Aerkomm Inc.

Aerkomm Malta previously leased approximately 150 square meters of space at our Malta office. The lease expired on December 31, 2020, and the monthly lease payment was €2,000. The lease was renewed on December 6, 2020, for a further period of one year and extended until the end of February 2022 under the same conditions. The lease terminated at the end of February 2022 and Aerkomm Malta gave up this office space at the end of the lease.

We believe that our properties have been adequately maintained, are generally in good condition, and are suitable and adequate for our business.

• Risks Related to Economic and Market Conditions
• 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.
• 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.
• We expect to rely on a few key customers for all our initial revenue.
• The Markets in Which We Compete Are Highly Competitive and Our Competitors May Have Greater Resources than Us
• Our Anticipated Reliance on U.S. Government and Foreign Governments Contracts and Approvals Exposes Us to Significant Risks
• 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.
• We cannot accurately predict future revenues or profitability in the emerging market for our semiconductor glass antenna technology.
• We may face challenges in the development and monetization of new products and services, specifically related to our universal terminals.
• 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.
• 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.
• 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.
• We may not be able to successfully negotiate agreements with potential civilian telecommunications partners for our backhaul solutions or grow this additional business.
• 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.
• 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.
• 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.
• 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.
• 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.
• 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
• 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.
• The price of satellite bandwidth may decrease or develop more slowly than we expect.
• We may be unsuccessful in generating revenue from entertainment services.
• We may be unsuccessful in expanding our operations internationally.
• 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.
• 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.
• 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.
• A future act or threat of terrorism or other events could result in a prohibition on the use of Wi-Fi enabled connectivity devices.
• 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.
• 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.
• 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.
• 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.
• 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.
• We may not be in compliance with all government regulations, which could harm our results of operations.
• 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.
• Further Risks Related to Government Regulation.
• Risks related to the regulation of our business we may be unable to obtain or maintain required authorizations or contractual arrangements.
• Changes in the regulatory environment could have a material adverse impact on our competitive position, growth and financial performance.
• 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.
• 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.
• Our reputation and business could be materially harmed as a result of data breaches, data theft, unauthorized access or hacking.
• One customer accounted for 100% of our total revenues in fiscal year 2024.
• 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.
• Our reliance on a limited number of third parties to manufacture and supply our products and the components contained therein exposes us to various risks.
• We depend upon third parties to manufacture equipment components and to provide services for our network.
• We depend on a limited number of key employees who would be difficult to replace.
• Because we conduct business internationally, we face additional risks, including risks related to global political and economic conditions, changes in regulation and currency fluctuations.
• Our Investment in Ejectt Inc. (formerly Yuanjiu Inc.) could result in losses to us.
• We may fail to recruit, train and retain the highly skilled employees that are necessary to remain competitive and execute our growth strategy. The loss of one or more of our key personnel could harm our business.
• We have identified material weaknesses in our internal control over financial reporting. If we fail to develop or maintain an effective system of internal controls, we may not be able to accurately report our financial results and prevent fraud. As a result, current and potential stockholders could lose confidence in our financial statements, which would harm the trading price of our common stock.
• Expenses or liabilities resulting from litigation could adversely affect our results of operations and financial condition.
• Technological advances may harm our business.
• We may have exposure to foreign currency risks in the future and our future hedging activities could create losses.
• We will source our content from studios, distributors and other content providers, and any reduction in the volume of content produced by such content providers could hurt our business by providing us with less quality content to choose from and resulting in potentially less attractive offerings for customers.
• We are a holding company with no operations of our own, and we depend on our subsidiaries for cash.
• Risks Related to Our Indebtedness.
• Our Level of Indebtedness May Adversely Affect Our Ability to Operate Our Business, Remain in Compliance with Debt Covenants, React to Changes in Our Business or the Industry in which We Operate, or Prevent Us from Making Payments on Our Indebtedness.
• We may not be able to generate sufficient cash to service all of our indebtedness and fund our working capital and capital expenditures or refinance our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
• Risks Relating to our Industries.
• The satellites that we currently rely on or may rely on in the future have minimum design lives but could fail or suffer reduced capacity before then.
• Satellites that are not yet in service are subject to construction and launch related risks.
• Satellite Failures or Degradations in Satellite Performance for our Partners Could Affect Our Business, Financial Condition and Results of Operations.
• Our Partners’ Satellites Have a Finite Useful Life, and Their Actual Operational Life May Be Shorter than Their Design Life.
• Our Partners’ New or Proposed Satellites are Subject to Significant Risks Related to Construction and Launch that Could Limit Our Ability to Utilize these Satellites.
• Our Partners’ Potential Satellite Losses May Not Be Fully Covered By Insurance, or at All
• Our future airline industry business may be affected by factors beyond the airlines’ control. The airline industry is highly competitive and sensitive to changing economic conditions.
• Limited satellite availability may delay or curtail our ability to develop our satellite backhaul business.
• Our planned CDN business will be subject to certain industry-specific risks that may affect our operations and financial performance.
• Air traffic congestion at airports, air traffic control inefficiencies, weather conditions, such as hurricanes or blizzards, increased security measures, new travel-related taxes, the outbreak of disease or any other similar event could harm the airline industry.