, it has been projected that by the end of 2030, two-thirds of the world’s aircraft fleet will have some form of connectivity, whether through retrofit or line fit at production stage. Currently, most connectivity upgrades are being done through aircraft modification as in-service aircraft are outfitted with new and high-speed systems. It is estimated that more than 1,000 commercial aircraft are being upgraded annually.

Whether aircraft connectivity is being carried out as a retrofit or built into the initial aircraft production line, demand for in-flight connectivity is increasing.

Civilian Telecommunications

As the telecommunications industry advances toward 5G Advanced and prepares for the eventual adoption of 6G standards defined by the 3rd Generation Partnership Project (3GPP), the importance of Non-Terrestrial Networks (NTN) continues to grow. These networks—leveraging satellite systems across Low Earth Orbit (LEO), Medium Earth Orbit (MEO), Geostationary Earth Orbit (GEO), Highly Elliptical Orbit (HEO), and High-Altitude Platform Stations (HAPS)—are increasingly seen as essential to extending coverage to underserved and remote environments, including maritime, aviation, and rural regions.

The evolving geopolitical landscape, including ongoing instability in Eastern Europe and heightened global tensions, has further highlighted the strategic importance of resilient and secure communications infrastructure. Satellite communication, in particular, has become a vital element in ensuring continuity of service and national preparedness during times of disruption.

In response to these industry and geopolitical developments, we continue to prioritize the civilian telecommunications sector as a core pillar of our satellite communications strategy, alongside our focus on Aerospace and Defense. Our efforts in this sector center around three key areas: satellite-enabled mobile backhaul to support the expansion of 5G and future 6G networks; satellite-based Business Continuity Planning (BCP) to ensure service continuity during disruptions; and comprehensive network resilience solutions to safeguard connectivity across critical infrastructure. These capabilities position us to meet rising connectivity demands while enhancing the reliability and adaptability of telecommunications systems in both public and private sectors. 

Mobile Backhaul via Satellite

The mobile backhaul sector is projected to grow significantly, with revenues expected to increase from $3 billion in 2023 to $25 billion by 2030, representing a compound annual growth rate (CAGR) of 17.6% (Source: NSR “Wireless Backhaul via Satellite, 15th Edition Report”). This growth is driven by the ongoing expansion of 4G and 5G networks, with an estimated 6 to 7 million 4G base stations and 3.8 million 5G base stations already deployed worldwide (Sources: GSMA, Huawei). Similarly, the network resilience sector is forecasted to experience revenue growth from $16.2 billion in 2023 to $33 billion by 2028 (Source: Mordor Intelligence: Network Resilience Market Forecast).

In the rapidly evolving civilian telecommunications landscape, mobile backhaul via satellite has become an increasingly critical component. This technology facilitates the reliable transmission of data between remote base stations and the core network, enabling uninterrupted mobile connectivity even in areas where terrestrial infrastructure is limited or unavailable. As mobile operators strive to extend network coverage and capacity—particularly in underserved or geographically challenging regions—the demand for flexible, scalable, and high-performance satellite-based backhaul solutions continues to rise.

We recognize the vital role that mobile backhaul via satellite plays in supporting next-generation mobile networks. With the global push toward 5G and the future transition to 6G, backhaul capacity and resilience are more important than ever. Our satellite communication solutions are designed to complement and enhance terrestrial infrastructure, offering mobile network operators a reliable alternative for expanding their coverage and ensuring service continuity across a wide range of environments.

In modern telecommunications infrastructure, the backhaul network is essential for delivering high-capacity connectivity between cell sites and the core network. While fiber optics and microwave links remain widely used, satellite transmission has become an increasingly critical component—not only for remote and underserved regions but also as part of strategic backbone deployments in broader network architectures.

Mobile backhaul via satellite has evolved significantly. Although historically viewed as a last resort by mobile network operators, advancements in satellite technologies—such as high-throughput satellites (HTS), low Earth orbit (LEO) constellations, and improved network orchestration—have transformed satellite connectivity into a viable, high-performance alternative. Coupled with professional managed services, today’s satellite backhaul solutions are cost-effective, scalable, and capable of supporting the rapid deployment of 4G, 5G, 5G Advanced, and IoT services across diverse geographies.

In addition to enabling coverage in hard-to-reach areas, satellite backhaul plays a vital role in strengthening network resilience. It serves as a reliable backup or supplementary backbone solution in cases of fiber or microwave network failures, ensuring business continuity and uninterrupted service delivery.

Looking ahead, the mobile backhaul market via satellite is bolstered by factors such as:

In addition, the ongoing expansion of 5G infrastructure—coupled with the growing demand for higher-capacity mobile data transmission—is expected to further accelerate the need for satellite-enabled connectivity solutions. This is particularly true in regions where terrestrial networks are limited or economically unfeasible, and where advanced satellite technologies such as LEO, MEO, and GEO constellations, along with High-Throughput Satellites (HTS), can provide critical coverage and capacity. 

This momentum reflects a broader trend within the telecommunications industry, where the demand for high-throughput, resilient, and scalable satellite connectivity solutions—driven by technological advancements and the increasing number of satellites launched over the past two years—is continuing to rise. This growth is expected to accelerate over the next two to three years. In response, we are committed to delivering integrated, end-to-end satellite-based mobile backhaul solutions that complement terrestrial infrastructure and meet the evolving needs of telecom operators and end users.

Mobile Network Operators (MNOs) are increasingly shifting their view of satellite connectivity—from a secondary backup option to a core element of their network backbone—particularly as non-terrestrial networks (NTNs) become integral to 5G Advanced and the future 6G ecosystem. Our products and solutions are designed to align with this industry evolution, effectively addressing the emerging demands of the market.

Source: GSMA IPLOOK Satellite Solution – Satellite Backhaul

One of the key challenges MNOs currently face is the reliance on bulky and expensive antenna systems. Our advanced glass semiconductor flat panel antennas offer a compact form factor combined with high throughput performance. These antennas are engineered to support high-volume data transmission, making them ideal for both mobile backhaul and backbone applications. Their streamlined design also enables easier installation on cell sites, providing a practical and efficient solution to a widespread issue in the telecommunications sector.

In conclusion, the mobile backhaul via satellite market presents a significant growth opportunity, underpinned by the continued global expansion of mobile networks, increased mobile data consumption, and the deployment of next-generation technologies like 5G. As a company, we are strategically positioned to leverage our satellite communications infrastructure to meet the growing demand for high-performance, scalable backhaul solutions. 

NTT DoCoMo’s publication, “Research and Development for 6G Wireless,” highlights the critical importance of satellite technology in shaping the future of 6G. This strategic focus has been incorporated into both their technical roadmap and investment planning.

Source Link: https://www.docomo.ne.jp/27nglish/binary/pdf/info/media_center/event/mwc24/Research_ and_Development_for_6G_Wireless.pdf

We maintain strong collaborative relationships with strategic partners such as global telecom service providers, equipment manufacturers, and solution integrators. Positioned at the forefront of the evolving 5G and 6G ecosystem, we are well-prepared to capitalize on emerging business opportunities, paving the way for a promising future and sustainable revenue growth. 

Network Resilience

In today’s hyper-connected environment, network resilience has become a top priority across both public and private sectors. The increasing reliance on digital infrastructure for critical services—from defense and transportation to healthcare and finance—means that even short-lived network outages can lead to significant operational, financial, and reputational damage. Recent global events, such as the ongoing Russia–Ukraine conflict, heightened geopolitical tensions, and rising occurrences of cyber threats, have further emphasized the need for robust, fail-safe connectivity solutions that can withstand both intentional attacks and unforeseen disruptions.

As global networks evolve toward 5G, 6G, and beyond, low latency, high reliability, and uninterrupted service are no longer optional—they are foundational. Network resilience has therefore become a core design principle in next-generation connectivity architecture. This includes a shift toward decentralized models, integration of intelligent routing, and greater redundancy across communication layers.

Technologies like Software-Defined Networking (SDN) and Network Function Virtualization (NFV) remain central to enabling dynamic network management. SDN allows centralized, programmable control of network traffic for quick rerouting and mitigation during failures, while NFV facilitates rapid deployment and scaling of virtual network functions in response to real-time conditions. Together, these technologies enable networks to adapt rapidly and continue functioning under stress.

In addition, the fusion of multiple transport technologies—including fiber, high-capacity microwave, and multi-orbit satellite networks (LEO, MEO, and GEO)—enhances network redundancy and geographic reach. The strategic adoption of edge computing also plays a pivotal role by minimizing dependency on centralized infrastructure, allowing critical services to continue locally even during core network outages. Governments and national security agencies around the world are recognizing the strategic importance of resilient networks. Increased investments are being channeled into modernizing network infrastructure, particularly in mission-critical sectors. This includes collaborative efforts with satellite operators to strengthen sovereign communication capabilities, secure backhaul, and ensure continuity of operations during emergencies or natural disasters.

As the global threat landscape evolves, network resilience is no longer simply a technical consideration—it is a critical enabler of national security, economic stability, and societal continuity.

Our Strategy

Spotlight: Communications and Networking Infrastructure for Autonomous Platforms

The Company is focused on advancing resilient communications, networking, and infrastructure capabilities designed to support unmanned and autonomous platforms operating across airborne, maritime, terrestrial, and distributed operational environments. Our technologies are intended to support secure and flexible connectivity architectures across multiple operational domains while optimizing size, weight, and power (“SWaP”) requirements for autonomous and mobile platforms.

Today: Challenges of Current UAV Connectivity with GEO Satellites 

We are developing communications and networking technologies designed to support operations across multiple orbital layers, terrestrial network environments, and contested operational conditions. Our software-defined and carrier-neutral approach is intended to support interoperability across a broad range of satellite operators, network providers, platforms, and mission systems.

We are developing communications and networking technologies designed to support operations across multiple orbital layers, terrestrial network environments, and contested operational conditions. Our software-defined and carrier-neutral approach is intended to support interoperability across a broad range of satellite operators, network providers, platforms, and mission systems.

Current Operational Challenges for Autonomous Platform Connectivity 

Autonomous and unmanned systems increasingly rely on resilient communications, networking, and data transport capabilities to support operational coordination, remote control, sensor transmission, mission planning, and distributed operations. Existing communications architectures may present operational limitations in certain environments, including:

While unmanned platforms have brough compelling capabilities to militaries and governments over the last two decades, in the last two years with the conflict involving Ukraine, the urgent need for the capabilities of unmanned platforms to continue to evolve has become evident. 

Multi-Path and Multi-Domain Communications Architecture

Aerkomm’s Solution: “Multi-Path ^6” (domain, orbit, beam, carrier, frequency, satellite)

The Company is developing software-defined communications and networking architectures intended to support resilient operations across multiple communication paths, network environments, orbital layers, and operational domains. Our approach is designed to support flexible and distributed operational architectures capable of adapting to degraded or contested communications conditions. 

Our technologies are intended to support:

The Company believes resilient communications, distributed networking, and interoperable infrastructure will remain increasingly important components of future autonomous systems and multi-domain operational architectures.

In addition to communications technologies, the Company’s systems integration capabilities enable the integration of networking technologies, mission systems, payloads, sensors, and communications infrastructure into unified operational architectures designed to support evolving customer and mission requirements across defense, aerospace, and related sectors.

Our Solutions and Business Models

Aerospace & Defense

Our Defense Connectivity Solutions

Our universal terminal for defense aims to drive a paradigm shift in unmanned platform satellite communication, offering unparalleled connectivity, resilience, and security for mission-critical operations. With our innovative solution, unmanned platform operators can confidently navigate complex operational environments, ensuring continuous communication and mission success.

With our extensive experience in satellite communication technology, we are uniquely positioned to serve as a systems integrator for defense payloads. By leveraging our hardware and software platforms, we have the capability to seamlessly integrate onboard sensor payloads and other mission-specific equipment, ensuring interoperability, compatibility, and performance optimization in complex operational environments. 

We are currently developing three solutions which can be offered to the defense market.

1. Universal Terminal for Defense: Our universal terminals for defense aim to deliver a full satellite connectivity solution to both ISR and CCA UAVs. The universal terminal for defense UAVs, may contain antennas for transmission and receiving in one or more of the key frequency bands for high-throughput satellite connectivity for defense, principally Ka and Ku, which are used by satellites in GEO, MEO and in LEO orbits.

The building blocks of our multi-orbit universal terminals are modular tiles. We can implement terminals of different sizes and capacity without material additional engineering, by combining more or fewer tiles based on the requirements of the mission or the program. While we aim to deliver a universal terminal for defense UAVs using only our proprietary technologies in the medium term, in order to meet customer timelines, we may also source and integrated partner technologies in the short term. The requirements for defense programs and missions may differ from the requirements for commercial products. Our universal terminals for defense UAVs may not be required to comply with ARINC 791 and 781 standards of Aeronautical Radio, Incorporated (ARINC), but will meet the necessary design approvals of our customers and their programs. We aim to also be able to deliver universal terminals for unmanned systems across domains of air, land, and sea, but our initial focus is on airborne platforms.

2. Satellite Communications for Terrestrial and Maritime Installations: Our customers in the defense sector may require comprehensive communications solutions across domains of land, air and sea. We aim to provide end-to-end solutions for our customers, which means that we may be required to deliver satellite communications solutions for both stationary and mobile ground-based installations, such as control cars and command posts, as well as maritime based installations.

The satellite communications for terrestrial and maritime installations may contain antennas for transmission and receiving in one or more of the key frequency bands for high-throughput satellite connectivity for defense, principally Ka and Ku, which are used by satellites in GEO, MEO and in LEO orbits. We aim to deliver universal terminals using only our proprietary technologies in the medium term across all domains of land, air and sea, in order to meet customer timelines. Given that ground-based and sea-based installations typically have lesser requirements for size, weight and power, we may also source and integrated partner technologies in the short term. 

Requirements for defense programs and missions may be materially similar to requirements for commercial products, therefore our satellite communications for terrestrial and maritime installations may leverage dual-use technologies that are already certified for commercial use.

3. Systems Integration for Defense Platforms: Our multi-orbit universal terminals provide communications solution that we expect to be critical to the operations of both ISR and CCA-type missions. Our satellite communications systems will therefore typically need to be integrated with onboard sensor payloads, and other payloads required by certain customer missions, as well as guidance, navigation and controls (GNC) systems.

We expect that we may have the opportunity to expand our services beyond providing the communications solution to serving as an end-to-end systems integrator for the payloads that we are already connecting to through our hardware and our software. At this time, we do not expect to have the opportunity to serve as a system integrator for platforms that do not already include or require our communication systems and our value-added resale of satellite bandwidth, but we will remain open to requests from our present and future customers and partners to fill such role.

Defense Connectivity Solutions

1. Communications for Manned and Unmanned Systems

Within the defense segment, our main source of revenue is expected to be derived from contracts with militaries, governments and defense contractors for both the sale of our systems—the universal terminal for defense—as well as subscription-based plans for the bandwidth connectivity from our selected satellite operator partners.

We aim to achieve this with both retrofit solutions on manned and unmanned defense platforms already in operation being maintained by militaries and governments, as well as line-fit solutions for new manned and unmanned systems being assembled at the different defense contractors’ facilities prior to delivery to the respective militaries. We already have an agreement in place with our first classified defense development partner and customer to develop a first-of-its-kind satellite communications architecture for unmanned aerial vehicles (UAVs) engaged in classified ISR missions.

We are in advanced discussion with this development partner and customer to expand the engagement based on successful technology demonstrations in 2023 and 2024. We are also directly engaged with several additional potential partners developing unmanned platforms for ISR and CCA-type missions regarding implementing our connectivity solutions as part of their programs. We cannot give any assurance at this time, however, that we will be able to successfully complete any of these additional discussions. 

2. Terrestrial and Maritime Installations

To capitalize on the increasing demand for satellite communications for terrestrial and maritime installations for militaries and governments, we will aim to sell or to integrate end-to-end satellite communications systems to militaries, governments and defense contractors. In addition to selling integrated end-to-end satellite communications systems, we will also aim to sell to these military and government customers the bandwidth required for the operation of our services, priced on a subscription plan basis.

In some cases, we expect that the terrestrial and maritime installations may be components of a wholistic end-to-end satellite communications solution, but in other cases we expect that militaries and government customers may contract for standalone terrestrial or maritime solutions, such as to provide connectivity to individual ships or command posts.

We already have an agreement in place with our first classified defense development partner and customer for maritime and terrestrial installations as part of our end-to-end solution to support the classified ISR missions mentioned above. We also already are in discussions for standalone terrestrial customers. We cannot give any assurance at this time, however, that we will be able to successfully complete any of these additional discussions.

3. Systems Integrator for Manned and Unmanned Platforms

Within the defense segment, as an additional service to the customers interested in installing our satellite communications solutions on their manned and unmanned platforms, we are also able to support integration with onboard sensor payloads, and other payloads required by certain customer missions, as well as guidance, navigation and controls (GNC) systems, which we are already connecting to through our hardware and our software.

We already have an agreement in place with our first classified defense development partner and customer for a certain level of systems integrator support for the UAV engaged in the classified ISR missions mentioned above.

We also already are in discussions for an agreement with another systems integration partner expressing interest in our universal terminal for defense as well as our wrap-around services for system integration with other payloads. We cannot give any assurance at this time, however, that we will be able to successfully complete any of these additional discussions. 

Our Defense Business Solutions 

We can provide different business solutions to defense contractors, militaries and governments:

1. Retrofit solution for Militaries, Governments and Defense Contractors

Militaries, governments and defense contractors having an existing fleet manned and unmanned platforms already operating in service will require a retrofit solution. For those defense customers who already have manned and unmanned systems in operation with no multi-orbit satellite communications system installed, we aim to offer a retrofit solution, which could be used in addition to or in place of an existing satellite communications system, if any. In most situations, we expect that the fleet owner would be responsible for installing our systems under our supervision, as well as uninstalling any systems they may want to remove. The fleet owner would also be required to purchase the necessary satellite bandwidth from us to provide connectivity to its fleet.

2. Line Fit solution for Defense Contractors

Defense contractors manufacturing manned and unmanned platforms to which they want to add our multi-orbit universal terminals will require a line-fit solution. In most situations, we expect the installation would be done by the manufacturer of the manned or unmanned platforms in production and certified with the platform, so our systems would be delivered to the manufacturer upon request of the defense contractors or of the militaries and governments that are purchasing the platforms. 

3. Systems Integrator for Militaries, Governments and Defense Contractors

Our customers, militaries and governments, may require custom, proprietary or classified system level integrations on the manned and unmanned platforms onto which they want our communications solutions to be installed, and may request that we provide wrap-around system integrator services to perform such installations and integrations. Similarly, some of our defense contractors’ partners may, from time to time, require additional system integrator support from our team due to the complex design of contemporary manned and unmanned systems. In some situations, we expect the installation of third-party payloads onto the manned and unmanned systems may still be done by the manufacturer of the manned or unmanned platforms in production, but with close supervision by and certification by our team.

Commercial Aviation Connectivity and Entertainment Solutions

We have been developing two systems which can be offered to the aviation market.

1. Universal Terminal for Aviation: Our universal terminals aim to deliver a full internet connectivity solution to both commercial airlines and private business jet operators. The universal terminal for aviation, which we also refer to as the Aerkomm K++ System, will contain antennas for transmission and receiving in the key frequency bands for high-throughput commercial satellite connectivity, called Ka and Ku, which are used by satellites in GEO, MEO and in LEO orbits. While we aim to deliver a universal terminal for aviation using only our proprietary technologies in the medium term, in order to meet customer timelines, we may also source an integrated partner technologies in the short term. All of our universal terminals for aviation will comply with ARINC 791 and 781 standards of Aeronautical Radio, Incorporated (ARINC), meeting the necessary design approvals. 

2. Distributed Content System for Airlines: We have developed an intranet-based wireless connectivity solution, which we can also offer to both commercial airlines and to private business jet operators. Our distributed content system for airlines, which we also refer to as the Aerkomm AirCinema Cube, will provide passengers access to media content, including movies, videos, music, news feeds, video games, advertising and promotions. It will stream content from an onboard server to existing screens in stalled in the cabin or seats, and/or to passenger mobile devices.

Commercial Aviation Connectivity and Entertainment Market Business Models

1. Commercial Airlines

Within the commercial aviation segment, our main source of revenue is expected to be derived from contracts with commercial airlines for both the sale of our systems—both the universal terminal as well as the distributed content system—as well as subscription-based plans for the bandwidth connectivity from our selected satellite operator partners. We aim to achieve this with both retrofit solutions on commercial aircraft already in operation by airline customers, as well as line-fit solutions for new aircraft being assembled at the different aircraft manufacturers’ facilities prior to delivery to the respective aircraft lessors and airline customers. 

We already have a definitive agreement in place with our first commercial airline customer, Hong Kong Airlines (discussed below). We are in advanced discussion with several additional potential customers directly through our corporate network. We cannot give any assurance at this time, however, that we will be able to successfully complete any of these additional discussions.

We aim to complete our universal terminal for aviation system approval by Airbus and receiving the applicable airworthiness certifications, namely the European Union Aviation Safety Agency (EASA) and the US Federal Aviation Administration (FAA), by the last quarter of 2025. We will then be able to begin providing our universal terminal for aviation systems for installation on commercial airline aircraft.

2. Corporate Jet Customers

To capitalize on the private business aviation market, we will aim to sell our systems to corporate jet owners through the Airbus Corporate Jets (ACJ) and Boeing Business Jets (BBJ) programs. In addition to selling our systems, we will also aim to sell to these corporate jet aircraft owners the bandwidth required for the operation of our services, priced on a subscription plan basis.

We already have an agreement in place with our first corporate jet and launch customer, MJet GMBH (discussed below), and we have had advanced discussions with several additional potential customers both directly through our corporate network and through Airbus. We cannot give any assurance at this time, however, that we will be able to successfully complete any of these additional discussions. Sales of our universal terminal for aviation system to the corporate jet market will also require the EASA and FAA certification, which we expect to complete by the last quarter of 2025, as mentioned above.

3. Electric vertical take-off and landing (eVTOL) aircraft

To the extent that eVTOL aircraft become a real product, we aim to be in a position to sell our solutions to those companies and platforms as well.

Commercial Aviation Business Solutions 

We can provide different business solutions to airline customers and business jet operators, all of which generate revenue.

Retrofit solution for Airlines

We aim to offer a retrofit solution to potential commercial airline customers having an existing fleet with aircraft in operation having no satellite communications installed. In most situations, we expect that the fleet owner would be responsible for installing our systems, under our supervision, as well as uninstalling any systems they may want to remove. The fleet owner would also be required to purchase the necessary satellite bandwidth from us to provide connectivity to its fleet.

Line Fit solution for Airlines

We also aim to offer our multi-orbit universal terminals as a line-fit solution. Under this situation, the installation would be done by the manufacturer of the commercial aircraft and certified with the aircraft, so our systems would be delivered to the manufacturer upon request of the aircraft manufacturer or its customers, either commercial airlines or aircraft lessors, that are purchasing the platforms. The fleet owner would also be required to purchase the necessary satellite bandwidth from us to provide connectivity on its fleet.

Our Contracts with Commercial Aviation Partners

Airbus SAS -- On November 30, 2018, we entered into an agreement with Airbus SAS (“Airbus”), pursuant to which Airbus aims to develop and certify a complete retrofit solution allowing the installation of our “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.

We expect to expand our agreement with Airbus to include other Airbus models including the Airbus A330, A340, A350 and A380 series. Airbus would then apply for and obtain on our 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 our retrofit universal terminal for aviation, or AERKOMM K++ system.

Airbus agreed to provide us with the retrofit solution, including 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 2025, although there is no guarantee that the project will be successfully completed in the projected timeframe.

Multiple airlines, and in particular aircraft lessors, will accept only Service Bulletins issued by the aircraft manufacturers for the retrofit installation of any system on board their aircraft. Our agreement with Airbus aims to ensure that our system will meet this requirement for aircraft lessors who intend to purchase Airbus aircraft, although it does not guarantee that airlines or aircraft lessors will purchase our AERKOMM K++ system.  

Airbus Interior Services -- On July 24, 2020, our wholly owned subsidiary, Aerkomm Malta, entered into an agreement with Airbus Interior Services, a wholly owned subsidiary of Airbus as a follow-on to the agreement that Aerkomm signed with Airbus on November 30, 2018. Airbus agreed to develop, install and certify the Aerkomm K++ System on a prototype A320 aircraft to EASA and FAA certification standards, and Airbus Interior Services agreed to provide current cabin upgrade solutions for Airbus aircraft operators while bringing additional flexibility and reduced lead times to the cabin upgrade process.

under this agreement, Airbus Interior Services will provide and certify, via the Airbus Design Organization Approval process, a complete retrofit solution to develop EASA/FAA certified Service Bulletins, to supply related Aircraft Modification Kits and to install the Aerkomm K++ Connectivity solution on the A320 family of commercial aircraft. This agreement also includes Airbus support for the integration of the Aerkomm K++ System components on the aircraft including ARINC 791 structural reinforcements and related engineering work.

Airbus Interior Services will provide support for the European National Airworthiness Authorities (NAA) certification as required in addition to EASA certification. Airbus Interior Services will also provide on-site technical support at the Maintenance Repair Organization (MRO) base for the first aircraft retrofit of each new customer. 

We plan to install the Airbus Interior Services-created Service Bulletin and Airbus kits for the AERKOMM K++ retrofit solution first on the Hong Kong Airlines fleet of 12 Airbus A320 aircraft, following our certification approval. With this installation, Hong Kong Airlines should become Aerkomm’s first commercial airline customer. 

Hong Kong Airlines -- In June 2015, we entered into a master agreement with Hong Kong Airlines Limited, or Hong Kong Airlines, to install IFEC systems on-board their aircraft. On January 30, 2020, further to the master agreement with Hong Kong Airlines, we signed an agreement with Hong Kong Airlines to provide to Hong Kong Airlines both of its Aerkomm AirCinema and AERKOMM K++ solutions. 

We aim to provide our universal terminal for aviation, or AERKOMM K++ system, for installation on Hong Kong Airlines’ fleet of 12 Airbus A320 and 5 Airbus A330-300 aircraft as well as our AERKOMM AirCinema system for the Hong Kong Airlines Airbus A320 aircraft. Hong Kong Airlines aims to become our first commercial airliner launch customer. 

On November 17, 2021, we signed a new agreement with Hong Kong Airlines Ltd and Ejectt Inc. (formerly known as Yuanjiu Inc.). Based on the long-term relationship and anticipated further co-operation between Aerkomm and Hong Kong Airlines, we agreed to aim to provide to Hong Kong Airlines a LEO-compatible universal for aviation with LEO constellation service when available. We will aim to deliver our universal terminal for aviation with a full certified Service Bulletin by Airbus.

Our universal terminal for aviation aims to introduce high-speed internet access to the seatback screens of Hong Kong Airlines’ Airbus A320 aircraft, connected via the distributed content system for airlines. Instead of the traditionally preloaded and fixed selection of in-flight entertainment, passengers would have access to high-speed internet steaming services for videos, music and social media.

In order to install the AERKOMM K++ system on the Hong Kong Airlines aircraft, we will have to obtain local approval for the AERKOMM K++ system from the Hong Kong Civil Aviation (HKCAD). This HKCAD local approval will be based on our obtaining the Airbus Service Bulletin, which we expect to receive from Airbus, together with EASA certification, by some time in 2026. Once we receive the Airbus Service Bulletin and the EASA certification, jointly with the support of Airbus, we will be able to apply to the HKCAD for the required local approval.

Other Airline Partners and Business Jet Prospective Customers -- We are actively working with prospective airline customers to provide them with the universal terminal for aviation, or our AERKOMM K++ system.  In connection with the Airbus project, we have also identified the owners of Airbus Corporate Jet, or ACJ, as potential customers of our AERKOMM K++ system. To capitalize on this additional market, we plan to sell our AERKOMM K++ system hardware for installation on ACJ corporate jets and provide connectivity through subscription-based plans. This new corporate jet market could generate additional revenue and income for our company. As discussed below, we have entered into an agreement with Mjet GMBH, an Airbus ACJ customer.

While, to date, we have been concentrating on Airbus customers in view of our existing agreement with Airbus, our current plan is to also begin marketing to Boeing aircraft customers and Boeing Business Jets (BBJ) customers, and we intend to acquire the necessary certification of our AERKOMM K++ system equipment for the different Boeing aircraft models, with a particular focus on the Boeing B737 aircraft family.

We aim to enter into business agreements with additional airline partners and corporate jet owners, which would allow our universal terminals for aviation to be installed together with our bandwidth services provided, on additional fleet aircraft. Under any such agreements, we expect that the airlines will commit to have our equipment installed on some or all the aircraft they operate. We cannot guarantee that we will be able to enter into any such additional agreements.  

Contracts with Satellite Partners

Effective as of September 26, 2024, the Company entered into a Distribution Partner Agreement (“DPA”) with Eutelsat OneWeb Group, a global satellite communications operator providing Low Earth Orbit (“LEO”) connectivity services. Pursuant to the agreement, the Company’s subsidiary, Aerkomm Japan, was granted distribution rights for Eutelsat OneWeb’s LEO connectivity services in Japan for the commercial fixed and land mobile sectors, as well as in Taiwan for the commercial land mobile market.

The partnership is intended to support the Company’s strategy of expanding its next-generation multi-orbit communications capabilities and strengthening its position in broadband connectivity, mobility communications, and aerospace and defense-related applications throughout the Asia-Pacific region. The Company believes the collaboration with Eutelsat OneWeb may enhance its ability to provide integrated satellite communications solutions and support growing regional demand for resilient and globally available connectivity services.

The Company may continue to explore additional opportunities for technical, commercial, and strategic collaboration with Eutelsat OneWeb in the future. However, the Company cannot assure you that the relationship with Eutelsat OneWeb will result in additional definitive agreements, increased service commitments, or future revenues or product sales.

Effective as of May 26, 2026, the Company entered into a Master Services Agreement (“MSA”) with a global U.S.-based satellite communications provider offering broadband, mobility, and satellite networking services across maritime, aviation, and land-based markets. Pursuant to the agreement, the provider authorized the Company to provide satellite communications products and related services for the maritime, aviation, and land sectors in Japan and Taiwan, including user terminals and Ka-band and L-band airtime products.

The agreement is intended to support the Company’s strategy of expanding its satellite communications service offerings and strengthening its position in mobility communications, broadband connectivity, and aerospace and defense-related applications within its authorized markets. The Company believes the collaboration with a global U.S.-based satellite communications provider may enhance its ability to offer satellite communications products and services across maritime, aviation, and terrestrial environments.

The Company may continue to pursue additional technical, commercial, and strategic collaboration opportunities with the provider in the future.

Contract with Japan Defense Contractor

Effective as of April 29, 2026, the Company entered into a Co-Development and Collaboration General Agreement with a Japan-based defense prime contractor and trusted service provider to the Japan Ministry of Defense. Pursuant to the General Agreement, the parties will collaborate on the development, manufacturing, and commercialization of Unmanned Aerial Systems (UAS) related products.

The General Agreement establishes the intent of joining a local manufacturing facility within Japan to localize production, assembly, and maintenance, subject to applicable local regulatory, export control, and defense supply chain requirements. This collaboration is intended to support the Company’s strategy of expanding its defense-related applications and its commercial footprint within the Asia-Pacific aerospace and defense sectors.

The Company may continue to pursue additional technical, commercial, and strategic collaboration opportunities with the partner in the future.

Contract with Satellite Communication Terminals Manufacturer

Effective as of September 1, 2025, the Company entered into a Distribution Agreement with Global Comms Exchange LLC, doing business as VolitionRF. VolitionRF specializes in the design of satellite communication hardware optimized for low Size, Weight, and Power (SWaP) profiles, operational performance, and system integration capabilities.

Pursuant to the Distribution Agreement, the Company was appointed as an authorized distributor with the rights to market, sell, and distribute VolitionRF’s satellite communication terminals and associated hardware within the designated territories of Taiwan and Japan.

The arrangement is structured to expand the Company’s product offerings in multi-band satellite connectivity solutions for aerospace and defense applications across the Asia-Pacific region. The authorized product portfolio encompasses dual-band antenna systems, including Ku/Ka-band configurations and X/Ka-band satellite antennas.

Civilian Telecommunications Solutions

We are actively developing and offering two core solutions to serve the civilian telecommunications market:

Our universal terminal for network resiliency is designed to provide mobile backhaul satellite connectivity to support both 4G LTE and 5G networks. This terminal can be deployed either as a backup system or as a primary solution, depending on the customer’s network architecture and reliability requirements.

These terminals may incorporate antennas capable of transmitting and receiving in one or more of the key frequency bands—primarily Ka and Ku—commonly used for high-throughput satellite communications. These bands are supported across multiple orbital regimes, including Geostationary Earth Orbit (GEO), Medium Earth orbit (MEO), and Low Earth orbit (LEO) satellites.

While our long-term objective is to deliver fully proprietary universal terminals, in the short term we may integrate third-party technologies to accelerate deployment and meet urgent customer requirements.

Given the nature of satellite communication systems, our universal terminals for network resiliency are typically subject to earth station licensing requirements. These may include regulatory approvals from the U.S. Federal Communications Commission (FCC), the International Telecommunication Union (ITU), and other national or regional telecommunications authorities. Compliance with type approvals and certifications for both electronic and radiofrequency components will also be required. Depending on the market and customer arrangement, we may pursue such licensing directly or in partnership with local stakeholders. 

Our universal terminal for non-terrestrial networks (NTN) is intended to serve as a high-throughput mobile backhaul solution for next-generation 5G Advanced and future 6G networks. These NTN terminals are generally deployed as a primary solution, forming the satellite-based communications backbone of emerging mobile infrastructures.

Like our resiliency terminals, the NTN terminal will support Ka and Ku bands and will be compatible with GEO, MEO, and LEO satellite constellations. However, the distinguishing feature of our NTN offering lies in its higher throughput capability—driven by the performance of our proprietary glass semiconductor antennas and our software-defined modem technologies.

We intend to fully utilize proprietary technology in the medium term. However, due to less stringent requirements for size, weight, and power in NTN applications compared to defense use cases, we may integrate third-party components in the near term to accelerate market entry.

We anticipate that the regulatory framework for NTN deployments will mirror that of our network resiliency terminals, requiring similar licensing and certification procedures across different jurisdictions.

Civilian Telecommunications Solutions Market Business Models

Our civilian telecommunications strategy is structured around multiple revenue models to meet diverse market demands and optimize scalability. These include: (1) hardware leasing combined with value-added reseller services, (2) hardware sales with bundled bandwidth offerings, and (3) revenue-sharing arrangements with satellite operators.

In the civilian telecommunications market, our primary long-term revenue objective is to engage with mobile network operators and equipment vendors through a hybrid model involving the leasing of our proprietary systems—namely, the Universal Terminal for Network Resilience and the Universal Terminal for Non-Terrestrial Networks (NTN)—in combination with subscription-based satellite bandwidth plans. Under this model, we serve as a distribution partner for select satellite operators, allowing us to offer a complete and integrated connectivity solution.

This approach supports consistent recurring revenue streams and positions us to deliver the most up-to-date technology enhancements to our customers. To support the capital requirements associated with hardware leasing, we are actively pursuing partnerships with leasing firms or asset-based financing providers. As of August 9, 2023, we secured a key milestone in this direction by winning the first phase of the Taiwan Telecom Technology Center’s (TTC) verification project, titled “Emerging Technology Application for Enhancing Communication Network Resilience in Emergencies or War.” This project is designed to validate the effectiveness of our proposed heterogeneous resilient network architecture.

We are continuing commercial discussions with mobile network operators and ecosystem vendors to secure our first revenue-generating contracts under this model. Concurrently, we are progressing in our negotiations with financial partners to structure appropriate working capital support. While we remain optimistic, there is no assurance at this time that these discussions will result in finalized agreements.

In the near term, to manage working capital more efficiently, we may prioritize direct hardware sales in place of leasing. Under this structure, our revenue would be derived from the sale of our Universal Terminals—both for network resilience and NTN—along with subscription-based bandwidth services from our satellite operator partners, where we act as a value-added reseller.

Although this model does not provide the same level of recurring revenue as leasing, it offers a more immediate path to market entry without requiring significant upfront capital. Until suitable financing arrangements are secured, we anticipate that this model will be our primary operating structure. As with the leasing model, we continue to engage in active discussions with potential customers but cannot guarantee the successful completion of these negotiations. 

To further enhance flexibility and competitiveness, we also plan to engage in revenue-sharing agreements with selected satellite operators. In this model, mobile network operators may procure bundled solutions that include both hardware and connectivity under a single service plan. In some scenarios, the billing entity may be Aerkomm—particularly when delivering multi-orbit, multi-carrier solutions—while in others, the satellite operator may serve as the primary service provider.

In either case, revenue generated from these bundled services will be shared between Aerkomm and the respective satellite operator. The compact size, low power consumption, and high performance of our Universal Terminals make satellite communications viable in locations that were previously impractical or uneconomical. By enabling net-new deployments, especially in remote or underserved areas, we expect to earn a proportional share of the revenue generated at these newly accessible sites.

While early-stage discussions are underway with both customers and satellite partners under this model, we cannot provide assurance at this time that these will result in signed contracts or revenue realization.

Our Contracts with Civilian Telecommunications Partners

We operate as a satellite telecommunications provider in Japan and Taiwan, offering both systems integration and value-added services. This dual-role model allows us to deliver tailored satellite connectivity solutions and extend our presence in strategically important civilian telecommunications markets. Our experience in service design and deployment within these regions has created a replicable framework that supports future geographic expansion, enabled by existing relationships with satellite operators and the development of new strategic partnerships.

In Taiwan, our subsidiary, Aerkomm Taiwan Inc., in cooperation with its exclusive local agent EJECTT Inc. (Ejectt), was awarded the initial phase of a government-backed verification project titled “Emerging Technology Application for Enhancing Communication Network Resilience in Emergencies or War” by the Taiwan Telecom Technology Center (TTC) on August 9, 2023. Our proposed solution, submitted under the project name “Asynchronous Satellite Network Leasing and Transmission Service Procurement Project,” is focused on demonstrating the effectiveness of a heterogeneous resilient network architecture aimed at improving communication robustness during crises.

Further strengthening our market presence in Asia, we entered into a Distribution Partner Agreement (DPA) with Eutelsat OneWeb Group in September 2024. This agreement authorizes our subsidiary, AERKOMM Japan, to distribute OneWeb’s Low Earth Orbit (LEO) satellite connectivity services in Japan’s commercial fixed and land mobile markets, as well as in Taiwan’s land mobile sector. The DPA enhances our service offerings with next-generation LEO capabilities and represents a significant commercial milestone. It positions us for long-term revenue growth and further validates our credibility as a key regional player in satellite communications.

In May 2026, we entered into a Master Services Agreement (“MSA”) with a global U.S.-based satellite communications provider. Pursuant to the agreement, the Company is authorized to provide satellite communications products and related services for the Maritime, Aero, and Land sectors in Japan and Taiwan, including user terminals and Ka-band and L-band airtime products. The MSA broadens our satellite communications service portfolio and represents an important milestone in expanding our service capabilities within our authorized markets.

Acquisitions and Dispositions

In our fiscal year 2023, we announced the acquisition of Mesh Tech, a developer of distributed computing solutions. This acquisition enhanced our software capabilities and distributed computing portfolio for both the Aerospace & Defense and Civilian Telecommunications segments, which we expect to drive both customer acquisition and retention in the future. We aim to continue to evaluate opportunities to advance our strategy and to better serve our customers and our partners through both acquisitions and dispositions in the future.

Research & Development (R&D)

The industries in which we compete are subject to rapid technological developments, evolving standards, changes in customer requirements and continuing developments in the communications and networking environment. Our continuing ability to adapt to these changes, and to develop innovative satellite and communications technologies, and new and enhanced products and services, is a significant factor in maintaining or improving our competitive position and our prospects for growth. We continue to make significant investments in next-generation technologies and communications product and services development. We conduct the majority of our R&D activities in-house and have R&D and engineering staff. Focused, efficient investments in research and development are important to our future growth and competitive position in the marketplace. Our product development activities focus on products that we consider viable revenue opportunities to support all of our segments. Our research and development efforts are directly related to timely development of new and enhanced services and related products that are central to our core business strategy and our ability to drive profitable and sustainable growth.

The industries in which we compete are subject to rapid technological developments, evolving industry standards, changes in customer requirements, and new service and product introductions and enhancements. As a result, our success depends in part upon our ability, on a cost-effective and timely basis, to continue to enhance our existing services and to develop and introduce new products and services that improve performance and meet customers’ operational and cost requirements. Our current research and development activities relate to antennas, modems, distributed computing, and multi-orbit service development, enhancing our universal terminal product lines with new features desired by our customers, and integrating available geostationary orbit (GSO) and emerging non-geostationary satellite orbit (NGSO) products and services into our overall satellite communications offering.

Intellectual Property Rights

We currently hold intellectual property rights relating to various aspects of our hardware products, software and services. We believe that our ability to compete effectively depends in part on our ability to protect these intellectual property rights and our proprietary information. We rely primarily on copyright and trade secret laws, as well as trademarks, service marks and trade dress, to protect our valuable products and services. We use confidentiality undertakings and licensing arrangements to protect our intellectual property rights worldwide. In the future, when appropriate, we may seek to file patent applications to protect innovations arising from our research, development and design activities.

Manufacturing Operations

We outsource our manufacturing operations to well-known contract manufacturers located primarily in Taiwan and Japan, and we aim to engage manufacturing partners in North America, in the future. We rely on third party foundries or companies that use third party foundries for manufacture of our semiconductor devices that are Application Specific Integrated Circuits (“ASICs”). These foundries are located primarily in Taiwan. We also outsource printed circuit board production and amorphous silicon or glass substrate semiconductor thin-film-transistor (TFT) manufacturing.

Outsourcing our operations to manufacturers and foundries allows us to reduce our fixed costs, maintain production flexibility. Our proprietary products are manufactured to our designs with standard and custom components. Most of the components are available from multiple sources. We have several single-sourced supplier relationships, either because alternative sources are not yet available or because the relationship is advantageous to us.

Our manufacturing operations are dependent on relationships with these suppliers who are subject to occasional supply chain disruptions. As is the case across the industry, if key suppliers fail to provide timely and reliable supply of components, we could experience manufacturing delays that could adversely affect our consolidated results of operations in a material way. In an effort to mitigate supply chain exposure, we have increased our inventory over historical levels and will monitor whether adjustments to inventory levels are necessary to mitigate any future exposures. Further, a range of conditions and circumstances beyond our control such as global conflicts, recessionary economic conditions in various regions of the world or a recurrence of the Covid-19 pandemic could disrupt the availability of raw materials and components as well as our capacity to make and distribute our products.

Raw Materials, Components and Services

We purchase raw materials and most of the components used in our manufacturing processes, such as printed circuit boards, injection-molded plastic parts, machined metal components, connectors and housings. In addition, we purchase third party services, predominantly networking and mobile broadband services, to support the delivery of our solutions. The materials, molds and dies, subassemblies and components purchased from other manufacturers, and other materials and supplies used in our manufacturing processes are generally available from multiple sources. We believe there is a sufficient number of acceptable vendors for the components we purchase. We regularly evaluate both domestic and foreign suppliers for quality, dependability and cost effectiveness. From time to time, the cost and availability of materials and services is affected by the demands of other industries, as well as other factors.

Whenever practical, we seek to establish multiple sources for the purchase of raw materials, components and services to achieve competitive pricing, maintain flexibility, reduce tariff exposure, and protect against supply disruption. When possible, we employ a company-wide procurement strategy designed to reduce the purchase price of materials, purchased components and services. For reasons of quality assurance, scarcity or cost effectiveness, certain components and raw materials used in the manufacturing of our products, as well as certain services utilized in the delivery of our solutions, are available only from a limited number of suppliers or from a sole source supplier. We work with our suppliers to develop contingency plans and redundancy intended to ensure continuity of supply while maintaining high quality and reliability. In some cases, we established long-term supply contracts with our suppliers.

Due to the scarcity or market volatility of certain raw materials, purchased components and services, we may not be able to quickly re-establish additional or replacement sources for certain components, materials or services. In the event that we are unable to obtain sufficient quantities of raw materials or components, or unable to obtain sufficient access to the services needed to deliver our solutions on commercially reasonable terms or in a timely manner, our ability to manufacture and deliver our products and services on a timely and cost-competitive basis may be compromised, which may have a material adverse effect on our business, financial condition and results of operations. We also experienced increased raw material costs. We are continuing to monitor global developments, including the impact of inflation, and are prepared to implement actions that we determine to be necessary to sustain our business.

Competition

We operate in the rapidly evolving communications technology industry, where innovation, regulatory developments, and emerging customer needs continually shape the competitive landscape. As of 2024, the market for multi-orbit satellite connectivity—encompassing Low Earth Orbit (LEO), Medium Earth Orbit (MEO), and Geostationary Earth Orbit (GEO)—continues to grow, driven by increasing demand for secure, resilient, and high-throughput connectivity across the defense, aerospace, and civilian telecommunications sectors.

We operate in collaboration with companies that develop satellite terminals, connectivity platforms, and integrated ground segment solutions. Many of these companies specialize in specific market verticals such as maritime, mobility, tactical communications, or public safety, often offering proprietary architectures or tailored form factors. Aerkomm differentiates itself by developing lightweight, modular, and power-efficient universal terminals optimized for both Network Resiliency and Non-Terrestrial Network (NTN) applications, supported by software-defined modems and open-architecture design. As a full-systems integrator, our capabilities have positioned the company to navigate competitive pressures effectively while maintaining strong partnerships.

We continue to pursue a partnership-focused business strategy. During 2024 and 2026, we expanded our relationships with satellite operators and service providers, including Eutelsat OneWeb and a global U.S.-based satellite communications provider, while continuing discussions with other satellite operators regarding potential commercial opportunities. These relationships enhance our ability to offer satellite communications products and services utilizing LEO, MEO, and GEO satellite networks. By leveraging third-party satellite infrastructure rather than owning and operating satellite assets, we seek to maintain a carrier-neutral approach and provide connectivity solutions tailored to customer requirements. As satellite operators continue to expand network coverage and capacity, we believe these relationships may support additional commercial opportunities and service offerings in our authorized markets.

The Company operates in a rapidly evolving satellite communications market that includes satellite operators, communications service providers, and equipment manufacturers. Starlink, which operates one of the world’s largest LEO satellite constellations, may serve as both a competitive alternative and a potential commercial partner, depending on the market, customer requirements, and commercial arrangements involved. Other emerging satellite operators, including Telesat (Lightspeed) and Amazon’s Project Kuiper, may similarly represent future partnership opportunities or competitive alternatives. The Company seeks to differentiate itself by offering carrier-neutral and interoperable communications solutions designed to support connectivity across multiple satellite networks and orbital architectures, including LEO, MEO, and GEO systems.

The emergence of electronically steered array (“ESA”) terminals has increased competition within the satellite communications terminal market. ESA technologies, including those utilized by certain Low Earth Orbit (“LEO”) satellite operators, have gained market adoption due to their low-profile form factors, mobility capabilities, and ability to support broadband connectivity across a variety of applications. At the same time, established satellite communications equipment providers, including KVH Industries, Intellian Technologies, and Cobham SATCOM, continue to maintain significant market presence, long-standing customer relationships, and extensive global distribution networks.

The Company seeks to differentiate itself by providing carrier-neutral and interoperable communications solutions designed to support connectivity across multiple satellite networks and orbital architectures, including Low Earth Orbit (“LEO”), Medium Earth Orbit (“MEO”), and Geostationary Earth Orbit (“GEO”) systems. The Company believes demand for multi-network and multi-orbit connectivity solutions may continue to increase as customers seek greater flexibility, redundancy, and network resiliency. Through its focus on interoperability, network flexibility, and multi-orbit connectivity, the Company seeks to address the evolving communications requirements of commercial, enterprise, government, and defense-related customers.

We also face competition from providers of high-performance antennas and connectivity solutions for specialized sectors like commercial aviation. Notable competitors in this segment include Ball Aerospace (recently acquired by BAE Systems) and ThinKom, both of which specialize in low-profile, high-performance antenna systems for harsh or regulated environments. These companies provide robust solutions for commercial aviation connectivity, but Aerkomm’s modular, multi-orbit terminal strategy differentiates us with open-architecture flexibility and enhanced performance across a range of networks.

Additionally, we may face indirect competition from vertically integrated satellite service providers that develop proprietary terminal hardware and bundle them with satellite services. However, as the satellite communications market shifts toward open ecosystems and carrier-neutral approaches, we believe Aerkomm’s role as a neutral integrator and hardware innovator will become increasingly valuable.

In summary, while the competitive landscape remains intense and continues to evolve, Aerkomm is well-positioned through its focus on interoperability, innovation, and partnership-driven service delivery. We will continue investing in next-generation terminals and working with global satellite partners to expand our footprint and deliver reliable, high-performance solutions to meet growing customer needs.

Government Procurement

Substantial portions of our current and future revenues are and will be generated from contracts and subcontracts with government agencies. Such contracts are subject to a competitive bid process and are awarded based on technical merit, personnel qualifications, experience and price. We also receive some contract awards involving special technical capabilities on a negotiated, noncompetitive basis due to our unique mix of communication products, satellite services, engineering capabilities and technical expertise in specialized areas. Our future revenues and income could be materially affected by changes in government procurement policies and related oversight, a reduction in expenditure for the products and services we provide, and other risks generally associated with federal government contracts.

We provide products and services under government contracts that usually require performance over a period of several months to multiple years. Long-term contracts may be impacted based on when the government appropriated funds are available and to what level, which may result in a delay, reduction or termination of these contracts. Government contracts may be performed under cost-reimbursement contracts, time-and-materials contracts and fixed-price contracts. Cost-reimbursement contracts provide for reimbursement of costs and payment of a fee. The fee may be either fixed by the contract or variable, based upon cost control, quality, delivery and the customer’s subjective evaluation of the work. Government contracts may be terminated, in whole or in part, at the convenience of the relevant government office. If a termination for convenience occurs, the government office generally is obligated to pay for work completed or services rendered and/or the cost incurred by us under the contract, which may include a fee or allowance for profit. Contracts with prime contractors may have negotiated termination schedules that apply. When we participate as a subcontractor, we are at risk if the prime contractor does not perform its contract. Similarly, when we act as a prime contractor employing subcontractors, we are at risk if a subcontractor does not perform its subcontract. 

Government Regulation

We are subject to the laws and regulations of the U.S. and foreign jurisdictions in which we provide and sell our satellite communication products and services, including those of the Taiwan and Japan. Many of the countries where our customers use our products and services have licensing and regulatory requirements for the importation and use of satellite communications and reception equipment, including the use of such equipment in territorial waters, the transmission of satellite signals on certain radio frequencies, the transmission of VoIP services using such equipment, and, in some cases, the reception of certain video programming services.

In the U.S., many of these matters are regulated by the Federal Communications Commission. In other countries or foreign jurisdictions where we may aim to provide and sell our satellite communication products and services in the future, many of these matters are regulated by the telecom regulatory authority of each national government. While there are attempts to harmonize and standardize requirements among international regulators, there is still a significant amount of heterogeneity in licensing conditions and enforcement on a country-by-country basis. Furthermore, due to the rapid pace of advancement of satellite communications technology, the regulatory landscape is similarly evolving, so we are at risk of our technology not fitting neatly into an existing licensing category and thereby slowing our access to a given market as we seek a path to service which remains in compliance with all local regulations.

Radio-frequency and Communications Regulation - International Telecommunication Union (ITU)

The orbital location and frequencies for our partner satellites are subject to the ITU’s regulations, including its frequency registration and coordination procedures, and its various provisions on spectrum usage. Those procedures are specified in the ITU Radio Regulations and seek to facilitate shared international use of limited spectrum and orbital resources in a manner that avoids harmful interference. Among other things, the ITU regulations set forth procedures for establishing international priority with respect to the use of such resources, deadlines for bringing satellite networks into use in order to maintain such priority, and coordination rights and obligations with respect to other networks, which vary depending on whether such networks have higher or lower ITU priority.

The ITU regulations provide allocations or designations for how spectrum can be used for various purposes, and whether such uses operate on a primary or secondary basis with respect to one another. Secondary uses may not cause harmful interference to primary uses and may not claim interference protection from primary uses. The orbital arc is becoming increasingly congested with respect to such ITU filings and the satellite networks operated under those filings.

The ITU’s Radio Regulations are also subject to change at periodic ITU World Radiocommunication Conferences (WRCs), and their application is determined by various governing bodies within the ITU. WRCs typically are convened approximately every four years, with the last one occurring at the end of calendar year 2023.

Other Legal Requirements

As a result of our international operations, we are subject to a number of additional legal requirements, including the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and the customs, export, trade sanctions and anti-boycott laws of the United States, including those administered by the U.S. Customs and Border Protection, the Bureau of Industry and Security, the Department of Commerce, the Department of State, and the Office of Foreign Assets Control of the Treasury Department, as well as those of other nations in which we do business.

Our operations are also subject to various domestic and international privacy laws, including the European Union’s General Data Protection Regulation. These laws and regulations, as well as the interpretation and application of these laws and regulations, are subject to change, and any such change may affect our ability to offer and sell existing and planned satellite communications products and services. For more information, see “Further Risks Related to Government Regulation.”

ITEM 1A. RISK FACTORS.

Investment in our common stock involves a high degree of risk. You should carefully consider each of the following risks, together with all other information set forth in this annual report, including the financial statements and the related notes, before making a decision to buy our common stock. If any of the following risks actually occurs, our business could be harmed. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.

Risks Related to the Merger with IXAQ

The Merger is subject to conditions, including certain conditions that may not be satisfied on a timely basis, if at all.

Unless waived by the parties to the Merger Agreement, and subject to applicable law, the consummation of the Merger is subject to several conditions set forth in the Merger Agreement.

The Merger Agreement provides that IXAQ’s obligation to consummate the Merger is conditioned on, among other things, that as of the closing of the Merger, the combined company resulting from the Merger (the “Combined Company”) has obtained at least $45,000,000 (“PIPE Minimum Investment Amount”) in financing from investors in the form of (i) the proceeds of private placements in IXAQ in connection with consummation of the Merger (the “PIPE Investments”) and (ii) the proceeds of the SAFE investments in Company prior to consummation of the Merger (the “SAFE Investments”).

As of the date of this filing, agreements have been signed with investors for $35 million in PIPE Investment commitments to PIPE Investments and no SAFE Investment have yet been made. There is no assurance that subscriptions for the remaining $10 million PIPE Minimum Investment Amount. The actual additional amounts committed to PIPE Investments or funded to the Company under SAFE Investments will depend on market conditions and other factors.

If the PIPE Minimum Investment Amount or other conditions to IXAQ’s obligation to consummate the Merger are not met, and such conditions are not waived by IXAQ under the terms of the Merger Agreement, then the Merger Agreement could terminate, and the proposed Merger may not be consummated.

If such condition is waived and the Merger is consummated with less than the PIPE Minimum Investment Amount, the cash held by the Combined Company upon consummation of the closing may not be sufficient to allow the Combined Company to operate and pay its bills as they become due. Any such event in the future may negatively impact the analysis regarding the Combined Company’s ability to continue as a going concern at such time.

There can be no assurance that the shares of the Combined Company’s Common Stock that will be issued in connection with the Merger will be approved for listing on Nasdaq, or another U.S national exchange, following the closing, or that the Combined Company will be able to comply with the continued listing rules of Nasdaq, or another U.S. national exchange.

In connection with the Merger and as a condition to the Company’s obligations to complete the Merger, the Combined Company will be required to demonstrate compliance with Nasdaq’s initial listing requirements. The Company and IXAQ cannot be sure that the Combined Company will be able to meet those initial listing requirements or qualify to list on another national securities exchange. Even if the Combined Company’s Common Stock is approved for listing on Nasdaq, the Combined Company may not meet the Nasdaq continued listing requirements following the Merger.

The announcement of the proposed Merger could disrupt the Company’s relationships with its customers, suppliers, business partners and others, as well as its operating results and business generally.

Whether or not the Merger and related transactions are ultimately consummated, as a result of uncertainty related to the proposed transactions, risks relating to the impact of the announcement of the Merger on the Company’s business include the following:

If any of the aforementioned risks were to materialize, they could lead to significant costs which may impact the Company and, in the future, the Combined Company’s results of operations and cash available to fund its business.

We will be subject to contractual restrictions while the Merger is pending.

The Merger Agreement restricts the Company from making certain expenditures and taking other specified actions without the consent of IXAQ until the Merger occurs. These restrictions may prevent the Company from pursuing attractive business opportunities that may arise prior to the completion of the Merger.

The Company and IXAQ will incur significant transaction and transition costs in connection with the Merger.

The Company and IXAQ have both incurred and expect to incur significant, non-recurring costs in connection with consummating the Merger and following the consummation of the Merger. The Company and IXAQ may also incur additional costs to retain key employees. Costs incurred in connection with the Merger Agreement and Merger include legal, tax, accounting, consulting, investment banking and other fees, expenses, and costs, all of which have not been paid by the Company or IXAQ before the closing of the Merger will be paid by the Combined Company following the closing.

If the Merger does not meet the expectations of investors or securities analysts, the market price of IXAQ’s securities (prior to the closing), or the market price of the Combined Company’s Class A Common Stock after the closing, may decline.

If the Merger does not meet the expectations of investors, the market price of IXAQ’s securities prior to the Closing may decline. The market values of IXAQ’s securities at the time of the Merger may vary significantly from their prices on the date the Merger Agreement was executed, or the date the Company’s Stockholders vote on the Merger. Because the number of shares to be issued pursuant to the Merger Agreement will not be adjusted to reflect any changes in the market price of IXAQ’s Class A Common Stock, the market value of Class A Common Stock issued in connection with the Merger may be higher or lower than the values of these shares on earlier dates.

In addition, following the Merger, fluctuations in the price of securities of the Combined Company could contribute to the loss of all or part of your investment. The valuation ascribed to the Company in the Merger may not be indicative of the price that will prevail in the trading market following the Merger. If an active market for IXAQ’s securities develops and continues, the trading price of the securities of the Combined Company following the Merger could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond the Combined Company’s control. Any of the factors listed below could have a material adverse effect on the Combined Company’s securities and the Combined Company’s securities may trade at prices significantly below the price paid for them by investors in the Company or IXAQ. In such circumstances, the trading price of the Combined Company’s securities may not recover and may experience a further decline.

Broad market and industry factors may materially harm the market price of securities, irrespective of a company’s operating performance. The stock market in general, and Nasdaq in particular, have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of the Combined Company’s securities, may not be predictable. A loss of investor confidence in the market for the stock of other companies that investors perceive to be similar to the Combined Company could depress the Combined Company’s stock price regardless of its business, prospects, financial conditions, or results of operations. A decline in the market price of the Combined Company’s securities also could adversely affect the Combined Company’s ability to issue additional securities and to obtain additional financing in the future. 

Risks Related to Our Business

Operational Risks

We depend on manufacturing relationships and a broad set of suppliers, some of whom provide us with limited-source components and parts, and disruptions in these relationships may cause damage to our customer relationships or otherwise negatively impact our business. Although most of the components of our products are available from multiple vendors, we have several single-source supplier relationships, either because alternative sources are not available or because the relationship is advantageous to us. Further, in recent years supply chains globally have experienced stress due to a range of factors.

There can be no assurance that our suppliers will be able to meet our future requirements for products and components in a timely fashion. In addition, the availability of many of the components we need is dependent in part on our ability to provide our suppliers with accurate forecasts of our future requirements. Delays or lost revenue could be caused by other factors beyond our control, including late deliveries by vendors of components, or force majeure events.

The sales of our products and services may require a significant technical evaluation and commitment of capital and other resources by potential customers and end users, as well as delays frequently associated with end users’ internal procedures to deploy new technologies and to test and accept new technologies. For these and other reasons, the sales cycle associated with certain of our products is typically lengthy and is subject to a number of significant risks, such as end users’ internal purchasing reviews, as well as the availability of capital for purchases, that are beyond our control.

While we believe we have a strong foundation to compete, it is uncertain whether our strategies will attract the customers or generate the revenue required to be successful. Certain potential customers were adversely impacted by the Covid-19 pandemic and the resulting global economic downturn. Any future economic slowdown could impede our ability to win and retain customers.

Risks Related to Competition

We have and expect to encounter competition from other solutions providers, some of whom may have more significant resources than us. Whether we are successful in this business model depends on a number of factors, including:

Risks Related to Acquisitions

Acquisitions could disrupt our business and seriously harm our financial condition. We will continue to consider acquisitions of businesses, products or technologies. In the event of any future acquisitions, we could issue stock that would dilute our current stockholders’ percentage ownership, incur additional debt, assume liabilities or incur large and immediate write-offs.

Our operation of any acquired business also involves numerous risks, including but not limited to:

We cannot be sure that we will be able to integrate successfully any businesses, products, technologies, or personnel that we have acquired or that we might acquire in the future. Any such integration failure could disrupt our business and have a material adverse effect on our consolidated financial condition and results of operations. Moreover, from time to time, we may enter into negotiations for a proposed acquisition but be unable or unwilling to consummate the acquisition under consideration. This could cause significant diversion of management’s attention and out-of-pocket expenses for us. We could also be exposed to litigation as a result of any consummated or unconsummated acquisition.

Risks Related to Economic and Market Conditions

Our business and operating results are affected by the global business environment and economic conditions, including changes in interest rates, consumer credit conditions, consumer debt levels, consumer confidence, rates of inflation, unemployment rates, energy costs, geopolitical issues and other macro-economic factors. For example, high unemployment levels or energy costs may impact our customer base in our civilian telecommunications segment by reducing the mobile network operators’ end-users’ discretionary income and affecting their ability to subscribe for cell phone services.

Our consolidated operating results and financial condition may be adversely impacted by worldwide economic conditions and credit tightening. If worldwide economic conditions experience a significant downturn, these conditions may make it difficult or impossible for our customers and suppliers to accurately forecast and plan future business activities, which may cause them to slow or suspend spending on products and services.

Our customers or suppliers may find it difficult to gain sufficient credit or service existing credit in a timely manner, which could result in an impairment of their ability to process or place orders with us, deliver inventory or services to us in the case of suppliers, or to make timely payments to us for previous purchases in the case of customers. If this occurs, our revenue may be reduced, thereby having a negative impact on our results of operations. In addition, we may be forced to increase our allowance for credit losses and our days sales outstanding may increase, which would have a negative impact on our cash position, liquidity and financial condition.

To the extent we incur debt, we may be unable to adhere to financial covenants or to service the debt. These risks associated with credit and debt are more pronounced for the parties with whom we do business and ourselves in the current environment, which has seen interest rates rise rapidly, especially if they remain elevated for an extended period of time. We cannot predict either the timing or duration of an economic downturn in the economy, should one occur. Any downturn could have a material adverse impact on our business, results of operations, financial condition and prospects.

Our commercial aerospace segment similarly depends on the economic health and willingness of our customers and potential customers, principally commercial airlines, to make and adhere to capital and financial commitments to purchase our products and services. During periods of slowing global economic growth or recession, our customers or key suppliers may experience deterioration of their businesses, cash flow shortages and difficulty obtaining financing or insolvency. Existing or potential customers may reduce or postpone spending in response to tighter credit, reduced consumer demand, negative financial news or declines in income or asset values, which could have a material negative effect on the demand for our products and services.

For example, the business and financial condition of our commercial airline customers were materially impacted during the COVID-19 pandemic by the severe decline in global air travel. In addition, current supply chain and labor market challenges and inflationary pressures have negatively affected and may continue to negatively affect our performance as well as the performance of our suppliers and customers. Moreover, natural disasters (including those resulting from climate change), political instability, civil unrest, terrorist activity, acts of war, and public health issues such as the COVID-19 pandemic or epidemics could disrupt supplies and raise prices globally which, in turn, may have adverse effects on the world and U.S. economies. Any of these factors could result in reduced demand for, and pricing pressure on, our products and services, which could reduce our revenues and adversely affect our business, financial condition and results of operations. In addition, U.S. credit and capital markets have experienced significant dislocations and liquidity disruptions from time to time.

In addition, recent policy shifts under the current U.S. administration led by President Donald Trump have introduced new dynamics into the global economic and regulatory landscape. The administration’s positions on trade, tariffs, defense spending, taxation, and international alliances are creating both opportunities and uncertainties across global markets. These evolving policies may impact global supply chains, capital flows, regulatory approvals, and procurement cycles—particularly in sectors such as telecommunications, aerospace, and defense. As a result, we may face increased volatility in customer demand, delays in contract execution, or shifts in regulatory compliance requirements, all of which could adversely affect our operations, financial condition, and long-term growth prospects.

Uncertainty or volatility in credit or capital markets may negatively impact our ability to access additional debt or equity financing or to refinance existing indebtedness in the future on favorable terms or at all. Any of these risks could impair our ability to fund our operations or limit our ability to expand our business, which could have a material adverse effect on our business, financial condition and results of operations.

Excluding non-recurring revenues in the second quarter of 2019 and 2021 from affiliates, we have incurred operating losses in every quarter since we launched our business and may continue to incur quarterly operating losses, which could negatively affect the value of our company.

Excluding non-recurring revenues that we earned from affiliates and one non-affiliate in 2021 and in the second quarter of fiscal 2019, we have incurred operating losses since our inception in 2014, and we may not be able to generate sufficient revenue in the future to generate operating income. We also expect our costs to increase materially in future periods, which could negatively affect our future operating results. We expect to continue to expend substantial financial and other resources on the continued development and future expansion of our business. The amount and timing of these costs are subject to numerous variables, and such initiatives may require additional funding.

In addition, we may incur significant costs in connection with our pursuit of next generation satellite communications technology or other new technologies such as our glass antenna. With respect to our growth, significant variables may include costs related to sales and marketing activities and administrative support functions, government defense spending, equipment subsidies to airlines and additional legal and regulatory expenses associated with operating in the international commercial aviation market. In addition, we expect to incur additional general and administrative expenses, including legal and accounting expenses, related to being a public company. Our investments may not result in revenue or growth in our business. If we fail to grow our overall business and generate revenue, our financial condition and results of operations would be adversely affected.

Our company has a limited operating history in its current business focus and evolving operational scale, which may make it difficult to evaluate our business and predict our future performance. 

Our company operates in rapidly evolving defense technology, communications, and autonomous systems markets, and we continue to face the risks and uncertainties associated with scaling an emerging business in dynamic and competitive industries. While we are advancing commercialization, customer engagement, deployment activities, and operational expansion, our limited operating history in our current strategic focus may make it difficult to accurately evaluate our business and predict future performance.

Any assessments of our current business and predictions that we or investors make regarding our future success, operational execution, or long-term viability may not be as accurate as they would be if we had a longer operating history at our current scale. We have encountered and expect to continue to encounter risks and difficulties frequently experienced by growing companies in rapidly changing industries, including those related to scaling operations, integrating technologies, managing strategic partnerships, securing customer adoption, and expanding deployment capabilities.

In addition, the size, timing, and nature of our market opportunities may continue to evolve as defense modernization priorities, autonomous systems adoption, satellite communications architectures, and operational requirements change over time. If we are unable to successfully address these risks and uncertainties, our business, financial condition, and results of operations could be materially adversely affected.

We expect to rely on a few key customers for all our initial revenue.

Our near term, future business will be substantially dependent on our relationship with a few key customers. There can be no assurance that we will be able to maintain our relationship with these customers. If we are unable to maintain and renew our relationship with these customers, or if our arrangement is modified so that the economic terms become less favorable to us, then our business would be materially adversely affected. 

The Markets in Which We Compete Are Highly Competitive and Our Competitors May Have Greater Resources than Us

The markets in which we compete are highly competitive and competition is increasing. In addition, because the markets in which we operate are constantly evolving and characterized by rapid technological change, it is difficult for us to predict whether, when and by whom new competing technologies, products or services may be introduced into our markets. Currently, we face substantial competition in each of our segments.

Many of our competitors have significant competitive advantages, including strong customer relationships, more experience with regulatory compliance, greater financial and management resources and access to technologies not available to us. Many of our competitors are also substantially larger than we are and may have more extensive engineering, manufacturing and marketing capabilities than we do. As a result, these competitors may be able to adapt more quickly to changing technology or market conditions or may be able to devote greater resources to the development, promotion and sale of their products.

Our ability to compete in each of our segments may also be adversely affected by limits on our capital resources and our ability to invest in maintaining and expanding our market share.

Our Anticipated Reliance on U.S. Government and Foreign Governments Contracts and Approvals Exposes Us to Significant Risks

We expect our defense segment is to represent a significant percentage of our total revenues in the future and is likely to consist of both U.S. Government and Foreign Government, in particular, Taiwanese government applications. Therefore, any significant disruption or deterioration of our relationship with the U.S. Government or with relevant Foreign Governments would significantly reduce our revenues. U.S. Government and Foreign Government business exposes us to various risks, including:

We must comply with and are affected by laws and regulations relating to the award, administration and performance of U.S. Government, and Foreign Government, contracts. Government contract laws and regulations affect how we do business with our customers and, in some instances, impose added costs on our business, including the establishment of compliance procedures. A violation of specific laws and regulations could result in the imposition of fines and penalties, the termination of our contracts or debarment from bidding on contracts. Substantially all of our potential U.S. Government or Foreign Government backlog scheduled for delivery could be terminated at the convenience of the U.S. Government, or a Foreign Government, because our potential contracts with the U.S. Government, or a Foreign Government, typically would be anticipated to provide that orders may be terminated with limited or no penalties. If we are unable to address any of the risks described above, or if we were to lose all or a substantial portion of our sales to the U.S. Government, or to a Foreign Government, it could materially harm our business and impair the value of our common stock.

The funding of U.S. Government, or Foreign Government, programs is subject to congressional appropriations, or such similar mechanism in each country. In the U.S., Congress generally appropriates funds on a fiscal year basis even though a program may extend over several fiscal years. Foreign Governments may appropriate funds with a materially similar or materially different approach. Consequently, programs are often only partially funded initially and additional funds are committed only as Congress, or the relevant Foreign Government body, makes further appropriations.

We may not be successful in our efforts to develop and monetize new products and services that are currently in development, including value-added resale of satellite bandwidth in certain geographies where we are already licensed or intend to be licensed, our multi-orbit universal satellite communications terminals that incorporate flat panel antennas (FPAs) or electronically steered arrays (ESAs) with both hardware and software defined modems, communications systems for manned and unmanned aerospace and defense platforms, system integration for manned and unmanned aerospace and defense platforms, our proprietary, full-dominance glass semiconductor antenna (also referred to as “FGSA”), distributed content delivery network (“CDN”), distributed computing or mesh computing applications and inflight entertainment and connectivity services.

In order to meet the evolving needs of our future customers and partners, we must continue to develop new products and services that are responsive to those needs. Our ability to realize the benefits of enabling our products, and to use these applications, including monetizing our services at a profitable price point, depends, in part, on the adoption and utilization of such applications by different potential customers including militaries, governments, defense contractors, airlines, other aircraft operators and other companies in the aviation industry such as aircraft equipment suppliers, mobile network operators, other telecommunications service operators and other companies in the telecommunications industry such as communications equipment suppliers, and we cannot be certain that our potential customers, outlined above will adopt such offerings in the near term or at all.

We also expect to continue to rely on third parties to operate and maintain the satellites and satellite constellations to be used to provide bandwidth to our potential customers, and we cannot be certain that such satellites or satellite constellations will be capable to meet the service level requirements, quality of service expectations or service reliability metrics necessary to meet the needs our potential customers. If we are not successful in our efforts to develop and monetize new products and services, including our operations-oriented communications services, our future business prospects, financial condition and results of operations would be materially adversely affected.

Our development and implementation of our semiconductor glass antenna, while poised to offer significant advantages in terms of performance and cost-effectiveness, introduces additional layers of risk. This technology involves highly specialized and novel manufacturing processes that may encounter operational hurdles, higher than anticipated production costs, or delays in scaling production to meet market demands. Additionally, our semiconductor glass antenna’s reliance on proprietary technology and materials might limit rapid adaptation in the face of changing industry standards or emerging competitive technologies. Given the rapid evolution of technology in the aerospace and telecommunications sectors, there is a risk that our newly developed technology may become obsolete more quickly than expected, or fail to gain sufficient market acceptance, thereby negatively impacting our competitive position and financial performance.

Our semiconductor glass antenna technology is not yet commercialized and has not been widely applied or developed for the markets being targeted by our company.

As an emerging technology, our semiconductor glass antenna has not undergone extensive field testing across different market applications, which is crucial for establishing its viability and reliability in real-world scenarios. The unproven nature of our semiconductor glass antenna in operational environments, particularly in space and satellite communications—a sector marked by exceptionally high requirements for accuracy and durability—presents a substantial risk. 

Without established performance data and market acceptance, the potential for our semiconductor glass antenna to meet the specific needs of satellite operators and other telecommunications stakeholders remains uncertain. This untested status could delay adoption and affect our ability to attract partnerships and customers necessary for successful market entry and scaling.

We cannot accurately predict future revenues or profitability in the emerging market for our semiconductor glass antenna technology.

The market for advanced satellite communication technologies is rapidly evolving. As is typical of a rapidly evolving industry, demand and market acceptance for newly developing technologies like our semiconductor glass antenna are subject to a high level of uncertainty. Moreover, since the market for satellite antenna technology is evolving, it is difficult to predict the future growth rate, if any, and size of this market.

Because of our limited development history with our semiconductor glass antenna and the emerging nature of the markets in which we expect to compete, we are unable to accurately forecast any revenues or our profitability that we might generate through the marketing of our semiconductor glass antenna technology. The market for our semiconductor glass antenna products and the long-term acceptance of our technology are uncertain, and our ability to attract and retain qualified personnel with industry expertise, particularly in engineering, sales, and marketing, is uncertain. To the extent we are unsuccessful in generating revenues from FGSA, we may be required to appropriately adjust spending to compensate for any unexpected revenue shortfall, or to reduce our operating expenses, causing us to forego potential revenue-generating activities.

We may face challenges in the development and monetization of new products and services, specifically related to our universal terminals.

In order to meet the ever-changing needs of our target customers, we must continuously innovate and introduce new offerings that cater to their requirements. However, the successful adoption and utilization of these products depend on the interest and acceptance of our target customers. There is no guarantee that they will embrace our offerings in the near future or at all.

Additionally, as we strive to provide comprehensive and efficient multi-orbit broadband connectivity, we may need to collaborate with third-party developers or technology providers to enhance our product and service offerings and ensure compatibility with our potential partners’ satellites and ground infrastructure. However, uncertainties exist regarding the seamless integration and effectiveness of these technical collaborations in meeting the unique needs of our potential customers. Should we encounter obstacles in effectively developing and monetizing new products and services, specifically pertaining to our universal terminals, it could significantly impact our business prospects, financial performance, and overall success in the market.

We may not be able to grow our business with our current and potential satellite and satellite constellation partners or to successfully negotiate agreements with satellite and satellite constellation partners whose bandwidth and services we do not currently resell or otherwise distribute.

Currently, our satellite partners include Eutelsat Group (including Eutelsat Communications, Eutelsat SA, and Eutelsat OneWeb) and a global U.S.-based satellite communications provider. We also engage with, and may pursue commercial opportunities involving, other satellite operators and service providers, including Intelsat S.A., Rivada Space Networks, Astranis Space Technologies Corp., Telesat Corp., and others. We seek to maintain the technical capability to support connectivity across multiple satellite networks and constellations, subject to applicable commercial arrangements and regulatory approvals. However, there can be no assurance that discussions with existing or prospective operators and service providers will result in definitive agreements, expanded authorizations, favorable commercial terms, or additional revenue opportunities.

We have acquired terminal equipment and satellite connectively and related services from SES and also have participated in demonstration and testing with SES under a confidential agreement with our development customer since 2022.

Negotiations with prospective satellite partners require substantial time, effort and resources. The time required to reach a final agreement with a satellite operator is unpredictable and may lead to variances in our operating results from quarter to quarter. We may ultimately fail in our negotiations and any such failure could harm our results of operations due to, among other things, a diversion of our focus and resources, actual costs and opportunity costs of pursuing these opportunities. To the extent that any negotiations with current or future potential satellite partners are unsuccessful, or any new agreements contain terms that are less favorable to us, our growth prospects could be materially and adversely affected.

We may not be able to grow our business with our current and potential aerospace and defense partners or to successfully negotiate agreements with aerospace and defense partners to which we do not currently provide our technologies or services.

Our primary potential aerospace & defense partners include prime contractors like Kratos Defense, Lockheed Martin, Anduril, Shield.AI, Boeing Defense, Airbus Defense, Northrop Grumman, General Atomics and RTX, although we do not yet have in place binding agreements to serve as a joint venture partner, mentor-protégé partner, subcontractor, vendor, or system integrator with these prime contractors. We are currently in discussions with certain of our potential aerospace & defense partners to enter into binding contracts together. Currently, we also have a number of potential aerospace& defense customers, including militaries and governments, regarding providing our products and services to meet their classified programs and missions.

Negotiations with prospective aerospace & defense partners and potential customers require substantial time, effort and resources. The time required to reach a final agreement with an aerospace & defense prime contractor or a military customer is unpredictable and may lead to variances in our operating results from quarter to quarter. We may ultimately fail in our negotiations and any such failure could harm our results of operations due to, among other things, a diversion of our focus and resources, actual costs and opportunity costs of pursuing these opportunities. To the extent that any negotiations with current or future potential aerospace & defense partners or customers are unsuccessful, or any new agreements contain terms that are less favorable to us, our growth prospects could be materially and adversely affected.

We may not be able to grow our business with our current airline partners or successfully negotiate agreements with airlines and other partners or grow our additional businesses.

Currently, our only airline partners are MJet GmbH, an Austrian-based private jet operator, MJet, Hong Kong Airlines Limited, a Hong Kong-based airline, or Hong Kong Airlines, and Vietjet Aviation Joint Stock Company, a Vietnam-based airline, or Vietjet, although we have not yet begun to provide our universal terminals for aviation with associated bandwidth services or our distributed content system for airlines to these companies under our agreement with them. We are currently in advanced negotiations or discussions with certain other airline partners to provide our products and services on additional aircraft in their fleets. We have no assurance that these efforts will be successful.

Negotiations with prospective airline partners require substantial time, effort and resources. The time required to reach a final agreement with an airline is unpredictable and may lead to variances in our operating results from quarter to quarter. We may ultimately fail in our negotiations, and any such failure could harm our results of operations due to, among other things, a diversion of our focus and resources, actual costs and opportunity costs of pursuing these opportunities. In addition, the terms of any future agreements could be materially different than the terms included in our existing agreement with Hong Kong Airlines. To the extent that any negotiations with current or future potential airline partners are unsuccessful, or any new agreements contain terms that are less favorable to us, our growth prospects could be materially and adversely affected.

We may not be able to successfully negotiate agreements with potential civilian telecommunications partners for our backhaul solutions or grow this additional business.

The varying awareness and sense of urgency regarding network resilience in different countries will directly impact the growth of our mobile backhaul business. Network resilience is the ability of a network to withstand and recover from unexpected disruptions, ensuring uninterrupted service and minimizing downtime. However, the importance placed on network resilience can differ across countries due to varying factors such as geographical location, infrastructure stability, and previous experiences with network failures. In countries where there is a high level of awareness and a sense of urgency regarding network resilience, there is a greater demand for robust mobile backhaul solutions. Customers in these regions prioritize the reliability and resilience of their networks, driving the adoption of mobile backhaul technologies that offer built-in redundancy, failover mechanisms, and efficient disaster recovery capabilities. Conversely, in regions where network resilience is not a primary concern or where there is limited awareness, the demand for advanced satellite mobile backhaul solutions may be relatively lower.

We are dependent on airline partners to be able to access our customers. We expect that future payments by these customers for our services to be provided to them will account for most, if not all, of our initial revenues.

Under our existing contract with MJet, Hong Kong Airlines and Vietjet, we will provide our equipment for installation on, and provide our services to passengers on, a portion of the aircraft operated by these airlines. We expect to enter into similar contracts with other airlines in the future but there is no assurance that we will be successful in signing up additional airline partners. We expect that revenue from the successful installation of our Aerkomm AirCinema cube on Hong Kong Airlines and Vietjet sometime in 2025 as well as the successful installation of our Aerkomm K++ System on MJet and Hong Kong Airlines in the fourth quarter of 2025 and first quarter of 2026 respectively, together with the monthly bandwidth charge, will account for a material portion of our projected initial revenue from commercial aviation once we begin our services.

As of the date of this Annual Report, we do not yet have any revenue from equipment sales and installation. Our growth will be dependent on our ability to have our equipment installed on the aircraft of airline partners and increased use of our service on installed aircraft. Any delays in installations under these contracts may negatively affect our ability to grow our user base and revenue.

We will be dependent on backhaul partners to be able to access our future customers. We expect that future payments by these customers for our services to be provided to them will account for a percentage of our revenues.

As of the date of this Annual Report, we do not yet have any revenue from equipment sales and the installation of our mobile backhaul business. Our growth will be dependent on our ability to have our equipment installed on 4G/5G mobile base stations. Any delays in installations negatively may affect our ability to increase our user base and revenue.

A failure to maintain customers’ satisfaction with our equipment or our service could have a material adverse effect on our revenue and results of operations.

Our relationships with our current and future development and commercialization partners are critical to the growth and ongoing success of our business. If partners are not satisfied with our equipment or our service for any reason, they may reduce efforts to co-market our service to their customers, which could result in lower usage and reduced revenue, which could in turn give our partners the right to terminate their contracts with us. In addition, airline dissatisfaction with us for any reason, including delays in obtaining certification for or installing our equipment, could negatively affect our ability to expand our service to additional commercialization partners or lead to claims for damages, which may be material, or termination rights under our existing or potential contracts with airline partners.

A failure to maintain backhaul customers satisfaction with our equipment or our service could have a material adverse effect on our revenue and results of operations.

If our mobile backhaul solution fails to effectively ensure network resilience, customers may turn to competitors’ offerings. This would have a direct impact on our revenue and operations. Network resilience is a critical requirement for customers seeking mobile backhaul solutions. Backhaul customers will rely on our services to maintain a robust and reliable network infrastructure that will be able to withstand disruptions and ensure uninterrupted connectivity. If our solution does not meet their expectations in terms of network resilience, customers may perceive it as a risk to their operations and seek alternative options.

We may experience network capacity constraints in our future operations regions, and we expect capacity demands to increase, and we may in the future experience capacity constraints internationally. If we are unable to successfully implement planned or future technology enhancements to increase our network capacity, or our airline partners do not agree to such enhancements, our ability to acquire and maintain sufficient network capacity and our business could be materially and adversely affected.

All providers of wireless connectivity services, including all providers of in-flight connectivity services, face certain limits on their ability to provide connectivity service, including escalating capacity constraints due to expanding consumption of wireless services and the increasing prevalence of higher bandwidth uses such as file downloads and streaming media content. The success of our business depends on our ability to provide adequate bandwidth to meet customer demands while in-flight. We may find it difficult to provide this adequate bandwidth. 

As the number of base stations increases with the implementation of 4G/5G mobile backhaul, it indicates a growing user base. However, when the network capacity reaches its initial design threshold, if we fail to timely develop new technologies to increase capacity and meet customer demands, such a failure will negatively impact our business. If we are unable to develop and introduce new technologies that can expand our network’s capacity, customers may experience congestion, slow data speeds, and poor service quality. This can lead to customer dissatisfaction, churn, and a negative impact on our business.

We face the risk of network capacity constraints in our future CDN business as the demand for high-speed content delivery continues to grow. If we are unable to effectively scale our network infrastructure to meet increasing capacity demands, this failure may result in degraded performance, slower content delivery, and potential customer dissatisfaction. To mitigate this risk, we need to continuously invest in expanding our network capacity and implementing advanced technologies to ensure optimal performance and scalability. Failure to do so may adversely impact our competitiveness and market position.

The demand for satellite bandwidth may decrease or develop more slowly than we expect. We cannot predict with certainty the development of the international satellite bandwidth market in general or the general market acceptance for our products and services

We have invested significant resources towards the roll-out of value-added resale of satellite bandwidth services, which represent part of our growth strategy. We face the risk that the U.S. and international markets for satellite bandwidth services may decrease or develop more slowly or differently than we currently expect, or that our services may not achieve widespread market acceptance. We may be unable to market and sell our services successfully and cost-effectively to a sufficiently large number of customers.

Our business depends on the continued proliferation of satellite-based broadband connectivity as a critical business or program need for our potential customers. The growth in demand for satellite broadband internet access services also depends in part on the continued and increased use of manned and unmanned airborne, maritime and land-based vehicles and platforms and the rate of evolution of data-intensive applications on such platforms and vehicles.

If satellite bandwidth ceases to be a critical feature in manned and unmanned platforms, if the rate of integration of satellite bandwidth on manned and unmanned platforms decreases or is slower than expected, or if the use of satellite bandwidth enabled devices or development of related applications decreases or grows more slowly than anticipated, the market for our services may be substantially diminished.

Competition from a number of companies, as well as other market forces, could result in price reduction, reduced revenue and loss of market share and could harm our results of operations.

We face strong competition from satellite-based providers of broadband services that include in-flight internet and live television services. Competition from such providers has in the past and could have in the future, an adverse effect on our ability to maintain or gain market share.

Most of our competitors are larger, more diversified corporations that have greater financial, marketing, production, and research and development resources. As a result, they may be better able to withstand the effects of periodic economic downturns or may offer a broader product line to customers. In addition, to the extent that competing in-flight connectivity services offered by commercial airlines that are not our airline partners are available on more aircraft or offer improved quality or reliability as compared to our service, our business and results of operations could be adversely affected. Competition could increase our sales and marketing expenses and related customer acquisition costs. We may not have the financial resources, technical expertise or marketing and support capabilities to continue to compete successfully. A failure to effectively respond to established and new competitors could have a material adverse impact on our business and results of operations.

Competition from various companies in the content delivery and edge computing industry, as well as market dynamics, may lead to price pressures, reduced revenue, and potential loss of market share, which could adversely affect our business operations. We operate in a highly competitive landscape where other providers of content delivery solutions and edge computing services offer products and services similar to those we intend to introduce. These competitors may have greater financial resources, established customer bases, and extensive marketing and research and development capabilities. Increased competition could result in price reductions, which may impact our profitability and revenue generation. Additionally, if competing solutions offer enhanced features, performance, or reliability compared to our planned CDN service, this could negatively impact our market position and customer adoption.

To maintain a competitive edge, we must continuously invest in innovation, technology advancements, and marketing efforts to differentiate ourselves from competitors. Failure to effectively address competitive pressures, anticipate market trends, and adapt to evolving customer needs may limit our growth potential and financial performance.

The price of satellite bandwidth may decrease or develop more slowly than we expect.

Due to the recent and anticipated proliferation of satellites and constellations into LEO, MEO, GEO and HEO orbits by our potential partners and potential competitors, as noted above, there is an increased supply of satellite bandwidth. As a result, in the event that a large quantity of satellite bandwidth is sold on the market without commensurate demand, we face the inherent risk that the price of satellite bandwidth may decrease or develop more slowly than we expect, or than our potential partners expect. As we aim to be a distribution partner, or value-added reseller, of satellite bandwidth, in the event that the price of satellite bandwidth decreases or develops more slowly than we expect, the potential revenue we may be able to generate in the future may decrease, which could have a material adverse effect on our growth prospects.

We may be unsuccessful in generating revenue from entertainment services.

We are currently developing a host of in-flight entertainment and connectivity service offerings to deliver to our future customers. We plan to offer a number of services to our customers, and no assurance can be given that we will ultimately be able to launch any service. Additionally, we plan to generate a revenue stream from our video on demand and other in-flight entertainment services. If we are unable to generate revenue from our services or if other entertainment services do not ultimately develop, our growth and financial prospects would be materially adversely impacted. 

The future growth prospects for our business depend, in part, on revenue from sale of equipment and bandwidth, advertising fees and e-commerce revenue share arrangements on passenger purchases of goods and services, including video and media services. Our ability to generate revenue from these service offerings depends on:

If we are unsuccessful in generating revenue from our service offerings, that failure could have a material adverse effect on our growth prospects. 

We may be unsuccessful in expanding our operations internationally.

Our ability to grow our international business involves various risks, including the need to invest significant resources in unfamiliar markets and the possibility that we may not realize a return on our investments in the near future or at all. In addition, we have incurred and expect to continue to incur significant expenses before we generate any material revenue in these new markets. Under our agreements with providers of satellite capacity, we are obligated to purchase bandwidth for specified periods in advance. If we are unable to generate sufficient passenger demand or airline partners to which we provide satellite service to their aircraft terminate their agreements with us for any reason during these periods, we may be forced to incur satellite costs in excess of connectivity revenue generated through such satellites.

Any future international operations may fail to succeed due to risks inherent in foreign operations, including:

As a result of these obstacles, we may find it difficult or prohibitively expensive to grow our business internationally or we may be unsuccessful in our attempt to do so, which could harm our future operating results and financial condition.

Acquisitions such as the Mesh Tech Transaction, Joint Ventures and Other Strategic Alliances May Have an Adverse Effect on Our Business; We May Fail to Realize the Anticipated Benefits of such Transactions.

In order to position ourselves to take advantage of growth opportunities, from time to time we make strategic acquisitions and enter into joint ventures and other strategic alliances that involve significant risks and uncertainties. For example, during 2023 we announced and closed on the Mesh Tech Transaction and announced an intent for a merger with EJECTT. Risks and uncertainties relating to these transactions and any other acquisitions, joint ventures and other strategic alliances we may undertake include:

We may not achieve the anticipated growth, cost savings or other benefits from the Mesh Tech Transaction or any other transaction we may undertake without adversely affecting current revenues and investments in future growth. Moreover, the anticipated growth, cost savings, synergies and other benefits of the Mesh Tech Transaction or any other transaction we may undertake may not be realized fully, or at all, or may take longer to realize than expected.

Additionally, we may inherit legal, regulatory, operational and other risks of the acquired business, whether known or unknown to us, which may be material to the combined company. Moreover, uncertainty about the effect of the recently closed transaction such as the Mesh Tech Transaction on employees, suppliers and customers may have an adverse effect on us and/or the acquired business, which uncertainties may impair our or its ability to attract, retain and motivate key personnel, and could cause our or its customers, suppliers and distributors to seek to change existing business relationships with either of us.

In addition, in connection with acquisitions, joint ventures or strategic alliances, we may incur debt, issue equity securities, assume contingent liabilities or have amortization expenses and write-downs of acquired assets, which could cause our earnings per share to decline. In addition, companies such as Mesh Tech that are private companies at the time of acquisition are not subject to reporting requirements and may not have accounting personnel specifically employed to review internal controls over financial reporting and other procedures or to ensure compliance with the requirements of the Sarbanes-Oxley Act of 2002. Bringing the legacy systems for these businesses into compliance with those requirements and integrating them into our compliance and accounting systems may cause us to incur substantial additional expenses, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources.

Mergers, acquisitions, joint ventures and strategic alliances are inherently risky and subject to many factors outside of our control, and we cannot be certain that our previous or future acquisitions, joint ventures and strategic alliances will be successful and will not materially adversely affect our business, operating results or financial condition. We may not be able to successfully integrate the businesses, products, technologies or personnel that we might acquire in the future, and any strategic investments we make may not meet our financial or other investment objectives. Any failure to do so could seriously harm our business, financial condition and results of operations.

An extended delay in the transfer of title to Aerkomm Taiwan of the Taiwan land parcel that we recently purchased could delay the building of our first satellite ground station and have a negative impact on our business prospects.

In July 2019, we completed payment of the NT$1,098,549,407, or US$35,861,589, purchase price for our acquisition of approximately 6.3 acres of undeveloped land (which we refer to as the Taiwan land parcel) located at the Taishui Grottoes in the Xinyi District of Keelung City, Taiwan. Our agent has received all of the necessary title transfer documentation from the seller however, according to the land use law of Taiwan, our Taiwan based subsidiary, Aerkomm Taiwan, needed to first, obtain a telecommunications license in Taiwan, which it has obtained, then second, submit a usage plan to the local land office and to obtain the necessary operational/development license or authorization for the intended usage before Aerkomm Taiwan can obtain an official certificate of title. Aerkomm Taiwan is currently preparing the plan of usage and has worked with various regulatory authorities to obtain the necessary license and approval to meet the local land use law requirements. 

We do not know at this time how long it will take to complete this process and receive the certificate of title to the parcel. Although we expected to complete the entire process and receive or certificate of title during 2024, the process is not yet completed. We do expect the process to be completed during 2025 and, once title to the Taiwan land parcel is transferred to Aerkomm Taiwan, we expect we may lease a portion of the land parcel, pursuant to the terms of an existing binding memorandum of understanding, to a Samoa based telecom company who intends to use the land for their own satellite ground station and to mortgage the land to be able to raise funds to build our first satellite ground station and data center.

If there is an extended delay in the transfer of the Taiwan land parcel title to Aerkomm Taiwan, our agreement with the Samoa telecom company may be terminated and we may not be able to raise the funds needed to build our ground station in a timely fashion. Either or both of these eventualities could have a negative impact on our business plans, prospects and future results of operations.

From time to time, we enter into memorandums of understanding (MOUs) with various third parties. If the transactions contemplated by these MOUs do not proceed, our results of operations and financial condition could be materially adversely affected.

From time to time, we enter into MOUs with potential prospective collaborative partners or potential customers. These MOUs typically are nonbinding and as a result, they only express the desires and understandings between the parties and do not create any legally binding rights, obligations or contracts except for certain customary provisions such as exclusivity, costs and expenses, confidentiality and governing law. Any binding obligation to proceed with the transactions contemplated by the MOUs would need to be included in a definitive agreement that is subject to negotiations of the parties, approvals by the board of directors of respective parties and in certain instances, approvals from regulatory authorities. There can be no assurance that we will be able to reach definitive agreements with any parties who may sign MOUs with us. If for whatever reason the transactions contemplated by signed MOUs do not proceed, our results of operations and financial condition could be materially adversely affected.

A future act or threat of terrorism or other events could result in a prohibition on the use of Wi-Fi enabled connectivity devices.

A future act of terrorism, the threat of such acts or other airline incidents could have an adverse effect on the airline industry. In the event of a terrorist attack, terrorist threats or unrelated airline accidents, the industry would likely experience significantly reduced passenger demand. The U.S. federal government or any other government could respond to such events by prohibiting the use of Wi-Fi enabled devices on aircraft, which would eliminate demand for our equipment and service. In addition, any association or perceived association between our equipment or service and incidents involving aircraft on which our equipment or service operates would likely have an adverse effect on demand for our equipment and service. Reduced demand for our products and services would adversely affect our business prospects, financial condition and results of operations.

The demand for in-flight broadband internet access services may decrease or develop more slowly than we expect. We cannot predict with certainty the development of the U.S. or international in-flight broadband internet access market or the market acceptance for our products and services.

We have invested significant resources towards the roll-out of commercial aviation service offerings, which represent part of our growth strategy. We face the risk that the U.S. and international markets for in-flight broadband internet access services may decrease or develop more slowly or differently than we currently expect, or that our services, including our offerings, may not achieve widespread market acceptance. We may be unable to market and sell our services successfully and cost-effectively to a sufficiently large number of customers.

Our business depends on the continued proliferation of Wi-Fi as a standard feature in mobile devices. The growth in demand for in-flight broadband internet access services also depends in part on the continued and increased use of laptops, smartphones, tablet computers, and other Wi-Fi enabled devices and the rate of evolution of data-intensive applications on the mobile internet. If Wi-Fi ceases to be a standard feature in mobile devices, if the rate of integration of Wi-Fi on mobile devices decreases or is slower than expected, or if the use of Wi-Fi enabled devices or development of related applications decreases or grows more slowly than anticipated, the market for our services may be substantially diminished. 

Increased costs and other demands associated with our growth could impact our ability to achieve profitability over the long term and could strain our personnel, technology and infrastructure resources.

We expect our costs to increase in future periods, which could negatively affect our future operating results. We expect to experience growth in our headcount and operations, which will place significant demands on our management, administrative, technological, operational and financial infrastructure. Anticipated future growth will require the outlay of significant operating and capital expenditure and will continue to place strains on our personnel, technology and infrastructure.

Our success will depend in part upon our ability to contain costs with respect to growth opportunities. To successfully manage the expected growth of our operations, on a timely and cost-effective basis we will need to continue to improve our operational, financial, technological and management controls and our reporting systems and procedures. In addition, as we continue to grow, we must effectively integrate, develop and motivate new employees, and we must maintain the beneficial aspects of our corporate culture. If we fail to successfully manage our growth, it could adversely affect our business, financial condition and results of operations.

Regulation by United States and foreign government agencies, including the Federal Aviation Administration and the Federal Communications Commission, may increase our costs of providing service or require us to change our services.

The commercial and private aviation industries, including civil aviation manufacturing and repair industries, are highly regulated in the United States by the FAA, in Europe by EASA as well as other compatible civil aviation authorities. FAA and/or EASA certification is required for all equipment we install on commercial aircraft and type certificated business aircraft, and certain of our operating activities require that we obtain FAA/EASA certification as a parts manufacturer. As discussed in more detail in the section entitled “Business—Regulation—Federal Aviation Administration,” FAA and/or EASA approvals required to operate our business include Supplemental Type Certificates, or STCs and Parts Manufacturing Authorities, or PMAs and Service Bulletins, or SBs. Obtaining SBs, STCs and PMAs is an expensive and time-consuming process that requires significant focus and resources. Any inability to obtain, delay in obtaining, or change in, needed FAA/EASA certifications, authorizations, or approvals, could have an adverse effect on our ability to meet our installation commitments, manufacture and sell parts for installation on aircraft, or expand our business and could, therefore, materially adversely affect our growth prospects, business and operating results.

The FAA/EASA closely regulates many of our operations. If we fail to comply with the FAA’s and/or EASA’s many regulations and standards that apply to our activities, we could lose the FAA/EASA certifications, authorizations, or other approvals on which our manufacturing, installation, maintenance, preventive maintenance, and alteration capabilities are based. In addition, from time to time, the FAA/EASA or comparable foreign authorities adopt new regulations or amend existing regulations. The FAA/EASA could also change its policies regarding the delegation of inspection and certification responsibilities to private companies, which could adversely affect our business. To the extent that any such new regulations or amendments to existing regulations or policies apply to our activities, those new regulations or amendments to existing regulations generally increase our costs of compliance.

As a broadband Internet provider, we must comply with the Communications Assistance for Law Enforcement Act of 1994, or CALEA, which requires communications carriers to ensure that their equipment, facilities and services can accommodate certain technical capabilities in executing authorized wiretapping and other electronic surveillance. Currently, our CALEA solution is being deployed in our network. However, we could be subject to an enforcement action by the FCC or law enforcement agencies for any delays related to meetings, or if we fail to comply with, any current or future CALEA, or similarly mandated law enforcement related obligations. Such enforcement actions could subject us to fines, cease and desist orders, or other penalties, all of which could adversely affect our business. Further, to the extent the FCC adopts additional capability requirements applicable to broadband Internet providers, its decision may increase the costs we incur to comply with such regulations. 

In addition to these U.S. agencies, we are also subject to regulation by foreign government agencies that choose to assert jurisdiction over us as a result of the service we provide on aircraft that fly international routes. Adverse decisions or regulations of these U.S. and foreign regulatory bodies could negatively impact our operations and costs of doing business and could delay the roll-out of our services and have other adverse consequences for us. Our ability to obtain certain regulatory approvals to offer our services internationally may also be the responsibility of a third party, and, therefore, may be out of our control. We are unable to predict the scope, pace or financial impact of regulations and other policy changes that could be adopted by the various governmental entities that oversee portions of our business.

The certification time for 4G/5G mobile backhaul by regulatory authorities varies among different countries. Each country has its own standards and procedures for assessing and certifying the compliance and safety of satellite communication products. Therefore, the time required for products to obtain certification may vary depending on the country. Some countries may have faster certification processes that can be completed in a shorter period of time. In other countries, the certification process may be relatively longer, requiring more time for review and testing. Therefore, when selling satellite communication systems for 4G/5G mobile backhaul in the global market, it is necessary to consider the differences in certification time among different countries which may increase our costs of providing service. We are unable to predict the scope, pace or financial impact of regulations and other policy changes that could be adopted by the various governmental entities that oversee portions of our business.

We are subject to various regulations, including those regulations promulgated by various federal, state and local regulatory agencies and legislative bodies and comparable agencies outside the United States where we may do business. The two U.S. government agencies that have primary regulatory authority over our operations are the Federal Aviation Administration, or FAA, and the Federal Communications Commission, or FCC, the European Administration and Safety Agency, or EASA and other compatible civil aviation authorities.

Regulation by government agencies, such as the Federal Communications Commission (FCC) and other relevant regulatory bodies, may impact our satellite internet service and our CDN business for households, resulting in increased costs and the need to modify our services. As a future provider of satellite internet service and CDN solutions for households, we will be subject to various regulations imposed by government agencies at the federal, state, and local levels. The FCC will play a significant role in regulating our future broadband internet services and ensuring compliance with applicable rules and requirements.

Compliance with FCC regulations, including licensing, spectrum usage, and service quality standards, is crucial to our operations. Failure to comply with FCC rules and guidelines may lead to penalties, fines, or restrictions that could adversely impact our ability to provide reliable and high-speed internet connectivity to households. Furthermore, other regulatory bodies may have jurisdiction over aspects of our planned satellite internet service and our CDN business, such as data privacy and consumer protection. Compliance with these regulations, including privacy laws and fair business practices, is essential to maintaining customer trust and avoiding legal and reputational risks.

We face the risk of potential cybersecurity breaches and data privacy concerns that could harm our reputation, disrupt our services, and result in legal and financial liabilities.

As a potential future provider of CDN services for households, we will handle a significant amount of data, including user information, content delivery, and advertising data. The increasing prevalence of cyber threats and data breaches poses a substantial risk to our business operations and customer trust. Despite implementing robust security measures, such as encryption protocols and firewalls, there is no guarantee that our systems will be immune to unauthorized access or malicious attacks. Cybercriminals could exploit vulnerabilities in our network infrastructure, software, or third-party services, leading to unauthorized access, data breaches, service disruptions, or theft of sensitive information.

A cybersecurity breach or unauthorized disclosure of customer data could result in significant reputational damage, loss of customer trust, and legal and financial liabilities. We may be subject to legal and regulatory obligations to notify affected individuals and authorities, provide remedies, and face potential lawsuits and fines. The costs associated with investigating and mitigating the effects of a breach, as well as potential legal settlements and regulatory penalties, could have a material adverse impact on our business and financial position.  

Furthermore, data privacy concerns and evolving privacy regulations, such as the General Data Protection Regulation (GDPR) in the European Union, require us to implement stringent data protection measures and obtain appropriate consents from users. Failure to comply with these regulations, or any changes in privacy laws or regulations, could result in legal consequences, reputational harm, and disruptions to our operations. To address these risks, we invest in cybersecurity technologies, conduct regular security assessments, and train our employees on best practices. However, the evolving nature of cyber threats and the sophistication of attackers require ongoing vigilance and investment in cybersecurity measures. It is essential for us to maintain the trust of our customers by safeguarding their data and addressing potential cybersecurity threats effectively. Failure to adequately protect against cyber threats and address data privacy concerns could adversely affect our reputation, customer relationships, and financial performance.

We may not be in compliance with all government regulations, which could harm our results of operations.

The current legal environment for Internet communications, products and services is uncertain and subject to statutory, regulatory or interpretive change. We cannot be certain that we, our vendors or our customers, are currently in compliance with applicable regulatory or other legal requirements in the countries in which our service is used. Our failure, or the failure of our vendors, customers and others with whom we transact business to comply with existing or future legal or regulatory requirements could materially adversely affect our business, financial condition and results of operations. Regulators may disagree with our interpretations of existing laws or regulations or the applicability of existing laws or regulations to our business, and existing laws, regulations and interpretations may change in unexpected ways.

If government regulation of the Internet changes, we may need to change the way we conduct our business to a manner that incurs greater operating expenses, which could harm our results of operations.

The current legal environment for Internet communications, products and services is uncertain and subject to statutory, regulatory or interpretive change. For example, our mobile wireless broadband Internet access services were previously classified as information services, and not as telecommunications services. Therefore, these services were not subject to FCC common carrier regulation. However, effective June 12, 2015, the FCC reclassified mobile (and fixed) broadband Internet access services as Title II telecommunications services pursuant to the Open Internet Order. The Open Internet Order also adopted broad net neutrality rules. For example, broadband providers may not block access to lawful content, applications, services, or non-harmful devices. Broadband providers also may not impair or degrade lawful Internet traffic on the basis of content, applications, services, or non-harmful devices. In addition, broadband providers may not favor some lawful Internet traffic over other lawful traffic in exchange for consideration of any kind, and they may not prioritize the content and services of their affiliates. Other than for paid prioritization, the rules contain an exception for “reasonable network management.” The Open Internet Order recognizes that whether a network management practice is reasonable varies according to the broadband technology involved and may provide more flexibility to implement network management practices in the context of our capacity-constrained air-to-ground and satellite broadband networks.

Other jurisdictions may adopt similar or different regulations that could affect our ability to use “network management” techniques. Likewise, the United States and the European Union, among other jurisdictions, are considering proposals regarding data protection that, if adopted, could impose heightened restrictions on certain of our activities relating to the collection and use of data of end users. Further, as we promote exclusive content and services and increase targeted advertising with our media partners to customers of our services, we may attract increased regulatory scrutiny.

We cannot be certain what positions regulators may take regarding our compliance with, or lack of compliance with, current and future legal and regulatory requirements or what positions regulators may take regarding any past or future actions we have taken or may take in any jurisdiction. Regulators may determine that we are not in compliance with legal and regulatory requirements, and impose penalties, or we may need to make changes to our services, which could be costly and difficult. Any of these events would adversely affect our operating results and business. 

Further Risks Related to Government Regulation.

Our international operations complicate our business and require us to comply with multiple regulatory environments. Historically, sales to customers outside the United States have accounted for all of our net sales. Risks associated with our international business activities may increase our costs and require significant management attention. These risks include restrictions on international travel, which may restrict our ability to grow and service our business; international shipping delays; tariffs; sanctions or other trade restrictions that preclude or restrict doing business with particular foreign governments, companies or individuals; technical challenges we may face in adapting our solutions to function with different satellite services and technology in use in various regions around the world; satisfaction of international regulatory requirements and delays and costs associated with procurement of any necessary licenses or permits; the potential unavailability of content licenses covering international waters and foreign locations; increased costs of providing customer support in multiple languages; increased costs of managing operations that are international in scope; potentially adverse tax consequences, including restrictions on the repatriation of earnings; protectionist laws and business practices that favor local competitors, which could slow our growth in international markets; potentially longer sales cycles; potentially longer accounts receivable payment cycles and difficulties in collecting accounts receivable; and economic and political instability in some international markets. We could incur additional legal compliance costs associated with our international operations and could become subject to legal penalties if we do not comply with certain regulations.

Our international operations subject us to a number of legal requirements, including the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and the customs, export, trade sanctions and anti-boycott laws of the United States, including those administered by the U.S. Customs and Border Protection, the Bureau of Industry and Security, the Department of Commerce, the Department of State, and the Office of Foreign Assets Control of the Treasury Department, as well as those of other nations.

In addition, many of the countries where our customers use our products and services have licensing and regulatory requirements for the importation and use of satellite communications and reception equipment, including the use of such equipment in territorial waters, the transmission of satellite signals on certain radio frequencies, the transmission of VoIP services using such equipment and the reception of certain video programming services. These laws and regulations are continually changing, making compliance complex.

We incur significant costs identifying and maintaining compliance with applicable licensing and regulatory requirements. Our training and compliance programs and our other internal control policies may be insufficient to protect us from acts committed by our employees, agents or third-party contractors. Any violation of these requirements by us or our employees, agents or third-party contractors may subject us to significant criminal and civil liability. Further, many of our commercial suppliers of satellite transmission capacity impose contractual obligations on us that permit them to suspend or terminate their provision of satellite services to support our network if we fail to maintain compliance with these laws and regulations.

The loss of access to satellite capacity would materially and adversely affect our satellite communications service offerings. We are subject to FCC rules and regulations, and any non-compliance could subject us to FCC enforcement actions, fines, loss of licenses and possibly restrictions on our ability to operate or offer certain of our services. The satellite communications industry in the United States is regulated by the Federal Communications Commission (FCC), and we are subject to FCC regulations relating to privacy, contributions to the Universal Service Fund, or USF, and other requirements. If we do not comply with FCC regulations, we could face enforcement actions, substantial fines, penalties, loss of licenses and possibly restrictions on our ability to operate or offer services. Any enforcement action by the FCC, which may be a public process, could hurt our reputation, impair our ability to sell our services to customers and harm our business and results of operations.

Privacy concerns and domestic or foreign laws and regulations may reduce demand for our services, increase our costs and harm our business. Our company and our customers can use our services to collect, use and store personal, confidential and sensitive information regarding the content and manner of usage of our services by them, their employees and maritime crews. Federal, state and foreign governments have adopted and are proposing more stringent laws and regulations regarding the collection, use, storage and transfer of information, such as the European Union’s General Data Protection Regulation (“GDPR”).

The costs of compliance with, and other burdens imposed by, such laws and regulations may limit the use and adoption of our services and reduce overall demand. Noncompliance with these laws and regulations could lead to significant remediation expenses, fines, penalties or other liabilities, such as orders or consent decrees that require modifications to our privacy practices, as well as reputational damage or third-party lawsuits seeking damages or other relief. For example, the GDPR imposes a strict data protection compliance regime with penalties of up to the greater of 2%-4% of worldwide revenue or €11-22 million.

Domestic and international legislative and regulatory initiatives may harm our ability, and the ability of our customers, to process, handle, store, use and transmit information, which could reduce demand for our services, increase our costs and force us to change our business practices. These laws and regulations are still evolving, are likely to be in flux and may be subject to uncertain interpretation for the foreseeable future. Our business also could be harmed if legislation or regulations are adopted, interpreted or implemented in a manner that is inconsistent from country to country or inconsistent with our current policies and practices or those of our customers. Risks related to owning our common stock The market price of our common stock may be volatile.

Our stock price has historically been volatile. Many factors may cause our stock price to fluctuate, including variations in quarterly results; the introduction of new products and services by us or our competitors; adverse business developments; reductions-in-force; changes in estimates of our performance or recommendations by securities analysts; the hiring or departure of key personnel; acquisitions or strategic alliances involving us or our competitors; market conditions in our industry; and the global macroeconomic and geopolitical environment. Broad market fluctuations may adversely affect our stock price. When the market price of a company’s stock drops significantly, stockholders often institute securities litigation against that company. Any such litigation could cause us to incur significant expenses defending against the claim, divert the time and attention of our management and result in significant damage.

Risks related to the regulation of our business we may be unable to obtain or maintain required authorizations or contractual arrangements.

Various types of U.S. domestic and international authorizations and contractual arrangements are required in connection with the products and services that we provide. See “Regulatory Environment.” Compliance with certain laws, regulations, conditions and other requirements, including the payment of fees, may be required to maintain the rights provided by such authorizations, including the rights to operate satellite earth stations in certain radio frequencies. Failure to comply with such requirements, or comply in a timely manner, could lead to the loss of such authorizations and could have a material adverse impact on our business, financial condition and results of operations.

We, or our group companies, currently hold authorizations to, among other things, operate various satellite earth stations (including but not limited to user terminals, facilities that interconnect with the internet backbone, and network hubs) and operate satellite space stations and/or use those space stations to provide service to certain jurisdictions. Such authorizations are conditioned upon meeting certain milestone conditions and/or due diligence requirements, which if not met or extended could result in loss of the authorization. While we anticipate that these authorizations will be extended or renewed in the ordinary course to the extent that they otherwise would expire, or replaced by authorizations covering more advanced facilities, we can provide no assurance that this will be the case. Our inability to timely obtain or maintain such authorizations could delay or preclude our operation of such satellites or our provision of products and services that rely upon such satellites.

Further, changes to the laws and regulations under which we operate could adversely affect our ability to obtain or maintain authorizations. Any of these circumstances could have a material adverse impact on our business, financial condition and results of operations. The satellites of our partners that we connect to in our business are subject to the regulatory authority of, and conditions imposed by, foreign governments, as well as contractual arrangements with third parties and the regulations and procedures of the ITU governing access to orbital and spectrum rights and the international coordination of satellite networks. The use of spacecraft by our partners in our business is subject to various conditions in the underlying authorizations held by us and third parties, as well as the requirements of the laws and regulations of those jurisdictions.

Any failure to meet these types of requirements in a timely manner, maintain our contractual arrangements, obtain or maintain our authorizations, or manage potential conflicts with the orbital slot rights afforded to third parties, could lead to us losing our rights to operate from these orbital locations or may otherwise require us to modify or limit our operations from these locations, which could materially adversely affect our ability to operate a satellite at full capacity or at all, and could have a material adverse impact on our business, financial condition and results of operations. 

Changes in the regulatory environment could have a material adverse impact on our competitive position, growth and financial performance.

Our business is highly regulated. We are subject to the regulatory authority of the jurisdictions in which we operate, including the United States and other jurisdictions around the world. Those authorities regulate, among other things, the launch and operation of satellites, the use of radio spectrum, the ability to operate satellites at specific orbital locations in space, the licensing of earth stations and other radio transmitters, the provision of communications services, privacy and data security, and the design, manufacture and marketing of communications systems and networking infrastructure. The space stations and ground network we use to provide our broadband services operate using some spectrum that is regulated for use on a primary basis for certain types of the satellite services we provide, some spectrum that is regulated for use on a shared basis with terrestrial wireless services, and some spectrum that is regulated primarily for terrestrial wireless and other uses but that we are authorized to use on a secondary or non-interference basis.

Moreover, spectrum availability varies from country to country, and even within countries, within our service areas. Laws and regulations affecting our business are subject to change in response to industry developments, new technology, and political considerations, among other things. Legislators and regulatory authorities in various countries are considering, and may in the future adopt, new laws, policies and regulations, as well as changes to existing regulations. We cannot predict when or whether applicable laws or regulations may come into effect or change, or what the cost and time necessary to comply with such new or updated laws or regulations may be. For example, cybersecurity and data privacy security and protection laws and regulations are evolving and present increasing compliance challenges, which may increase our costs, affect our competitiveness, cause reputational harm and expose us to substantial fines or other penalties.

Changes in laws or regulations, including changes in the way spectrum is regulated and/or in regulations governing our products and services, changes in the way spectrum is made available to us, or is allowed to be used by others, or competing uses of spectrum or orbital locations, could, directly or indirectly, affect our operations or the operations of our distribution partners, increase the cost of providing our products and services and make our products and services less competitive. Some regulators are considering new or additional terrestrial services in the spectrum in which we operate, which may not be compatible with the way we use, or plan to use, that same spectrum.

In certain instances, such changes could have a material adverse effect on our business, financial condition and results of operations. Among other things, changes to laws and regulations could materially harm our business by (1) affecting our ability to obtain or retain required governmental authorizations, (2) restricting our ability to provide certain products or services, (3) restricting development efforts by us and our customers, (4) making our current products and services less attractive or obsolete, (5) increasing our operational costs, or (6) making it easier or less expensive for our competitors to compete with us. Failure to comply with applicable laws or regulations could result in the imposition of financial penalties against us, the adverse modification or cancellation of required authorizations, or other material adverse actions. Any such matters could materially harm our business and impair the value of our common stock.

Our international sales and operations are subject to applicable laws relating to trade, sanctions, export controls and foreign corrupt practices, the violation of which could have a material adverse impact on our business.

We must comply with all applicable export control laws and regulations of the United States and other countries. U.S. export and control laws and regulations applicable to us include the Arms Export Control Act, the International Traffic in Arms Regulations (ITAR), the Export Control Reform Act of 2018 (ECRA) and the Export Administration Regulations (EAR). The export of certain satellite communications hardware, antenna control hardware, software services and technical data relating to communicating with satellites and communicating with manned and unmanned defense platforms is regulated by the U.S. Department of State under ITAR.

Certain satellite communications technologies and other items are controlled for export by the U.S. Department of Commerce under the EAR. Adverse changes in U.S. and Foreign export control laws that restrict our ability to conduct joint research activities with, or receive technical information from, US based defense contractor companies, will have a material adverse effect on our ability to conduct our business as currently contemplated. In addition, we must comply with trade and economic sanctions laws and regulations, including those administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC). We cannot provide certain products and services to certain countries or persons subject to U.S. trade sanctions unless we first obtain the necessary authorizations from OFAC. We are also subject to the Foreign Corrupt Practices Act and the UK Bribery Act, which generally bar bribes to foreign governments or officials.

Although we have in place policies for our respective employees, directors and officers, and we have clauses in our contracts with our distribution partners, resellers and other intermediaries, we cannot be certain that any such activities are not undertaken, and cannot guarantee that our policies and contracts will prevent situations occurring, including actions by distribution partners, resellers and other intermediaries, for which we may be held responsible. Non-compliance with any applicable trade control, sanctions, export control or anti-corruption laws or other legal requirements may result in criminal and/or civil penalties, disgorgement and/or other sanctions and remedial measures, and may result in unexpected legal or compliance costs.

Violations of any of these laws or regulations could also result in more onerous compliance requirements, more extensive debarments from export privileges or loss of authorizations needed to conduct aspects of our business, and could materially adversely affect our business, financial condition and results of operations. Moreover, any investigation of alleged violations of any such laws could have a material adverse impact on our reputation, business, financial condition and results of operations.

Our possession and use of personal information and the use of credit cards by our customers present risks and expenses that could harm our business. Unauthorized disclosure or manipulation of such data, whether through breach of our network security or otherwise, could expose us to costly litigation and damage our reputation.

Maintaining our network security is of critical importance because our online systems will store confidential registered users, employees and other sensitive data, such as names, email addresses, addresses and other personal information. We will depend on the security of our networks and the security of the network infrastructures of our third-party telecommunications service providers, our customer support providers and our other vendors. Unauthorized use of our, or our third-party service providers’, networks, computer systems and services could potentially jeopardize the security of confidential information, including credit card information, of our future customers.

There can be no assurance that any security measures we, or third parties, take will be effective in preventing these activities. As a result of any such breaches, customers may assert claims of liability against us as a result of any failure by us to prevent these activities. Further, our in-cabin network operates as an open, unsecured Wi-Fi hotspot, and non-encrypted transmissions users send over this network may be vulnerable to access by users on the same plane. These activities may subject us to legal claims, adversely impact our reputation, and interfere with our ability to provide our services, all of which could have a material adverse effect on our business prospects, financial condition and results of operations.

Failure to protect confidential customer data or to provide customers with adequate notice of our privacy policies could also subject us to liabilities imposed by United States federal and state regulatory agencies or courts. For example, the FCC’s Consumer Proprietary Network Information, or CPNI rules, applicable to our satellite-based offerings, require us to comply with a range of marketing and privacy safeguards. The Federal Trade Commission, or FTC, could assert jurisdiction to impose penalties related our service if it found our privacy policies or security measures to be inadequate under existing federal law. We could also be subject to certain state laws that impose data breach notification requirements, specific data security obligations, or other consumer privacy-related requirements. Our failure to comply with any of these rules or regulations could have an adverse effect on our business, financial condition and results of operations.

Other countries in which we may operate or from which our services may be offered, including those in the European Union, also have certain privacy and data security requirements that may apply to our business, either now or in the future. These countries’ laws may in some cases be more stringent than the requirements in the United States. For example, European Union member countries have specific requirements relating to cross border transfers of personal information to certain jurisdictions, including to the United States.

In addition, some countries have stricter consumer notice and/or consent requirements relating to personal information collection, use or sharing. Moreover, international privacy and data security regulations may become more complex. For example, the European Union is considering a draft proposed data protection regulation which, if enacted, may result in even more restrictive privacy-related requirements. Our failure to comply with other countries’ privacy or data security-related laws, rules or regulations could also have an adverse effect on our business, financial condition and results of operations.

In addition, we expect that our customers in the future will use credit cards to purchase our products and services. Problems with our or our vendors billing software could adversely affect our customer satisfaction and could cause one or more of the major credit card companies to disallow our continued use of their payment services. In addition, if our billing software fails to work properly and, as a result, we do not automatically charge our subscribers’ credit cards on a timely basis or at all, our business, financial condition and results of operations could be adversely affected.

Our reputation and business could be materially harmed as a result of data breaches, data theft, unauthorized access or hacking.

Our success depends, in part, on the secure and uninterrupted performance of our information technology systems. These systems may be subject to damage or interruption from, among other things, earthquakes, adverse weather conditions, other natural disasters, terrorist attacks, acts of war, rogue employees, power loss, telecommunications failures and cybersecurity risks. An increasing number of companies have disclosed breaches of their security, some of which have involved sophisticated and highly targeted attacks on their computer networks. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems, change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures.

Additionally, outside parties may attempt to induce employees or users to disclose sensitive or confidential information in order to gain access to data. If unauthorized parties gain access to our information technology systems, they may be able to misappropriate assets or sensitive information (such as personal information of our customers, business partners and employees), cause interruption in our operations, corrupt our data or computers, or otherwise damage our reputation and business. In such circumstances, we could be held liable to our customers or other parties, or be subject to regulatory or other actions for breaching privacy rules. Any compromise of our security could result in a loss of confidence in our security measures, and subject us to litigation, civil or criminal penalties, and negative publicity that could adversely affect our financial condition and results of operations.

We could also suffer other negative consequences, including significant remediation costs, significant increased cybersecurity protection costs, loss of material revenues resulting from attacks on our satellites or technology, and the unauthorized use of proprietary information or the failure to retain or attract customers following an attack. Further, if we are unable to comply with the security standards established by banks and the payment card industry, we may be subject to fines, restrictions, and expulsion from card acceptance programs, which could adversely affect our operations.

One customer accounted for 100% of our total revenues in fiscal year 2024.

The failure of this customer, or our inability to secure additional orders for any reason, including any downturn in their business or financial condition or our inability to renew this contract with this customer or obtain new contracts when they expire, could materially harm our business and impair the value of our common stock.

Our development contracts may be difficult for us to comply with and may expose us to third-party claims for damages, and we may experience losses from fixed-price contracts.

We may be party to government and commercial contracts involving the development of new products. We derived 100% of our total revenues for fiscal year 2025 from one such development contract. These contracts typically contain strict performance obligations and project milestones. We cannot assure you we will comply with these performance obligations or meet these project milestones in the future. If we are unable to comply with these performance obligations or meet these milestones, our current and future customers may terminate these contracts and, under some circumstances, recover damages or other penalties from us. We cannot assure you that the other parties to any such contract will not terminate the contract or seek damages from us. If other parties elect to terminate their contracts or seek damages from us, it could materially harm our business and impair the value of our common stock. 

A substantial majority of revenues in our peer’s government systems and commercial networks segments are derived from contracts with fixed prices. These types of contracts carry the risk of potential cost overruns because we could assume all of the cost burden. We could assume greater financial risk on fixed-price contracts than on other types of contracts because if we do not anticipate technical problems, estimate costs accurately or control costs during performance of a fixed-price contract, it would significantly reduce our net profit or cause a loss on the contract.

In the past, our peers have experienced significant cost overruns and losses on fixed-price contracts. Because these kinds of contracts typically involve new technologies and applications and can last for years, unforeseen events, such as technological difficulties, fluctuations in the price of raw materials, a significant increase in or a sustained period of increased inflation, problems with suppliers and cost overruns, can result in the contractual price becoming less favorable or even unprofitable to our peers over time (which, especially in the case of sharp increases in or significant sustained inflation, could happen quickly and have long-lasting impacts).

Furthermore, if we do not meet contract deadlines or specifications, we may need to renegotiate contracts on less favorable terms, be forced to pay penalties or liquidated damages or suffer major losses if the customer exercises its right to terminate. Although we will attempt to accurately estimate costs for any fixed-price contracts, we cannot assure you our estimates will be adequate or that substantial losses on fixed-price contracts will not occur in the future. If we are unable to address any of the risks described above, it could materially harm our business, financial condition and results of operations, and impair the value of our common stock.