UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2024
or
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from to
Commission File Number: 001-40878
IX ACQUISITION CORP.
(Exact name of registrant as specified in its charter)
| Cayman Islands |
|
98-1586922 |
(State or other jurisdiction of
incorporation or organization) |
|
(I.R.S. Employer
Identification No.) |
Arch 124
53 Davies Street
London,
United Kingdom
(Address of principal executive offices)
W1K 5JH
(Zip Code)
+44 02039830450
(Registrant’s telephone number, including
area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of
the Act:
| Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange
on which registered |
| Units,
each consisting of one Class A Ordinary Share and one-half of one redeemable Warrant |
|
IXAQU |
|
The
Nasdaq Stock Market LLC |
| Class A
Ordinary Shares, par value $0.0001 per share |
|
IXAQA |
|
The
Nasdaq Stock Market LLC |
| Warrants,
each exercisable for one Class A Ordinary Share for $11.50 per share |
|
IXAQW |
|
The
Nasdaq Stock Market LLC |
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 x No ¨
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405
of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes x No ¨
Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth
company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| |
Large accelerated filer ¨ |
Accelerated filer ¨ |
| |
Non-accelerated filer x |
Smaller reporting company x |
| |
|
Emerging growth company x |
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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
As of August 19,
2024, there were 6,848,192 Class A ordinary shares, par value $0.0001 per share (the “Class A ordinary shares”),
and 1,747,879 Class B ordinary shares, par value $0.0001 per share (the “Class B ordinary shares,” together with
the Class A ordinary shares, the “ordinary shares”), of the registrant issued and outstanding.
IX ACQUISITION CORP.
FORM 10-Q FOR THE QUARTER ENDED JUNE 30,
2024
TABLE OF CONTENTS
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
IX ACQUISITION CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
| | |
June 30, | | |
December 31, | |
| | |
2024 | | |
2023 | |
| | |
| (Unaudited) | | |
| | |
| Assets | |
| | | |
| | |
| Current assets: | |
| | | |
| | |
| Cash | |
$ | 7,655 | | |
$ | 24,278 | |
| Prepaid expenses | |
| 41,505 | | |
| 30,030 | |
| Due from related party | |
| 4,380 | | |
| | |
| Total current assets | |
| 53,540 | | |
| 54,308 | |
| Non-current assets: | |
| | | |
| | |
| Cash held in the Trust Account | |
| 32,430,440 | | |
| 31,440,528 | |
| Total Assets | |
$ | 32,483,980 | | |
$ | 31,494,836 | |
| | |
| | | |
| | |
| Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit: | |
| | | |
| | |
| Current liabilities: | |
| | | |
| | |
| Accounts payable | |
$ | 116,281 | | |
$ | — | |
| Accrued expenses | |
| 1,836,656 | | |
| 1,256,667 | |
| Extension Promissory Note | |
| 3,103,268 | | |
| 1,889,768 | |
| Total current liabilities | |
| 5,056,205 | | |
| 3,146,435 | |
| Non-current liabilities: | |
| | | |
| | |
| Derivative warrant liabilities | |
| 1,492,000 | | |
| 373,000 | |
| Deferred underwriting fee payable | |
| 6,050,000 | | |
| 6,050,000 | |
| Total non-current liabilities | |
| 7,542,000 | | |
| 6,423,000 | |
| Total Liabilities | |
| 12,598,205 | | |
| 9,569,435 | |
| | |
| | | |
| | |
| Commitments and Contingencies (Note 6) | |
| | | |
| | |
| | |
| | | |
| | |
| Class A ordinary shares subject to possible redemption, $0.0001 par value, at approximately $11.39 and $11.05 per share, respectively; 2,846,071 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively | |
| 32,430,440 | | |
| 31,440,528 | |
| | |
| | | |
| | |
| Shareholders’ Deficit: | |
| | | |
| | |
| Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding | |
| — | | |
| — | |
| Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; 4,002,121 non-redeemable shares issued or outstanding as of June 30, 2024 and December 31, 2023, respectively | |
| 401 | | |
| 401 | |
| Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 1,747,879 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively | |
| 174 | | |
| 174 | |
| Additional paid-in capital | |
| 776,644 | | |
| 1,766,556 | |
| Accumulated deficit | |
| (13,321,884 | ) | |
| (11,282,258 | ) |
| Total shareholders’ deficit | |
| (12,544,665 | ) | |
| (9,515,127 | ) |
| Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit | |
$ | 32,483,980 | | |
$ | 31,494,836 | |
The accompanying notes are an integral part
of the unaudited condensed consolidated financial statements.
IX ACQUISITION CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS
| | |
For the Three Months Ended
June 30, | | |
For the Six Months Ended
June 30, | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| Operating and formation expenses | |
$ | 729,679 | | |
$ | 225,714 | | |
$ | 1,610,470 | | |
$ | 503,246 | |
| Loss from operations | |
| (729,679 | ) | |
| (225,714 | ) | |
| (1,610,470 | ) | |
| (503,246 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Other income (expense): | |
| | | |
| | | |
| | | |
| | |
| Income from cash and investments held in the Trust Account | |
| 344,295 | | |
| 1,372,568 | | |
| 689,912 | | |
| 3,481,050 | |
| Interest income (expense) on operating account | |
| — | | |
| 19 | | |
| (68 | ) | |
| 88 | |
| Gain on forfeiture of deferred underwriting fee payable | |
| — | | |
| 336,985 | | |
| — | | |
| 336,985 | |
| Change in fair value of derivative warrant liabilities | |
| (932,500 | ) | |
| 186,500 | | |
| (1,119,000 | ) | |
| (186,500 | ) |
| Total other income (expense), net | |
| (588,205 | ) | |
| 1,896,072 | | |
| (429,156 | ) | |
| 3,631,623 | |
| | |
| | | |
| | | |
| | | |
| | |
| Net (loss) income | |
$ | (1,317,884 | ) | |
$ | 1,670,358 | | |
$ | (2,039,626 | ) | |
$ | 3,128,377 | |
| | |
| | | |
| | | |
| | | |
| | |
| Basic and diluted weighted average shares outstanding, Class A ordinary shares | |
| 2,846,071 | | |
| 4,951,910 | | |
| 2,846,071 | | |
| 2,503,465 | |
| Basic and diluted net (loss) income per share, Class A ordinary shares | |
$ | (0.15 | ) | |
$ | 0.28 | | |
$ | (0.24 | ) | |
$ | 1.04 | |
| Basic and diluted weighted average shares outstanding, Class A (non-redeemable) and Class B ordinary shares | |
| 5,750,000 | | |
| 998,788 | | |
| 5,750,000 | | |
| 504,943 | |
| Basic and diluted net (loss) income per share, Class A (non-redeemable) and Class B ordinary shares | |
$ | (0.15 | ) | |
$ | 0.28 | | |
$ | (0.24 | ) | |
$ | 1.04 | |
The accompanying notes are an integral part
of the unaudited condensed consolidated financial statements.
IX ACQUISITION CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF CHANGES IN SHAREHOLDERS’ DEFICIT
FOR THE THREE AND SIX MONTHS ENDED JUNE 30,
2024
| | |
Class A | | |
Class B | | |
Additional | | |
| | |
Total | |
| | |
Ordinary Shares | | |
Ordinary Shares | | |
Paid-in | | |
Accumulated | | |
Shareholders’ | |
| | |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | |
| Balance — January 1, 2024 | |
| 4,002,121 | | |
$ | 401 | | |
| 1,747,879 | | |
$ | 174 | | |
$ | 1,766,556 | | |
$ | (11,282,258 | ) | |
$ | (9,515,127 | ) |
| Remeasurement of Class A ordinary shares to redemption amount | |
| — | | |
| — | | |
| — | | |
| — | | |
| (495,617 | ) | |
| — | | |
| (495,617 | ) |
| Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (721,742 | ) | |
| (721,742 | ) |
| Balance — March 31, 2024 (Unaudited) | |
| 4,002,121 | | |
$ | 401 | | |
| 1,747,879 | | |
$ | 174 | | |
$ | 1,270,939 | | |
$ | (12,004,000 | ) | |
$ | (10,732,486 | ) |
| Remeasurement of Class A ordinary shares to redemption amount | |
| — | | |
| — | | |
| — | | |
| — | | |
| (494,295 | ) | |
| — | | |
| (494,295 | ) |
| Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (1,317,884 | ) | |
| (1,317,884 | ) |
| Balance — June 30, 2024 (Unaudited) | |
| 4,002,121 | | |
$ | 401 | | |
| 1,747,879 | | |
$ | 174 | | |
$ | 776,644 | | |
$ | (13,321,884 | ) | |
$ | (12,544,665 | ) |
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023
| | |
Class A | | |
Class B | | |
Additional | | |
| | |
Total | |
| | |
Ordinary Shares | | |
Ordinary Shares | | |
Paid-in | | |
Accumulated | | |
Shareholders’ | |
| | |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | |
| Balance — January 1, 2023 | |
| — | | |
$ | — | | |
| 5,750,000 | | |
$ | 575 | | |
$ | — | | |
$ | (13,192,169 | ) | |
$ | (13,191,594 | ) |
| Remeasurement of Class A ordinary shares to redemption amount | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (2,108,482 | ) | |
| (2,108,482 | ) |
| Net income | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,458,019 | | |
| 1,458,019 | |
| Balance — March 31, 2023 (Unaudited) | |
| — | | |
$ | — | | |
| 5,750,000 | | |
$ | 575 | | |
$ | — | | |
$ | (13,842,632 | ) | |
$ | (13,842,057 | ) |
| Remeasurement of Class A ordinary shares to redemption amount | |
| — | | |
| — | | |
| — | | |
| — | | |
| (1,852,568 | ) | |
| — | | |
| (1,852,568 | ) |
| Gain on forfeiture of deferred underwriting fee payable | |
| — | | |
| — | | |
| — | | |
| — | | |
| 5,713,015 | | |
| — | | |
| 5,713,015 | |
| Class B to Class A Conversion | |
| 4,002,121 | | |
| 401 | | |
| (4,002,121 | ) | |
| (401 | ) | |
| — | | |
| — | | |
| — | |
| Net income | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,670,358 | | |
| 1,670,358 | |
| Balance — June 30, 2023 (Unaudited) | |
| 4,002,121 | | |
$ | 401 | | |
| 1,747,879 | | |
$ | 174 | | |
$ | 3,860,447 | | |
$ | (12,172,274 | ) | |
$ | (8,311,252 | ) |
The accompanying notes are an integral part
of the unaudited condensed consolidated financial statements.
IX ACQUISITION CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
| | |
For the Six Months Ended June 30, | |
| | |
2024 | | |
2023 | |
| Cash Flows from Operating Activities: | |
| | | |
| | |
| Net (loss) income | |
$ | (2,039,626 | ) | |
$ | 3,128,377 | |
| Adjustments to reconcile net (loss) income to net cash used in operating activities: | |
| | | |
| | |
| Change in fair value of derivative warrant liabilities | |
| 1,119,000 | | |
| 186,500 | |
| Income from cash and investments held in the Trust Account | |
| (689,912 | ) | |
| (3,481,050 | ) |
| Gain on forfeiture deferred underwriting fee payable | |
| — | | |
| (336,985 | ) |
| Changes in operating assets and liabilities: | |
| | | |
| | |
| Prepaid expenses | |
| (15,855 | ) | |
| 127,000 | |
| Accounts payable | |
| 116,280 | | |
| 119,661 | |
| Accrued expenses | |
| 579,990 | | |
| 76,615 | |
| Net cash used in operating activities | |
| (930,123 | ) | |
| (179,882 | ) |
| | |
| | | |
| | |
| Cash Flows from Investing Activities: | |
| | | |
| | |
| Cash withdrawn from Trust Account in connection with Redemptions | |
| — | | |
| 188,985,305 | |
| Cash deposited in Trust Account | |
| (300,000 | ) | |
| (480,000 | ) |
| Net cash used in investing activities | |
| (300,000 | ) | |
| 188,505,305 | |
| | |
| | | |
| | |
| Cash Flows from Financing Activities: | |
| | | |
| | |
| Proceeds from subscription receivable | |
| — | | |
| — | |
| Repayment from advance to related party, net | |
| — | | |
| — | |
| Proceeds from convertible promissory note-related party | |
| 1,213,500 | | |
| 689,968 | |
| Redemption of ordinary shares | |
| — | | |
| (188,985,305 | ) |
| Proceeds from note payable/promissory to related party | |
| — | | |
| — | |
| Net cash provided by (used in) financing activities | |
| 1,213,500 | | |
| (188,295,337 | ) |
| | |
| | | |
| | |
| Net change in cash | |
| (16,623 | ) | |
| 30,086 | |
| Cash - beginning of the period | |
| 24,278 | | |
| 70,236 | |
| Cash - end of the period | |
$ | 7,655 | | |
$ | 100,322 | |
| | |
| | | |
| | |
| Supplemental disclosure of noncash investing and financing activities: | |
| | | |
| | |
| Deferred underwriting fee reduction | |
$ | — | | |
| 5,713,015 | |
| Remeasurement of Class A ordinary shares to redemption amount | |
$ | 989,912 | | |
$ | 3,961,050 | |
The
accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
IX ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
JUNE 30, 2024
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Overview
IX Acquisition
Corp. (the “Company”, “our Company,” “we” or “us”) is a blank check company incorporated
in the Cayman Islands on March 1, 2021. The Company was formed for the purpose of entering into a merger, share exchange, asset
acquisition, share purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”).
The Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination. The Company
is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and
emerging growth companies.
The Company has
a wholly-owned subsidiary that was created on March 15, 2024, AKOM Merger Sub, Inc., a Nevada corporation and a wholly owned
subsidiary of the Company (“Merger Sub”) and AERKOMM Inc., a Nevada corporation (“AERKOMM”). The transactions
contemplated by the Merger Agreement are intended to serve as the Company’s initial Business Combination. See Note 6 for further
information.
As of June 30,
2024, the Company had not commenced any operations. All activity for the period from March 1, 2021 (inception) through June 30,
2024 relates to the Company’s formation and the initial public offering consummated on October 12, 2021 (“Initial Public
Offering”), which is described below, and since the Initial Public Offering, the search for a prospective initial Business Combination.
The Company generates non-operating income in the form of interest income from the amount held in the Trust Account (as defined below).
The Registration
Statement on Form S-1 initially filed with the U.S. Securities and Exchange Commission (the “SEC”) on September 16,
2021 (File No. 333-259567), as amended (the “Registration Statement) for the Initial Public Offering was declared effective
on October 6, 2021. On October 12, 2021, the Company consummated the Initial Public Offering of 23,000,000 Units (the “Units”
and, with respect to the Class A ordinary shares included in the Units sold, the “Public Shares”, and the warrants included
in the Units sold, the “Public Warrants”), including 3,000,000 Units that were issued pursuant to the underwriter’s
exercise of its over-allotment option in full, at $10.00 per Unit, generating total gross proceeds of $230,000,000 (see Note 3).
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the sale of 7,150,000 warrants (the “Private Placement
Warrants”, and together with the Public Warrants, the “warrants”) at a price of $1.00 per Private Placement Warrant
in a private placement to IX Acquisition Sponsor, LLC (the “Sponsor”), Cantor Fitzgerald & Co. (“Cantor”)
and Odeon Capital Group, LLC (“Odeon”), generating gross proceeds of $7,150,000 (the “Private Placement”) (see
Note 4).
Transaction costs
amounted to $30,639,304, consisting of $4,000,000 of underwriting fees, $12,100,000 of deferred underwriting fees (See Note 6 for the
difference on underwriting agreement), $13,853,689 for the excess of the fair value over the sales price of Founder Shares (as defined
in Note 5) sold to the Anchor Investors (as defined in Note 5), and $685,615 of other offering costs.
Upon the closing
of the Initial Public Offering on October 12, 2021, an amount of $231,150,000 from the net proceeds of the sale of the Units in
the Initial Public Offering and the sale of the Private Placement Warrants in the Private Placement was placed in a U.S.-based trust
account (the “Trust Account”) and was initially invested only in the U.S. Department of the Treasury (the “Treasury”)
obligations with maturities of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment
Company Act of 1940, as amended (the “Investment Company Act”), which invest only in direct Treasury obligations. To mitigate
the risk that the Company might be deemed to be an investment company for purposes of the Investment Company Act, on November 13,
2023 the Company instructed Continental Stock Transfer & Trust Company (“Continental”) to liquidate the investments
held in the Trust Account, and instead to hold the funds in the Trust Account in an interest-bearing demand deposit account at a bank,
with Continental continuing to act as trustee, until the earliest of: (i) the completion of the initial Business Combination; (ii) the
redemption of any Public Shares properly tendered in connection with a shareholder vote to amend the amended and restated memorandum
and articles of association of the Company currently in effect, as amended, (the “Amended and Restated Memorandum and Articles
of Association”) to modify the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the
Company does not complete the initial Business Combination within the Combination Period (as defined below); and (iii) absent an
initial Business Combination within the Combination Period, the return of the funds held in the Trust Account to the Public Shareholders
(as defined below) as part of the redemption of the Public Shares.
IX ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
JUNE 30, 2024
If the Company
does not invest the proceeds as discussed above, the Company may be deemed to be subject to the Investment Company Act. If the Company
is deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses
for which the Company has not allotted funds and may hinder the Company’s ability to complete a Business Combination. If the Company
is unable to complete the initial Business Combination, the Public Shareholders may only receive their pro rata portion of the funds
in the Trust Account that are available for distribution to Public Shareholders, and the warrants will expire worthless.
The Company will
provide its holders of the outstanding Public Shares (the “Public Shareholders”) with the opportunity to redeem all or a
portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting
called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek
shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. All Public
Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially
$10.05 per Public Share, plus (x) any pro rata interest earned on the funds held in the Trust Account and not previously released
to the Company to pay its tax obligations and (y) the per share portion of the Contribution (as defined below) (see Notes 5). There
will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. All Public Shares
subject to redemption were recorded at redemption value and classified as temporary equity upon the completion of the Initial Public
Offering in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”)
Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”).
The Company will
proceed with a Business Combination if a majority of the shares voted are voted in favor of the Business Combination. If a shareholder
vote is not required under applicable law or stock exchange listing requirements and the Company does not decide to hold a shareholder
vote for business or other reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association as
then in effect, conduct the redemptions pursuant to the tender offer rules of the SEC, and file tender offer documents containing
substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination.
If the Company seeks shareholder approval in connection with a Business Combination, the holders of the Founder Shares prior to the Initial
Public Offering (other than the Anchor Investors) (the “Initial Shareholders”), the Anchor Investors, and the Company’s
executive officers and directors (“Management” or “Management Team”) agreed to vote any Founder Shares held by
them, and any Public Shares purchased in or after the Initial Public Offering in favor of approving a Business Combination. Additionally,
each Public Shareholder may elect to redeem their Public Shares irrespective of whether they (i) vote for or against the proposed
transaction or (ii) were a Public Shareholder on the record date for the general meeting held to approve the proposed transaction.
Notwithstanding
the above, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender
offer rules, the Amended and Restated Memorandum and Articles of Association provides that a Public Shareholder, together with any affiliate
of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under
Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming
its shares with respect to more than an aggregate of 15% of the Public Shares, without the Company’s prior written consent.
The Initial Shareholders
agreed to (i) waive their redemption rights with respect to any Founder Shares and Public Shares they hold in connection with the
completion of an initial Business Combination, (ii) waive their redemption rights with respect to any Founder Shares and Public
Shares they hold in connection with a shareholder vote to approve an amendment to the Amended and Restated Memorandum and Articles of
Association to modify the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company has
not consummated an initial Business Combination within the Combination Period and (iii) waive their rights to liquidating distributions
from the Trust Account with respect to any Founder Shares they hold if the Company fails to complete an initial Business Combination
within the Combination Period. However, if the Initial Shareholders acquire Public Shares in or after the Initial Public Offering, such
Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination
within the Combination Period.
IX ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
JUNE 30, 2024
Combination Period and Share
Redemption/Conversion Events
If the Company
is unable to complete a Business Combination within a certain period of time as outlined below (“the Combination Period”),
the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but
not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount
then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account (which interest shall be net of
taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which
redemption will completely extinguish Public Shareholders’ rights as shareholders (including the right to receive further liquidating
distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s
remaining shareholders and Board of Directors, liquidate and dissolve, subject, in each case, to the Company’s obligations under
Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
The Company initially
had 18 months from the closing of the Initial Public Offering (by April 12, 2023) to consummate a Business Combination as the Combination
Period, prior to any amendments to the Amended and Restated Memorandum and Articles of Association to extend the duration of the Combination
Period. As outlined through a series of proposals below, the Combination Period has since been extended. The Company had until January 12,
2024 to complete a Business Combination, with the right to extend the Combination Period through no later than October 12, 2024,
subject to making required monthly extension deposits into the Trust Account of the lesser of (x) $50,000 or (y) $0.025 for
each Class A Ordinary Share included as part of the units sold in the IPO. The Company made three $50,000 monthly extension payment
deposits into the Trust Account during the three-months ended June 30, 2024, extending the Combination Period to July 12, 2024.
Subsequent to June 30, 2024, the Company has made each of the applicable extension deposits into the Trust allowing for the
Business Combination Period to extend to September 12, 2024 (see Note 10).
On April 10,
2023, the Company held an extraordinary general meeting of shareholders (the “2023 Extraordinary Meeting”). At the 2023 Extraordinary
Meeting, the Company’s shareholders approved, among other things, a proposal to grant the Company the right to extend the Combination
Period, from April 12, 2023 to May 12, 2023 (the “Extended Date”), and to allow the Company, without another shareholder
vote, by resolution of the Company’s board of directors (the “Board of Directors”), to elect to further extend the
Extended Date in one-month increments up to eleven additional times, or a total of up to twelve months total, up to April 12, 2024
(the “Extension Proposal”) by amending the Amended and Restated Memorandum and Articles of Association. Under Cayman Islands
law, such amendment of the Amended and Restated Memorandum and Articles of Association took effect upon approval of the Extension Proposal.
As a result of the approval of the Extension Proposal, the Company was provided the ability, with monthly extension payments, but without
another shareholder vote and by resolution of the Board of Directors, to extend the Extended Date in one-month increments through April 12,
2024, and further extending the Combination Period up to October 12, 2024 to complete a Business Combination which was approved
during the Extraordinary General Meeting held on December 11, 2023.
At the 2023 Extraordinary
Meeting, the Company’s shareholders also approved to further amend the Amended and Restated Memorandum and Articles of Association
(i) to eliminate (x) the limitation that the Company may not redeem Public Shares in an amount that would cause the Company’s
net tangible assets to be less than $5,000,001 and (y) the limitation that the Company shall not consummate a Business Combination
unless the Company has net tangible assets of at least $5,000,001 immediately prior to, or upon consummation of, or any greater net tangible
asset or cash requirement that may be contained in the agreement relating to, such Business Combination (the “Redemption Limitation
Amendment Proposal”) and (ii) to provide for the right of a holder of the Class B ordinary shares, par value $0.0001
per share, to convert into Class A ordinary shares, par value $0.0001 per share, on a one-for-one basis at any time and from time
to time prior to the closing of a Business Combination at the election of the holder (the “Founder Share Amendment Proposal”).
Those amendments to the Amended and Restated Memorandum and Articles of Association took effect upon the approval of the Company’s
shareholders. In connection with the votes to approve the Extension Proposal, the Redemption Limitation Amendment Proposal and the Founder
Share Amendment Proposal, the holders of 18,336,279 Class A ordinary shares properly exercised their right to redeem their shares
for cash at a redemption price of approximately $10.31 per share (the “Redemptions”), for an aggregate redemption amount
of approximately $189 million. After the satisfaction of such Redemptions, the balance in the Trust Account was approximately $48 million.
IX ACQUISITION
CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2024
Additionally, the
Sponsor agreed that if the Extension Proposal was approved, it or its designee would deposit into the Trust Account as a loan, an amount
equal to the lesser of (x) $160,000 or (y) $0.04 per Public Share multiplied by the number of Public Shares outstanding (the
“Contribution”), on each of the following dates: (i) April 13, 2023; and (ii) one business day following the
public announcement by the Company disclosing that the Board of Directors has determined to extend the Extended Date for an additional
month in accordance with the Extension Proposal.
In connection with
the Contribution and advances the Sponsor may make in the future to the Company for working capital expenses, on April 13, 2023,
the Company issued a convertible promissory note to the Sponsor with a principal amount up to $1 million (the “Original Extension
Promissory Note”), which was amended and restated as described below (see Note 5).
On April 13,
2023, the Sponsor advanced $160,000 for the first Contribution. On May 9, 2023, the Board of Directors elected to extend the Extended
Date from May 12, 2023 to June 12, 2023. In connection with such election, the Board of Directors delivered the Sponsor a written
request to draw down $160,000 under the Extension Promissory Note (as defined below). On May 12, 2023, the Sponsor deposited the
$160,000 Contribution into the Trust Account in connection with this second extension of the Extended Date. On June 9, 2023, the
Board of Directors elected to extend the Extended Date from June 12, 2023 to July 12, 2023. On June 12, 2023, the Sponsor
deposited the $160,000 Contribution into the Trust Account in connection with this third extension. On July 11, 2023, the Board
of Directors elected to extend the Extended Date from July 12, 2023 to August 12, 2023. On July 12, 2023, the Sponsor
deposited the $160,000 Contribution into the Trust Account in connection with this fourth extension. On August 9, 2023, the Board
of Directors elected to extend the Extended Date from August 12, 2023 to September 12, 2023. On August 11, 2023, the Sponsor
deposited the $160,000 Contribution into the Trust Account in connection with this fifth extension. On September 12, 2023, the Sponsor
deposited the $160,000 Contribution into the Trust Account in connection with this sixth extension, extending the Combination Period
to October 12, 2023.
On May 9,
2023, pursuant to the terms of the Amended and Restated Memorandum and Articles of Association, the Sponsor, the holder of an aggregate
of 4,002,121 of the Class B ordinary shares, elected to convert each outstanding Class B ordinary share held by it on a one-for-one
basis into Class A ordinary shares, with immediate effect (the “Founder Conversion”). Following the Founder Conversion,
the Company had an aggregate of 8,665,842 Class A ordinary shares and 1,747,879 Class B ordinary shares issued and outstanding.
On September 8,
2023, the Company issued an amended and restated promissory note in the principal amount of up to $2.5 million to the Sponsor (the “Amended
and Restated Extension Promissory Note” and together with the Original Extension Promissory Note, the “Extension Promissory
Note”), to amend and restate the Original Extension Promissory Note. The Amended and Restated Extension Promissory Note was issued
in connection with advances the Sponsor may make, in its discretion, to the Company for working capital expenses. The Amended and Restated
Extension Promissory Note bears no interest and is due and payable upon the earlier to occur of (i) the date on which the Company
consummates its initial Business Combination and (ii) the date of the Company’s liquidation.
At the election
of the Sponsor, up to $1,500,000 of the unpaid principal balance under the Amended and Restated Extension Promissory Note may be converted
into warrants of the Company (the “Conversion Warrants”) at the price of $1.00 per warrant. Such Conversion Warrants will
have terms identical to the warrants issued to the Sponsor in the Private Placement.
On October 12,
2023, the Company issued a press release announcing that the Board of Directors has elected to extend the Combination Period for an additional
month, from October 12, 2023 to November 12, 2023. In connection with the seventh extension of the Extended Date, the Board
of Directors delivered the Sponsor a written request to draw down $160,000 under the Extension Promissory Note. On October 13, 2023,
the Sponsor deposited the $160,000 Contribution into the Trust Account in connection with this seventh extension.
On November 13,
2023, the Company issued a press release announcing that the Board of Directors has elected to extend the Combination Period for an additional
month, from November 12, 2023 to December 12, 2023. In connection with the eighth extension of the Extended Date, the Board
of Directors delivered the Sponsor a written request to draw down $160,000 under the Extension Promissory Note. On November 13,
2023, the Sponsor deposited the $160,000 Contribution into the Trust Account in connection with this eighth extension.
IX ACQUISITION
CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2024
On December 11,
2023, the Company held the Meeting. At the Meeting, the Second Extension Amendment Proposal to give the Board the right to extend the
date by which the Company must consummate a Business Combination from December 12, 2023 on a monthly basis up to ten (10) times
until October 12, 2024 (or such earlier date as determined by the Board) (the “Second Extension Amendment”) was approved.
Under the law of the Cayman Islands, upon approval of the Second Extension Amendment Proposal by the affirmative vote of at least two-thirds
(2/3) of the shareholders entitled to vote, who attended and voted at the Meeting (including those who voted online), the Second Extension
Amendment became effective. The Company filed the Second Extension Amendment with the Cayman Islands Registrar of Companies on December 12,
2023.
The Meeting was
held, in part, to satisfy the annual meeting requirement pursuant to Listing Rule 5620(a) (the “Rule”) of The Nasdaq
Stock Market LLC. Pursuant to the Rule, the Company was required to hold its first annual meeting of shareholders on or prior to December 31,
2023. Because the Meeting did not technically constitute an “annual general meeting” under Cayman Islands law, the terms
of the Company’s Class I directors did not expire at the Meeting.
In connection with
the approval of the Second Extension Amendment Proposal, the Sponsor agreed to contribute to the Company, as a loan (the “Contribution”),
the lesser of (x) $50,000 or (y) $0.025 for each Class A Ordinary Share included as part of the units sold in the IPO
(the “Public Shares”) that remains outstanding and was not redeemed for each calendar month (commencing on December 12,
2023 and on the 12th day of each subsequent month) until October 12, 2024, or portion thereof, that is needed to complete a Business
Combination.
In connection with
the vote to approve the Second Extension Amendment Proposal, the holders of 1,817,650 Public Shares properly exercised their right to
redeem such shares for cash at a redemption price of approximately $11.00 per share, for an aggregate redemption amount of approximately
$19.99 million. Consequently, the Contribution will be $50,000 per month needed for the Company to continue to extend the Combination
Period monthly. On December 12, 2023, the Company made deposits of $50,000 for December extension contribution. The underwriters
of the Initial Public Offering agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust
Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts
will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In
the event of such distribution, it is possible that the per share value of the assets remaining available for distribution might be less
than the Initial Public Offering price per Unit ($10.00).
In order to protect
the amounts held in the Trust Account, the Sponsor agreed to be liable to the Company if and to the extent any claims by a third party
for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering
into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.05 per Public Share or (2) the
actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.05 per
Public Share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay the Company’s
tax obligations, provided that such liability will not apply to any claims by a third-party or prospective target business that executed
a waiver of any and all rights to seek access to the Trust Account (whether or not such waiver is enforceable) nor will it apply to any
claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including
liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed
waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such
third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to
claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent registered public
accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company
waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
On January 19,
2024, the Company issued a press release announcing that the Board had elected to extend the date by which the Company has to consummate
a business combination from January 12, 2024 for an additional month to February 12, 2024 and further extend March 12,
2024 and April 12, 2024. The Company’s Amended and Restated Memorandum and Articles of Association provides the Company with
the right to extend the Deadline Date eighteen times for an additional one month each time, from April 12, 2023, the initial Deadline
Date, to up to October 12, 2024. In connection with the tenth Extension, the Board delivered the Sponsor a written request to draw
down $50,000 under its previously-disclosed promissory note. The Sponsor deposited $50,000 each into the Company’s trust account
in connection with the tenth, eleventh, twelfth, thirteenth, fourteenth, fifteenth, sixteenth and seventeenth Extension on January 12,
2024, February 17, 2024, March 12, 2024, April 19, 2024, May 17, 2024, June 20, 2024, July 23, 2024 and
August 16, 2024 respectively, to extend the life until September 12, 2024.
IX ACQUISITION
CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2024
Nasdaq listing
On October 9,
2023, the Company received a letter (the “Total Shareholders Notice”) from the Listing Qualifications Department of the Nasdaq
Stock Market (“Nasdaq”) notifying the Company that it was not in compliance with Nasdaq Listing Rule 5450(a)(2), which
required the Company to main at least 400 total holders for continued listing on the Nasdaq Global Market (the “Minimum Total Holders
Rule”). The Total Shareholders Notice stated that the Company had until November 24, 2023 to provide Nasdaq with a plan to
regain compliance. If the plan was accepted, Nasdaq might grant an extension of up to 180 calendar days from the date of the Total Shareholders
Notice to evidence compliance. If Nasdaq did not accept the Company’s plan, the Company would have the opportunity to appeal that
decision to a Nasdaq Hearings Panel (the “Panel”). The Total Shareholders Notice had no immediate effect on the listing of
the Company’s securities, and the Company’s securities continued to trade on the Nasdaq Global Market. On November 24,
2023, the Company provided plan to Nasdaq for meeting the requirements under Nasdaq Listing Rule 5450(a)(2), and evaluated available
options to regain compliance. However, there could be no assurance that the Company would be able to regain compliance under Nasdaq Listing
Rule 5450(a)(2), or would otherwise be in compliance with other Nasdaq listing criteria. On October 12, 2023, the Company filed
a Current Report on Form 8-K with the SEC (the “Oct. 2023 Current Report”) to disclose its receipt of the Total
Shareholders Notice in accordance with Nasdaq Listing Rule 5810(b). On January 18, 2024 the Company provided an update to Nasdaq
of its progress on fulfilling the plan to regain compliance and received a request to provide an additional update to Nasdaq on February 20,
2024. On February 20, 2024 the Company again updated Nasdaq on its progress in fulfilling the plan to regain compliance and continues
to be proactive in regaining compliance. Pursuant to the 180-day deadline from the letter received October 9, 2023, the date for
the Company to demonstrate compliance is April 6, 2024. In the event that the Company is not able to demonstrate compliance to Nasdaq
on such date, there is a reasonable possibility that the Company may receive a de-list letter from Nasdaq, at which point the Company
would need to request a hearing (see Note 10 for subsequent update on Nasdaq listing status).
On
April 30, 2024, the Company received a Total Shareholders Notice from Nasdaq indicating that the Company did not regain compliance
with the Minimum Total Holders Rule. The Company timely requested a hearing before the Panel to appeal the Total Shareholders Notice
from Nasdaq and the hearing was held on June 18, 2024. On August 5, 2024, the Panel granted the Company’s request for
continued listing on the Nasdaq Global Market and confirmed that the Company was in compliance with the Minimum Total Holders Rule.
NOTE 2. BASIS OF PRESENTATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GOING CONCERN
Basis of Presentation
The accompanying
unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally
accepted in the United States of America (“GAAP”) for interim financial information and Article 10 of Regulation S-X.
Accordingly, certain disclosures included in the annual financial statements have been condensed or omitted from these condensed consolidated
financial statements as they are not required for interim condensed consolidated financial statements under GAAP and the rules of
the SEC. In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair presentation have been included.
Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected
for the year ending December 31, 2024 or any future period.
The accompanying
unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2023, as filed with the SEC on March 28, 2024 (the “2023 Annual Report”),
which contains the audited financial statements and notes thereto. The financial information as of June 30, 2024, is derived from
the audited financial statements presented in the 2023 Annual Report.
Principles of Consolidation
The accompanying
unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, which was
formed on March 15, 2024. All significant intercompany balances and transactions have been eliminated in consolidation.
IX ACQUISITION
CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2024
Going Concern Consideration
As of June 30,
2024, the Company had approximately $7,655 in cash held outside of the Trust Account and a working capital deficit of approximately
$5.0 million. The Company has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans. In connection
with the Company’s assessment of going concern considerations in accordance with FASB ASC Topic 205-40, “Presentation of
Financial Statements - Going Concern” (“ASC 205-40”), the Company has until October 12, 2024, if all extensions
of the Extended Date are exercised, to consummate a Business Combination. It is uncertain that the Company will be able to consummate
a Business Combination by this time, and if a Business Combination is not consummated by this date, then there will be a mandatory liquidation
and subsequent dissolution of the Company.
Management has
determined that the liquidity condition and mandatory liquidation, should a Business Combination not occur, and potential subsequent
dissolution of the Company raises substantial doubt about its ability to continue as a going concern for a period of time within one
year after the date that the accompanying condensed consolidated financial statements are issued.
Management plans
to address this uncertainty through the initial Business Combination as discussed above. There is no assurance that the Company’s
plans to consummate the initial Business Combination will be successful or successful within the Combination Period. The accompanying
condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Emerging Growth Company
The Company is
an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our
Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required
to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act,
reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the
requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments
not previously approved.
Further, Section 102(b)(1) of
the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until
private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class
of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS
Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of
such extended transition period, which means that when a standard is issued or revised and it has different application dates for public
or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies
adopt the new or revised standard. This may make comparison of the accompanying condensed consolidated financial statements with another
public company which is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition
period, difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The
preparation of the accompanying condensed consolidated financial statements in conformity with GAAP requires Management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the accompanying condensed consolidated financial statements and the reported amounts of expenses during the reporting periods.
The most significant estimates are related to the fair value of the warrants.
Making
estimates requires Management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of
a condition, situation or set of circumstances that existed at the date of the condensed consolidated financial statements, which Management
considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual
results could differ from those estimates.
IX ACQUISITION
CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2024
Concentration
of Credit Risk
Financial instruments
that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at
times, may exceed the Federal Depository Insurance Corporation coverage limit of $250,000. As of June 30, 2024 and December 31,
2023, the Company has not experienced losses on these accounts.
Cash and Cash Equivalents
The Company considers
all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not
have any cash equivalents as of June 30, 2024 and December 31, 2023.
Cash Held in the Trust Account
The
Company’s portfolio of investments was initially comprised of U.S. government securities, within the meaning set forth in Section 2(a)(16)
of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government
securities and generally have a readily determinable fair value, or a combination thereof. When the Company’s investments held
in the Trust Account were comprised of U.S. government securities, the investments were classified as “trading securities”.
When the Company’s investments held in the Trust Account are comprised of money market funds, the investments are recognized at
“fair value”. Trading securities and investments in money market funds are presented on the accompanying balance sheets at
fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities is included
in income from investments held in the Trust Account in the accompanying statements of operations. The estimated fair values of investments
held in the Trust Account are determined using available market information.
To
mitigate the risk that the Company might be deemed to be an investment company for purposes of the Investment Company Act, on November 13,
2023 the Company instructed Continental to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust
Account in an interest-bearing demand deposit account at a bank, with Continental continuing to act as trustee, until the earlier of:
(i) the consummation of a Business Combination or (ii) the distribution of the Trust Account to the Company’s shareholders
(see Note 1). As of June 30, 2024 and December 31, 2023, the assets held in the Trust Account were in cash.
Derivative Financial Instruments
The
Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded
derivatives in accordance with FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). Derivative instruments
are initially recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported
in the accompanying statements of operations. The classification of derivative instruments, including whether such instruments should
be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Derivative warrant liabilities are classified
as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation
of current liabilities. The Company evaluated the Public Warrants and Private Placement Warrants in accordance with ASC 480 and ASC 815
and concluded that a provision in the warrant agreement related to certain tender or exchange offers precludes the Public Warrants and
Private Placement Warrants from being accounted for as components of equity. As the Public Warrants and Private Placement Warrants meet
the definition of a derivative as contemplated in ASC 815, they were recorded as derivative liabilities on the accompanying balance sheets
and measured at fair value at inception (on the date of the Initial Public Offering) and at each reporting date in accordance with FASB
ASC Topic 820, “Fair Value Measurement” (“ASC 820”), with changes in fair value recognized in the accompanying
statements of operations in the period of change. The determination of fair value for the warrant liabilities represents a significant
estimate within the accompanying condensed consolidated financial statements.
IX ACQUISITION
CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2024
Convertible
Instruments
The
Company accounts for that feature conversion options in its promissory notes in accordance with ASC 815. ASC 815 requires companies to
bifurcate conversion options from their host instruments and account for them as freestanding derivative financial instruments according
to certain criteria. The criteria includes circumstances in which (a) the economic characteristics and risks of the embedded derivative
instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) a promissory
note that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable
GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded
derivative instrument would be considered a derivative instrument.
Fair Value of Financial Instruments
“Fair
value” is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction
between market participants at the measurement date. ASC 820 establishes a fair value hierarchy that prioritizes and ranks the level
of observability of inputs used to measure investments at fair value. The observability of inputs is impacted by a number of factors,
including the type of investment, characteristics specific to the investment, market conditions and other factors. The hierarchy gives
the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the
lowest priority to unobservable inputs (Level 3 measurements). Investments with readily available quoted prices or for which fair value
can be measured from quoted prices in active markets will typically have a higher degree of input observability and a lesser degree of
judgment applied in determining fair value.
The
carrying amounts reflected in the accompanying balance sheets for cash, due from related party, and accounts payable approximate fair
value due to their short-term nature. The three levels of the fair value hierarchy under ASC 820 are as follows:
| |
· |
“Level
1”, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
| |
· |
“Level 2”,
defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices
for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
| |
· |
“Level 3”,
defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions,
such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
In
some cases, the inputs used to measure fair value might fall within different levels of the fair value hierarchy. In such cases, the
level in the fair value hierarchy within which the investment is categorized in its entirety is determined based on the lowest level
input that is significant to the investment. Assessing the significance of a particular input to the valuation of an investment in its
entirety requires judgment and considers factors specific to the investment. The categorization of an investment within the hierarchy
is based upon the pricing transparency of the investment and does not necessarily correspond to the perceived risk of that investment.
See
Note 9 for additional information on assets and liabilities measured at fair value.
Class A Ordinary Shares
Subject to Possible Redemption
All
of the 23,000,000 Class A ordinary shares sold as part of the Units in the Initial Public Offering and subsequent full
exercise of the underwriters’ over-allotment option contain a redemption feature that allows for the redemption of such Public
Shares (i) in connection with the Company’s liquidation, (ii) if there is a shareholder vote or tender offer in connection
with the Business Combination and (iii) in connection with certain amendments to the Amended and Restated Memorandum and Articles
of Association. In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC
480, redemption provisions not solely within the control of the Company require ordinary shares subject to redemption to be classified
outside of permanent equity. Therefore, all Public Shares have been classified outside of permanent equity.
The
Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares
to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary
shares are affected by charges against additional paid in capital and accumulated deficit.
IX ACQUISITION
CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2024
As
of June 30, 2024 and December 31, 2023, the Class A ordinary shares subject to redemption reflected in the accompanying
balance sheets are reconciled in the following table:
| Class A ordinary shares subject to possible redemption — January 1, 2023 | |
$ | 234,364,451 | |
| Less: | |
| | |
| Redemption of ordinary shares | |
| (208,978,864 | ) |
| Plus: | |
| | |
| Increase in redemption value of Class A ordinary shares subject to redemption | |
| 6,054,941 | |
| Class A ordinary shares subject to possible redemption — December 31, 2023 | |
$ | 31,440,528 | |
| Plus: | |
| | |
| Increase in redemption value of Class A ordinary shares subject to redemption | |
| 495,617 | |
| Class A ordinary shares subject to possible redemption — March 31, 2024 | |
$ | 31,936,145 | |
| Plus: | |
| | |
| Increase in redemption value of Class A ordinary shares subject to redemption | |
| 494,295 | |
| Class A ordinary shares subject to possible redemption — June 30, 2024 | |
$ | 32,430,440 | |
Offering Costs associated with
the Initial Public Offering
Offering costs
consisted of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that were directly related
to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering
based on a relative fair value basis, compared to total proceeds received. Offering costs associated with derivative warrant liabilities
were expensed as incurred and presented as non-operating expenses in the accompanying statements of operations. Offering costs associated
with the Class A ordinary shares were charged against the carrying value of Class A ordinary shares subject to possible redemption
upon the completion of the Initial Public Offering. Deferred underwriting commissions are classified as non-current liabilities as their
liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
Income Taxes
The Company accounts
for income taxes under FASB ASC Topic 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred
tax assets and liabilities for both the expected impact of differences between the condensed consolidated financial statements and tax
basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC
740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax
assets will not be realized.
ASC 740 also clarifies
the accounting for uncertainty in income taxes recognized in an enterprise’s condensed consolidated financial statements and prescribes
a recognition threshold and measurement process for condensed consolidated financial statement recognition and measurement of a tax position
taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be
sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties,
accounting in interim periods, disclosure and transitions. Based on the Company’s evaluation, it has been concluded that there
are no significant uncertain tax positions requiring recognition in the accompanying condensed consolidated financial statements.
The Company recognizes
accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and
no amounts accrued for interest and penalties as of June 30, 2024 and December 31, 2023. The Company is currently not aware
of any issues under review that could result in significant payments, accruals or material deviation from its position. There are no
taxes in the Cayman Islands and accordingly income taxes are not levied on the Company. Consequently, income taxes are not reflected
in the accompanying condensed consolidated financial statements.
Net (Loss) Income Per Ordinary
Share
The
Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share” (“ASC 260”).
The Company has two classes of shares, the Class A ordinary shares and Class B ordinary shares. Income is shared pro rata between
the two classes of shares.
IX ACQUISITION
CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2024
Net
(loss) income per ordinary share is computed by dividing net (loss) income by the weighted-average number of ordinary shares outstanding
during the period. Remeasurement associated with the redeemable Class A ordinary shares is excluded from net (loss) income per share
as the redemption value approximates fair value. Therefore, the (loss) income per share calculation allocates income shared pro rata
between redeemable and non - redeemable ordinary shares. The Company has not considered the effect of the exercise of the Public Warrants
and Private Placement Warrants to purchase an aggregate of 18,650,000 shares in the calculation of diluted (loss) income per
share, since the exercise of the warrants is contingent upon the occurrence of future events.
The
following tables reflect the calculation of basic and diluted net (loss) income per ordinary share (in dollars, except per share amounts):
| | |
For the Three Months
Ended June 30, | | |
For the Six Months
Ended June 30, | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| Class A Ordinary Shares subject to possible redemption | |
| | | |
| | | |
| | | |
| | |
| Numerator: Net (loss) income allocable to Class A ordinary shares (Redeemable) | |
$ | (436,338 | ) | |
$ | 1,389,999 | | |
$ | (675,299 | ) | |
$ | 2,603,298 | |
| Denominator: Weighted Average Class A ordinary shares (Redeemable) | |
| | | |
| | | |
| | | |
| | |
| Basic and diluted weighted average shares outstanding | |
| 2,846,071 | | |
| 4,951,910 | | |
| 2,846,071 | | |
| 2,503,465 | |
| Basic and diluted net (loss) income per share | |
$ | (0.15 | ) | |
$ | 0.28 | | |
$ | (0.24 | ) | |
$ | 1.04 | |
| | |
| | | |
| | | |
| | | |
| | |
| Class A (non-redeemable) and Class B Ordinary Shares | |
| | | |
| | | |
| | | |
| | |
| Numerator: Net (loss) income allocable to Class A ordinary shares (non-redeemable) and Class B ordinary shares | |
| (881,545 | ) | |
| 280,359 | | |
| (1,364,327 | ) | |
| 525,079 | |
| Denominator: | |
| | | |
| | | |
| | | |
| | |
| Weighted Average Class A (non-redeemable) and Class B ordinary shares — Basic and diluted weighted average shares outstanding | |
| 5,750,000 | | |
| 998,788 | | |
| 5,750,000 | | |
| 504,943 | |
| Basic and diluted net (loss) income per share | |
$ | (0.15 | ) | |
$ | 0.28 | | |
$ | (0.24 | ) | |
$ | 1.04 | |
Recent Accounting Pronouncements
In December 2023,
the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure
of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure
requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company’s
management does not believe the adoption of ASU 2023-09 will have a material impact on its condensed consolidated financial statements
and disclosures.
Management
does not believe there are any material recently issued, but not yet effective, accounting standards that, if currently adopted, would
have a material effect on the accompanying condensed consolidated financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the
Initial Public Offering, which was consummated on October 12, 2021, the Company sold 23,000,000 Units, including 3,000,000 Units
that were issued pursuant to the underwriters’ exercise of their over-allotment option in full, at a purchase price of $10.00 per
Unit. Each Unit consists of one Public Share and one-half of one Public Warrant. Each Public Warrant entitles the holder to purchase
one Class A ordinary share at an exercise price of $11.50 per whole share (see Note 7).
NOTE 4. PRIVATE PLACEMENT
Simultaneously
with the closing of the Initial Public Offering, the Sponsor, Cantor and Odeon purchased an aggregate of 7,150,000 Private Placement
Warrants at a price of $1.00 per Private Placement Warrant ($7,150,000 in the aggregate), $19,982 of which was not funded by the
Sponsor at the time of the Private Placement and recorded as a subscription receivable as of December 31, 2021. The subscription
receivable was paid on April 12, 2022.
IX ACQUISITION
CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2024
Each Private Placement
Warrant is exercisable to purchase one Class A ordinary share at a price of $11.50 per share. The proceeds from the Private Placement
were added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business
Combination within the Combination Period, the proceeds from the Private Placement will be used to fund the redemption of the Public
Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On March 11,
2021, the Sponsor was issued 5,750,000 Class B ordinary shares (the “Founder Shares”) for an aggregate of $25,000 paid
to cover certain expenses on behalf of the Company. The Founder Shares included an aggregate of up to 750,000 Class B ordinary shares
subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment option was not exercised in full or in
part, so that the Sponsor and its permitted transferees would own, on an as-converted basis, 20% of the Company’s issued and outstanding
shares after the Initial Public Offering. The underwriters exercised the over-allotment in full simultaneously with the closing of the
Initial Public Offering, thus the 750,000 Class B ordinary shares are no longer subject to forfeiture.
On May 9,
2023, pursuant to the terms of the Amended and Restated Memorandum and Articles of Association, the Sponsor elected to convert all 4,002,121
Founder Shares it held on a one-for-one basis into Class A ordinary shares, with immediate effect. Following this Founder Conversion
and the Redemptions, the Company had an aggregate of 8,665,842 Class A ordinary shares and 1,747,879 Class B ordinary shares
issued and outstanding.
The Initial Shareholders
agreed that, subject to certain limited exceptions, the Founder Shares will not be transferred, assigned, or sold until the earlier of
(i) one year after the completion of a Business Combination or (ii) subsequent to an initial Business Combination, (x) if
the closing price of Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations,
reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days
after an initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, share exchange or other
similar transaction that results in all of the Public Shareholders having the right to exchange their ordinary shares for cash, securities
or other property.
A total of (i) eight
investors (the “Anchor Investors”), purchased 1,980,000 Units in the Initial Public Offering at the offering price of $10.00
per Unit: (ii) six Anchor Investors purchased 980,000 Units in the Initial Public Offering at the offering price of $10.00 per Unit;
(iii) one Anchor Investor purchased 780,000 Units in the Initial Public Offering at the offering price of $10.00 per Unit; and (iv) one
Anchor Investor purchased 500,000 Units in the Initial Public Offering at the offering price of $10.00 per Unit. Pursuant to such Units,
the Anchor Investors have not been granted any shareholder or other rights in addition to those afforded to the Company’s other
Public Shareholders. Further, the Anchor Investors are not required to (x) hold any Units, Class A ordinary shares or warrants
they may purchase in the Initial Public Offering or thereafter for any amount of time, (y) vote any Class A ordinary shares
they may own at the applicable time in favor of the Business Combination or (z) refrain from exercising their right to redeem their
Public Shares at the time of the Business Combination. The Anchor Investors have the same rights to the funds held in the Trust Account
with respect to the Class A ordinary shares underlying the Units purchased in the Initial Public Offering as the rights afforded
to the Company’s other Public Shareholders.
Each Anchor Investor
entered into separate investment agreements (the “Anchor Investment Agreements”) with the Company and the Sponsor pursuant
to which each Anchor Investor purchased a specified number of Founder Shares, or an aggregate of 1,747,879 Founder Shares, from the Sponsor
for $0.004 per share, or an aggregate purchase price of $6,992 at the closing of the Initial Public Offering. Pursuant to the investment
agreements, the Anchor Investors agreed to (a) vote any Founder Shares held by them in favor of the Business Combination and (b) subject
any Founder Shares held by them to the same lock-up restrictions as the Founder Shares held by the Sponsor and independent directors.
IX ACQUISITION
CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2024
The Company estimated
the fair value of the Founder Shares attributable to the Anchor Investors to be $13,860,681 or $7.93 per share recognized upon the Initial
Public Offering. The Company determined the fair value based on a stock price simulation performed by a third party. The excess of the
fair value of the Founder Shares sold over the purchase price of $6,992 (or $0.004 per share) was determined to be an offering cost in
accordance with Staff Accounting Bulletin Topic 5A, “Expenses of Offering”. Accordingly, the offering cost was allocated
to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total
proceeds received. Offering costs allocated to derivative warrant liabilities were expensed in the accompanying statements of operations.
Offering costs allocated to the Public Shares were charged to temporary equity upon the completion of the Initial Public Offering.
Prior to the First
Extension vote in April 12, 2023, the owners of all of the Founders Shares distributed pursuant to the Anchor Investment Agreements
all entered into a first amendment of such agreement, such that the transferred shares shall, in the same proportion applicable to the
Founder Shares held by the Sponsor, be automatically, and without further action of any of the parties, subject to any cut-back, reduction,
mandatory repurchase, redemption, forfeiture, vesting or revesting, earnouts or other concessions agreed upon by the Company and the
Sponsor in connection with the Company’s entry into an agreement with respect to, or the consummation of, an initial business combination.
Administrative Support Agreement
On October 6,
2021, the Company entered into an agreement with IX Services, to pay up to $10,000 per month for office space, secretarial and administrative
services. Upon completion of a Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees;
however, IX Services waived these fees for the three and six months ended June 30, 2024 and 2023.
Related Party Loans
The Sponsor has
committed to loan the Company an aggregate of up to $1,400,000 for working capital purposes (“Committed Sponsor Loans”),
at the Company’s request, on or after January 15, 2022. Such Committed Sponsor Loans will be convertible into Private Placement
Warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price of $1.00 per warrant, or up to
$1,400,000 in the aggregate. In addition, in order to finance transaction costs in connection with an intended initial Business Combination,
the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to (except
in the case of the Committed Sponsor Loans), loan the Company additional funds as may be required on a non-interest basis (together with
the Committed Sponsor Loans, the “Working Capital Loans”). If the Company completes an initial Business Combination, the
Company would repay any such Working Capital Loans. In the event that the initial Business Combination does not close, the Company may
use a portion of the working capital held outside the Trust Account to repay any such Working Capital Loans but no proceeds from the
Trust Account would be used for such repayment. Up to $1,400,000 of such loans (which amount includes the Committed Sponsor Loans) may
be convertible into warrants of the post Business Combination entity at a price of $1.00 per warrant at the option of the lender.
The warrants would be identical to the Private Placement Warrants. As of June 30, 2024 and December 31, 2023, there were no borrowings
under any Working Capital Loans.
In connection with
the Contribution and advances the Sponsor may make in the future to the Company for working capital expenses, on April 13, 2023,
the Company issued the Extension Promissory Note to the Sponsor with a principal amount up to $1 million. The Extension Promissory Note
bears no interest and is repayable in full upon the earlier of (a) the date of the consummation of the Business Combination, or
(b) the date of the Company’s liquidation. If the Company does not consummate an initial Business Combination within the Combination
Period, the Extension Promissory Note will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated
or otherwise forgiven. Upon maturity, the outstanding principal of the Extension Promissory Note may be converted into warrants, at a
price of $1.00 per warrant, at the option of the Sponsor. Such warrants will have terms identical to the warrants issued to the Sponsor
in the Private Placement. The Contribution and any drawdowns in connection with the Extension Promissory Note are subject to unanimous
written consent of the Board of Directors and the consent of the Sponsor.
IX ACQUISITION
CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2024
On September 8,
2023, the Company issued the Amended and Restated Extension Promissory Note in the principal amount of up to $2.5 million to the Sponsor,
to amend and restate the Extension Promissory Note. The Amended and Restated Extension Promissory Note was issued in connection with
advances the Sponsor may make, in its discretion, to the Company for working capital expenses. The Amended and Restated Extension Promissory
Note bears no interest and is due and payable upon the earlier to occur of (i) the date on which the Company consummates its initial
Business Combination and (ii) the date of the Company’s liquidation.
On April 18,
2024, the Company amended and restated the convertible promissory note, dated as of September 8, 2023, previously issued to Sponsor,
to increase the aggregate principal amount to up to $3,500,000 (as amended and restated, the “Note”). The Note was issued
in connection with advances the Sponsor may make, in its discretion, to the Company for working capital expenses. The Note bears no interest
and is due and payable upon the earlier to occur of (i) the date on which the Company consummates its initial business combination
and (ii) the date of the liquidation of the Company.
At the election
of the Sponsor, up to $1,500,000 of the unpaid principal balance under the Amended and Restated Extension Promissory Note may be converted
into Conversion Warrants at the price of $1.00 per warrant. Such Conversion Warrants will have terms identical to the warrants issued
to the Sponsor in the Private Placement.
As of June 30,
2024 and December 31, 2023, the Company had a total of $3,103,268 and $1,889,768 drawn on the Extension Promissory Note, respectively.
In accordance with ASC 815 the Company analyzed the fair value of the derivative included in the conversion options and determined its
value at zero since inception of each advance under the note, see note 9 for further information.
NOTE 6. COMMITMENTS AND CONTINGENCIES
Registration Rights Agreement
The holders of
the Founder Shares, Private Placement Warrants and Public Warrants that may be issued upon conversion of Working Capital Loans (and any
Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants issued upon conversion of the
Working Capital Loans) are entitled to registration rights pursuant to a registration rights agreement signed on the effective date of
the Registration Statement. The holders of these securities are entitled to make up to three demands, excluding short form demands, that
the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect
to registration statements filed subsequent to consummation of a Business Combination. The Company has granted Cantor and Odeon or their
designees or affiliates certain registration rights relating to these securities. The underwriters of the Initial Public Offering may
not exercise their demand and “piggyback” registration rights after five and seven years, respectively, after the effective
date of the Registration Statement and may not exercise demand rights on more than one occasion. The Company bears the expenses incurred
in connection with the filing of any such registration statements.
Underwriting Agreement
In connection with
the Initial Public Offering, the underwriters were granted a 45-day option from the date of the prospectus to purchase up to 3,000,000
additional Units to cover over-allotments. On October 12, 2021, the underwriters fully exercised the over-allotment option to purchase
an additional 3,000,000 Units at an offering price of $10.00 per Unit, generating additional gross proceeds of $30,000,000 to the Company.
The underwriters
were paid a cash underwriting discount of $0.20 per Unit (excluding over-allotment Units) in the Initial Public Offering, or $4,000,000
in the aggregate, upon the closing of the Initial Public Offering. In addition, $0.50 per Unit (excluding over-allotment Units) and $0.70
per over-allotment Unit (totaling $12,100,000 in the aggregate) is payable to the underwriters for deferred underwriting commissions.
The deferred fee is payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes
a Business Combination, subject to the terms of that certain underwriting agreement, dated as of October 6, 2021 (the “Underwriting
Agreement”).
On April 12,
2023, the Company entered into a fee reduction agreement (the “Fee Reduction Agreement”), which amends the Underwriting Agreement.
According to the Underwriting Agreement, the Company previously agreed to pay to the underwriters of the Initial Public Offering an aggregate
of $12,100,000 as deferred underwriting commissions, a portion of which fee is payable to each underwriter in proportion to their respective
commitments pursuant to the Underwriting Agreement, upon the consummation of a Business Combination. Pursuant to the Fee Reduction Agreement,
the underwriters have agreed to forfeit sixty-six and 94/100 percent (66.94%) of the aggregate deferred underwriting commissions of $12,100,000
for a total reduction of $8,100,000. However, if the Company enters into a Business Combination with a target at a pre-money valuation
above $100 million, the forfeiture percentage for underwriters will be reduced to no less than fifty percent (50%) of the aggregate deferred
underwriting commissions of $12,100,000 for an approximate reduction of $6,050,000.
On April 4,
2024, the Company entered into an Amended & Restated Fee Reduction Agreement, which amends the Underwriting Agreement with Cantor
Fitzgerald & Co. (“CF&CO”). Pursuant to the Amended and Restated Fee Reduction Agreement with CF&CO, in
the event that the Company consummates the Business Combination with AERKOMM, CF&CO agrees that it will forfeit $6,475,000 of the
aggregate original deferred fee that would otherwise be payable by the Company to CF&CO, resulting in a remainder of $1,995,000.
The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company
completes a business combination, subject to the terms of the underwriting agreement.
On April 4,
2024, the Company entered into an Amended & Restated Fee Reduction Agreement, which amends the Underwriting Agreement with Odeon
Capital Group LLC (“Odeon”). Pursuant to the Amended and Restated Fee Reduction Agreement with Odeon, in the event that the
Company consummates the Business Combination with AERKOMM, Odeon agrees that it will forfeit $2,775,000 of the aggregate original deferred
fee that would otherwise be payable by the Company to Odeon, resulting in a remainder of $855,000. The deferred fee will become payable
to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a business combination,
subject to the terms of the underwriting agreement.
IX ACQUISITION
CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2024
Merger Agreement
On March 29,
2024, the Company, a Cayman Islands exempted company (which will de-register from the Register of Companies in the Cayman Islands by
way of continuation out of the Cayman Islands and into the State of Delaware so as to migrate to and domesticate as a Delaware corporation
prior to the Closing Date) entered into a Merger Agreement, by and among the Company, AKOM Merger Sub Inc., a Nevada corporation and
a wholly owned subsidiary of the Company (“Merger Sub”), and AERKOMM Inc., a Nevada corporation (the “AERKOMM”)
(as it may be amended and/or restated from time to time, the “Merger Agreement”).
The PIPE Investment
Concurrently with
the execution of the Merger Agreement, the Company and AERKOMM entered into subscription agreements (the “Subscription Agreements”)
with certain accredited investors providing for investments in the Company’s Common Stock in a private placement for an aggregate
cash amount of $35,000,000 at $11.50 per share of the Company’s Common Stock (the “PIPE Investment”).
AERKOMM will exercise
reasonable best efforts to obtain a PIPE Investment Amount of at least $65,000,000 (inclusive of investment amounts under SAFE Agreements
(as defined below)) pursuant to PIPE arrangements, and will obtain a minimum PIPE Investment Amount, unless waived by the Company, of
at least $ 45,000,000 minus the investment amount obtained pursuant to SAFE Agreements (the “PIPE Minimum Investment Amount”)
and will consummate the transactions contemplated by the Subscription Agreements.
The SAFE Investment
On March 29,
2024, IX Acquisition Corp. (Parent), a Cayman Islands exempted company, entered into a Merger Agreement, by and among Parent, AKOM
Merger Sub Inc., a Nevada corporation and a wholly owned subsidiary of Parent (“Merger Sub”), and AERKOMM Inc., a Nevada
corporation (the “Company”) (as it may be amended and/or restated from time to time, the “Merger Agreement”).
Capitalized terms used but not otherwise defined herein have the meanings given to them in the Merger Agreement.
Pursuant to the
Merger Agreement, the Company was obligated to enter into simple agreements for future equity (the “SAFE Agreements”) with
certain investors providing for investments in shares of the Company’s Common Stock in a private placement in an aggregate amount
of not less than $15,000,000 (exercising reasonable best efforts to secure $5,000,000 within twenty (20) Business Days of the date of
the Merger Agreement, another $5,000,000 within forty (40) Business Days of the date of the Merger Agreement, and another $5,000,000
within sixty (60) Business Days of the date of the Merger Agreement) that will automatically convert upon the Closing at $11.50 per share
of the Parent’s Common Stock and in accordance with such SAFE Agreements and the Merger Agreement (such investments in the aggregate,
the “SAFE Investment”).
As of August 12,
2024, an aggregate of $2.6 million of SAFE Investment has been made. The SAFE Investment will initially be placed in an escrow account
and may be released from such escrow account to an account of the Company pursuant to the joint written instructions of the Company and
the Parent.
The Company analyzed the SAFE agreement
under ASC 480 and ASC 815, noting that the Common Stock and Incentive Shares issuable under the SAFE Agreement do NOT meets the requirements
for equity classification. As a result, the Common Stock and Incentive Shares are required to be classified as a liability and measured
at fair value with changes in fair value recorded in earnings, the SAFE notes were issued by Aerkomm and as such the liability has been
reflected in the financial statement of Aerkomm, Inc at issuance and as of June 30, 2024. Sponsor Support Agreement
In connection with
the execution of the Merger Agreement, the Company entered into a support agreement (the “Sponsor Support Agreement”) with
the Sponsor and AERKOMM, pursuant to which the Sponsor agreed to, among other things, (i) vote all of its shares in favor of each
the Company Proposal sought by the Company with respect to the Merger Agreement or the transactions contemplated thereby, (ii) vote
against any Alternative Proposal or proposal relating to a business combination transaction, (iii) vote against any merger agreement
or merger, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding
up of or by the Company (other than the Merger Agreement and transactions relating to the Merger), (iv) vote against any change
in the business, management or Board of Directors of the Company (other than in connection with the Merger), (v) vote against any
proposal that would impede the Merger or that would result in a breach with respect to any obligation or agreement of the Company, Merger
Sub or the Sponsor under the Merger Agreement or the Company Support Agreement, and (vi) vote in favor of any proposal to extend
the period of time the Company is afforded under its organizational documents to consummate an initial business combination, in each
case, subject to the terms and conditions of the Company Support Agreement.
IX ACQUISITION
CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2024
AERKOMM Support Agreement
In connection with
the execution of the Merger Agreement, the Company entered into a support agreement (the “AERKOMM Support Agreement”) with
AERKOMM and certain shareholders of AERKOMM (the “AERKOMM Supporting Shareholders”) pursuant to which the AERKOMM Supporting
Shareholders agreed to, among other things,(i) vote to approve and adopt the Merger Agreement and the transactions contemplated
thereby, including the Merger (“AERKOMM Transaction Proposals”); (ii) vote against any merger agreement or merger, consolidation,
combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by AERKOMM (other
than the Merger Agreement and the transactions relating to the Merger); (iii) vote against any change in the business (to the extent
in violation of the Merger Agreement), management or Board of Directors of AERKOMM (other than in connection with AERKOMM Transaction
Proposals and the transactions contemplated thereby); and (iv) vote against any proposal that would impede the Merger or that would
result in a breach with respect to any obligation or agreement of AERKOMM or AERKOMM Securityholders under the Merger Agreement or the
AERKOMM Support Agreement.
Registration Rights Agreement
The Merger Agreement
contemplates that, at the Closing, Pubco, the Sponsor and certain former shareholders of AERKOMM (collectively, the “Holders”)
will enter into a registration rights agreement (the “Registration Rights Agreement”), pursuant to which Pubco will agree
to register for resale, pursuant to Rule 415 under the Securities Act, certain the Company’s Common Shares and Domesticated
the Company Warrants that are held by the Holders from time to time.
The Registration
Rights Agreement amends and restates the registration rights agreement that was entered into the Company, the Sponsor and the other parties
thereto in connection with the Company’s initial public offering. The Registration Rights Agreement will terminate on the earlier
of (a) the five year anniversary of the date of the Registration Rights Agreement or (b) with respect to any Holder, on the
date that such Holder no longer holds any Registrable Securities.
NOTE 7. WARRANTS
As of June 30,
2024 and December 31, 2023, there were an aggregate of 18,650,000 warrants outstanding, comprised of 11,500,000 Public
Warrants and 7,150,000 Private Placement Warrants.
Public Warrants
may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public
Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months
from the closing of the Initial Public Offering. The Public Warrants will expire five years from the completion of a Business Combination,
at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
The Company will
not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a warrant and will have no obligation to settle
such warrant exercise unless a registration statement under the Securities Act with respect to the Class A ordinary shares underlying
the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying the obligations described
below with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue Class A ordinary
shares upon exercise of a warrant unless the Class A ordinary shares issuable upon such warrant exercise have been registered, qualified
or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. In the event that
the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will
not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will the Company be required
to net cash settle any warrant.
IX ACQUISITION
CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2024
The Company agreed
that as soon as practicable, but in no event later than fifteen (15) business days after the closing of an initial Business Combination,
the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of
the Class A ordinary shares issuable upon exercise of the warrants. The Company will use its best efforts to cause the same to become
effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration
of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the Class A ordinary
shares issuable upon exercise of the warrants is not effective by the sixtieth (60th) business day after the closing of an initial Business
Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company
will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with
Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Class A ordinary shares
are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a
“covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders
of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of
the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration
statement, and in the event the Company does not so elect, the Company will use its best efforts to register or qualify the shares under
applicable blue sky laws to the extent an exemption is not available.
Once the warrants
become exercisable, the Company may call the warrants for redemption:
| |
· |
in whole and
not in part; |
| |
· |
at a price
of $0.01 per warrant; |
| |
· |
upon not less
than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and |
| |
· |
if, and only
if, the closing price of the ordinary shares equals or exceeds $18.00 per share (as adjusted for share subdivisions, share capitalizations,
reorganizations, recapitalizations and the like and for certain issuances of Class A ordinary shares and equity-linked securities
for capital raising purposes in connection with the closing of the initial Business Combination) for any 20 trading days within a
30-trading day period ending three business days before the Company sends to the notice of redemption to the warrant holders. |
The Company will
not redeem the warrants for cash unless an effective registration statement under the Securities Act covering the Class A ordinary
shares issuable upon exercise of the warrants is effective and a current prospectus relating to those Class A ordinary shares is
available throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise
is exempt from registration under the Securities Act. If and when the warrants become redeemable by the Company, the Company may exercise
its redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state
securities laws.
If the Company
calls the warrants for redemption as described above, Management will have the option to require all holders that wish to exercise warrants
to do so on a “cashless basis.” In determining whether to require all holders to exercise their warrants on a “cashless
basis,” Management will consider, among other factors, its cash position, the number of warrants that are outstanding and the dilutive
effect on the Company’s shareholders of issuing the maximum number of Class A ordinary shares issuable upon the exercise of
the warrants. In such event, each holder would pay the exercise price by surrendering the warrants for that number of Class A ordinary
shares equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants,
multiplied by the excess of the “fair market value” of the Class A ordinary shares over the exercise price of the warrants
by (y) the fair market value. The “fair market value” will mean the average reported closing price of the Class A
ordinary shares for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to
the holders of warrants.
IX ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
JUNE 30, 2024
In addition, if
(x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection
with the closing of an initial Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary
share (with such issue price or effective issue price to be determined in good faith by the Board of Directors and, in the case of any
such issuance to the Initial Shareholders, and Anchor Investors, or their affiliates, without taking into account any Founder Shares
held by the Initial Shareholders, and Anchor Investors or such affiliates, as applicable, prior to such issuance) (the “Newly Issued
Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest
thereon, available for the funding of an initial Business Combination on the date of the consummation of an initial Business Combination
(net of redemptions), and the volume weighted average trading price of the Class A ordinary shares during the 20 trading day period
starting on the trading day after the day on which the Company consummates an initial Business Combination (such price, the “Market
Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115%
of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price described above will
be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
The Private Placement
Warrants (including the Class A ordinary shares issuable upon exercise of the Private Placement Warrants) will not be transferable,
assignable or salable until 30 days after the completion of an initial Business Combination (except, among other limited exceptions,
to the officers and directors and other persons or entities affiliated with the initial purchasers of the Private Placement Warrants)
and they will not be redeemable by the Company so long as they are held by the initial purchasers or their permitted transferees. The
initial purchasers, or their permitted transferees, have the option to exercise the Private Placement Warrants on a cashless basis. Except
as described herein, the Private Placement Warrants have terms and provisions that are identical to those of the Public Warrants. If
the Private Placement Warrants are held by holders other than the initial purchasers or their permitted transferees, the Private Placement
Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants.
The accounting
treatment of derivative financial instruments requires that the Company record the warrants as derivative liabilities at fair value upon
the closing of the Initial Public Offering. The Public Warrants have been allocated a portion of the proceeds from the issuance of the
Units equal to their fair value. The warrant liabilities are subject to re-measurement at each balance sheet date. With each such re-measurement,
the warrant liabilities will be adjusted to its current fair value, with the change in fair value recognized in the Company’s statements
of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of
events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification.
NOTE 8. CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE
REDEMPTION AND SHAREHOLDERS’ DEFICIT
Preference Shares
The Company is
authorized to issue 1,000,000 preference shares with a par value of $0.0001 per share with such designations, voting and other rights
and preferences as may be determined from time to time by the Board of Directors. As of June 30, 2024 and December 31, 2023,
there were no preference shares issued or outstanding.
Class A Ordinary Shares
The Company is
authorized to issue 200,000,000 Class A ordinary shares with a par value of $0.0001 per share. Holders of Class A ordinary
shares are entitled to one vote for each share. As of June 30, 2024 and December 31, 2023, there were 4,002,121 Class A
ordinary shares issued and outstanding, excluding 2,846,071 shares of Class A ordinary shares subject to possible redemption, which
are presented as temporary equity, respectively.
Class B Ordinary Shares
The Company is
authorized to issue 20,000,000 Class B ordinary shares with a par value of $0.0001 per share. Holders of Class B ordinary shares
are entitled to one vote for each share. As of June 30, 2024 and December 31, 2023, there were 1,747,879 Class B ordinary
shares issued and outstanding, respectively, and the Initial Shareholders, including the Anchor Investors, owned 67% of the Company’s
issued and outstanding shares on an as-converted basis.
IX ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
JUNE 30, 2024
Ordinary shareholders
of record are entitled to one vote for each share held on all matters to be voted on by shareholders. Except as described below, holders
of Class A ordinary shares and holders of Class B ordinary shares vote together as a single class on all matters submitted
to a vote of the Company’s shareholders, except as required by law. Unless specified in the Amended and Restated Memorandum and
Articles of Association, or as required by applicable provisions of the Companies Act or applicable stock exchange rules, the affirmative
vote of a majority of the ordinary shares that are voted is required to approve any such matter voted on by the shareholders. Approval
of certain actions will require a special resolution under Cayman Islands law, being the affirmative vote of at least two-thirds of the
ordinary shares that are voted, and pursuant to the Amended and Restated Memorandum and Articles of Association; such actions include
amending the Amended and Restated Memorandum and Articles of Association and approving a statutory merger or consolidation with another
company.
The Board of Directors
is divided into three classes, each of which will generally serve for a term of three years with only one class of directors being appointed
in each year. There is no cumulative voting with respect to the appointment of directors, with the result that the holders of more than
50% of the shares voted for the appointment of directors can appoint all of the directors. The Company’s shareholders are entitled
to receive ratable dividends when, as and if declared by the Board of Directors out of funds legally available therefor. Prior to the
Company’s initial Business Combination, (i) only holders of the Founder Shares will have the right to vote on the appointment
of directors and (ii) in a vote to continue the Company in a jurisdiction outside the Cayman Islands (which requires the approval
of at least two thirds of the votes of all ordinary shares), holders of the Class B ordinary shares will have ten votes for every
Class B ordinary share and holders of the Class A ordinary shares will have one vote for every Class A ordinary share.
These provisions of the Amended and Restated Memorandum and Articles of Association may only be amended by a special resolution passed
by not less than 90% of the ordinary shares who attend and vote at the Company’s general meeting which shall include the affirmative
vote of a simple majority of the Class B ordinary shares. Holders of the Public Shares will not be entitled to vote on the appointment
of directors prior to the initial Business Combination. In addition, prior to the completion of an initial Business Combination, holders
of a majority of the Founder Shares may remove a member of the Board of Directors for any reason. In connection with the initial Business
Combination, the Company may enter into a shareholders agreement or other arrangements with the shareholders of the target with respect
to voting and other corporate governance matters following completion of the initial Business Combination.
NOTE 9.
FAIR VALUE MEASUREMENTS
The
following table presents information about the Company’s financial assets that are measured at fair value on a recurring basis
as of June 30, 2024 and December 31, 2023, and indicates the fair value hierarchy of the valuation inputs the Company utilized
to determine such fair value:
| | |
Amount at Fair | | |
| | |
| | |
| |
| Description | |
Value | | |
Level 1 | | |
Level 2 | | |
Level 3 | |
| June 30, 2024 | |
| | | |
| | | |
| | | |
| | |
| Liabilities | |
| | | |
| | | |
| | | |
| | |
| Warrant liability – Public Warrants | |
$ | 920,000 | | |
$ | — | | |
$ | 920,000 | | |
$ | — | |
| Warrant liability – Private Placement Warrants | |
| 572,000 | | |
| — | | |
| — | | |
| 572,000 | |
| Total Liabilities | |
$ | 1,492,000 | | |
$ | — | | |
$ | 920,000 | | |
$ | 572,000 | |
| | |
Amount at Fair | | |
| | |
| | |
| |
| Description | |
Value | | |
Level 1 | | |
Level 2 | | |
Level 3 | |
| December 31, 2023 | |
| | | |
| | | |
| | | |
| | |
| Liabilities | |
| | | |
| | | |
| | | |
| | |
| Warrant liability – Public Warrants | |
$ | 230,000 | | |
$ | — | | |
$ | 230,000 | | |
$ | — | |
| Warrant liability – Private Placement Warrants | |
| 143,000 | | |
| — | | |
| — | | |
| 143,000 | |
| Total Liabilities | |
$ | 373,000 | | |
$ | — | | |
$ | 230,000 | | |
$ | 143,000 | |
Cash
Held in Trust Account
As
of June 30, 2024, assets held in the Trust Account were comprised of approximately $32.4 million in cash held by Trust Account.
As of December 31, 2023, assets held in the Trust Account were comprised of approximately $31.4 million in cash held by Trust Account.
IX ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
JUNE 30, 2024
Fair
Value Measurements
Transfers
to/from Levels 1, 2 and 3 are recognized at the end of the reporting period. The estimated fair value of the Public Warrants transferred
from a Level 3 measurement to a Level 1 fair value measurement in November 2021, when the Public Warrants were separately listed
and traded, and subsequently transferred to a Level 2 measurement during the quarter ended March 31, 2022 due to low trading volume.
The
Company utilized a Monte-Carlo simulation model for the initial valuation of the Public Warrants. Beginning in November 2021, the
fair value of Public Warrants has been measured based on the listed market price of such Public Warrants under the ticker “IXAQW”.
The
Company utilized a probability-adjusted Black-Scholes method to value the Private Placement Warrants at each reporting period, with changes
in fair value recognized in the statements of operations. The estimated fair value of the Private Placement Warrant liabilities is determined
using Level 3 inputs. Inherent in pricing models are assumptions related to expected share-price volatility, expected life, risk-free
interest rate and dividend yield. The Company estimates the volatility of its ordinary shares based on historical volatility that matches
the expected remaining life of the warrants. The risk-free interest rate is based on the Treasury zero-coupon yield curve on the grant
date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent
to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero.
The following
table provides the significant inputs to the probability-adjusted Black-Scholes method for the fair value of the Private Placement Warrants:
| | |
June 30, 2024 | | |
December 31,
2023 | |
| Stock price | |
$ | 11.40 | | |
$ | 11.05 | |
| Exercise price | |
$ | 11.50 | | |
$ | 11.50 | |
| Dividend yield | |
| — | % | |
| — | % |
| Expected term (in years) | |
| 5.28 | | |
| 5.28 | |
| Volatility | |
| 4.10 | % | |
| 2.80 | % |
| Risk-free rate | |
| 4.24 | % | |
| 3.77 | % |
| Fair value | |
$ | 0.08 | | |
$ | 0.02 | |
The following
table provides a summary of the changes in the fair value of the Company’s Level 3 financial instruments that are measured at fair
value on a recurring basis:
| Fair value at December 31, 2023 | |
$ | 143,000 | |
| Change in fair value of Private Placement Warrants | |
| 71,500 | |
| Fair value at March 31, 2024 | |
$ | 214,500 | |
| Change in fair value of Private Placement Warrants | |
| 357,500 | |
| Fair value at June 30, 2024 | |
$ | 572,000 | |
| | |
| | |
| Fair value at December 31, 2022 | |
$ | 143,000 | |
| Change in fair value of Private Placement Warrants | |
| 143,000 | |
| Fair value at March 31, 2023 | |
$ | 286,000 | |
| Change in fair value of Private Placement Warrants | |
| (71,500 | ) |
| Fair value at June 30, 2023 | |
$ | 214,500 | |
The
Company recognized $932,500 loss and $186,500 gain on change in the fair value of the Public Warrants and Private Placement Warrants
in the accompanying statements of operations for the three months period ended June 30, 2024 and 2023, respectively. The Company
recognized $1,119,000 loss and $186,500 loss on change in the fair value of the Public Warrants and Private Placement Warrants in the
accompanying statements of operations for the six months period ended June 30, 2024 and 2023, respectively.
Derivative
Liability-Conversion Feature
The
Company utilizes a Monte Carlo model to estimate the fair value of the conversion feature within the Extension Promissory Note, which
is required to be recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the
estimated fair value of the conversion feature are recognized as non-cash gains or losses in the accompanying statements of operations.
IX ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
JUNE 30, 2024
The
key assumptions in the model relate to expected share-price volatility, risk-free interest rate, exercise price, expected term and the
probability of occurrence of the transaction. The expected volatility was based on the average volatility of special purpose acquisition
companies that are searching for an acquisition target. The risk-free interest rate is based on interpolation of Treasury yields with
a term commensurate with the term of the warrants. The Company anticipates the dividend yield to be zero. The expected term of the warrants
is assumed to be the estimated date of a Business Combination.
The
estimated fair value of the conversion feature related to the Extension Promissory Note as of issuance and for the period ended June 30,
2024 is zero.
NOTE 10. SUBSEQUENT EVENTS
The Company evaluated
subsequent events and transactions that occurred after the balance sheet date up to the date that the accompanying unaudited condensed
consolidated financial statements were issued. Based upon this review, other than below, the Company did not identify any subsequent
events that would have required adjustment or disclosure in the accompanying unaudited condensed consolidated financial statements.
On August 5,
2024, the Panel granted the Company’s request for continued listing on the Nasdaq Global Market and confirmed that the Company
was in compliance with the Minimum Total Holders Rule.
On July 23,
2024 and August 16, 2024, the Sponsor deposited $50,000 each into the Company’s trust account in connection with the
thirteenth and nineteenth Extension, respectively to extend the life until September 12, 2024.
On August 12,
2024, the Parent and the Company entered into one new SAFE Agreement and amended one of the SAFE Agreements previously executed on May 13,
2024. Additionally, on July 8, 2024, the Company canceled the other SAFE Agreement that was entered into on May 13, 2024. Furthermore,
on June 26, 2024, the Parent and the Company entered into one new SAFE Agreement. As a result, as of August 12, 2024, SAFE
Agreements for an aggregate of $2,585,200 have been entered into. The SAFE Agreements will automatically convert upon the closing of
the merger at $11.50 per share of Parent Common Stock.
Item 2. Management’s Discussion and Analysis of
Financial Condition and Results of Operations.
Cautionary Note Regarding Forward-Looking
Statements
All statements
other than statements of historical fact included in this quarterly report on Form 10-Q (this “Report”) including, without
limitation, statements in this section regarding our financial position, business strategy and the plans and objectives of Management
for future operations, are forward-looking statements. When used in this Report, words such as “anticipate,” “believe,”
“estimate,” “expect,” “intend” and similar expressions, as they relate to us or our Management, identify
forward-looking statements. Such forward-looking statements are based on the beliefs of our Management, as well as assumptions made by,
and information currently available to, our Management. Actual results could differ materially from those contemplated by the forward-looking
statements as a result of certain factors detailed in our filings with the SEC. All subsequent written or oral forward-looking statements
attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.
The following discussion
and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated
financial statements and the notes thereto included in this Report under “Item 1. Financial Statements”.
Overview
We
are a blank check company incorporated on March 1, 2021 as a Cayman Islands exempted company for the purpose of effecting a business
combination. We have not selected any business combination target, but we have had substantive discussions with potential business combination
targets. We intend to effectuate our initial business combination using cash from the proceeds of our Initial Public Offering and the
Private Placement, the proceeds of the sale of our shares in connection with our initial business combination pursuant to the forward
purchase agreements (or backstop agreements we may enter into or otherwise), shares issued to the owners of the target, debt issued to
bank or other lenders or the owners of the target, or a combination of the foregoing or other sources.
The
registration statement was declared effective on October 6, 2021. On October 12, 2021, we consummated the Initial Public Offering
of 23,000,000 Units, including 3,000,000 Units that were issued pursuant to the underwriters’ exercise of their over-allotment
option in full, at $10.00 per Unit, generating total gross proceeds of $230,000,000.
Simultaneously
with the closing of the Initial Public Offering, we consummated the sale of 7,150,000 Private Placement Warrants at a price of $1.00
per Private Placement Warrant in the Private Placement to our sponsor, Cantor and Odeon, generating gross proceeds of $7,150,000.
Upon
the closing of the Initial Public Offering on October 12, 2021, an amount of $231,150,000 from the net proceeds of the sale of the
Units in the Initial Public Offering and the sale of the Private Placement Warrants in the Private Placement was placed in the Trust
Account and was initially invested in Treasury obligations with maturities of 185 days or less or in money market funds meeting certain
conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct Treasury obligations. To mitigate the risk
that we might be deemed to be an investment company for purposes of the Investment Company Act, on November 13, 2023 we instructed
Continental to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in an interest-bearing
demand deposit account at a bank, with Continental continuing to act as trustee, until the earliest of: (i) the completion of the
initial business combination; (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to
amend the Amended and Restated Memorandum and Articles of Association to modify the substance or timing of our obligation to redeem 100%
of the public shares if we do not complete the initial business combination within the Combination Period; and (iii) absent an initial
business combination within the Combination Period, the return of the funds held in the Trust Account to the Public Shareholders as part
of the redemption of the public shares.
Merger
Agreement
On
March 29, 2024, the Company, a Cayman Islands exempted company, entered into a Merger Agreement, by and among the Company, AKOM
Merger Sub Inc., a Nevada corporation and a wholly owned subsidiary of the Company (“Merger Sub”), and AERKOMM Inc., a Nevada
corporation (“AERKOMM”) (as it may be amended and/or restated from time to time, the “Merger Agreement”), pursuant
to which the Company will acquire AERKOMM. Pursuant to the Merger Agreement, the Company will de-register from the Register of Companies
in the Cayman Islands by way of continuation out of the Cayman Islands and into the State of Delaware so as to migrate to and domesticate
as a Delaware corporation prior to the Closing Date.
The PIPE
Investment
Concurrently
with the execution of the Merger Agreement, the Company and AERKOMM entered into subscription agreements (the “Subscription Agreements”)
with certain accredited investors providing for investments in the Company’s Common Stock in a private placement for an aggregate
cash amount of $35,000,000 at $11.50 per share of the Company’s Common Stock (the “PIPE Investment”).
AERKOMM
will exercise reasonable best efforts to obtain a PIPE Investment Amount of at least $65,000,000 (inclusive of investment amounts under
SAFE Agreements (as defined below)) pursuant to PIPE arrangements, and will obtain a minimum PIPE Investment Amount, unless waived by
the Company, of at least $ 45,000,000 minus the investment amount obtained pursuant to SAFE Agreements (the “PIPE Minimum Investment
Amount”) and will consummate the transactions contemplated by the Subscription Agreements.
The SAFE
Investment
On March 29,
2024, IX Acquisition Corp. (Parent), a Cayman Islands exempted company, entered into a Merger Agreement, by and among Parent, AKOM
Merger Sub Inc., a Nevada corporation and a wholly owned subsidiary of Parent (“Merger Sub”), and AERKOMM Inc., a Nevada
corporation (the “Company”) (as it may be amended and/or restated from time to time, the “Merger Agreement”).
Capitalized terms used but not otherwise defined herein have the meanings given to them in the Merger Agreement.
Pursuant to the
Merger Agreement, the Company was obligated to enter into simple agreements for future equity (the “SAFE Agreements”) with
certain investors providing for investments in shares of the Company’s Common Stock in a private placement in an aggregate amount
of not less than $15,000,000 (exercising reasonable best efforts to secure $5,000,000 within twenty (20) Business Days of the date of
the Merger Agreement, another $5,000,000 within forty (40) Business Days of the date of the Merger Agreement, and another $5,000,000
within sixty (60) Business Days of the date of the Merger Agreement) that will automatically convert upon the Closing at $11.50 per share
of the Parent’s Common Stock and in accordance with such SAFE Agreements and the Merger Agreement (such investments in the aggregate,
the “SAFE Investment”).
As of August 12,
2024, an aggregate of $2.6 million of SAFE Investment has been made. The SAFE Investment will initially be placed in an escrow account
and may be released from such escrow account to an account of the Company pursuant to the joint written instructions of the Company and
the Parent.
Sponsor
Support Agreement
In
connection with the execution of the Merger Agreement, the Company entered into a support agreement (the “Sponsor Support Agreement”)
with the Sponsor and AERKOMM, pursuant to which the Sponsor agreed to, among other things, (i) vote all of its shares in favor of
each the Company Proposal sought by the Company with respect to the Merger Agreement or the transactions contemplated thereby, (ii) vote
against any Alternative Proposal or proposal relating to a business combination transaction, (iii) vote against any merger agreement
or merger, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding
up of or by the Company (other than the Merger Agreement and transactions relating to the Merger), (iv) vote against any change
in the business, management or Board of Directors of the Company (other than in connection with the Merger), (v) vote against any
proposal that would impede the Merger or that would result in a breach with respect to any obligation or agreement of the Company, Merger
Sub or the Sponsor under the Merger Agreement or the Company Support Agreement, and (vi) vote in favor of any proposal to extend
the period of time the Company is afforded under its organizational documents to consummate an initial business combination, in each
case, subject to the terms and conditions of the Company Support Agreement.
AERKOMM
Support Agreement
In
connection with the execution of the Merger Agreement, the Company entered into a support agreement (the “AERKOMM Support Agreement”)
with AERKOMM and certain shareholders of AERKOMM (the “AERKOMM Supporting Shareholders”) pursuant to which the AERKOMM Supporting
Shareholders agreed to, among other things,(i) vote to approve and adopt the Merger Agreement and the transactions contemplated
thereby, including the Merger (“AERKOMM Transaction Proposals”); (ii) vote against any merger agreement or merger, consolidation,
combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by AERKOMM (other
than the Merger Agreement and the transactions relating to the Merger); (iii) vote against any change in the business (to the extent
in violation of the Merger Agreement), management or Board of Directors of AERKOMM (other than in connection with AERKOMM Transaction
Proposals and the transactions contemplated thereby); and (iv) vote against any proposal that would impede the Merger or that would
result in a breach with respect to any obligation or agreement of AERKOMM or AERKOMM Securityholders under the Merger Agreement or the
AERKOMM Support Agreement.
Registration
Rights Agreement
The
Merger Agreement contemplates that, at the Closing, Pubco, the Sponsor and certain former shareholders of AERKOMM (collectively, the
“Holders”) will enter into a registration rights agreement (the “Registration Rights Agreement”), pursuant to
which Pubco will agree to register for resale, pursuant to Rule 415 under the Securities Act, certain the Company Common Shares
and Domesticated the Company Warrants that are held by the Holders from time to time.
The
Registration Rights Agreement amends and restates the registration rights agreement that was entered into the Company, the Sponsor and
the other parties thereto in connection with the Company’s initial public offering. The Registration Rights Agreement will terminate
on the earlier of (a) the five year anniversary of the date of the Registration Rights Agreement or (b) with respect to any
Holder, on the date that such Holder no longer holds any Registrable Securities.
Extension
of Our Combination Period
On
April 10, 2023, we held the 2023 extraordinary meeting, at which, our shareholders approved, among other things: (i) the Extension
Proposal; (ii) the Redemption Limitation Amendment Proposal; and (iii) the Founder Share Amendment Proposal. Under Cayman Islands
law, the amendments to the Amended and Restated Memorandum and Articles of Association took effect upon approval of the Extension Proposal,
Founder Share Amendment Proposal and Redemption Limitation Amendment Proposal.
In
connection with the votes to approve the Extension Proposal, the Redemption Limitation Amendment Proposal and the Founder Share Amendment
Proposal, the holders of 18,336,279 Class A ordinary shares properly exercised their right to redeem their shares for cash at a
redemption price of approximately $10.31 per share, for an aggregate redemption amount of approximately $189 million. After the satisfaction
of the Redemptions, the balance in the Trust Account was approximately $48 million.
As
disclosed in the definitive proxy statement filed by the Company with the SEC on March 23, 2023, relating to the extraordinary general
meeting of shareholders, the sponsor agreed that if the Extension Proposal is approved, it or its designee will deposit into the Trust
Account established in connection with the Company’s initial public offering as a loan, an amount equal to the lesser of (x) $160,000
or (y) $0.04 per public share multiplied by the number of public shares outstanding, on each of the following dates: (i) April 13,
2023; and (ii) one business day following the public announcement by the Company disclosing that the board of directors of the Company
has determined to extend the Deadline Date (as defined below) for an additional month in accordance with the extension. On April 13,
2023, the sponsor advanced $160,000 to the Company for the first month of extension.
On
May 9, 2023, the Company issued a press release announcing that the board has elected to extend the date by which the Company has
to consummate a business combination (the “Deadline Date”) from May 12, 2023 for an additional month to June 12,
2023. The Company’s Amended and Restated Memorandum and Articles of Association provides the Company the right to extend the Deadline
Date twelve times for an additional one month each time, from April 12, 2023, the initial Deadline Date, to up to April 12,
2024. In connection with the second Extension, the board delivered the sponsor a written request to draw down $160,000 under its previously-disclosed
promissory note for the second month of the extension. On or before May 12, 2023, the sponsor deposited $160,000 into the Company’s
Trust Account in connection with the second extension.
On
June 9, 2023, the Company issued a press release announcing that its board of directors has elected to extend the date by which
the Company has to consummate a business combination from June 12, 2023 for an additional month to July 12, 2023. In connection
with the third extension, the board of directors delivered the sponsor a written request to draw down $160,000 under its previously-disclosed
promissory note for the third extension. On or before June 12, 2023, the sponsor deposited $160,000 into the Company’s Trust
Account in connection with the third extension.
On
July 11, 2023, the Company issued a press release announcing that its board of directors has elected to extend the date by which
the Company has to consummate a business combination from July 12, 2023 for an additional month to August 12, 2023. In connection
with the fourth extension, the board of directors delivered the sponsor a written request to draw down $160,000 under its previously-disclosed
promissory note for the fourth extension. On or before July 12, 2023, the sponsor deposited $160,000 into the Company’s Trust
Account in connection with the fourth extension.
On
August 9, 2023, the Company issued a press release announcing that its board of directors has elected to extend the date by which
the Company has to consummate a business combination from August 12, 2023 for an additional month to September 12, 2023. In
connection with the fifth extension, the board of directors delivered the sponsor a written request to draw down $160,000 under its previously-disclosed
promissory note for the fifth extension. On or before August 12, 2023, the sponsor deposited $160,000 into the Company’s Trust
Account in connection with the fifth extension.
On
September 7, 2023, the Company issued a press release announcing that its board of directors has elected to extend the date by which
the Company has to consummate a business combination from September 12, 2023 for an additional month to October 12, 2023. In
connection with the sixth extension, the board of directors delivered the sponsor a written request to draw down $160,000 under its previously-disclosed
promissory note for the sixth extension. On or before September 12, 2023, the sponsor will deposit $160,000 into the Company’s
Trust Account in connection with the sixth extension.
On
October 12, 2023, we issued a press release announcing that the board of directors has elected to extend the Combination Period
for an additional month, from October 12, 2023 to November 12, 2023. In connection with the seventh extension of the extended
date, the board of directors delivered the sponsor a written request to draw down $160,000 under the extension promissory note. On October 13,
2023, the sponsor deposited $160,000 into the Trust Account in connection with this seventh extension.
On
November 13, 2023, we issued a press release announcing that the board of directors has elected to extend the Combination Period
for an additional month, from November 12, 2023 to December 12, 2023. In connection with the eighth extension of the extended
date, the board of directors delivered the sponsor a written request to draw down $160,000 under the extension promissory note. On November 13,
2023, the sponsor deposited $160,000 into the Trust Account in connection with this eighth extension.
On
December 11, 2023, the Second Extension Amendment Proposal to give the board of directors the right to extend the date by which
we must consummate a business combination from December 12, 2023 on a monthly basis up to ten (10) times until October 12,
2024 (or such earlier date as determined by the board of directors) (the “Second Extension Amendment”) was approved. We filed
the Second Extension Amendment with the Cayman Islands Registrar of Companies on December 12, 2023. On December 12, 2023, the
sponsor deposited $50,000 into the Trust Account in connection with this ninth extension to extend the liquidation to January 12,
2024.
In
connection with the vote to approve the Second Extension Amendment Proposal, the holders of 1,817,650 public shares properly exercised
their right to redeem such shares for cash at a redemption price of approximately $11.00 per share, for an aggregate redemption amount
of approximately $19.99 million. Consequently, the Contribution will be $50,000 per month needed for us to continue to extend the Combination
Period monthly.
On
January 19, 2024, we issued a press release announcing that its board of directors had elected to extend the date by which the Company
has to consummate a business combination (the “Deadline Date”) from January 12, 2024 for an additional month to February 12,
2024. The Company’s Amended and Restated Memorandum and Articles of Association provides the Company with the right to extend the
Deadline Date eighteen times for an additional one month each time, from April 12, 2023, the initial Deadline Date, to up to October 12,
2024. In connection with the tenth Extension, the Board delivered the Sponsor a written request to draw down $50,000 under its previously-disclosed
promissory note. The Sponsor deposited $50,000 each into our trust account in connection with the tenth, eleventh, twelfth, thirteenth,
fourteenth, fifteenth, sixteenth and seventeenth, Extension on January 12, 2024, February 17, 2024, March 12, 2024, April 19,
2024, May 17, 2024, June 30, 2024, July 23, 2024 and August 16, 2024, respectively, to extend the Combination Period
until September 12, 2024.
The
board of directors furthermore confirmed their intention and policy to continue to extend the Deadline Date on a monthly basis, but will
not be issuing a press release every month. Therefore, investors can expect that the sponsor will continue to deposit $50,000 into the
Company’s Trust Account in connection with each extension within seven days of the 12th day of each month. In the event that the
board of directors elects not to extend, they will issue a press release announcing this change in policy.
Contribution
and Extension Promissory Note
On
April 10, 2023, the Company held the 2023 Extraordinary Meeting. At the 2023 Extraordinary Meeting, the Company’s shareholders
approved, among other things, a proposal to grant the Company the right to extend the Combination Period to the Extended Date, and to
allow the Company, without another shareholder vote, by resolution of the Company’s board of directors, to elect to further extend
the Extended Date in one-month increments up to eleven additional times, or a total of up to twelve months total, up to April 12,
2024 (the “Extension Proposal”) by amending the Amended and Restated Memorandum and Articles of Association (the “First
Extension”). Under Cayman Islands law, such amendment of the Amended and Restated Memorandum and Articles of Association took effect
upon approval of the Extension Proposal. In connection with the vote to approve the Extension Proposal, the holders of 18,336,279 Class A
ordinary shares properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.31 per share,
for an aggregate redemption amount of approximately $189 million. In connection with each monthly extension in accordance with the First
Extension, the sponsor deposited $160,000 into the Trust Account every month from April to November 2023.
Additionally,
the sponsor agreed that if the Extension Proposal was approved, it or its designee would deposit into the Trust Account, as a loan, the
Contribution on each of the following dates: (i) April 13, 2023; and (ii) one business day following our public announcement
disclosing that the board of directors has determined to extend the extended date for an additional month in accordance with the Extension
Proposal. Subsequently, the sponsor agreed that if the Second Extension Proposal was approved, it or its designee would deposit into
the Trust Account, as a loan, the Contribution within seven days of the 12th day of each month pursuant to the board of directors determining
to extend the extended date for an additional month in accordance with the Second Extension Proposal. In connection with the Contribution
and advances the sponsor may make in the future to us for working capital expenses, on April 13, 2023, we issued the original extension
promissory note, a convertible promissory note to the sponsor with a principal amount up to $1 million (the “Original Extension
Promissory Note”). On September 8, 2023, we issued the amended and restated promissory note in the principal amount of up
to $2.5 million to the sponsor (the “Amended and Restated Promissory Note”), to amend and restate the Original Extension
Promissory Note. On April 18, 2024, we amended and restated the convertible promissory note, dated as of September 8, 2023,
previously issued to the Sponsor to increase the aggregate principal amount to up to $3,500,000 (as amended and restated, the “Note”).
The Note was issued in connection with advances the Sponsor may make, in its discretion, to us for working capital expenses. The Amended
and Restated Extension Promissory Note bears no interest and is due and payable upon the earlier to occur of (i) the date on which
the Company consummates its initial business combination and (ii) the date of the Company’s liquidation. At the election of
the sponsor, up to $1,500,000 of the unpaid principal balance under the Amended and Restated Extension Promissory Note may be converted
into conversion warrants at the price of $1.00 per warrant. Such conversion warrants will have terms identical to the warrants issued
to the sponsor in the Private Placement.
On
December 11, 2023, the Company held the Meeting. At the Meeting, the Second Extension Amendment Proposal to give the board
of directors the right to extend the date by which the Company must consummate a Business Combination from December 12, 2023 on
a monthly basis up to ten (10) times until October 12, 2024 (or such earlier date as determined by the Board) (the “Second
Extension Amendment”) was approved. Under the law of the Cayman Islands, upon approval of the Second Extension Amendment Proposal
by the affirmative vote of at least two-thirds (2/3) of the shareholders entitled to vote, who attended and voted at the Meeting (including
those who voted online), the Second Extension Amendment became effective. The Company filed the Second Extension Amendment with the Cayman
Islands Registrar of Companies on December 12, 2023. In connection with the vote to approve the Second Extension Amendment Proposal,
the holders of 1,817,650 Public Shares properly exercised their right to redeem such shares for cash at a redemption price of approximately
$11.00 per share, for an aggregate redemption amount of approximately $19.99 million. Consequently, the Contribution will be $50,000
per month needed for the Company to complete a Business Combination.
As
of June 30, 2024, the outstanding principal under the Amended and Restated Extension Promissory Note was $3,103,268 .
Founder
Conversion
On
May 9, 2023, pursuant to the terms of the Amended and Restated Memorandum and Articles of Association and the approval of the Founder
Share Amendment Proposal, the sponsor, the holder of an aggregate of 4,002,121 of the Class B ordinary shares, elected to convert
each outstanding Class B ordinary share held by it on a one-for-one basis into Class A ordinary shares, with immediate effect
in the founder conversion. Following this founder conversion and the redemptions, we had an aggregate of 8,665,842 Class A ordinary
shares and 1,747,879 Class B ordinary shares issued and outstanding.
Recent
Developments
Nasdaq
listing
On October 9,
2023, the Company received a letter (the “Total Shareholders Notice”) from the Listing Qualifications Department of the Nasdaq
Stock Market (“Nasdaq”) notifying the Company that it was not in compliance with Nasdaq Listing Rule 5450(a)(2), which
required the Company to main at least 400 total holders for continued listing on the Nasdaq Global Market (the “Minimum Total Holders
Rule”). The Total Shareholders Notice stated that the Company had until November 24, 2023 to provide Nasdaq with a plan to
regain compliance. If the plan was accepted, Nasdaq might grant an extension of up to 180 calendar days from the date of the Total Shareholders
Notice to evidence compliance. If Nasdaq did not accept the Company’s plan, the Company would have the opportunity to appeal that
decision to a Nasdaq Hearings Panel (the “Panel”). The Total Shareholders Notice had no immediate effect on the listing of
the Company’s securities, and the Company’s securities continued to trade on the Nasdaq Global Market. On November 24,
2023, the Company provided plan to Nasdaq for meeting the requirements under Nasdaq Listing Rule 5450(a)(2), and evaluated available
options to regain compliance. However, there could be no assurance that the Company would be able to regain compliance under Nasdaq Listing
Rule 5450(a)(2), or would otherwise be in compliance with other Nasdaq listing criteria. On October 12, 2023, the Company filed
a Current Report on Form 8-K with the SEC (the “Oct. 2023 Current Report”) to disclose its receipt of the Total
Shareholders Notice in accordance with Nasdaq Listing Rule 5810(b). On January 18, 2024 the Company provided an update to Nasdaq
of its progress on fulfilling the plan to regain compliance and received a request to provide an additional update to Nasdaq on February 20,
2024. On February 20, 2024 the Company again updated Nasdaq on its progress in fulfilling the plan to regain compliance and continues
to be proactive in regaining compliance. Pursuant to the 180-day deadline from the letter received October 9, 2023, the date for
the Company to demonstrate compliance is April 6, 2024. In the event that the Company is not able to demonstrate compliance to Nasdaq
on such date, there is a reasonable possibility that the Company may receive a de-list letter from Nasdaq, at which point the Company
would need to request a hearing (see Note 10 for subsequent update on Nasdaq listing status).
On
April 30, 2024, the Company received a Total Shareholders Notice from Nasdaq indicating that the Company did not regain compliance
with the Minimum Total Holders Rule. The Company timely requested a hearing before the Panel to appeal the Total Shareholders Notice
from Nasdaq and the hearing was held on June 18, 2024. On August 5, 2024, the Panel granted the Company’s request for
continued listing on the Nasdaq Global Market and confirmed that the Company was in compliance with the Minimum Total Holders Rule.
Results
of Operations
Our
entire activity since inception up to June 30, 2024 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. We will not be generating
any operating revenues until the closing and completion of our initial business combination, at the earliest. We will generate non-operating
income in the form of interest income from the amount held in the Trust Account.
For
the three months ended June 30, 2024, we had net loss of approximately $1.3 million, which consisted of approximately $730,000 in
operating and formation expenses and a loss of approximately $932,000 from change in fair value of warrant liability, which were partially
offset by approximately $344,000 in income from cash held in the Trust Account.
For
the six months ended June 30, 2024, we had net loss of approximately $2.0 million, which consisted of approximately $1.6 million
in operating and formation expenses and approximately $70 interest expense from bank and a loss of approximately $1.1 million from change
in fair value of derivative warrant liability, which were partially offset by approximately $690,000 in income from cash held in the
Trust Account.
For
the three months ended June 30, 2023, we had net income of approximately $1.7 million, which consisted of a gain of approximately
$187,000 from the change in fair value of derivative warrant liabilities, a gain of approximately $337,000 from the forfeiture of deferred
underwriting fees, approximately $1.4 million in income from investments held in Trust Account and interest income on operating account,
which were partially offset by and approximately $226,000 in operating and formation expenses.
For
the six months ended June 30, 2023, we had net income of approximately $3.1 million, which consisted of approximately $3.5 million
in income from investments held in Trust Account and interest income on operating account, gain of approximately $337,000 from the forfeiture
of deferred underwriting fees, which were partially offset by a loss of approximately $187,000 from the change in fair value of derivative
warrant liabilities and approximately $503,000 in operating and formation expenses.
Factors
That May Adversely Affect Our Results of Operations
Our results of
operations and our ability to complete an initial business combination may be adversely affected by various factors that could cause
economic uncertainty and volatility in the financial markets, many of which are beyond our control. Our business could be impacted by,
among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, increases in interest
rates, supply chain disruptions, declines in consumer confidence and spending, and geopolitical instability, such as the military conflict
in Ukraine and the Middle East. We cannot at this time fully predict the likelihood of one or more of the above events, their duration
or magnitude or the extent to which they may negatively impact our business and our ability to complete an initial business combination.
Liquidity, Capital Resources and
Going Concern
Our liquidity needs
to date have been satisfied through the payment of $25,000 from our sponsor to cover for certain offering expenses on behalf of us in
exchange for issuance of Founder Shares, a loan under the Initial Public Offering’s promissory note in the amount of $250,000 and
advances from our sponsor to cover for certain expenses on our behalf, and net proceeds from the consummation of the Initial Public Offering
and the Private Placement held outside of the Trust Account. We fully repaid the Initial Public Offering’s promissory note balance
on October 12, 2021. We also paid for certain expenses on behalf of a related party. As of December 31, 2021, we had approximately
$3,500 in amount due from related party outstanding, which was fully paid in April 2022. Subsequently, we borrowed an additional
amount of approximately $2,800 and fully settled the balance in July 2022.
As of June 30,
2024, we had approximately $8,000 in cash held outside of the Trust Account and a working capital deficit of approximately $5.0 million.
For the six months
ended June 30, 2024, net cash used in operating activities was approximately $930,000. Net loss of approximately $2.04 million was
affected by income from cash held in the Trust Account of approximately $690,000, change in fair value of warrant liabilities of approximately
$1.1 million and changes in operating assets and liabilities provided approximately $680,000 of cash for operating activities. Cash used
in investing activities resulted from monthly extension deposits into the Trust Account of $300,000. Cash provided by financing activities
resulted from the proceeds from the Extension Promissory Note of $1,213,500.
For the six months
ended June 30, 2023, net cash used in operating activities was approximately $180,000. Net income of approximately $3.1 million
was affected by change in fair value of derivative warrant liabilities of approximately $187,000, income from investments held in Trust
Account of approximately $3.5 million, gain on forfeiture deferred underwriting commission of approximately $337,000 and changes in operating
assets and liabilities provided approximately $323,000 of cash for operating activities.
As of June 30,
2024, we had cash held in the Trust Account of approximately $32.4 million. We intend to use substantially all of the funds held in the
Trust Account, including any amounts representing interest earned on the Trust Account (less taxes payable, if applicable, and deferred
underwriting commissions) to complete our initial business combination. To the extent that our equity or debt is used, in whole or in
part, as consideration to complete our initial business combination, the remaining proceeds held in the Trust Account will be used as
working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
We have incurred
and expect to continue to incur significant costs in pursuit of our acquisition plans. In connection with our assessment of going concern
considerations in accordance with ASC 205-40, we have until October 12, 2024, if all extensions of the extended date are exercised,
to consummate a business combination. It is uncertain that we will be able to consummate a business combination by this time, and if
a business combination is not consummated by this date, then there will be a mandatory liquidation and subsequent dissolution of our
Company.
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. The condensed consolidated financial statements and notes thereto included
in this Report under “Item 1. Financial Statements” do not include any adjustments that might result from the outcome of
this uncertainty.
Contractual Obligations
Registration Rights Agreement
The holders of
the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of working capital loans (and any Class A
ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants issued upon conversion of working capital loans)
are entitled to registration rights pursuant to a registration rights agreement signed on the effective date of the registration statement.
The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities.
In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent
to consummation of a business combination. We have granted Cantor and Odeon or their designees or affiliates certain registration rights
relating to these securities. The underwriters of the Initial Public Offering may not exercise their demand and “piggyback”
registration rights after five and seven years, respectively, after the effective date of the registration statement and may not exercise
demand rights on more than one occasion. We bear the expenses incurred in connection with the filing of any such registration statements.
Underwriters Agreement
In connection with
the Initial Public Offering, the underwriters were granted a 45-day option from the date of the prospectus to purchase up to 3,000,000
additional Units to cover over-allotments. On October 12, 2021, the underwriters fully exercised the over-allotment option to purchase
an additional 3,000,000 Units at an offering price of $10.00 per Unit, generating additional gross proceeds of $30,000,000 to us.
The underwriters
were paid a cash underwriting discount of $0.20 per Unit (excluding over-allotment Units) in the Initial Public Offering, or $4,000,000
in the aggregate upon the closing of the Initial Public Offering. In addition, $0.50 per Unit (excluding over-allotment Units), and $0.70
per over-allotment Unit (totaling $12,100,000 in aggregate) is payable to the underwriters for deferred underwriting commission. The
deferred fee is payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete a business
combination, subject to the terms of the Underwriting Agreement.
On April 12,
2023, we entered into a Fee Reduction Agreement, which amends the Underwriting Agreement. According to the Underwriting Agreement, we
previously agreed to pay to the underwriters of the Initial Public Offering an aggregate of $12,100,000 as deferred underwriting commissions,
a portion of which fee is payable to each underwriter in proportion to their respective commitments pursuant to the Underwriting Agreement,
upon the consummation of a business combination. Pursuant to the Fee Reduction Agreement, the underwriters have agreed to forfeit sixty-six
and 94/100 percent (66.94%) of the aggregate deferred underwriting commissions of $12,100,000 for a total reduction of $8,100,000. However,
if we enter into a business combination with a target at a pre-money valuation above $100 million, the forfeiture percentage for underwriters
will be reduced to no less than fifty percent (50%) to each, an approximate reduction of $6,050,000. On April 4, 2024, we entered
into an Amended & Restated Fee Reduction Agreement, which amends the Underwriting Agreement with Cantor Fitzgerald &
Co. (“CF&CO”). Pursuant to the Amended and Restated Fee Reduction Agreement with CF&CO, in the event that we consummates
the Business Combination, CF&CO agrees that it will forfeit $6,475,000 of the aggregate original deferred fee that would otherwise
be payable by us to CF&CO, resulting in a remainder of $1,995,000. On April 4, 2024, we entered into an Amended & Restated
Fee Reduction Agreement, which amends the Underwriting Agreement with Odeon Capital Group LLC (“Odeon”). Pursuant to the
Amended and Restated Fee Reduction Agreement with Odeon, in the event that we consummates the Business Combination with AERKOMM, Odeon
agrees that it will forfeit $2,775,000 of the aggregate original deferred fee that would otherwise be payable by us to Odeon, resulting
in a remainder of $855,000. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely
in the event that we complete a business combination, subject to the terms of the underwriting agreement.
Administrative Support Agreement
On October 6,
2021, we entered into an agreement with IX Acquisition Services LLC, to pay up to $10,000 per month for office space, secretarial and
administrative services. Upon completion of a business combination or our liquidation, we will cease paying these monthly fees, however, IX
Services waived these fees for the year ended December 31, 2023 and three and six-months ended June 30, 2024.
Off-Balance Sheet Arrangements
As of June 30,
2024, we did not have any off-balance sheet arrangements.
Critical Accounting Estimates
The preparation
of the condensed consolidated financial statements included in this Report under “Item 1. Financial Statements” and related
disclosures in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets
and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and
income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the
following critical accounting estimates:
Class A Ordinary Shares
Subject to Possible Redemption
All of the 23,000,000
Class A ordinary shares sold as part of the Units in the Initial Public Offering and subsequent full exercise of the underwriters’
over-allotment option contain a redemption feature, which allows for the redemption of such public shares in connection with our liquidation,
if there is a shareholder vote or tender offer in connection with the business combination and in connection with certain amendments
to the Amended and Restated Memorandum and Articles of Association. In accordance with SEC and its staff’s guidance on redeemable
equity instruments, which has been codified in ASC 480, redemption provisions not solely within the control of our Company require ordinary
shares subject to redemption to be classified outside of permanent equity. Therefore, all public shares have been classified outside
of permanent equity.
We recognize changes
in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value
at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges
against additional paid in capital and accumulated deficit.
Derivative Financial Instruments
We evaluate our
financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance
with ASC 815. Derivative instruments are initially recorded at fair value on the grant date and re-valued at each reporting date, with
changes in the fair value reported in the statements of operations included in this Report under “Item 1. Financial Statements”.
The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed
at the end of each reporting period. Derivative warrant liabilities are classified as non-current liabilities as their liquidation is
not reasonably expected to require the use of current assets or require the creation of current liabilities.
We evaluated the
Public Warrants and Private Placement Warrants in accordance with ASC 480 and ASC 815 and concluded that a provision in the warrant agreement
related to certain tender or exchange offers precludes the Public Warrants and Private Placement Warrants from being accounted for as
components of equity. As the Public Warrants and Private Placement Warrants meet the definition of a derivative as contemplated in ASC
815, they were recorded as derivative liabilities on the balance sheets included in this Report under “Item 1. Financial Statements”
and measured at fair value at inception (on the date of the Initial Public Offering) and at each reporting date in accordance with ASC
820, with changes in fair value recognized in the statements of operations included in this Report under “Item 1. Financial Statements”
in the period of change. The determination of fair value for the warrant liabilities represents a significant estimate within the financial
statements included in this Report under “Item 1. Financial Statements”.
Convertible Instruments
The Company accounts
for its promissory notes that feature conversion options in accordance with ASC 815. ASC 815 requires companies to bifurcate conversion
options from their host instruments and account for them as freestanding derivative financial instruments according to certain criteria.
The criteria includes circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are
not clearly and closely related to the economic characteristics and risks of the host contract, (b) a promissory note that embodies
both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable GAAP with changes
in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument
would be considered a derivative instrument.
Recent Accounting Pronouncements
In December 2023,
the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure
of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure
requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company’s
management does not believe the adoption of ASU 2023-09 will have a material impact on its condensed consolidated financial statements
and disclosures.
Management does
not believe there are any material recently issued, but not yet effective, accounting standards that, if currently adopted, would have
a material effect on our condensed consolidated financial statements included in this Report under “Item 1. Financial Statements”.
Item 3. Quantitative and Qualitative Disclosures
About Market Risk.
We are a smaller
reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required
under this Item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls
and Procedures
Disclosure controls
and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or
submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s
rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that
information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management,
including our Chief Executive Officer and Chief Financial Officer (together, the “Certifying Officers”), or persons performing
similar functions, as appropriate, to allow timely decisions regarding required disclosure.
Under the supervision
and with the participation of our management, including our Certifying Officers, we carried out an evaluation of the effectiveness of
the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the
Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were effective as
of the end of the period covered by this Report.
We do not expect
that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no
matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls
and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints,
and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures,
no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies
and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the
likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential
future conditions.
Changes in Internal Control over
Financial Reporting
There have been
no changes to our internal control over financial reporting during the quarterly period ended June 30, 2024 that materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
To the knowledge
of our Management Team, there is no litigation currently pending or contemplated against us, any of our officers or directors in their
capacity as such or against any of our property.
Item 1A. Risk Factors.
As a smaller reporting
company under Rule 12b-2 of the Exchange Act, we are not required to include risk factors in this Report. However, as of the date
of this Report, other than as set forth below, there have been no material changes with respect to those risk factors previously disclosed
in our (i) Registration Statement, (ii) Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as
filed with the SEC on April 13, 2022 and as amended May 9, 2022 (the “2021 Annual Report”) (iii) 2022 Annual
Report, (iv) Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2022, September 30, 2022 and
March 31, 2023, as filed with the SEC on May 13, 2022, November 10, 2022 and May 22, 2023, respectively (v) Definitive
Proxy Statement on Schedule 14A, as filed with the SEC on March 23, 2023, and (vi) the Registration Statement on Form S-4
as filed with the SEC on May 13, 2024. Any of these factors could result in a significant or material adverse effect on our results
of operations or financial condition. Additional risks could arise that may also affect our business or ability to consummate an initial
Business Combination. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future
filings with the SEC.
There is substantial doubt about
our ability to continue as a “going concern.”
In connection with
our assessment of going concern considerations under applicable accounting standards, Management has determined that our possible need
for additional financing to enable us negotiate and complete our initial Business Combination, as well as the deadline by which we may
be required to liquidate our trust account, raises substantial doubt about our ability to continue as a going concern through approximately
one year from the date the unaudited condensed consolidated financial statements included in this Report under “Item 1. Financial
Statements” were issued.
To mitigate the risk that we
might be deemed to be an investment company for purposes of the Investment Company Act, on November 13, 2023, we instructed the
trustee to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in an interest-bearing
demand deposit account at a bank until the earlier of the consummation of our initial Business Combination or our liquidation. As a result,
we may receive less interest on the funds held in the Trust Account than the interest we would have received pursuant to our original
Trust Account investments, which could reduce the dollar amount our Public Shareholders would receive upon any redemption or our liquidation.
The funds in the
Trust Account had, since our Initial Public Offering, been held in U.S. government treasury obligations with a maturity of 185 days or
less or in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7
under the Investment Company Act. However on November 13, 2023, to mitigate the risk of us being deemed to be an unregistered investment
company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act) and thus subject to regulation
under the Investment Company Act, we instructed Continental, the trustee with respect to the trust account, to liquidate the U.S. government
treasury obligations or money market funds held in the Trust Account and thereafter to hold all funds in the Trust Account in an interest-bearing
demand deposit account at a bank until the earlier of the consummation of our initial Business Combination or liquidation. Following
such liquidation, we may receive less interest on the funds held in the Trust Account than the interest we would have received pursuant
to our original Trust Account investments; however, interest previously earned on the funds held in the Trust Account still may be released
to us to pay our taxes, if any, and certain other expenses as permitted. Consequently, the transfer of the funds in the Trust Account
to an interest-bearing demand deposit account could reduce the dollar amount our Public Shareholders would receive upon any redemption
or our liquidation.
In the event that
we may be deemed to be an investment company, we may be required to liquidate the Company.
Military or other conflicts in
Ukraine, the Middle East or elsewhere may lead to increased volume and price volatility for publicly traded securities, or affect the
operations or financial condition of potential target companies, which could make it more difficult for us to consummate an initial Business
Combination.
Military or other
conflicts in Ukraine, the Middle East or elsewhere may lead to increased volume and price volatility for publicly traded securities,
or affect the operations or financial condition of potential target companies, and to other company or industry-specific, national, regional
or international economic disruptions and economic uncertainty, any of which could make it more difficult for us to identify a Business
Combination target and consummate an initial Business Combination on acceptable commercial terms or at all.
If the Company is deemed to be
an investment company for purposes of the Investment Company Act, the Company may be forced to abandon its efforts to complete the Business
Combination and instead be required to liquidate. To mitigate the risk of that result, as of November 13, 2023, the Company has
moved its Trust Account from investments in securities to an interest-bearing bank demand deposit account.
There is currently
uncertainty concerning the applicability of the Investment Company Act to a SPAC. It is possible that a claim could be made that the
Company has been operating as an unregistered investment company, including under the subjective test of Section 3(a)(1)(A) of
the Investment Company Act, based on the current views of the SEC. If the Company was deemed to be an investment company for purposes
of the Investment Company Act, the Company might be forced to abandon its efforts to complete the Business Combination and instead be
required to liquidate. If the Company is required to liquidate, the Company would not be able to complete the Business Combination and
investors would not be able to realize the benefits of owning shares in AKOM Inc., including the potential appreciation in the value
of the shares and warrants following such a transaction, and the the Company’s warrants would expire worthless.
Prior to December 31,
2023, the funds in the Trust Account were held only in U.S. government treasury obligations with a maturity of 185 days or less or in
money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under
the Investment Company Act. Nevertheless, to mitigate the risk of the Company being deemed to have been operating as an unregistered
investment company under the Investment Company Act, as of November 13, 2023, the Company has instructed Continental Stock Transfer &
Trust Company, the trustee with respect to the Trust Account, to liquidate the U.S. government securities or money market funds held
in the Trust Account and, thereafter, to hold all funds in the Trust Account in an interest-bearing bank demand deposit account until
the earlier of the consummation of our business combination or our liquidation.
The SEC has recently issued final
rules relating to certain activities of SPACs. Certain of the procedures that we, a potential business combination target, or others
may determine to undertake in connection with such proposals may increase our costs and the time needed to complete a business combination
and may make it more difficult to complete a business combination. The need for compliance with the SPAC Final Rules may cause us
to liquidate the Company at an earlier time than we might otherwise choose.
On January 24,
2024, the SEC adopted final rules (the “SPAC Rules”) relating, among other things, to disclosures in SEC filings in
connection with business combination transactions between special purpose acquisition companies (“SPACs”) such as us and
private operating companies; the financial statement requirements applicable to transactions involving shell companies; and the use of
projections by SPACs in SEC filings in connection with proposed business combination transactions. SPACs will be required to comply with
the SPAC Rules beginning July 1, 2024. In connection with the issuance of the SPAC Rules, the SEC also issued guidance (the
“SPAC Guidance”) regarding the potential liability of certain participants in business combination transactions and the extent
to which SPACs could become subject to regulation under the Investment Company Act of 1940, as amended (the “Investment Company
Act”). The need for compliance with the SPAC Rules and the SPAC Guidance may cause us to liquidate the Company at an earlier
time than we might otherwise choose. Certain of the procedures that we or others may determine to undertake in connection with the SPAC
Rules, the SPAC Guidance, or before July 1, 2024 as a matter of practice in light of the SEC’s previously expressed views,
may increase the costs and time of negotiating and completing an initial business combination, including the transaction with respect
to the Merger Agreement, and may constrain the circumstances under which we could complete an initial business combination. The need
for compliance with the SPAC Rules and the SPAC Guidance may cause us to liquidate the Company at an earlier time than we might
otherwise choose. Were we to liquidate, our warrants would expire worthless, and our securityholders would lose the investment opportunity
associated with an investment in the combined company, including any potential price appreciation of our securities.
Item 2. Unregistered Sales of Equity Securities and Use
of Proceeds.
Unregistered Sales of Equity Securities
None.
Use of Proceeds
For a description
of the use of proceeds generated in our Initial Public Offering and Private Placement, see Part II, Item 5 of the 2021 Annual
Report. There has been no material change in the planned use of proceeds from the Initial Public Offering and Private Placement as described
in the Registration Statement. The specific investments in our Trust Account may change from time to time.
On November 13,
2023 we instructed Continental to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account
in an interest-bearing demand deposit account at a bank, with Continental continuing to act as trustee, As a result, following the liquidation
of investments in the Trust Account, the remaining proceeds from the Initial Public Offering and Private Placement are no longer invested
in U.S. government securities or money market funds.
Purchases of Equity Securities by
the Issuer and Affiliated Purchasers
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
Item 6. Exhibits.
The
following exhibits are filed as part of, or incorporated by reference into, this Report.3
| * | Filed herewith. |
| ** | Furnished herewith. |
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
| Dated: August 19, 2024 |
IX Acquisition Corp. |
| |
|
|
| |
By: |
/s/ Karen
Bach |
| |
Name: |
Karen Bach |
| |
Title: |
Chief Executive Officer |
| |
|
(Principal Executive Officer) |
| |
|
|
| |
By: |
/s/ Noah
Aptekar |
| |
Name: |
Noah Aptekar |
| |
Title: |
Chief Financial Officer and Chief Operating Officer |
| |
|
(Principal Financial Officer) |
Exhibit 31.1
CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14(a) AND RULE 15d-14(a) UNDER
THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Karen Bach, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of IX
Acquisition Corp.; |
| 2. | Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant
and have: |
| a) | Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant
is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure
controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s
internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee
of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s
ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: August 19, 2024 |
By: |
/s/ Karen Bach |
| |
|
Karen Bach |
| |
|
Chief Executive Officer |
| |
|
(Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER
PURSUANT TO RULE 13a-14(a) AND RULE 15d-14(a) UNDER
THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Noah Aptekar,
certify that:
| 1. | I
have reviewed this Quarterly Report on Form 10-Q of IX Acquisition Corp.; |
| 2. | Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered
by this report; |
| 3. | Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The
registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant is made known to us by others within those entities, particularly during the period
in which this report is being prepared; |
| b) | Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
and |
| d) | Disclosed
in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The
registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing
the equivalent functions): |
| a) | All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal
control over financial reporting. |
| Date: August 19, 2024 |
By: |
/s/
Noah Aptekar |
|
|
Noah Aptekar |
|
|
Chief Financial Officer and Chief Operating
Officer |
| |
|
(Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
In connection
with the Quarterly Report on Form 10-Q of IX Acquisition Corp. (the “Company”) for the quarterly period ended June 30,
2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Karen Bach, Chief Executive
Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that to my knowledge:
| 1. | The
Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended;
and |
| 2. | The
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Company as of and for the period covered by the Report. |
| Date:
August 19, 2024 |
By: |
/s/ Karen Bach |
|
|
Karen
Bach |
|
|
Chief
Executive Officer |
| |
|
(Principal
Executive Officer) |
Exhibit 32.2
CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
In connection
with the Quarterly Report on Form 10-Q of IX Acquisition Corp. (the “Company”) for the quarterly period ended June 30,
2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Noah Aptekar, Chief
Financial Officer and Chief Operating Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
| 1. | The
Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended;
and |
| 2. | The
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Company as of and for the period covered by the Report. |
| Date:
August 19, 2024 |
By: |
/s/ Noah Aptekar |
|
|
Noah Aptekar |
|
|
Chief Financial Officer
and Chief Operating Officer |
| |
|
(Principal Financial
Officer) |
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