This article first appeared in The Edge Malaysia Weekly on September 14, 2026 - September 20, 2026

DESPITE the terminated deal with Next Lion Ltd on the Philippines venture, Zetrix AI Bhd’s (KL:ZETRIX) ties with the former remain firmly on their interest on the other side of the world — a special purpose acquisition company (SPAC) listed on the Nasdaq in the US.

Incorporated in the British Virgin Islands, Next Lion is the managing member of Next Lion Sponsor Holdings LLC, the sponsor of Nasdaq-listed SPAC Forefront Tech Holdings Acquisition Corp (FTHAC). Next Lion is owned by Malaysian fund manager Sean Yap Shon Leong, who is managing director of M&A Asset Management Malaysia Sdn Bhd.

The SPAC, which raised US$100 million from its initial public offering (IPO) on May 1, entered into a memorandum of understanding (MoU) with Zetrix AI on May 25 for a potential business combination.

FTHAC is eyeing a potential business combination in the technology sector, “with emphasis on blockchain-enabled artificial intelligence (AI), digital trade identities and robotics”, according to its prospectus sighted by The Edge.

Zetrix AI, together with government-to-government initiative China-Asean AI Lab, meanwhile, has been focused on the development of technology that converges blockchain, AI and robotics solutions. The group said it was exploring carving out projects from the China-Asean AI Lab into a new subsidiary intended for listing on an exchange overseas such as the Nasdaq.

Zetrix AI co-founder and managing director Wong Thean Soon, or better known as T S Wong, previously indicated that the listing was targeted for this year.

The carving out of projects, dubbed AI Foundation Lab, is targeting a valuation of US$3 billion (RM12.2 billion), alongside a US$200 million capital-raising exercise before the listing, according to an Aug 26 CLSA note. It plans to eventually pare down its stake in the US-listed company, with proceeds to be used to reduce its debt, and potentially pay a special dividend.

Zetrix AI has been piling on debt since 2022, following its refocus in blockchain and AI-related services. Its gross debt stood at RM166.1 million in the financial year ended Dec 31, 2021 (FY2021), which rose to RM483.3 million in FY2022 and steadily increased to RM2.2 billion at end-June 2026.

Rising debt is attributed to Zetrix AI’s spending on the development of its blockchain platform, applications and associated agentic AI. Its development cost of RM171.3 million in FY2020 was noticeable. At end-June 2026, it stood at RM3.7 billion.

The increase in development cost has also outpaced the rate at which the assets are being amortised. The company’s development cost has grown at an average of RM720.17 million a year over the past three financial years, while an average of RM28.51 million was amortised each year.

The development cost has already been highlighted as a “key audit matter” by Zetrix AI’s external auditors, signifying the rising concern.

In FY2025, management already noted that increased competitor activity had caused the board of directors to “reconsider their assumptions on future market share and anticipated margins” of its Zetrix Layer-1 public blockchain platform. Nonetheless, the board said it remained confident of recovering the assets’ development cost, even if the returns were reduced.

The MoU with FTHAC, meanwhile, does not guarantee a transaction or specifically commit parties to a Nasdaq listing. The MoU is non-binding and carries an exclusivity period until Nov 21, unless mutually extended.

FTHAC has until Nov 1, 2027, subject to shareholder-approved extensions, to complete its initial business combination. If it fails to do so, the SPAC will be liquidated and the public shares redeemed.

Still, Next Lion’s position behind the sponsor of FTHAC makes the connection notable.

Next Lion Sponsor Holdings, together with Next Lion, were each disclosed as beneficial owners of the 3.69 million FTHAC shares, or 26.9% of the SPAC’s voting shares. It has already forked out close to US$3.6 million to subscribe for the shares in the SPAC.

The sponsor has significant influence over FTHAC before its initial business combination, including control over the appointment of the SPAC’s directors. Three of its five directors, however, are independent under the Nasdaq’s listing rules.

A proposed business combination requires a simple majority vote of shareholders, with a quorum of at least one-third of the voting shares. As such, the sponsor’s voting shares alone would be sufficient to approve a business combination, according to FTHAC’s prospectus.

This gives Next Lion an influential position in deciding the course of FTHAC’s initial business combination. But whether Zetrix AI’s plans to list its blockchain and AI-related unit via the Nasdaq-listed SPAC comes to fruition remains to be seen.

Read also:
Cover Story 1: Questions abound about Zetrix AI
Cover Story 1: Puzzling off-then-on Philippines deal

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