10-Q: IX Acquisition Corp. Reports Q1 2025 Results Amidst Ongoing Merger Efforts and Nasdaq Delisting

Sentiment:

Quarterly Report 26 June 2025 4:27 PM

IX Acquisition Corp., a SPAC, reported a net income of $242,125 for Q1 2025, a significant improvement from the prior year's loss, as it continues efforts to finalize a business combination with AERKOMM Inc. despite recent delisting from Nasdaq.

Delay expectedThe company has repeatedly extended its business combination deadline, from an initial April 12, 2023, to the current July 12, 2025, with potential for further extension to October 12, 2025.The Merger Agreement with AERKOMM Inc. has undergone multiple amendments, including one on April 12, 2025, specifically to amend and restate the closing date term, indicating delays in finalizing the merger.

Capital raiseThe company is targeting a PIPE Investment of $35,000,000 in its common stock at $11.50 per share in connection with the merger with AERKOMM.AERKOMM is exercising reasonable best efforts to obtain a total PIPE Investment Amount of at least $65,000,000 (inclusive of SAFE Agreements), with a minimum of $45,000,000 minus SAFE investment amounts.The company entered into Simple Agreements for Future Equity (SAFE Agreements) with certain investors, targeting an aggregate of not less than $15,000,000. As of December 4, 2024, SAFE Agreements for an aggregate of $4,997,200 have been entered into, converting at $11.50 per share upon merger closing.The Sponsor has provided ongoing financial support through an Extension Promissory Note, with an outstanding principal of $4,242,575 as of March 31, 2025, which can be converted into warrants up to $1,500,000 at the Sponsor's election.

Worse than expectedThe company was delisted from Nasdaq, a significant negative event that impacts liquidity and investor confidence.Despite a net income for the quarter, the company continues to operate with a substantial working capital deficit of approximately $6.9 million, indicating ongoing financial strain.The company's ability to continue as a going concern remains in substantial doubt, highlighting fundamental financial instability.The continued reliance on the Sponsor's promissory note, which has increased to over $4.2 million, underscores the company's persistent need for external funding to sustain operations and extensions.The reduction in interest income from the Trust Account due to the change in investment strategy negatively impacts the potential per-share redemption value for public shareholders.

Summary

IX Acquisition Corp. (IXAQF) reported a net income of $242,125 for the three months ended March 31, 2025, a substantial improvement compared to a net loss of $721,742 for the same period in 2024.
Operating and formation expenses significantly decreased to $281,488 in Q1 2025 from $880,791 in Q1 2024.
The company's cash held in the Trust Account increased to $19,245,085 as of March 31, 2025, from $18,949,539 at December 31, 2024.
The company is actively pursuing a business combination with AERKOMM Inc. under a Merger Agreement, which has been amended multiple times, most recently on April 12, 2025, to amend the closing date term.
The Combination Period has been extended multiple times, with the latest extension payments made in May and June 2025, extending the deadline to July 12, 2025.
The company was delisted from the Nasdaq Stock Market on June 6, 2025, due to non-compliance with the 36-month business combination rule and is now quoted on the OTC Pink Markets under symbols IXAQF and IXQWF.
The Sponsor has provided significant financial support through a promissory note, with an outstanding principal of $4,242,575 as of March 31, 2025, for working capital and extension contributions.
A PIPE Investment target of $35,000,000 and SAFE Agreements totaling $4,997,200 (as of December 4, 2024) are in place to support the business combination with AERKOMM.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the Nasdaq delisting, ongoing going concern doubts, significant working capital deficit, and repeated delays in completing the business combination, despite a quarterly net income driven by non-cash warrant revaluation and reduced operating expenses. The company's future remains highly uncertain and dependent on a successful, albeit delayed, merger.

Positives

The company achieved a net income of $242,125 for Q1 2025, a significant turnaround from a net loss of $721,742 in Q1 2024.
Operating and formation expenses were substantially reduced to $281,488 in Q1 2025 from $880,791 in Q1 2024, indicating improved cost management.
Cash held in the Trust Account increased to $19,245,085, providing funds for the potential business combination.
The Merger Agreement with AERKOMM Inc. continues to be actively pursued, with recent amendments indicating ongoing commitment to the transaction.
Deferred underwriting fees have been significantly reduced from $12,100,000 to $6,050,000, contingent on the target's pre-money valuation exceeding $100 million, which benefits the company's financial position post-merger.

Negatives

The company was delisted from the Nasdaq Stock Market on June 6, 2025, due to its failure to complete a business combination within 36 months, resulting in its securities now trading on the less liquid OTC Pink Markets.
The company has a working capital deficit of approximately $6.9 million as of March 31, 2025.
The company's ability to continue as a going concern is in substantial doubt, contingent on the successful consummation of a business combination by October 12, 2025.
Interest income from the Trust Account decreased to $150,613 in Q1 2025 from $345,617 in Q1 2024, due to the change in investment strategy from U.S. government securities to an interest-bearing demand deposit account to mitigate Investment Company Act risk.
The company has an outstanding promissory note to a related party (Sponsor) of $4,242,575 as of March 31, 2025, which has increased from $3,856,641 at December 31, 2024, indicating continued reliance on sponsor funding for extensions and working capital.

Risks

There is substantial doubt about the company's ability to continue as a going concern if it cannot complete its initial Business Combination by October 12, 2025, which would lead to mandatory liquidation.
The company may receive less interest on funds held in the Trust Account due to the change from investing in U.S. government treasury obligations to an interest-bearing demand deposit account, potentially reducing the amount public shareholders receive upon redemption or liquidation.
The company faces the risk of being deemed an investment company under the Investment Company Act, which could force it to abandon the Business Combination and liquidate, causing warrants to expire worthless.
Geopolitical conflicts (e.g., Ukraine, Middle East) could lead to increased market volatility or affect potential target companies, making it harder to complete a Business Combination.
New SEC SPAC rules (effective July 1, 2024) may increase costs and time needed to complete a business combination, potentially forcing an earlier liquidation.

Future Outlook

The company's primary future outlook is centered on the successful consummation of its initial business combination with AERKOMM Inc. The Merger Agreement has been amended to adjust the closing date term, indicating ongoing efforts to finalize the transaction. The company continues to extend its combination period monthly, with the current deadline set for July 12, 2025, and a potential extension up to October 12, 2025. The company aims to secure the PIPE Investment and SAFE Agreements to fund the combined entity. However, the ability to continue as a going concern is dependent on completing this business combination, and the recent delisting from Nasdaq adds uncertainty to its future public market presence.

Management Comments

"Our entire activity since inception up to March 31, 2025 related to our formation, the preparation for the Initial Public Offering, and since the closing of the Initial Public Offering, the search for a prospective initial business combination target and we have been working on the initial business combination since it was entered into."
"We will not be generating any operating revenues until the closing and completion of our initial business combination, at the earliest."
"Our management has determined that the liquidity condition and mandatory liquidation, should a business combination not occur, and potential subsequent dissolution raises substantial doubt about our ability to continue as a going concern for a period of time within one year after the date that the condensed consolidated financial statements included in this Report under Item 1. Financial Statements are issued."
"We plan to address this uncertainty through the initial business combination. There is no assurance that our plans to consummate the initial business combination will be successful or successful within the Combination Period."

Industry Context

This filing highlights the inherent challenges and complexities within the Special Purpose Acquisition Company (SPAC) market, particularly for those struggling to complete a de-SPAC transaction within regulatory timelines. IX Acquisition Corp.'s repeated extensions of its business combination deadline, significant redemptions by public shareholders, and ultimate delisting from Nasdaq are indicative of the broader difficulties faced by many SPACs in a less favorable market environment. The shift of Trust Account funds from higher-yielding securities to demand deposit accounts to avoid being deemed an investment company reflects a common regulatory concern for SPACs. The ongoing efforts to secure PIPE and SAFE investments, alongside the sponsor's continued financial support, are typical strategies employed by SPACs to bolster deal certainty and meet minimum cash conditions for a merger, especially as traditional IPOs and direct listings gain favor over SPACs.

Comparison to Industry Standards

**Trust Account Management:** The company's decision to move Trust Account funds from U.S. government securities to an interest-bearing demand deposit account on November 13, 2023, aligns with a broader industry trend among SPACs to mitigate the risk of being deemed an unregistered investment company by the SEC. This move, while reducing interest income (e.g., Q1 2025 income of $150,613 vs. Q1 2024 income of $345,617), is a direct response to SEC guidance and is a common practice for SPACs seeking to avoid regulatory scrutiny, such as those that have faced similar challenges like Digital World Acquisition Corp. (DWAC) or other SPACs that have had to adjust their investment strategies.
**Extension and Redemptions:** The company's multiple extensions of its business combination deadline (from April 2023 to July 2025, with potential to October 2025) and the associated high redemption rates (e.g., 18,336,279 shares redeemed for ~$189M in April 2023, 1,817,650 shares for ~$19.99M in December 2023, and 1,235,698 shares for ~$14.3M in October 2024) are consistent with the challenging SPAC market conditions observed since late 2021. Many SPACs, such as those that failed to complete deals or saw significant redemptions like Gores Guggenheim (now Polestar) or Churchill Capital Corp IV (now Lucid Group), have experienced similar pressures, leading to reduced trust sizes and increased reliance on sponsor funding.
**Nasdaq Delisting:** The delisting from Nasdaq on June 6, 2025, due to failure to complete a business combination within 36 months (Nasdaq IM 5101-2) is a significant negative and reflects a common outcome for SPACs that cannot finalize a deal within their mandated timeframe. This is a stark contrast to successful de-SPACs that maintain their listing, such as DraftKings (DKNG) or Virgin Galactic (SPCE), which completed their combinations and continued trading on major exchanges. The move to OTC Pink Markets (IXAQF, IXQWF) signifies a loss of liquidity and institutional investor interest, typical for companies that fail to meet major exchange listing requirements.
**Sponsor Support and Promissory Notes:** The increasing reliance on the Sponsor's promissory note (outstanding balance of $4,242,575 as of March 31, 2025) for working capital and extension contributions is a standard mechanism in the SPAC industry when trust funds are depleted by redemptions or cannot be used for operating expenses. This is a common feature seen in many SPACs, where the sponsor provides bridge financing to keep the SPAC alive while it seeks or finalizes a target, though the increasing balance highlights the prolonged nature of IX Acquisition Corp.'s search and merger process.
**PIPE and SAFE Investments:** The pursuit of a PIPE Investment ($35M target) and SAFE Agreements ($4.997M secured as of Dec 4, 2024) for the target company, AERKOMM, is a standard practice in de-SPAC transactions to provide additional capital and validate the valuation of the combined entity. However, the fact that the full PIPE target has not been met (only SAFE agreements totaling ~$5M secured against a $15M SAFE target and $35M PIPE target) indicates potential challenges in attracting sufficient investor interest, a common hurdle for SPACs in a less enthusiastic market compared to the SPAC boom of 2020-2021.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Chief Executive Officer	Karen Bach	Noah Aptekar	2024-09-23	Resignation of previous CEO; current CEO (Noah Aptekar) also serves as CFO and COO.
Independent Director, Chair of Audit Committee, Member of Compensation Committee	Andrew Bartley	Eduardo Marini	2024-09-23	Resignation of previous director; new director appointed to roles.
Independent Director, Member of Audit Committee, Member of Compensation Committee	Teresa Barger		2024-09-23	Resignation of previous director.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Amendment to Memorandum and Articles of Association	Eliminated the limitation that the company's net tangible assets must be at least $5,000,001 for redemptions and business combinations, and provided for the right of Class B ordinary shares to convert into Class A ordinary shares on a one-for-one basis.	2023-04-10	Increased flexibility for redemptions and business combination requirements, and simplified share structure by allowing Class B conversion to Class A.
Amendment to Merger Agreement	Provided that any lock-up period applicable to the Sponsor or company officers/directors/affiliates will terminate at merger closing, changed escrowed Sponsor shares from 50% to 25%, added provision for AERKOMM to pay company's working capital/extension expenses, and added termination clause if AERKOMM enters bankruptcy or fails to remove a bankruptcy petition.	2024-09-25	Adjusts post-merger lock-up terms, reduces Sponsor's escrowed share burden, shifts some financial responsibility to AERKOMM, and provides clearer termination conditions for the merger.
Amendment to Merger Agreement	Amended and restated the definitions of 'Indebtedness' and 'Working Capital'.	2025-02-12	Clarifies financial terms within the merger agreement, potentially impacting the final deal structure or post-merger financial calculations.
Amendment to Merger Agreement	Amended and restated the closing date term.	2025-04-12	Adjusts the timeline for the completion of the business combination, indicating a delay in the original schedule.

Legal Proceedings

To the knowledge of management, there is no litigation currently pending or contemplated against the company, its officers or directors in their capacity as such, or against any of its property.

Related Party Transactions

The Sponsor was issued 5,750,000 Class B ordinary shares for $25,000, which were subsequently converted to Class A ordinary shares.
Anchor Investors purchased 1,747,879 Founder Shares from the Sponsor for $0.004 per share, totaling $6,992, with an estimated fair value of $13,860,681.
The company has an Administrative Support Agreement with the Sponsor to pay up to $10,000 per month for office space and administrative services, though the Sponsor waived these fees for the three months ended March 31, 2025 and 2024.
The Sponsor has provided loans to the company through an Extension Promissory Note, with an outstanding principal of $4,242,575 as of March 31, 2025, which can be converted into warrants.
The company had $13,877 due from a related party as of March 31, 2025 and December 31, 2024, for expenses covered on behalf of its Sponsor.

Stakeholder Impact

**Shareholders:** Public shareholders have experienced significant dilution through multiple redemptions (over $220 million in total) and the company's delisting from Nasdaq, which reduces liquidity and potentially the value of their holdings. The ongoing uncertainty regarding the business combination and the 'going concern' warning pose substantial risks to their investment.
**Sponsor:** The Sponsor continues to provide financial support through promissory notes and has waived administrative fees, demonstrating commitment to the business combination, but also bearing increased financial risk due to the prolonged process and potential for warrants to expire worthless if the merger fails.
**AERKOMM Inc. (Target Company):** The merger agreement with AERKOMM is subject to amendments and funding conditions (PIPE/SAFE), indicating that AERKOMM's future is tied to the successful completion of this transaction. Delays and funding shortfalls could impact AERKOMM's strategic plans.
**Underwriters:** The underwriters of the IPO have agreed to forfeit a significant portion of their deferred underwriting fees ($6.05 million remaining from $12.1 million), contingent on the business combination's success, impacting their potential earnings from the deal.
**Creditors:** The company's 'going concern' warning and working capital deficit suggest potential risks for creditors, although the Trust Account funds are protected for public shareholders.

Next Steps

Consummate the initial Business Combination with AERKOMM Inc. by the extended deadline of July 12, 2025, or potentially October 12, 2025, if further extensions are exercised.
Finalize the PIPE Investment and secure additional SAFE Agreements to meet the target funding for the business combination.
Address the substantial doubt about the company's ability to continue as a going concern, primarily through the completion of the Business Combination.
Manage operations and expenses to ensure sufficient capital is available to complete the business combination or for potential liquidation.
Continue to be quoted on the OTC Pink Markets following Nasdaq delisting.

Key Dates

Date	Description
2021-03-01	Company incorporated in the Cayman Islands.
2021-10-06	Registration Statement on Form S-1 declared effective.
2021-10-12	Initial Public Offering (IPO) consummated, selling 23,000,000 Units at $10.00 per Unit, generating $230,000,000. Simultaneously, 7,150,000 Private Placement Warrants sold for $7,150,000. $231,150,000 placed in Trust Account.
2023-04-10	Extraordinary general meeting of shareholders held; Extension Proposal, Redemption Limitation Amendment Proposal, and Founder Share Amendment Proposal approved. Holders of 18,336,279 Class A ordinary shares redeemed for approximately $189 million.
2023-04-12	Initial deadline for Business Combination (18 months from IPO). Amended and Restated Memorandum and Articles of Association took effect.
2023-04-13	Sponsor advanced $160,000 for the first monthly extension contribution. Company issued Original Extension Promissory Note to Sponsor.
2023-05-09	Board of Directors elected to extend the Combination Period from May 12, 2023, to June 12, 2023. Sponsor elected to convert all 4,002,121 Class B Founder Shares into Class A ordinary shares.
2023-05-12	Sponsor deposited $160,000 Contribution into the Trust Account for the second extension.
2023-06-09	Board of Directors elected to extend the Combination Period from June 12, 2023, to July 12, 2023.
2023-06-12	Sponsor deposited $160,000 Contribution into the Trust Account for the third extension.
2023-07-11	Board of Directors elected to extend the Combination Period from July 12, 2023, to August 12, 2023.
2023-07-12	Sponsor deposited $160,000 Contribution into the Trust Account for the fourth extension.
2023-08-09	Board of Directors elected to extend the Combination Period from August 12, 2023, to September 12, 2023.
2023-08-11	Sponsor deposited $160,000 Contribution into the Trust Account for the fifth extension.
2023-09-07	Board of Directors elected to extend the Combination Period from September 12, 2023, to October 12, 2023.
2023-09-08	Company issued Amended and Restated Extension Promissory Note to Sponsor for up to $2.5 million.
2023-09-12	Sponsor deposited $160,000 Contribution into the Trust Account for the ninth extension.
2023-10-09	Company received Nasdaq notice of non-compliance with 400 total holders rule.
2023-10-12	Board of Directors elected to extend the Combination Period from October 12, 2023, to November 12, 2023. Company filed Form 8-K disclosing Nasdaq notice.
2023-10-13	Sponsor deposited $160,000 Contribution into the Trust Account for the seventh extension.
2023-11-13	Board of Directors elected to extend the Combination Period from November 12, 2023, to December 12, 2023. Company instructed Continental to liquidate Trust Account investments and hold funds in an interest-bearing demand deposit account.
2023-12-11	Extraordinary general meeting held; Second Extension Amendment Proposal approved, extending the Combination Period to October 12, 2024. Holders of 1,817,650 Public Shares redeemed for approximately $19.99 million.
2023-12-12	Company filed Second Extension Amendment with Cayman Islands Registrar of Companies. Company made $50,000 deposit for December extension contribution.
2024-01-12	Sponsor deposited $50,000 into Trust Account for the tenth extension.
2024-01-18	Company provided update to Nasdaq on compliance plan.
2024-01-19	Board elected to extend Deadline Date from January 12, 2024, to February 12, 2024.
2024-02-12	Company, Merger Sub, and AERKOMM entered into Amendment No. 2 to the Merger Agreement.
2024-02-17	Sponsor deposited $50,000 into Trust Account for the eleventh extension.
2024-02-20	Company updated Nasdaq on compliance plan.
2024-03-12	Sponsor deposited $50,000 into Trust Account for the twelfth extension.
2024-03-29	Company entered into Merger Agreement with Merger Sub and AERKOMM. Company obligated to enter into SAFE Agreements for at least $15,000,000.
2024-04-03	Filed Annual Report on Form 10-K for fiscal year ended December 31, 2024.
2024-04-04	Company entered into Amended & Restated Fee Reduction Agreements with Cantor Fitzgerald & Co. and Odeon Capital Group LLC.
2024-04-06	Deadline for company to demonstrate compliance with Nasdaq's 400 total holders rule.
2024-04-18	Company amended and restated convertible promissory note to Sponsor, increasing principal to up to $3,500,000.
2024-04-19	Sponsor deposited $50,000 into Trust Account for the thirteenth extension.
2024-04-30	Company received Nasdaq notice of non-compliance with Minimum Total Holders Rule.
2024-05-13	Company and AERKOMM entered into one new SAFE Agreement and amended another.
2024-05-17	Sponsor deposited $50,000 into Trust Account for the fourteenth extension.
2024-06-18	Hearing held before Nasdaq Hearings Panel regarding non-compliance with Minimum Total Holders Rule.
2024-06-20	Sponsor deposited $50,000 into Trust Account for the fifteenth extension.
2024-06-26	Company and AERKOMM entered into one new SAFE Agreement. As of this date, 5,612,494 Class A ordinary shares and 1,747,879 Class B ordinary shares were issued and outstanding.
2024-07-08	Company canceled one SAFE Agreement entered into on May 13, 2024.
2024-07-23	Sponsor deposited $50,000 into Trust Account for the sixteenth extension.
2024-08-05	Nasdaq Hearing Panel granted company's request for continued listing and confirmed compliance with Minimum Total Holders Rule.
2024-08-12	As of this date, SAFE Agreements for an aggregate of $2,585,200 had been entered into.
2024-08-16	Sponsor deposited $50,000 into Trust Account for the seventeenth extension.
2024-09-20	Company issued Third Amended and Restated Extension Promissory Note to Sponsor for up to $4.5 million. Sponsor deposited $50,000 into Trust Account for the eighteenth extension.
2024-09-23	Karen Bach resigned as CEO. Andrew Bartley and Teresa Barger resigned as independent directors. Eduardo Marini appointed as independent director, chair of audit committee, and member of compensation committee.
2024-09-25	Company, Merger Sub, and AERKOMM entered into an amendment to the Merger Agreement.
2024-09-29	Company and AERKOMM signed engagement letter to appoint Benchmark as non-exclusive PIPE placement agent.
2024-10-07	Company received Nasdaq notice of non-compliance with IM 5101-2 (36-month business combination rule) and was subject to delisting. Company submitted initial listing application for de-SPAC combination.
2024-10-09	Extraordinary general meeting held; Third Extension Amendment Proposal approved, extending the Combination Period to October 12, 2025. Holders of 1,235,698 shares redeemed for approximately $14.3 million. Company and AERKOMM entered into an amendment with Benchmark regarding fees.
2024-10-11	Nasdaq provided comment letter and required documentation for initial business combination closing.
2024-10-12	Sponsor deposited $48,311 for November extension contribution. Trading in company's securities suspended on Nasdaq.
2024-11-13	Company made $48,311 deposit for December extension contribution.
2024-11-26	Company and AERKOMM entered into a second amendment with Benchmark regarding sub-placement agents.
2024-12-04	Company and AERKOMM entered into one new SAFE Agreement. As of this date, SAFE Agreements for an aggregate of $4,997,200 had been entered into.
2024-12-09	Company and AERKOMM entered into Sub Placement Agreement with Yuanta Securities (Hong Kong) Company Limited.
2024-12-10	Company withdrew appeal of Nasdaq delist determination. Hearing held regarding delisting.
2024-12-12	Trading in company's securities suspended on Nasdaq.
2024-12-13	Company made $48,311 deposit for January extension contribution.
2025-01-17	Company made $48,311 deposit for February extension contribution.
2025-02-12	Company made $48,311 deposit for March extension contribution.
2025-03-12	Company made $48,311 deposit for April extension contribution.
2025-03-31	End of the quarterly period covered by this report.
2025-04-12	Company, Merger Sub, and AERKOMM entered into Amendment No. 3 to the Merger Agreement to amend and restate the closing date term.
2025-05-13	Company made $48,311 deposit for May extension contribution.
2025-06-06	Company filed Form 25 Notification of Delisting with the SEC, removing its securities from Nasdaq. Securities began quoting on OTC Pink Markets.
2025-06-13	Company made $48,311 deposit for June extension contribution, extending life until July 12, 2025.
2025-06-26	Date of filing of this Quarterly Report on Form 10-Q.
2025-07-12	Current extended deadline for Business Combination.
2025-10-12	Latest possible extended deadline for Business Combination if all extensions are exercised.

Recommendation

sell

Keywords

SPAC, Special Purpose Acquisition Company, Business Combination, AERKOMM Inc., Merger Agreement, 10-Q Filing, Financial Report, Nasdaq Delisting, Trust Account, PIPE Investment, SAFE Agreements, Going Concern, Warrants, SEC Filings, Financial Performance, Corporate Governance

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