NOTE 8 - Long-term Investment, net

-Investment in Aerkomm Taiwan

On December 3, 2020, the Company entered into three separate stock purchase agreements with three individuals to acquire an aggregate of 6,000,000 shares of YuanJiu Inc. (“YuanJiu”) for total consideration of NT$141,175,000 (approximately US$5.0 million). At the time of acquisition, YuanJiu was listed on the Taiwan Exchange. Albert Hsu, a member of the Company’s Board of Directors, served as Chairman of YuanJiu. On July 19, 2021, YuanJiu changed its name to EJECTT Inc. (“Ejectt”).

On July 20, 2023, the Taipei Exchange suspended trading of Ejectt’s securities pursuant to Article 12-1 of the Taipei Exchange Business Rules due to significant changes in the scope of Ejectt’s business following a change in control and the dismissal of an independent director. Although Ejectt intended to undertake actions necessary to satisfy the requirements for resumption of trading, its shares did not resume trading and were subsequently delisted from the Taipei Exchange on March 4, 2024.

On July 28, 2023, the Company and Ejectt entered into a non-binding letter of intent regarding a proposed merger between Aerkomm Taiwan Inc. (“Aerkomm Taiwan”) and Ejectt, with Aerkomm Taiwan as the surviving entity. On January 30, 2024, the shareholders of Aerkomm Taiwan approved pursuing the merger, and a merger proposal was delivered to Ejectt on February 1, 2024. On May 23, 2024, the shareholders of both Aerkomm Taiwan and Ejectt approved the merger, and the merger agreement became effective. Aerkomm Taiwan subsequently amended its articles of incorporation to increase its authorized capital in connection with the transaction. The merger required approval from the Taiwan Depository & Clearing Corporation (“TDCC”), and an application for approval was submitted on July 10, 2024.

As of March 11, 2026, the Company held 6,000,000 shares of Ejectt common stock, which were recorded as a long-term investment and pledged as collateral for certain debt obligations of the Company to Bank of Panhsin and Hsiao, Chia-Sung. In prior periods, the Company sold 5,000,000 of the pledged shares and subsequently reacquired 5,000,000 shares of Ejectt common stock. Accordingly, the Company applied an average acquisition cost of NT$25.58 per share, or NT$153,523,000 in aggregate, in determining the carrying value of the investment. During the years ended December 31, 2025 and 2024, the Company concluded that declines in the value of its investment in Ejectt were other-than-temporary and recognized impairment losses of NT$9,320,874 (approximately US$0.3 million) and NT$101,123,141 (approximately US$3.1 million), respectively. As of March 11, 2026, the carrying value of the investment in Ejectt was NT$43,078,985 (approximately US$1.3 million).

On March 11, 2026, Aerkomm Taiwan received official approval from TDCC and completed its merger with Ejectt. Upon completion of the merger, Ejectt’s shares were cancelled and new shares of Aerkomm Taiwan were issued to the former shareholders of Ejectt. As a result, the Company collectively holds a 48.65% ownership interest in Aerkomm Taiwan, consisting of (i) 30,501,000 shares held directly by the Company and (ii) 25,500,000 shares registered in the name of dMobile System Co., Ltd. in connection with a pending transaction that had not been completed as of March 11, 2026, as dMobile had not yet paid the Company for such shares. Accordingly, for purposes of describing the Company’s ownership interest, these shares are included in the Company’s 48.65% ownership interest.

Following the completion of the merger and the resulting change in ownership structure, the Company determined that it no longer had a controlling financial interest in Aerkomm Taiwan and therefore deconsolidated Aerkomm Taiwan effective March 11, 2026 (see Note 4). Upon deconsolidation, the Company initially measured its retained investment in Aerkomm Taiwan at fair value and subsequently accounted for the investment under the equity method of accounting. On March 11, 2026, the Company recognized a gain on its retained investment of $8,332,715, representing the excess of the fair value over the carrying value of its retained investment in Aerkomm Taiwan, and a loss on deconsolidation of $393,452. The fair value of the retained investment on March 11, 2026 was $21,004,976, based on the per share fair value of Aerkomm Taiwan as of that date, as determined based on a valuation performed by an independent third-party valuation firm. The valuation was determined using P/B ratio under market approach, reflecting three scenarios with 29.0%, 32.0%, and 35.0% discount for lack of liquidity, respectively. The valuation methodology incorporates unobservable inputs based on management’s best estimates of the inputs that market participants would use in pricing the asset or liability as of the measurement date, which are consistent with a Level 3 input within the fair value hierarchy. For the period from March 12, 2026 through March 31, 2026, the Company recognized its proportionate share of Aerkomm Taiwan’s net loss of $89,127.

-Investment in Shinbao

On September 30, 2022, the Company entered into a stock purchase agreement to purchase common stock of Shinbao in a total amount of NT$95,000,000 (approximately $2,897,225) for Shinbao’s 7,500,000 shares (25% of total shares). The Company paid NT$35,000,000 (approximately $1,092,044 and $1,115,716, as of March 31, 2026 and December 31, 2025, respectively) as downpayment. During the year ended December 31, 2024, the Company reviews several factors and determined that the decline in value of the prepaid investment in Shinbao was other-than-temporary and recognized an impairment of NT$17,647,368 (approximately US$0.6 million). As of March 31, 2026, the transaction has not been completed, and the Company does not hold any equity interest in Shinbao. Shinbao is a privately-held company in Taiwan. As of March 31, 2026, the value of prepaid investment in Shinbao was NT$17,352,632 (approximately US$0.5 million). For the three months ended March 31, 2026, the Company recorded impairments of $0 against prepaid investment in Shinbao.

As of March 31, 2026 and December 31, 2025, the long-term investment was as follows: