Stock code: 8101

Arima Communications Corp.
Parent Company Only Financial Statements
For the years ended December 31, 2025 and 2024
Together with Independent Auditors' Report

For the convenience of readers and for information purpose only, the auditors' report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors' report and financial statements shall prevail.

Arima Communications Corp.

	Pages
1. Front cover	1
2. Table of contents	2
3. Independent auditors' report	3-10
4. Parent company only balance sheets	11-12
5. Parent company only statement of comprehensive income	13-14
6. Parent company only statement of changes in equity	15
7. Parent company only statement of cash flows	16-17
8. Notes to the parent company only financial statements
(1) History and organization	18
(2) The date of authorization for issuance of the parent company only financial statements and procedures for authorization	18
(3) Application of new standards, amendments and interpretations	18-27
(4) Summary of significant accounting policies	28-42
(5) Critical accounting judgments, estimates and key sources of assumption uncertainty	42-43
(6) Details of significant accounts	44-68
(7) Related party transactions	68-72
(8) Pledge of assets	73
(9) Significant contingent liabilities and unrecognized commitments	73-75
(10) Significant disaster loss	75
(11) Significant events after the balance sheet date	75
(12) Others	75-88
(13) Supplementary disclosures
A. Significant transactions information	89
B. Information on investments	89
C. Information on investments in Mainland China	89
(14) Segment information	99
9. Statement of significant accounts	100-113

值永中和聯合會計師事務所 | SHINEWING CPAs | T. (886) 2 7706 4888 | F. (886) 2 7706 4899

10595 台北市南京東路四段1號11樓 | 11F, 1, Sec. 4, Nanjing E. Rd., Taipei 10595, Taiwan | www.swtw.com.tw

Independent Auditors' Report

Opinion

We have audited the accompanying parent company only balance sheets of Arima Communications Corp. (the "Company") as of December 31, 2025 and 2024, and the related parent company only financial statements of comprehensive income, changes in equity and cash flows for the years then ended and the notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of the Company as of December 31, 2025 and 2024, and its parent company only financial performance and its parent company only cash flows for the years then ended, in accordance with the "Regulations Governing the Preparations of Financial Reports by Securities Issuers" and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the "Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants" and auditing standards accepted in the Republic of China. Our responsibilities under those standards are further described in the Independent auditor's responsibilities for the audit of the parent company only financial statements section of our report. We are independent of the Company in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the "Code"), and we have fulfilled our other ethical responsibilities in accordance with this Code. Based on our audits, we believe that our audits provide a reasonable basis for our opinion.

Catalyst for success

Independent Auditors' Report (Continued)

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements for the year ended December 31, 2025. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters. We determined the key audit matters should be communicated in our audit report are as follows:

Investments accounted for using the equity method

Please refer to Note 4(11) for the accounting policy of investments accounted for using the equity method. Please refer to Note 6(6) for the details of investments accounted for using the equity method.

According to the operation scope and nature of the Company's subsidiaries and associates, the estimated net realizable value of certain subsidiaries' inventories and impairment assessment of their property, plant, and equipment rely on management's subjective judgment, which is an accounting assessment with uncertainty and affects the operating results of the subsidiaries. Therefore, we considered the Company's subsidiaries that accounted for using the equity method, in which their financial statements related to estimating the net realization of the inventory and impairment assessment of their property, plant and equipment as one of the key matters for the year.

Our audit procedures on inventory valuation of subsidiaries accounted for using the equity method included, but were not limited to, understanding and assessing whether the subsidiaries' inventory valuation policy is consistent with the Company's and whether it has been implemented as specified, sampling to inspect the correctness of inventory aging and analyzing changes in inventory aging, reviewing the reasonableness of the allowance for inventory valuation in

Independent Auditors' Report (Continued)

prior years and comparing it with the method and assumptions used to estimate the allowance for inventory valuation in the current period to assess their appropriateness.

Our auditing procedures on impairment assessment of property, plant, and equipment of subsidiaries accounted for using the equity method included, but were not limited to, evaluating cash-generating units as well as the internal and external indications of impairment identified by the management, and obtaining the impairment report issued by the external experts entrusted by the management, and reviewing significant subsequent transactions to identify, if any, whether there is any event that affects the impairment test after the reporting date.

2. Related party transactions

Please refer to Note 4(7) for the accounting policy of loan. Please refer to Note 7 for disclosures.

The transactions between the Company and related parties are frequent, considering that the transactions with related parties are highly controllable, and the rationality and commercial substance of related party transaction conditions will have a significant impact on the expression of these transactions in the parent company only financial statements. Therefore, we considered the related party transactions as one of the key audit matters for the year.

Our audit procedures included, but were not limited to, obtaining the list of related party transactions provided by the management and the letter of representation that all related party transactions have been listed for our audit, reviewing the types of related party transactions, checking or sampling the original vouchers or related documents of each related party transaction in the list provided, inquiring the management to understand the reasons for related party transactions and the basis and rationality of transaction prices, reviewing

Independent Auditors' Report (Continued)

the actual receipts and payments of receivables and payables arising from related party transactions, considering the various evidence obtained from aforesaid, to evaluate the reasonableness of the management's claim that the related party transactions are of commercial substance, sending audit confirmation to related parties and reconciling the response with the list of related party transactions provided, examining whether significant subsequent events has affected the original processing of related party transactions, and reviewing whether various related party transactions have been properly disclosed in parent company only financial statements.

Assessment of going concern assumption

The Company incurred a loss of NT$111,056 thousand in 2025, and the accumulated losses as of December 31, 2025 reached NT$350,941 thousand. As mentioned in Note 12, measures to improve operations and financial condition, to the financial statements, the management of the Company has successively taken necessary measures to ensure that the Company can continue to operate and gradually improve its financial condition in the future. The financial status of the Company in the coming year will have a significant impact and is listed as one of the key audit matters for this year.

Our main audit procedures included as follows:

(1) Discuss with management events or circumstances that may affect the going concern assumption and the plans for responding to them.

(2) Evaluate the feasibility of management's response plans and the effectiveness of improving financial conditions.

(3) Obtain and verify the reasonableness of the cash flow forecast for the next twelve months prepared by management, including:

(A) Evaluate the reasonableness of the assumptions used by management in producing the forecasted financial information;

Independent Auditors' Report (Continued)

(B) Inquire the terms of the loan contract to ascertained that there is no defaults of contract that would result in unexpected cash outflows;

(C) Review existing financing contracts to ascertain the credit period and unused facilities, and also review whether the additional cash injection after the period is sufficient to support the operating capital for the next twelve months.

(4) Assess the appropriateness of management's disclosures in the notes to the financial statements

Responsibilities of management and those charged with governance for the parent company only financial statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the "Regulations Governing the Preparations of Financial Reports by Securities Issuers" and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charges with governance, including members of the Audit Committee are responsible for overseeing the Company's financial reporting process.

Independent Auditors' Report (Continued)

Independent auditor's responsibilities for the audit of the parent company only financial statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a report that includes our opinion. Reasonable assurance is a high level of assurance, but it is not a guarantee that an audit conducted in accordance with the auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

As part of an audit in accordance with the auditing standards, we exercise professional judgment and professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than the one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.
Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Independent Auditors' Report (Continued)

Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the parent company only financial statements, including the footnote disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentations.
Obtain sufficient appropriate audit evidence regarding the financial information of the Company's investee companies accounted for under the equity method to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of audit of the Company's investee companies. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationship and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Independent Auditors' Report (Continued)

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements for the year ended December 31, 2025 and are therefore the key audit matters. We describe these matters in our report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Kuo, Chenyu

Chen, Kuang-Hui

For and on behalf of ShineWing CPAs

March 23, 2026

Taipei, Taiwan

Republic of China

Notice to Readers

The accompanying financial statements are not intended to present the financial position, results of financial operations and cash flows in accordance with accounting principles and practice generally accepted in countries and jurisdictions other than the Republic of China. The standard, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying parent only financial statements and independent auditors' report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the parent company only financial statements are the responsibility of the management, ShineWing CPAs cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

Arima Communications Corp.

Parent company only balance sheets

December 31, 2025 and 2024

(Expressed in thousands of New Taiwan dollars)

Assets	Notes	December 31,
		2025	%	2024	%
Current assets
Cash and cash equivalents	6.(1)	$ 32,316	5	$ 37,208	5
Accounts receivable, net	6.(3)	3,422	1	4,668	1
Other receivables	6.(4)	12	-	457	-
Other receivables - related parties	6.(4) and 7	3,746	1	18,285	3
Current tax assets		2	-	2	-
Inventories	6.(5)	-	-	7,026	1
Prepayments	7	30,496	4	6,351	1
Other current financial assets	8	23,759	4	23,763	3
Other current assets - others	7	7,739	1	3	-
		101,492	16	97,763	14
Non-current assets
Financial assets at fair value through other comprehensive income	6.(2)	-	-	-	-
Investments accounted for using the equity method	6.(6) and 8	504,185	80	560,360	83
Property, plant and equipment	6.(7)	8,396	1	9,035	1
Right-of-use asset	6.(8)	10,501	2	2,527	-
Intangible assets	6.(9)	845	-	5,011	1
Guarantee deposits paid	7	6,494	1	4,692	1
		530,421	84	581,625	86
Total assets		$ 631,913	100	$ 679,388	100

(Continued on next page)

Arima Communications Corp.
Parent company only balance sheets
December 31, 2025 and 2024
(Expressed in thousands of New Taiwan dollars)

(Continued from previous page)

Liabilities and equity	Notes	December 31,
		2025	%	2024	%
Current liabilities
Current borrowings	6.(11)	$ 12,000	2	$ 12,917	2
Current contract liabilities	6.(19)	14,914	2	18,697	3
Notes payable	6.(12)	-	-	-	-
Accounts payable	6.(12)	3,849	-	5,790	1
Accounts payable - related parties	6.(12) and 7	212,601	34	158,575	23
Other payables		23,485	4	17,568	3
Other payables - related parties	7	27,896	4	65,470	10
Current lease liabilities	6.(8) and 7	4,997	1	2,719	-
Long-term borrowings - current portion	6.(13)	16,902	3	27,335	4
Other current liabilities - others		2,255	-	8,579	1
		318,899	50	317,650	47
Non-current liabilities
Long-term borrowings	6.(13)	-	-	7,710	1
Lease liabilities - non-current	6.(8) and 7	5,634	1	646	-
Long-term payable - related parties	7	48,977	8	262,980	39
Guarantee deposits received	7	183	-	-	-
Other non-current liabilities - others		1,000	-	1,000	-
		55,794	9	272,336	40
Total liabilities		374,693	59	589,986	87
Equity
Ordinary share	6.(15)	464,662	74	266,662	39
Advance receipts for share capital	6.(15)	39,600	6	-	-
Capital surplus	6.(16)	120,344	19	61,084	9
Retained earnings:	6.(17)
Accumulated losses		( 350,941 )	( 56 )	( 228,722 )	( 34 )
Other equity interest	6.(18)	( 16,445 )	( 2 )	( 9,622 )	( 1 )
Total equity		257,220	41	89,402	13
Total liabilities and equity		$ 631,913	100	$ 679,388	100

The accompanying notes are an integral part of the parent company only financial statements.

Arima Communications Corp.

Parent company only statement of comprehensive income

For the years ended December 31, 2025 and 2024

(Expressed in thousands of New Taiwan dollars)

	Notes	For the year ended December 31,
		2025	%	2024	%
Operating Revenue	6.(19)	$ 71,268	100	$ 78,484	100
Operating cost	6.(5) and 7	( 49,540 )	( 70 )	( 61,040 )	( 78 )
Gross profit from operations		21,728	30	17,444	22
Operating expenses
Selling expenses		( 7,532 )	( 11 )	( 13,732 )	( 17 )
General and administrative expenses		( 58,365 )	( 82 )	( 53,230 )	( 68 )
Research and development expenses		( 40,210 )	( 56 )	( 62,521 )	( 79 )
Expected credit losses	6.(3), (4) and 7	( 230 )	-	( 2,298 )	( 3 )
		( 106,337 )	( 149 )	( 131,781 )	( 167 )
Loss from operations		( 84,609 )	( 119 )	( 114,337 )	( 145 )
Non-operating income and expenses
Interest income	6.(20)	101	-	92	-
Other income	6.(21) and 7	7,088	10	11,658	14
Other gains and losses	6.(22)	2,860	5	( 15,175 )	( 19 )
Finance costs	6.(25) and 7	( 1,794 )	( 3 )	( 17,339 )	( 22 )
Share of loss of subsidiaries, affiliates and joint ventures accounted for under equity method	6.(6)	( 34,702 )	( 49 )	( 26,092 )	( 33 )
		( 26,447 )	( 37 )	( 46,856 )	( 60 )
Loss before income tax		( 111,056 )	( 156 )	( 161,193 )	( 205 )
Income tax expense	6.(26)	-	-	-	-
Net loss for the year		( 111,056 )	( 156 )	( 161,193 )	( 205 )
(Continued on next page)

Arima Communications Corp.
Parent company only statement of comprehensive income
For the years ended December 31, 2025 and 2024
(Expressed in thousands of New Taiwan dollars)

(Continued from previous page)

	Notes	For the year ended December 31,
		2025	%	2024	%
Other comprehensive income (loss)
Items that are not to be reclassified to profit or loss
Share of other comprehensive income on subsidiaries and associates	6.(6)	305	-	329	-
Income tax expenses related to components that will not be reclassified to profit or loss		-	-	-	-
		305	-	329	-
Items that may be reclassified subsequently to profit or loss
Exchange differences arising on translation of foreign operations		(6,823)	(9)	10,369	13
Income tax expenses related to components that may be reclassified to profit or loss	6.(26)	-	-	-	-
		(6,823)	(9)	10,369	13
Total other comprehensive (loss) income for the year, net of income tax		(6,518)	(9)	10,698	13
Total comprehensive loss for the year		($ 117,574)	(165)	($ 150,495)	(192)
Loss per share (in New Taiwan dollars)	6.(27)
Basic loss per share		($ 3.15)		($ 9.22)

The accompanying notes are an integral part of the parent company only financial statements.

Arima Communications Corp.

Parent company only statement of changes in equity

For the years ended December 31, 2025 and 2024

(Expressed in thousands of New Taiwan dollars)

	Ordinary share	Advance receipts for share capital	Capital surplus	Accumulated losses	Other equity		Total equity
					Accumulated balances of exchange differences on translating foreign operations	Unrealized gains (losses) of financial assets measured at fair value through other comprehensive income
Balance, January 1, 2024	$ 728,311	$ -	$ 32,939	($ 650,509)	($ 184)	($ 19,807)	$ 90,750
Capital reduction to offset accumulated losses	( 582,649 )	-	-	582,649	-	-	-
Capital increase in cash	121,000	-	28,145	-	-	-	149,145
Changes in associates and joint ventures accounted for using equity method	-	-	-	2	-	-	2
	266,662	-	61,084	( 67,858 )	( 184 )	( 19,807 )	239,897
Net loss for the year ended December 31, 2024	-	-	-	( 161,193 )	-	-	( 161,193 )
Other comprehensive income for the year ended December 31, 2024, net of income tax	-	-	-	329	10,369	-	10,698
Total comprehensive income (loss) for the year ended December 31, 2024	-	-	-	( 160,864 )	10,369	-	( 150,495 )
Balance, December 31, 2024	266,662	-	61,084	( 228,722 )	10,185	( 19,807 )	89,402
Capital increase in cash	198,000	39,600	59,260	-	-	-	296,860
Changes in associates and joint ventures accounted for using equity method	-	-	-	( 11,468 )	-	-	( 11,468 )
	464,662	39,600	120,344	( 240,190 )	10,185	( 19,807 )	374,794
Net loss for the year ended December 31, 2025	-	-	-	( 111,056 )	-	-	( 111,056 )
Other comprehensive income (loss) for the year ended December 31, 2025, net of income tax	-	-	-	305	( 6,823 )	-	( 6,518 )
Total comprehensive loss for the year ended December 31, 2025	-	-	-	( 110,751 )	( 6,823 )	-	( 117,574 )
Balance, December 31, 2025	$ 464,662	$ 39,600	$ 120,344	($ 350,941 )	$ 3,362	($ 19,807 )	$ 257,220

The accompanying notes are an integral part of the parent company only financial statements.

Arima Communications Corp.

Parent company only statement of cash flows

For the years ended December 31, 2025 and 2024
(Expressed in thousands of New Taiwan dollars)

	For the year ended December 31,
	2025	2024
Cash flows from operating activities
Loss before income tax for the year	($ 111,056 )	($ 161,193 )
Adjustments for:
Income and expenses having no effect on cash flows
Depreciation expenses	8,286	7,999
Amortization expenses	5,008	6,689
Expected credit loss	230	2,298
Interest expense	1,794	17,339
Interest income	( 101 )	( 92 )
Share of loss of subsidiaries, affiliates and joint ventures accounted for under equity method	34,702	26,092
Loss on disposal of property, plant and equipment	3	9
(Gain) loss on foreign exchange net	( 3,398 )	13,741
Loss on allowance of inventory for decline in market value and obsolescence	8,181	-
Changes in operating assets and liabilities
Decrease (increase) in accounts receivable	1,747	( 2,051 )
Decrease in other receivables	33	40
Decrease (increase) in other receivables - related parties	14,220	( 3,937 )
Increase in inventories	( 1,155 )	( 7,026 )
Increase in prepayments	( 24,145 )	( 687 )
Decrease (increase) in other financial assets - current	4	( 27 )
Increase in other current assets	( 7,736 )	-
Decrease in contract liabilities - current	( 3,783 )	( 5,142 )
Decrease in notes payable	-	( 743 )
Decrease in accounts payable	( 1,941 )	( 37 )
Increase (decrease) in accounts payable - related parties	54,026	( 16,543 )
Increase (decrease) in other payables	5,917	( 1,291 )
(Decrease) increase in other payables - related parties	( 37,270 )	26,712
Decrease in other current liabilities	( 6,324 )	( 2,749 )
Cash used in operations	( 62,758 )	( 100,599 )
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Arima Communications Corp.
Parent company only statement of cash flows
For the years ended December 31, 2025 and 2024
(Expressed in thousands of New Taiwan dollars)

(Continued from previous page)

	For the year ended December 31,
	2025	2024
Interest received	101	92
Interest paid	( 1,794 )	( 4,805 )
Income tax refund	-	-
Net cash used in operating activities	( 64,451 )	( 105,312 )
Cash flows from investing activities
Proceeds from disposal of property, plant and equipment	130	-
Acquisition of property, plant and equipment	( 2,560 )	-
Acquisition of intangible assets	( 842 )	( 895 )
Increase in guarantee deposits paid	( 1,802 )	( 248 )
Dividend received	3,487	-
Net cash used in investing activities	( 1,587 )	( 1,143 )
Cash flows from financing activities
Decrease in current borrowings	( 917 )	( 73,000 )
Proceeds from long-term borrowings	15,000	-
Repayments of long-term borrowings	( 33,143 )	( 28,016 )
Increase in guarantee deposits received	183	-
Payments of lease liability	( 6,232 )	( 2,810 )
(Decrease) increase in long-term payable – related parties	( 214,003 )	110,120
Capital increase in cash	296,860	149,145
Net cash flows generated from financing activities	57,748	155,439
Effect of exchange rate changes on cash and cash equivalents	3,398	( 13,741 )
(Decrease) increase in cash and cash equivalents	( 4,892 )	35,243
Cash and cash equivalents at beginning of year	37,208	1,965
Cash and cash equivalents at end of year	$ 32,316	$ 37,208

The accompanying notes are an integral part of the parent company only financial statements.

Arima Communications Corp.

Notes to the parent company only financial statements

(Expressed in thousands of New Taiwan dollars, except as otherwise specified)

1. History and organization

Arima Communications Corp. (the "Company") was incorporated in August 1999. The registered address is 7F., No. 2, Ln. 258, Ruiguang Rd., Neihu Dist., Taipei City 11490, Taiwan, ROC. The Company is mainly engaged in the manufacturing, processing and sales of mobile phones and electronic components and solar products and equipment.

2. The date of authorization for issuance of the parent company only financial statements and procedures for authorization

The financial statements were approved and authorized for issuance by the Board of Directors on March 12, 2026.

3. Application of new standards, amendments and interpretations

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards ("IFRSs"), International Accounting Standards ("IAS") and interpretations that come into effect as endorsed and announced by the Financial Supervisory Commission ("FSC").

A. IFRSs, IAS and interpretations that come into effect as endorsed and announced by the FSC effective from 2025 are as follows:

New standards, interpretations and amendments	Main amendments	IASB effective date
Lack of Exchangeability (amendments to IAS 21)	This amendment defines exchangeability and provides guidance on how entities determine the exchange rate on the measurement date when a currency lacks exchangeability. The amendment also requires companies to provide more useful information in their financial statements when a currency is not exchangeable into another currency.	January 1, 2025

B. The Company assessed the above standards and interpretations and there is no significant impact to the Company's financial position and financial performance.

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Company.

A. New standards, interpretations and amendments as endorsed by the FSC effective from 2026 are as follows:

New standards, interpretations and amendments	Main amendments	IASB effective date
Amendments to the Classification and Measurement of Financial Instruments (amendments to IFRS 9 and IFRS 7)	(1) Clarifying and providing additional guidance on assessing whether a financial asset meets the Solely Payments of Principal and Interest (SPPI) criterion. The scope includes contractual terms that modify cash flows based on contingent events (e.g., interest rates linked to ESG targets), non-recourse features of instruments, and contractually linked instruments.	January 1, 2026
	(2) Adding disclosure requirements for instruments with contractual terms that modify cash flows (e.g., instruments with features linked to the achievement of environmental, social, and governance (ESG) targets). These include a qualitative description of the contingent nature of such terms, quantitative information on the potential range of contractual cash flow variations arising from these terms, and the total carrying amount of financial assets and the amortized cost of financial

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liabilities subject to such terms.

(3) Clarify the recognition and derecognition dates of certain financial assets and liabilities, and added that when settling financial liabilities (or part of a financial liability) in cash using an electronic payment system, an entity is permitted to consider the financial liability as extinguished before the settlement date if and only if the initiation of the payment instruction results in the following conditions:

A. The enterprise does not have the ability to revoke, stop or cancel the payment order;

B. The enterprise does not have the actual ability to obtain cash for settlement due to the payment instruction;

C. The settlement risk associated with the electronic payment system is not significant.

(4) Updating disclosure requirements for equity instruments designated as fair value through other comprehensive income (FVOCI) under an irrevocable election. Fair value disclosure is now required by category rather than for each individual instrument. Additionally, entities must disclose the fair value gains or losses recognized in other comprehensive income during the reporting

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period, separately presenting the fair value gains or losses related to investments derecognized during the reporting period and those related to investments still held at the end of the reporting period. Furthermore, the cumulative gains or losses transferred to equity upon derecognition of investments during the reporting period should also be disclosed.

Contracts Referencing Nature-dependent Electricity (amendments to IFRS 9 and IFRS 7)

This amendment pertains to contracts involving power generation that depends on uncontrollable natural conditions (e.g., weather), leading to variations in electricity production. The details are as follows:

(1) Clarification on the application of the "self-use" requirement for contracts where a company purchases or sells natural electricity:

When a contract requires a company to purchase and receive electricity when generated, and the design and operation of the electricity trading market mandate that the company sell any unused electricity within a specified timeframe, the company must consider reasonable and well-supported information regarding its past, current, and expected future electricity transactions within a reasonable period not exceeding 12 months. If the

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company purchases enough electricity to offset any unused electricity sold in the same market, it is considered a net purchaser of electricity. Newly added amendment for contracts involving natural electricity for self-use, requires disclosure of:

A. The company faces the risk of changes in the base electricity supply and the company may be required to purchase electricity during the delivery interval when electricity is not available;

B. Unrecognized contractual commitments, including expected future cash flows for electricity purchases under these contracts; and

C. The impact of these contracts on the company's financial performance during the reporting period.

(2) Clarify how hedge accounting can be applied to contracts involving natural electricity designated as hedging instruments: The hedged item must be designated as the variable notional amount of the forecasted electricity transaction, which matches the variable amount of natural electricity expected to be delivered by the generation facility mentioned in the hedging

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instrument.

Additionally, when the cash flows of a hedging instrument are part of a cash flow hedge relationship, and a contract involving natural electricity is designated as the hedging instrument based on the occurrence of a specified forecasted transaction, that forecasted transaction is presumed to be highly probable. For entities designating contracts involving natural electricity as hedging instruments, the terms and conditions of the hedging instruments should be disclosed by risk category in accordance with IFRS 7.

IFRS 17 "Insurance Contracts"

This Standard replaces IFRS 4 January 1, 2023

"Insurance Contracts" and establishes the principles for the recognition, measurement, presentation and disclosure of Insurance and reinsurance contracts that it issues by the entities. This standard applies to all insurance contracts (including reinsurance contracts) that an entity issues and to reinsurance contracts that it holds; and investment contracts with discretionary participation features it issues, provided that the entity also issues insurance contracts. Embedded derivatives, distinct investment components and distinct performance obligations should be separated from insurance contracts.

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On initial recognition, each portfolio of insurance contracts issued shall be divided into a minimum of three groups by the entities: onerous, no significant possibility of becoming onerous and the remaining contracts in the portfolio. This Standard requires a current measurement model where estimates are re-measured at each reporting period. Measurements are based on discounted contract and probability-weighted cash flows, risk adjustments, and the expected profit from the unearned portion of the contract (contractual service margins). An entity may apply a simplified approach to the measurement for some of insurance contracts (premium allocation approach). The entity should recognize the revenue generated by a group of insurance contract during the period when the entity provides insurance coverage and when the entity releases the risk. The entity should recognize the loss immediately, if a group of insurance contracts becomes onerous. The entity should present insurance income, insurance service fees, and insurance finance income and expenses separately and its shall also disclose the amount, judgment and risk information from the insurance contract.

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Insurance Contracts (amendments to IFRS 17)
This amendment includes the deferral of effective date, the expected recovery of the cash flow obtained by insurance, the contractual service margin attributable to investment services, the reinsurance contract held, the recovery of losses and other amendments. These amendments have not changed the basics of the standard in principle.

Initial Application of IFRS 17 and IFRS 9 - Comparative Information (amendment to IFRS 17)
This amendment allows enterprise to choose to apply the classification overlay approach for each comparative period reported in the initial application of IFRS 17. This option allows the financial assets held by an entity, including those held in activities that are not linked to contracts within the scope of IFRS 17, on an instrument-by-instrument basis, based on how they expect to classify these financial assets in the comparative period when IFRS 9 is initially applied. Entities that have applied IFRS 9 or will apply both IFRS 9 and IFRS 17 for the first time may choose to apply the classification overlay approach.

Annual Improvements to IFRS Accounting Standards - Volume 11
This primarily involves modifying references or terminology in the standards to avoid confusion, which typically has no substantive impact in practice.

B. The Company assessed the above standards and interpretations and there is no significant impact on the Company's financial position and financial performance.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

A. The following new standards and amendments issued by IASB but not yet endorsed by the FSC:

New standards, interpretations and amendments	Main amendments	IASB effective date
Sale or Contribution of Assets Between An Investor and Its Associate or Joint Venture (amendments to IFRS 10 and IAS 28)	This amendment addresses inconsistencies between the current IFRS 10 and IAS 28. When an investor sells (invests) assets to its affiliates or joint ventures, it is determined to recognize all or part of the disposal gains or losses depending on the nature of the assets sold (invested): (1) When the assets sold (invested) meet the “business”, all disposal gains and losses shall be recognized; (2) When the assets sold (invested) do not qualify as “business”, non-related investors can only recognize partial disposal of gains and losses within the scope of interests in affiliated companies or joint ventures.	To be determine by IASB
IFRS 18 “Presentation and Disclosure in Financial Statements”	Replace IAS 1 and update the structure of the statement of comprehensive income, introduce new disclosures on management performance measures, and enhance the principles of aggregation and disaggregation applied to the primary financial statements and notes.	January 1, 2027(Note)
IFRS 19 “Subsidiaries without Public Accountability: Disclosures”	This standard allows eligible subsidiaries to apply the reduced disclosure requirements of IFRS	January 1, 2027
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	accounting standards.
Translation to a Hyperinflationary Presentation Currency (amendments to IAS 21)	This amendment introduces a requirement that, when translating from a functional currency of a non-hyperinflationary economy into a presentation currency of a hyperinflationary economy, all amounts (including comparative amounts) must be translated using the closing rate at the end of the most recent reporting period. The amendment also provides an exception: when both the functional currency and the presentation currency are those of hyperinflationary economies, and the foreign operation belongs to an entity whose functional currency is that of a non-hyperinflationary economy, comparative amounts need not be restated. In addition, new disclosure requirements are added, including the translation method applied and aggregated financial information of foreign operations to which the method is applied.	January 1, 2027

Note: In its press release dated September 25, 2025, the FSC announced that publicly listed companies will be required to apply IFRS 18 starting from fiscal year 2028. Companies that wish to adopt IFRS 18 earlier may also do so, once IFRS 18 has been endorsed by the FSC.

B. After evaluating the above standards and interpretations, the Company has determined that, except for the impact of IFRS 18 'Presentation and Disclosure in Financial Statements,' which remains to be assessed, there are no material effects on the Company's financial position or financial performance.

4. Summary of significant accounting policies

The principal accounting policies applied in the preparation of the parent company only financial statements are set out below.

(1) Compliance statement

The parent company only financial statements of the Company have been prepared in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" and the IFRSs, IAS, IFRIC Interpretations, and SIC Interpretations that come into effect as endorsed by the FSC.

(2) Basis of preparation

A. Except for the financial assets at fair value through other comprehensive income are measured by financial instruments measured at fair value, the accompanying parent company only financial statements have been prepared under the historical cost basis.

B. The following significant accounting policies applied consistently to all periods of coverage of the parent company only financial statements.

C. The preparation of financial statements in accordance with IFRSs, IAS and that come into effect as endorsed by the FSC requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.

(3) Foreign currency translation

The parent company only financial statements are presented in New Taiwan dollars, which is the Company's functional and presentation currency.

A. Foreign currency transactions and balances

(A) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transaction or valuation where items are re-measured, except for those

that comply with cash flow hedging and net investment hedging and are deferred to other comprehensive gains and losses.

Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.

(B) Monetary assets and liabilities denominated in foreign currencies at the period end are re-translated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.

(C) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss; for the non-monetary assets and liabilities held at fair value through other comprehensive income or loss, their translation differences are recognized in other comprehensive income. Non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

(D) All exchange gains and losses are reported in the income statement under "Other gains and losses".

B. Translation of foreign operations

(A) The operating results and financial position of all the group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(a) Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

(b) Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

(B) When the foreign operation partially disposed of or sold as a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, if the Company retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

(C) The goodwill and fair value adjustments arising from the acquisition of foreign entities are regarded as the assets and liabilities of the foreign entity and translated at the closing exchange rate at the date of that balance sheet.

(4) Classification of current and non-current items

A. Assets that meet one of the following criteria are classified as current assets

(A) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;

(B) Assets held mainly for trading purposes;

(D) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.

The Company classified its assets that do not meet above criteria as non-current assets.

B. Liabilities that meet one of the following criteria are classified as current liabilities

(A) Liabilities that are expected to be paid off within the normal operating cycle;
(B) Liabilities arising mainly from trading activities;
(C) Liabilities that are to be paid off within twelve months from the balance sheet date; or
(D) Does not have the right to defer payment of its liabilities for at least twelve months after the reporting period.

The Company classified its liabilities that do not meet above criteria as non-current liabilities.

(5) Cash and cash equivalents

A. Cash and cash equivalents consists of cash on hand, cash in bank, time deposits with maturities of three months or less, short-term, highly liquid investments, which were within three months of maturity when acquired, and repayable bank overdraft, as part of the cash management. Bank overdraft items listed under current borrowings in current liabilities on the balance sheet.
B. Cash equivalents refer to short-term, highly liquid investments that also meet the following conditions:

(A) Readily convertible to known amount of cash.
(B) Subject to an insignificant risk of changes in interest rates.

(6) Financial assets at fair value through other comprehensive income

A. Refers to an irrevocable election made at initial recognition to present changes in fair value of an investment in an equity instrument that is not held for trading in other comprehensive income; or an investment in a debt instrument that meets all of the following conditions:

(A) The financial assets are held within an operating model with the objective of collecting contractual cash flows and selling.

(B) The contractual terms of the financial asset give rise to specified dated cash flows that are entirely payments of principal and interest on the principal amount outstanding.

B. The Company adopts the trade date accounting method for financial assets measured at fair value through other comprehensive income in accordance with transaction practice.

C. The Company measures the assets at fair value plus transaction costs upon initial recognition and subsequently measures at fair value:

(A) Changes in fair value of equity instruments are recognized in other comprehensive income. When derecognition occurs, any cumulative gains or losses previously recognized in other comprehensive income shall not be subsequently reclassified to profit or loss but shall be transferred to retained earnings. The Group recognizes dividend income in profit or loss when the right to receive dividends is established, it is probable that the economic benefits associated with the dividend will flow in, and the amount of the dividend can be measured reliably.

(B) Changes in fair value of debt instruments are recognized in other comprehensive income. Impairment losses, interest income and foreign exchange gains and losses are recognized in profit or loss before being extinguished. Upon extinguishment, cumulative gains or losses previously recognized in other comprehensive income are reclassified from equity to profit or loss.

(7) Notes and accounts receivable

A. In accordance with terms and conditions of the contracts, entitle a legal right to unconditionally receive consideration in exchange of notes and receivables for transferred goods or rendered services.

B. Short-term notes and accounts receivable without bearing interest are measured at initial invoice amount by the Company as effect of discounting is immaterial.

(8) Impairment of financial assets

On each balance sheet date, the Company's investment in debt instruments measured at fair value through other comprehensive income and financial assets measured at amortized cost, and accounts receivable or contractual assets, lease receivables, loan commitments and financial guarantee contracts with significant financial components, after considering all reasonable and corroborative information (including forward-looking), the loss allowance is measured on the 12-month expected credit losses for those who have not significantly increased the credit risk since the initial recognition. For those who have significantly increased the credit risk since the initial recognition, the loss allowance is measured by the expected credit losses during the period of existence; the accounts receivable or contract assets that do not contain significant financial components are measured by the lifetime expected credit loss.

(9) Derecognition of financial assets

The Company derecognizes a financial asset when:

A. The contractual rights to receive the cash flows from the financial asset expired[DU1.1].

B. The contractual rights to receive cash flows from the financial asset have been transferred and the Company has transferred substantially all risks and rewards of ownership of the financial asset.

C. The contractual rights to receive cash flows from the financial asset have been transferred; however, the Company has not retained control of the financial asset.

(10) Inventories

Inventories mainly are merchandise and are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. Net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at weighted-average cost on the balance sheet date.

(11) Investments accounted for using equity method

A. Affiliated enterprises refer to all the companies that the company has a significant influence on, and usually directly or indirectly hold more than 20% of its shares with voting rights. The Company adopts the equity method to deal with the investment in affiliated enterprises, and recognizes it at cost when acquired.

B. After the acquisition of the affiliated enterprises, the Company recognizes proportionately the share of profit and loss and other comprehensive income in the income statement as part of the Company's profit and loss and other comprehensive income, respectively. When the share of loss in the affiliated enterprises equals or exceeds the carrying amount of the Company's interest in that affiliated enterprises (including any other unsecured receivables), the Company discontinues to recognizing the further loss of the affiliated company, unless the Company has a statutory obligation, a constructive obligation, or has paid on behalf of the affiliated enterprises.

C. The Company's changes in equity interests in affiliated enterprises that did not lead to loss of control, deemed as equity transactions between owners.

D. Unrealized gains on transactions between the Company and its affiliated enterprises are eliminated to the extent of the Company's interest in the affiliated enterprises. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

E. When the Company disposes its investment in affiliated enterprises and loses significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over these affiliated enterprises, the amounts previously recognized in other comprehensive income in relation to the affiliated enterprises are reclassified to profit or loss proportionately in accordance

with the aforementioned approach.

F. As of the balance sheet date, the Company performs impairment testing on investments in associates that show indications of impairment. The carrying amount of the investment (including goodwill) is treated as a single asset and compared with its recoverable amount (the higher of value in use and fair value less costs of disposal). Any impairment loss recognized is included in the carrying amount of the investment. Reversal of impairment losses is recognized to the extent of subsequent increases in the recoverable amount of the investment.

(12) Property, plant and equipment

A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.

B. Subsequent costs are included in the asset's carrying amount or recognized as separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives.

Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

D. The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each balance sheet date. If expectations for the assets' residual values and useful lives differ from previous estimates or the patterns of consumption of the assets' future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, "Accounting Policies, Changes in Accounting Estimates and Errors", from the date of the change. The estimated useful lives of the following assets:

Machinery and equipment	5~20 years
Others equipment	3~10 years

(13) Leasing arrangements (lessee) - right-of-use assets/lease liabilities

A. Lease assets are recognized as a right-of-use asset and lease liabilities at the date at which the leased asset is available for use by the Company. For short-term leases or leases of low-value assets, lease payments are recognized as an expense on a straight-line basis over the lease term.

B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of fixed payments, less any lease incentives receivable. The Company subsequently measures the lease liability at amortized cost using the interest method and recognizes interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognized as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

C. At the commencement date, the right-of-use asset is recognized at cost, includes:

(A) The initial measured amount of the lease liability; and

(B) Any lease payments made at or before the commencement date.

The right-of use assets is measured using the cost model subsequently and is depreciated from the commencement date to the earlier of the end of the asset's useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognized as an adjustment to the right-of-use asset.

(14) Intangible Assets

Computer software

Computer software is initially recorded at cost amortized using the straight-line method over the estimated useful life of 1.5~5 years.

(15) Impairment of non-financial assets

The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to dispose or value in use. Except for goodwill, when the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognized.

(16) Borrowings

A. Borrowings refer to the non-current and current loans borrowed from the bank and other long-term and short-term loans. The Company initially recognizes the borrowings at fair value less transaction cost, any subsequent difference between the price and the redemption value after deducting the transaction cost, during the circulation period, the interest expense is recognized in profit or loss by using the effective interest method.

B. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is an evidence that it is probable

that some or all of the facility will not be drawn down, the fee is capitalized as a pre-payment for liquidity services and amortized over the period of the facility to which it relates.

(17) Notes and accounts payable

A. Notes payable refer to debts arising from purchase of raw materials, goods or services and notes due to operation and non-operation.

B. Short-term notes and accounts payable without bearing interest are measured at initial invoice amount by the Company as effect of discounting is immaterial.

(18) Employee benefits

A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expenses in that period when the employees render service.

B. Pensions

Defined contribution plans

For defined contribution plans, the contributions are recognized as pension expenses when they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent of a cash refund or a reduction in the future payments.

C. Termination benefit

Termination benefit is offered when the Company terminates the employee's contract before normal retirement date or when the employee decides to accept the Company's offer of benefits instead of the termination of the contract. The Company recognizes the cost at the earlier of when the offer of benefits is no longer withdrawable or when recognizing related significant cost component. Benefits that are not expected to be paid off 12 months after the balance sheet date shall be discounted.

D. Employees' compensation and directors' and supervisors' remuneration

Employees' compensation and directors' and supervisors' remuneration are recognized as expenses and liabilities, provided that such recognition is required under legal obligation or constructive obligation and those amounts can be reliably estimated. However, if the accrued amounts for employees' compensation and directors' and supervisors' remuneration are different from the actual distributed amounts as resolved by the shareholders at their shareholders' meeting subsequently, the differences should be recognized based on the accounting for changes in estimates.

(19) Income tax

A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.

B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company operated and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulation. It establishes provisions where appropriated based on the amounts expected to be paid to the tax authorities. According to the Income Tax Law, an additional income tax is levied on current year earnings that remain undistributed by the end of the following year after shareholdings' meeting; and recognized as income tax expenses.

C. Deferred income tax is recognized, using the balance sheet method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the balance sheet. However, the deferred income tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is provided on temporary

differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

D. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred income tax assets are reassessed.

E. Current tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.

F. "Income Basic Tax Act" began effective on January 1, 2006, the amount of basic income shall be the sum of the taxable income as calculated in accordance with the Income Tax Act, plus any related tax exempted income included in other laws with the rate prescribed by the Executive Yuan. Current income tax shall pay according to whichever is higher compared between the basic income and regular income tax. The Company assessed the impact of the basic income tax on the parent company only financial statements for current period income tax.

(20) Revenue recognition

The Company identifies contracts with customers, allocates the transaction price to the performance obligations, are recognizes revenue when performance obligation are satisfied.

A. Sales of merchandises

The Company is engaged in the manufacturing, processing and sales of mobile phones, electronic components, and solar products and equipment. The Company sells merchandise and recognizes revenue when the promised merchandise are transferred to a customer and the customer obtains control of it (i.e. the customer's ability to direct the use of the merchandises and to obtain substantially all of the remaining benefits from the merchandises).

The Company recognizes accounts receivable when the control of merchandise is transferred and has a unconditional right to receive consideration. Such accounts receivable usually have short periods and do not have significant financial components. When the Company has transferred the control of merchandise to a customer but still does not have an unconditional right to receive consideration, the contract assets and revenue are recognized. A contract liability is recognized for the Company's obligation to transfer merchandise to a customer for which the Company has received consideration from the customer and converted to revenue when the performance obligation is satisfied. When the costs incurred for a contract are directly related to the contract, generate or enhance resources that will be used in satisfying performance obligations, and are expected to be recovered, the Company recognizes an asset "Costs to fulfil a contract" from the costs. As the control is transfer to the customer, the asset is converted to cost of sales and revenue is recognized simultaneously.

B. Service

The Company provides mobile phone development and design services for customers. The revenue from delivering services is recognized based on the degree of completion of the transaction agreed by both parties on the reporting date.

(21) Operating segments

The Company has disclosed its segments information in the consolidation financial statements, therefore no segments information disclosed in the parent company only financial statements.

(22) Earnings per shares

The Company presents basic and diluted earnings per share ("EPS") data for its common stocks. Basic EPS is calculated by dividing the net income attributable to shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by adjusting the statement of income attributable to shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares.

Critical accounting judgments, estimates and key sources of assumption uncertainty

The preparation of the parent company only financial statement requires management to make critical judgments in applying the Company's accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. The information is addressed below:

(1) Critical judgments in applying the Company's accounting policies

None.

(2) Critical accounting estimates and assumptions

The Company makes estimates and assumptions based on the expectation of future events that are believed to be reasonable under the circumstances at the end of the reporting period. The resulting accounting estimates might be different from the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below:

A. Evaluation of inventories

As inventories are stated at the lower of cost and net realizable value, the Company must determine the net realizable value of inventories on balance sheet date using judgments and estimates. Due to the rapid changes in technology, the Company evaluates the amount of inventory due to normal wear and tear, obsolescence or no market value on the balance sheet date, and writes down the inventory cost to the net realizable value. This inventory evaluation is mainly based on the estimated demand for products in a specific period in the future, therefore there might be material changes to the evaluation.

As of December 31, 2025, the Company’s carrying amount of inventories is $0 thousand.

B. Impairment assessment of property, plant and equipment

In the process of assessing asset impairment, the Company must rely on subjective judgment and consider the usage patterns of assets and industry characteristics in determining independent cash flows of specific asset groups, useful lives of assets, and the future economic benefits and costs that may arise. Any changes in estimates resulting from shifts in economic conditions or group’s strategies may have a significant impact in the future.

As of December 31, 2025, the Company’s carrying amount of property, plant and equipment is $8,396 thousand.

6. Details of significant accounts

(1) Cash and cash equivalents

	December 31,
	2025	2024
Cash on hand and working capital	$ 41	$ 41
Checking accounts and demand deposits	32,275	37,167
Total	$ 32,316	$ 37,208

A. The Company transacts with a variety of financial institutions all with high credit quality to disperse credit risk, therefore the probability of counterparty default is remote. The Company's maximum exposure to credit risk at balance sheet date is the carrying amount of all cash and cash equivalents.

B. The Company did not pledge its cash and cash equivalents, respectively.

(2) Financial assets measured at fair value through other comprehensive profit or loss

A. The equity instruments held by the Company are long-term strategic investments and are not held for trading purposes. Therefore, they have been designated to be measured at fair value through other comprehensive income.

B. As of December 31, 2025, the book values of Arima Optoelectronics Corp., Arima Display Corp. and Arima Photovoltaic & Optical Corp. are both $0 thousand.

C. Information relating to credit risk, please refer to Note 12(3).

(3) Accounts receivable

	December 31,
	2025	2024
Accounts receivable	$ 3,422	$ 5,169
Less: allowance for doubtful accounts	-	( 501 )
Total	$ 3,422	$ 4,668

A. The Company grants an interest free and average credit term of 60 days to its customer accounts.

B. The Company's maximum exposure to credit risk at December 31, 2025 and 2024 was the carrying amount of each class of accounts receivable.

C. The Company's aging analysis of accounts receivable is as follows:

	December 31,
	2025	2024
Not past due	$ 3,422	$ -
Past due less than 1 month	-	1,160
Past due 1 - 3 months	-	2,139
Past due 3 - 6 months	-	1,870
Past due over 1 years	-	-
Total	$ 3,422	$ 5,169

D. The Company's allowance for doubtful accounts of accounts receivable based on the accounts receivable valuation policy and the credit risk assessment of individual customers, as follows:

December 31, 2025	Expected credit loss rate	Total carrying amount	Allowance for doubtful accounts (Lifetime expected credit loss)	Amortized cost
Not past due	0%	$ 3,422	$ -	$ 3,422
Past due less than 1 month	1%	-	-	-
Past due 1 - 3 months	10%	-	-	-
Past due 3 - 6 months	25%	-	-	-
Past due over 1 years	100%	-	-	-
Total		$ 3,422	$ -	$ 3,422
December 31, 2024	Expected credit loss rate	Total carrying amount	Allowance for doubtful accounts (Lifetime expected credit loss)	Amortized cost
---	---	---	---	---
Not past due	0%	$ -	$ -	$ -
Past due less than 1 month	1%	1,160	( 12 )	1,148
Past due 1 - 3 months	10%	2,139	( 21 )	2,118
Past due 3 - 6 months	25%	1,870	( 468 )	1,402
Past due over 1 years	100%	-	-	-
Total		$ 5,169	( $ 501 )	$ 4,668

E. Changes in allowance of doubtful accounts of accounts receivable are as follows:

	December 31,
	2025	2024
At January 1	$ 501	$ 12,648
Additions for current year	107	501
Reversal for the current year	( 608 )	-
Write-off due to uncollectible	-	( 12,648 )
At December 31	$ -	$ 501

F. Information relating to credit risk, please refer to Note 12(3).

(4) Other receivables

	December 31,
	2025	2024
Other receivables	$ 1,076	$ 1,109
Other receivables from related parties	5,661	19,881
Less: allowance for doubtful accounts	( 2,979 )	( 2,248 )
Total	$ 3,758	$ 18,742

A. Changes in allowance of doubtful accounts of other receivable are as follows:

	December 31,
	2025	2024
At January 1	$ 2,248	$ 451
Additions for current year	1,051	1,797
Reversal for the current year	( 320 )	-
Total	$ 2,979	$ 2,248

B. Information relating to credit risk, please refer to Note 12(3).

(5) Inventories

	December 31,
	2025	2024
Finished goods	$ 8,181	$ 7,026
Less: allowance for decline in market value and obsolescence	( 8,181 )	-
Total	$ -	$ 7,026

A. The cost of inventories recognized as expense (income) is as follows:

	For the year ended December 31,
	2025	2024
Cost of sales	$ 40,271	$ 39,222
Loss on allowance of inventory for decline in market value and obsolescence	8,181	-
Loss on inventory scrap	-	13,133
Other operating cost	1,088	8,685
Total	$ 49,540	$ 61,040

B. None of the above inventories are pledged.

(6) Investment accounted for using the equity method

	December 31,
	2025	2024
Subsidiaries	$ 199,129	$ 227,964
Associates	305,056	332,396
Total	$ 504,185	$ 560,360

A. Financial information of the Company's subsidiaries was summarized as follows:

Investee companies	December 31,
	Ownership		Ownership
	2025	%	2024	%
Arima Communication (Cayman)
Corp.	$ 172,521	100.00	$ 194,312	100.00
Technovation (Cayman) Corp.	17,863	100.00	23,163	100.00
Crown investment Corp.	8,745	100.00	10,489	100.00
Total	$ 199,129		$ 227,964

(A) The basic information of the associates that are significant to the Company is as follows:

Company name	Principal place of business	Methods of measurement
Arima Communication (Cayman)
Crop.	British Virgin Islands	Equity method
Technovation (Cayman) Crop.	British Virgin Islands	Equity method
Crown investment Corp.	Taiwan	Equity method

(B) The summarized financial information of the associates that are significant to the Company is as follows:

Balance sheet

	Arima Communication (Cayman) Corp.
	December 31,
	2025	2024
Current assets	$ 57,655	$ 60,592
Non-current assets	169,815	188,737
Current liabilities	-	( 68 )
Total net assets	$ 227,470	$ 249,261
Share of net assets of the associate	$ 172,521	$ 194,312
Goodwill	54,949	54,949
Carrying amount of the associate	$ 227,470	$ 249,261
	Technovation (Cayman) Crop.
	December 31,
	2025	2024
Current assets	$ 241,116	$ 257,832
Current liabilities	( 223,253 )	( 234,669 )
Total net assets	$ 17,863	$ 23,163
Share of net assets of the associate	$ 17,863	$ 23,163
Goodwill	-	-
Carrying amount of the associate	$ 17,863	$ 23,163
	Crown Investment Crop.
	December 31,
	2025	2024
Current assets	$ 530	$ 579
Non-current assets	8,475	10,170
Current liabilities	( 260 )	( 260 )
Total net assets	$ 8,745	$ 10,489
Share of net assets of the associate	$ 8,745	$ 10,489
Goodwill	-	-
Carrying amount of the associate	$ 8,745	$ 10,489

Statement of comprehensive income

| | Arima Communication
(Cayman) Corp. | |
| --- | --- | --- |
| | For the year ended December 31, | |
| | 2025 | 2024 |
| Revenue | $ - | $ - |
| Net loss for the year | ( 14,824 ) | ( 30,264 ) |
| Other comprehensive loss, net of tax | ( 143 ) | - |
| Total comprehensive loss for the year | ($ 14,967 ) | ($ 30,264 ) |
| Dividends received from the associate | $ - | $ - |
| | Technovation (Cayman) Crop. | |
| | For the year ended December 31, | |
| | 2025 | 2024 |
| Revenue | $ - | $ 21,280 |
| Net (loss) income for the year | ( 5,300 ) | 826 |
| Other comprehensive income, net of tax | - | - |
| Total comprehensive (loss) income for the year | ($ 5,300 ) | $ 826 |
| Dividends received from the associate | $ - | $ - |
| | Crown Investment Crop. | |
| | For the year ended December 31, | |
| | 2025 | 2024 |
| Revenue | ($ 1,693 ) | ($ 2,534 ) |
| Net loss for the year | ( 1,742 ) | ( 3,199 ) |
| Other comprehensive income, net of tax | - | - |
| Total comprehensive loss for the year | ($ 1,742 ) | ($ 3,199 ) |
| Dividends received from the associate | $ - | $ - |

B. Financial information of the Company’s associates that are not individually significant was summarized as follows:

Investee companies	December 31,
	Ownership			Ownership
	2025	%	2024	%
Tron San Investmet Co., Ltd.	$ 65,173	48.28	$ 65,085	48.28
Arima Lasers Corp.	239,883	22.51	267,311	22.51
Net	$ 305,056		$ 332,396

(A) The affiliated companies accounted for using equity method that are not individually significant, therefore only their summary information was disclosed as follows:

	For the year ended December 31,
	2025	2024
Current net (loss) income	($ 12,836)	$ 6,545
Other comprehensive income	448	329
Total comprehensive (loss) income	($ 12,388)	$ 6,874

(B) The Company received cash dividends of $19,022 thousand from Arima Lasers Corp. in 2022. The entire amount of the cash dividends was subjected to provisional attachment by the court and recorded as other current financial assets.

(C) The Company received cash dividends of $13,950 thousand from Arima Lasers Corp. in 2023, of which $10 thousand of the cash dividend was subjected to provisional attachment by the bank.

(D) The Company received cash dividends of $3,487 thousand from Arima Lasers Corp. in 2025.

(E) For the collateral information of assets, please refer to Note 8.

(7) Property, plant and equipment

	Machinery and equipment	Other equipment	Total
Cost
At January 1, 2025	$ 24,055	$ 10,891	$ 34,946
Additions	1,062	1,498	2,560
Disposals	( 4,426 )	( 198 )	( 4,624 )
At December 31, 2025	$ 20,691	$ 12,191	$ 32,882
At January 1, 2024	$ 24,055	$ 12,684	$ 36,739
Disposals	-	( 1,793 )	( 1,793 )
At December 31, 2024	$ 24,055	$ 10,891	$ 34,946
Accumulated depreciation and impairments
At January 1, 2025	$ 17,033	$ 8,878	$ 25,911
Depreciation	2,312	754	3,066
Disposals	( 4,299 )	( 192 )	( 4,491 )
At December 31, 2025	$ 15,046	$ 9,440	$ 24,486
At January 1, 2024	$ 13,840	$ 9,033	$ 22,873
Depreciation	3,193	1,629	4,822
Disposals	-	( 1,784 )	( 1,784 )
At December 31, 2024	$ 17,033	$ 8,878	$ 25,911
Net book value
At December 31, 2025	$ 5,645	$ 2,751	$ 8,396
At December 31, 2024	$ 7,022	$ 2,013	$ 9,035

Property, plant, and equipment have not been pledged as collateral.

(8) Leasing arrangements as lessee

A. The leased assets by the Company are buildings with the lease period of usually ranges from three to five years. Lease contracts are negotiated individually and contain a variety of terms and conditions. The leased assets are not to be subleased, to be lent, to be transferred or to be used by others in other disguised ways, no other restrictions are imposed.

B. The lease terms of the Company's office and transportation equipment were one year or less. The Company applied an exemption not to recognize related lease assets and lease liability.

C. The carrying amounts of the right-of-use asset and the depreciation expense recognized are as follows:

	December 31, 2025	For the year ended December 31, 2025
	Carrying amount	Depreciation
Buildings	$ 10,501	$ 5,220
	December 31, 2024	For the year ended December 31, 2024
	Carrying amount	Depreciation
Buildings	$ 2,527	$ 3,177
D. Lease liabilities	December 31, 2025	December 31, 2024
Current	$ 4,997	$ 2,719
Non-current	5,634	646
Total	$ 10,631	$ 3,365

E. Movements in right-of-use asset were as follows:

	Buildings
January 1, 2025	$ 2,527
Additions	13,194
Depreciation	( 5,220 )
December 31, 2025	$ 10,501
	Buildings
January 1, 2024	$ 5,704
Depreciation	( 3,177 )
December 31, 2024	$ 2,527

F. The increase of the Company's right-of-use assets in 2025 and 2024 was $13,194 and $0 thousand, respectively.

G. The items affecting profit or loss related to the lease contracts are recognized as follows:

Items affecting profit or loss	For the year ended December 31,
	2025	2024
Interest expense on lease liabilities	($ 304)	($ 162)
Expense on short-term lease contracts	$ 1,922	$ 6,605

H. The total cash outflows for the leases of the Company in 2025 and 2024 were $6,232 thousand and $2,810 thousand, respectively.

(9) Intangible assets

December 31, 2025	Computer software	Other	Total
Cost	$ 30,430	$ 2,194	$ 32,624
Accumulated amortization	( 30,386 )	( 1,393 )	( 31,779 )
	$ 44	$ 801	$ 845
2025
At January 1	$ 4,591	$ 420	$ 5,011
Additions	172	670	842
Amortization expenses	( 4,605 )	( 403 )	( 5,008 )
Reclassified	( 114 )	114	-
At December 31	$ 44	$ 801	$ 845
December 31, 2024
Cost	$ 32,544	$ 3,617	$ 36,161
Accumulated amortization	( 27,953 )	( 3,197 )	( 31,150 )
	$ 4,591	$ 420	$ 5,011
2024
At January 1	$ 10,634	$ 171	$ 10,805
Additions	165	730	895
Amortization expenses	( 6,208 )	( 481 )	( 6,689 )
At December 31	$ 4,591	$ 420	$ 5,011
January 1, 2024
Cost	$ 32,379	$ 2,887	$ 35,266
Accumulated amortization	( 21,745 )	( 2,716 )	( 24,461 )
	$ 10,634	$ 171	$ 10,805

(10) Impairment of non-financial assets

For the years ended December 31, 2025 and 2024, the Company did not recognize an impairment loss or gain on reversal of impairment loss of property, plant and equipment.

(11) Short-term borrowings

	December 31,
	2025	2024
Secured borrowings	$ 12,000	$ -
Other secured borrowings	-	12,917
Total	$ 12,000	$ 12,917
Interest rate range (%)	3.54	6.725~6.85

A. The above short-term borrowings are used for working capital.

B. As of December 31, 2025 and 2024, the Company entered into a financing agreement with Robina Finance & Leasing Corp., providing 0 shares and 3,000 shares, respectively of Arima Lasers Corp. as collateral.

C. The above bank-guaranteed borrowings are secured by the Small and Medium Enterprise Credit Guarantee Fund of Taiwan.

D. For details of collateral of current borrowings, please refer to Note 8.

(12) Notes payable and accounts payable

	December 31,
	2025	2024
Notes payable	$ -	$ -
Accounts payable	3,849	5,790
Accounts payable - related parties	212,601	158,575
Total	$ 216,450	$ 164,365

(13) long-term borrowings

	December 31, 2025	Interest rate	Due date
Secured bank credit loans	$ 1,542	2.72%	2020.11.16~2026.11.16
Secured bank borrowings		2.72%	2020.11.16~2026.11.16
(Note)	6,168
Other secured borrowings	9,192	5.86%	2025.04.30~2026.11.02
Total	16,902
Less: current portion expired within an operating cycle	( 16,902 )
Net	$ -

	December 31, 2024	Interest rate	Due date
Secured bank credit loans	$ 3,181	2.72%	2020.11.16~2026.11.16
Secured bank borrowings (Note)	12,724	2.72%	2020.11.16~2026.11.16
Secured bank borrowings	6,000	2.89%	2023.05.24~2025.03.24
Secured bank borrowings (Note)	7,820	3.09%	2020.12.03~2025.12.03
Other secured borrowings	5,320	8%	2023.04.13~2025.04.12
Total	35,045
Less: current portion expired within an operating cycle	( 27,335 )
Net	$ 7,710

Note: Secured by the Small and Medium Enterprise Credit Guarantee Fund of Taiwan.

A. The Company entered into a sale-and-leaseback financing agreement with He Jing Co., Ltd. on April 30, 2025 with a loan amount of $15,000 thousand with a term of 1.5 years, and provided 1,500 thousand shares of Arima Lasers Corp. as collateral.
B. The Company signed a financing contract with He Jing Co., Ltd. on April 13, 2023 with a loan amount of $30,000 thousand with a term of 2 years, and provided 1,500 thousand shares of Arima Lasers Corp. as collateral.
C. The Company signed a financing contract with Sunny Bank on May 24, 2023, with a loan amount of $30,900 thousand and provided 2,470 thousand shares of Arima Lasers Corp. as collateral. The loan was extended after it expired on May 24, 2024, and the expiration date is March 24, 2025.
D. For the collateral of the above long-term loans, please refer to Note 8.
E. For the issuance of guaranteed notes for other secured loans lines, please refer to Note 9.

(14) Retirement Benefit Plans

Defined benefit plans

The pension plan under the Labor Pension Act of the ROC (the "LPA") is considered a defined contribution plan. In accordance with the LPA, the contribution by the Company shall not be less than $6\%$ of employees' monthly salaries and wages. The Company makes monthly contributions to

employees' individual pension accounts at 6% of monthly salaries and wages. The total expense recognized for the Company's defined contribution plans was $2,892 thousand and $3,569 thousand in 2025 and 2024, respectively.

(15) Ordinary Share

A. The Company's authorized capital was $5,000,000 thousand with the par value of $10 per share, all of which were ordinary shares. As of December 31, 2025, the paid-in capital amounted to $464,662 thousand.

B. Details of the Company's private placements of shares

Date of issue	Issued share (in thousand shares)	Issued price ($ per share)
November 7, 2024	4,100	12.24
November 7, 2024	4,000	12.24
December 13, 2024	4,000	12.50
April 14, 2025	3,000	15.53
April 14, 2025	3,000	15.53
November 5, 2025	5,800	11.40
November 5, 2025	6,000	11.40
November 5, 2025	2,000	14.78
March 13, 2026 (Note)	1,500	13.20
March 13, 2026 (Note)	1,500	13.20

Note: As of December 31, 2025, the change of registration has not yet been completed with the Department of Commerce, Ministry of Economic Affairs. An amount of NT$39,600 thousand is recorded as advance receipts for share capital.

C. Movements in the number of the Company's outstanding ordinary shares outstanding are as follows:

	Number of outstanding shares (in thousand)
	For the year ended December 31,
	2024	2023
At January 1	26,666	72,831
Capital increase from private placements	19,800	12,100
Capital reduction to make up for losses	-	(58,265)
At December 31	46,466	26,666

D. On June 27, 2023, the Company passed the resolution at the extraordinary shareholders meeting to increase cash capital through private placements and issue 6,000 thousand ordinary shares, with a par value of $10 per share. The rights and obligations of this privately placed ordinary share are the same as those of other non-privately placed ordinary shares, except that there is a restriction on circulation and transfer of these new issued shares as stipulated by the Securities and Exchange Act, and the application for listing and trading must be three years after the delivery date and apply for initial public offering.

E. On May 14, 2024, the Board of Directors resolved to stop processing the private placement of ordinary shares approved by the extraordinary general meeting of shareholders on June 27, 2023.

F. In order to strengthen the financial structure and increase the net value per share, the Company's Board of Directors resolved on May 14, 2024 to reduce capital to make up for losses. The Company planned to reduce capital by $582,649 thousand and cancel 58,265 ordinary shares, with a capital reduction ratio of 80%. The capital reduction plan was approved by the shareholders' meeting on June 25, 2024, and was reported to the Taiwan Stock Exchange Corporation on July 17, 2024. The chairman of the board of directors set July 18, 2024 as the base date for the capital reduction, and the change registration has been completed with the Department of Commerce of the Ministry of Economic Affairs (the "MOEA")

G. On May 14, 2024, the Board of Directors resolved to issue ordinary shares in cash through private placements, with an issue amount of no more than 4,000 thousand shares and a par value of $10 per share. The issue will be processed in tranches within one year from the date of the shareholders' meeting resolution (no more than five tranches). On September 16, 2024, the Board of Directors resolved that the first private placement of ordinary shares was 4,100 thousand shares, the private placement price was $12.24, and the total amount of the private placement was $50,184 thousand. The second private placement of ordinary shares was 4,000 thousand shares, the private placement price was $12.24, and the total amount of the private placement was $48,960 thousand. The above private placement shares were 8,100 thousand shares in total, and the change registration has been completed with the MOEA. The rights and obligations of this private placement of ordinary shares are the same as other issued common shares, except that there is a restriction on circulation and transfer of these new issued shares as stipulated by the Securities and Exchange Act, (the "SEC Act") and the application for listing and trading must be three years after the delivery date and apply for initial public offering.

H. On October 29, 2024, the Board of Directors resolved that the number of ordinary shares to be privately placed for the third time was 4,000 thousand shares, the private placement price was $12.5, and the total amount of the private placement was $50,000 thousand. The change registration has been completed with the MOEA. The rights and obligations of the common shares of this private placement are the same as other issued common shares, except that there is a restriction on circulation and transfer of these new issued shares as stipulated by the (the "SEC Act"), and the application for listing and trading must be three years after the delivery date and apply for initial public offering.

I. On February 25, 2025, the Board of Directors resolved that the number of ordinary shares to be privately placed for the fourth time was 3,000 thousand shares, the private placement price was $15.53, and the total amount of the private placement was $46,590 thousand. The number of ordinary shares to be privately placed for the fifth time was 3,000 thousand shares, the private placement price was $15.53, and the total amount of the private placement was $46,590 thousand. The above private placements amount to 6,000 thousand shares, with a total private placement value of $93,180 thousand. The change of registration has been completed with the MOEA. The rights and obligations of the common shares of this private placement are the same as other issued common shares, except that there is a restriction on circulation and transfer of these new issued shares as stipulated by the SEC Act, and the application for listing and trading must be three years after the delivery date and apply for initial public offering.

J. On March 12, 2025, the Company's Board of Directors resolved to discontinue the private placements of ordinary shares that had been approved at the shareholders' meeting on June 25, 2024.

K. On April 15, 2025, the Board of Directors resolved to issue ordinary shares in cash through private placements, with an issue amount of no more than 19,500 thousand shares and a par value of $10 per share. The issue will be processed in tranches within one year from the date of the shareholders' meeting resolution (no more than six tranches). On September 10, 2025, the Board of Directors resolved that the first private placement of ordinary shares was 5,800 thousand shares, the private placement price was $11.40, and the total amount of the private placement was $66,120 thousand. The second private placement of ordinary shares was 6,000 thousand shares, the private placement price was $11.40, and the total amount of the private placement was $68,400 thousand. The above private placement shares were 11,800 thousand shares in total, and in which, on September 30, 2025, the change of registration of 5,800 shares has been completed with the MOEA. The change of registration of remaining 6,000 shares has been completed with MOEA on October 7. The rights and obligations of this private placement of ordinary shares are the same as other issued common

shares, except that there is a restriction on circulation and transfer of these new issued shares as stipulated by the SEC Act, and the application for listing and trading must be three years after the delivery date and apply for initial public offering.

L. On September 18, 2025, the Board of Directors resolved that the number of ordinary shares to be privately placed for the third time was 2,000 thousand shares, the private placement price was $14.78, and the total amount of the private placement was $29,560 thousand. The change of registration has been completed with the MOEA on October 14, 2025. The rights and obligations of the common shares of this private placement are the same as other issued common shares, except that there is a restriction on circulation and transfer of these new issued shares as stipulated by the SEC Act, and the application for listing and trading must be three years after the delivery date and apply for initial public offering.

M. On December 29, 2025, the Board of Directors resolved that the number of ordinary shares to be privately placed for the fourth time was 1,500 thousand shares, the private placement price was $13.20, and the total amount of the private placement was $19,800 thousand. The number of ordinary shares to be privately placed for the fifth time was 1,500 thousand shares, the private placement price was $13.20, and the total amount of the private placement was $19,800 thousand. The above private placements amount to 3,000 thousand shares. The change registration has been completed with the MOEA on February 12, 2026. The rights and obligations of the common shares of this private placement are the same as other issued common shares, except that there is a restriction on circulation and transfer of these new issued shares as stipulated by the SEC Act, and the application for listing and trading must be three years after the delivery date and apply for initial public offering.

N. Due to the Company's capital reduction to make up for losses, the remaining private placement shares as of December 31, 2025 and 2024 were $36,378 thousand shares and 13,578 thousand shares, respectively.

(16) Capital surplus

	December 31,
	2025	2024
Ordinary shares premium	$ 119,848	$ 60,588
Unpaid cash dividends transferred in	496	496
	$ 120,344	$ 61,084

Pursuant to the ROC Company Act, capital surplus arising from paid-up capital in excess of par value on issuance of ordinary shares and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the Securities and Exchange Act of ROC requires that the amount of capital surplus to be capitalized mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

(17) Retained earnings

A. Legal reserve

Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company's paid-in capital.

B. Distribution of retained earnings

Under the Company's Articles of Incorporation, the current year's earnings, if any, shall first be used to pay all taxes and offset accumulated losses and then 10% of the remaining amount shall be set aside as legal reserve, followed by providing or reversing special reserve. The remainder, if any, and retained earnings of prior year constitute appropriable earnings. The board of directors proposes the amount of dividend to distribute according to the need of operating capital. The proposal is resolved at the shareholders' meeting.

C. Dividend policy

The Company's takes into account the whole operating environment and the growth characteristic of the industry and distribute with overall consideration of unappropriated earnings, capital surplus, financial structure and operation status for steady operation growth and secure the right of investors. Shareholders' dividends can be distributed in cash or shares. However, cash dividends shall not be less than 10% of the total dividends of current year.

D. The Company passed the resolution at shareholders' general meeting on June 3, 2025 that no earnings will be distributed due to losses in 2024.

In addition, on June 25, 2024, the Company passed a resolution at the shareholders' general meeting that no earnings will be distributed due to losses in 2023.

E. The accumulated losses of the Company as of December 31, 2024 have reached a half of the paid-in capital, the Company reported to the general meeting of shareholders in accordance with Article 211 of the Company Act on June 3, 2025.

F. For details of information on employee's compensation and directors and supervisors' remuneration, please refer to Note 6(24).

(18) Other equity items

	Exchange differences on translating the financial statement of foreign operations	Unrealized losses on financial assets measured at fair value through other comprehensive income
At January 1, 2024	($ 184)	($ 19,807)
Foreign currency translation differences	10,369	-
At December 31, 2024	$ 10,185	($ 19,807)
Foreign currency translation differences	( 6,823)	-
At December 31, 2025	$ 3,362	($ 19,807)

(19) Revenue

	For the year ended December 31,
	2025	2024
Revenue from customer contracts
Sales revenue	$ 60,858	$ 51,251
Service revenue	350	9,127
Other income	10,060	18,106
Total	$ 71,268	$ 78,484

A. Segmentation of customer contract revenue

The Company's revenue derives from goods and services that are transferred over time and at a point of time. The revenue can be categorized into the following major regional markets:

	For the year ended December 31, 2025
Items	Mobile phone industry business group	Other	Total
External customer contract revenue	$ 15,020	$ 56,248	$ 71,268
Revenue recognized at a certain point of time	$ 15,020	$ 55,898	$ 70,918
Revenue recognized over time	-	350	350
Total	$ 15,020	$ 56,248	$ 71,268
	For the year ended December 31, 2024
Items	Mobile phone industry business group	Other	Total
External customer contract revenue	$ 78,484	$ -	$ 78,484
Revenue recognized at a certain point of time	$ 69,357	$ -	$ 69,357
Revenue recognized over time	9,127	-	9,127
Total	$ 78,484	$ -	$ 78,484

B. Contract liabilities

	December 31,
	2025	2024
Contract liabilities
Unearned sales revenue	$ 14,194	$ 18,697
	For the year ended December 31,
	2025	2024
Revenue recognized in the reporting period that was included in the contract liability balance at the beginning of the period	$ 14,102	$ 5,142
(20) Interest income	For the year ended December 31,
	2025	2024
Interest income	$ 101	$ 92
(21) Other income	For the year ended December 31,
	2025	2024
Other income - other	$ 7,088	$ 11,658
(22) Other gains and losses	For the year ended December 31,
	2025	2024
Loss on disposal of property, plant and equipment	($ 3)	($ 9)
Net currency exchange gains (losses)	3,398	(13,741)
Other losses	(535)	(1,425)
Total	$ 2,860	($ 15,175)

(23) Additional disclosures related to cost of revenues and operating expenses are as follows:

For the year ended December 31,

	2025			2024
	Cost of revenue	Operating expenses	Total	Cost of revenue	Operating expenses	Total
Employee benefit expenses	$ -	$ 62,496	$ 62,496	$ -	$ 92,425	$ 92,425
Depreciation expenses	-	8,286	8,286	-	7,999	7,999
Amortization expenses	-	5,008	5,008	-	6,689	6,689

(24) Employee benefit expenses

	For the year ended December 31,
	2025	2024
Wages and salaries	$ 46,196	$ 73,904
Director’s remuneration	6,870	6,855
Labor and health insurance contribution	4,681	5,837
Pension costs	2,892	3,569
Other personnel expenses	1,857	2,260
Total	$ 62,496	$ 92,425

A. The Company’s Articles of Association stipulate that the compensation of employees shall not be less than 5% of remainder of profit in current year after covering accumulated losses, and the remuneration of directors and supervisors shall not exceed 3% of that.

B. The compensation to employees was determined by the profit of the year. In 2025 and 2024, the employees’ compensation and directors’ remuneration of the Company were both $0 thousand.

The number of share dividend is calculated based on the closing price of the day before the resolution being made by the board and after considering the effect of ex-rights. If the actual amounts subsequently resolved by the shareholders differ from the proposed amounts by the board of directors, the differences are recorded in profit and loss in the subsequent year.

C. Please refer to Market Observation Post System for more information on the resolution by the Company’s board of directors’ meeting related to the appropriation of distributable earnings as employees’ compensation and directors’ remuneration.

(25) Finance costs

	For the year ended December 31,
	2025	2024
Interest expense	$ 1,490	$ 17,177
Lease liabilities interest	304	162
Total	$ 1,794	$ 17,339

(26) Income tax

A. Income tax expense

(A) Components of income tax expense:

	For the year ended December 31,
	2025	2024
Current income tax	$ -	$ -
Deferred income tax	-	-
Income tax expense	$ -	$ -

(B) Income tax recognized in components of other comprehensive income was as follows: None.

B. Reconciliation between income tax expense and loss before income tax:

	For the year ended December 31,
	2025	2024
Loss before income tax	($ 111,056)	($ 161,193)
Income tax expense at statutory rate	( 22,211)	( 32,238)
Tax effect of adjusting items
Permanent differences	2,952	2,055
Loss on unrecognized deferred tax assets	14,179	20,903
Unrecognized temporary differences	5,080	9,280
Income tax expense	$ -	$ -

C. The details of unrecognized deferred tax assets were as follow:

	December 31,
	2025	2024
Loss carry forward
Expired in 2026	$ 24,510	$ 49,705
Expired in 2027	84,323	84,323
Expired in 2028	280,878	280,878
Expired in 2030	71,322	71,322
Expired in 2031	64,104	64,104
Expired in 2033	28,603	28,740
Expired in 2034	24,028	20,903
Expired in 2035	13,482	-
	591,250	599,975

	December 31,
	2025	2024
Deductible temporary differences
Unrealized investment losses	439,338	435,313
Loss on decline in inventory value	1,636	-
Allowance for doubtful accounts	564	508
Current provisions	204	204
Unrealized interest expense	2,785	3,022
Unrealized exchange gains and losses	(3,036)	(1,269)
	441,491	437,778
Total	$1,032,741	$1,037,753

D. The Company’s income tax returns through 2023 have been assessed by the tax authority.

(27) Earnings per share

	For the year ended December 31, 2025
		Weighted average number of ordinary shares outstanding (in thousands)	Losses per share (in dollars)
	Amount after tax
Basic earnings per share
Loss attributable to common shareholders	($ 111,056)	35,293	($ 3.15)
Diluted earnings per share
None.
	For the year ended December 31, 2024
		Weighted average number of ordinary shares outstanding (in thousands)	Losses per share (in dollars)
	Amount after tax
Basic earnings per share
Loss attributable to common shareholders	($ 161,193)	17,488	($ 9.22)
Diluted earnings per share
None.

(28) Changes in liabilities from financing activities

The reconciliation of the Company's liabilities from financing activities is as follows:

	January 1, 2025	Cash flows	Other non-cash	December 31, 2025
Current borrowings	$ 12,917	( $ 917 )	$ -	$ 12,000
Lease liabilities	3,365	( 6,232 )	13,498	10,631
Long-term borrowings (including the portion expiring within one year)	35,045	( 18,143 )	-	16,902
Long-term payables	262,980	( 214,003 )	-	48,977
Liabilities from financing activities	$ 314,307	( $ 239,295 )	$ 13,498	$ 88,510
	January 1, 2024	Cash flows	Other non-cash	December 31, 2024
Current borrowings	$ 85,917	( $ 73,000 )	$ -	$ 12,917
Lease liabilities	6,175	( 2,810 )	-	3,365
Long-term borrowings (including the portion expiring within one year)	63,061	( 28,016 )	-	35,045
Long-term payables	152,860	110,120	-	262,980
Liabilities from financing activities	$ 308,013	$ 6,294	$ -	$ 314,307

Transactions with related parties

(1) Name of related parties and relationship

Related parties	Relationship
Arima Photovoltaic & Optical Corp.	Investor with significant influence over the Company
Technovation (Cayman) Corp.	Subsidiary
Arima Communications (Jiangsu) Co., Ltd.	Second-tier subsidiary of the Company
Arima Communication (Cayman) Corp.	Subsidiary
Crown Investment Corp.	Subsidiary
Aeon Biotherapeutics Corp.	Affiliated company
May-hwa Enterprise Corporation	Other related party
SilTec Instruments Limited	Other related party
Guang Lee Energy Corporation	Second-tier subsidiary of the Company
Arima Lasers Corp.	Affiliated company
TWR Entertainment, Inc.	Other related party

(2) Significant related party transactions and balances :

A. Purchase

	For the year ended December 31,
	2025	2024
Technovation (Cayman) Corp.	$ -	$ 22,694
Arima Communications (Jiangsu) Co., Ltd.	-	37,982
	$ -	$ 60,676

The Company's payment terms for the above-mentioned related parties are 30 days to 75 days, and some subsidiaries may choose to extend the payment terms or offset with their accounts receivable. Generally, the payment terms of suppliers are about 30 days to 120 days.

B. Other receivable - related party

	December 31,
	2025	2024
Arima Photovoltaic & Optical Corp.	$ 2,095	$ 2,327
Technovation (Cayman) Corp.	1,573	15,861
Crown Investment Corp.	210	210
Aeon Biotherapeutics Corp.	-	13
Guang Lee Energy Corporation	1,733	1,470
Arima Lasers Corp.	8	-
TWR Entertainment, Inc.	42	-
Total	$ 5,661	$ 19,881

The above other receivables - related parties mainly arose from advances. An allowance for doubtful accounts of $1,596 thousand was provided for other receivables - related parties in 2024.

C. Other current assets - others

	December 31,
	2025	2024
Arima Photovoltaic & Optical Corp.	$ -	$ 3
TWR Entertainment, Inc.	8	-
	$ 8	$ 3

D. Accounts payable - related party

	December 31,
	2025	2024
Arima Communications (Jiangsu) Co., Ltd.	$ 77,842	$ 95,018
Technovation (Cayman) Corp.	134,759	63,557
Total	$ 212,601	$ 158,575

E. Other payable - related party

	December 31,
	2025	2024
Technovation (Cayman) Corp.	$ 13,546	$ 14,130
Arima Photovoltaic & Optical Corp.	-	796
Aeon Biotherapeutics Corp.	71	59
Total	$ 13,617	$ 14,985

F. Prepayments to suppliers

	December 31,
	2025	2024
Arima Lasers Corp.	$ 6,150	$ -

G. Other income

	For the year ended December 31,
	2025	2024
Arima Photovoltaic & Optical Corp.	$ 5	$ 18
Aeon Biotherapeutics Corp.	-	1
Crown Investment Corp.	-	600
Guang Lee Energy Corporation.	250	600
Arima Lasers Corp.	75	-
TWR Entertainment, Inc.	48	-
SilTec Instruments Limited	1,217	-
Total	$ 1,595	$ 1,219

H. Other expenses

	For the year ended December 31,
	2025	2024
Guang Lee Energy Corporation	$ 119	$ -

I. Guarantee deposits paid

	December 31,
	2025	2024
Aeon Biotherapeutics Corp.	$ 115	$ 115
May-Hwa Enterprise Corp.	576	576
Total	$ 691	$ 691

J. Guarantee deposits received

	December 31,
	2025	2024
Arima Lasers Corp.	$ 183	$ -

K. Other payables for financing purpose

	For the year ended December 31, 2025
	Ending balance (Note)	Maximum balance	Interest rate	Interest expense	Interest payable
SilTec Instruments Limited	$ 46,777	$ 295,685	3%	$ -	$ 13,739
Arima Communication (Cayman) Corp.	2,200	2,200	1.5%	33	540
Total	$ 48,977			$ 33	$ 14,279

Note: Recognized in long-term payable - related parites.

	For the year ended December 31, 2024
	Ending balance	Maximum balance	Interest rate	Interest expense	Interest payable
SilTec Instruments Limited	$ 295,685 (Note 1)	$ 295,685	5%	$ 11,966	$ 14,956
Arima Communication (Cayman) Corp.	2,295 (Note 2)	2,295	1.5%	151	529
Total	$ 297,980			$ 12,117	$ 15,485

Note 1: Recognized in long-term payables - related parties amounting to $260,685 thousand and other payables - related parties amounting to $35,000 thousand.

Note 2: Recognized in long-term payable - related parties.

L. Lease agreement

(A) Lease liabilities (including current and non-current)

	December 31,
	2025	2024
May-hwa Enterprise Corp.	$ -	$ 2,093
Aeon Biotherapeutics Corp.	646	1,272
Total	$ 646	$ 3,365

(B) Interest expense

	For the year ended December 31,
	2025	2024
May-hwa Enterprise Corp.	$ 32	$ 112
Aeon Biotherapeutics Corp.	30	50
Total	$ 62	$ 162

	December 31,
	2025	2024
May-hwa Enterprise Corp.	$ -	$ 277
Aeon Biotherapeutics Corp.	57	59
Total	$ 57	$ 336

The above leasings are dealt with by the general market price, and the decision and collection method of the leasing are comparable to the terms of general leasing.

M.As of December 31, 2025 and 2024, the endorsement guarantee provided for the bank loans obtained by subsidiary Guang Lee Energy Corporation is both $10,000 thousand.

(3) Key management compensation

	For the year ended December 31,
	2025	2024
Salaries and other short-term employee benefits	$ 12,765	$ 13,165
Post-employment benefits	322	923
Total	$ 13,087	$ 14,088

The remuneration of directors and members of key management were determined by the compensation committee based on the performance of individual and market trend.

8. Pledge of assets

The Company's assets pledged as collateral are as follows:

Pledged assets	Purposes	Carrying amount
		December 31,
		2025	2024
Other current financial assets (restricted bank deposits)	Current and non-current borrowing and provisional attachment	$ 23,759	$ 23,763
Investment accounted for using the equity method	Current and non-current borrowing	51,757	267,124
Total		$ 75,516	$ 290,887

9. Significant contingent liabilities and unrecognized commitments

(1) The amount of guarantee notes issued by the Company for the credit facility of financial institutions is as follows:

	December 31,
	2025	2024
Guarantee notes submitted	$ 42,000	$ 70,000

(2) The amounts of guarantee notes issued by the Company for borrowing facilities of non-financial institutions are as follows:

	December 31,
	2025	2024
Guarantee notes submitted	$ -	$ 41,321

(3) The amount of the guarantee notes issued by the Company for the post-sale repurchase of financing loans is as follows:

	December 31,
	2025	2024
Guarantee notes submitted	$ 18,000	$ 36,000

(4) In February 2022, a Japanese mobile phone distributor (hereinafter referred to as "Japanese Company") engaged a law firm to sue the Company for damage of the manufacturing defect of a smartphone. The smartphone's design was entrusted by a third party company to the Company and shipped to the "Japanese distributor by a third party company. The Japanese Company filed a lawsuit against the Company in Japan, and the Tokyo District Court ruled that the Company should pay about JPY416.74 million as compensation. On

August 10, 2022, the Company received a court letter from the Japanese Company requesting the Taiwanese court to for a provisional attachment of the Company's assets within the range of NT$90,000 thousand. As of December 31, 2024, because the amount of assets subject to a provisional attachment of this case was $23,763 thousand. The Company filed an appeal to the court against this enforcement action, and on August 29, 2022, the Taipei Shilin District Court overruled the Japanese company's provisional attachment claim; however, the Japanese Company was unconvinced and filed an appeal on September 12, 2022. This appeal was ruled by the Taiwan High Court on July 7, 2023, overruled the Taipei Shilin District Court's decision and the Japanese Company petitioned the Taiwan court to claim for a provisional attachment of the Company's assets within the range of $90,000, are reasonable and should be approved. The Company appealed to the Supreme Court and the case was dismissed by the Supreme Court on November 14, 2023 and the Company lost the case.

In addition, the Japanese Company has filed a civil lawsuit with the local court to confirm the judgment of the Tokyo District Court of Japan and to allow enforcement of the corresponding compensation amount; the case was ruled by the Shilin District Court on November 7, 2023 that the Japanese Company lost the case. The Japanese Company filed an appeal on February 6, 2024, and the Company completed the filing of the petition to the Taiwan High Court on April 29, 2024. On May 29, 2024, the Company received the High Court's hearing notice, and scheduled to conduct preparatory procedures and the first hearing of the second instance at the High Court Civil Court on July 1, 2024. However, there was no judgment result yet. The second hearing of the second instance was held on August 12, 2024. The judge organized the claims of both parties into the minutes and confirmed them with both parties. The judge also continued to encourage settlement between the parties. On September 30, 2024, the third hearing of the second instance was held. The judge requested both parties to submit written statements analyzing the principles of reciprocity and convenience. On November 11, 2024, the fourth hearing of the second instance was held. The judge organized and recorded each party's written claims in the court notes and confirmed them with both sides. The judge then informed both parties that, due to pending

investigations by other judges in the panel, a date for oral arguments would not be set at this time. On February 10, 2025, the fifth hearing of the second instance was held. The court instructed that another preparatory proceeding should be convened.

On May 12, 2025, the sixth hearing of the second instance was held. The judge organized the parties' respective written submissions into the record and confirmed them with both sides, and also appointed an expert, instructing the parties to confirm in writing the questions they wished to ask the expert. On December 8 and December 22, 2025, the seventh and eighth hearings of the second instance were held respectively. The judge again organized the parties' written submissions into the record and confirmed them with both sides, and invited the expert to present his opinions. On February 2, 2026, the ninth hearing of the second instance was held. After confirming with both sides that there were no further issues, the judge declared the preparatory proceedings concluded. On March 17, 2026, the oral argument hearing of the second instance was held. After both parties presented their arguments, the presiding judge announced that judgment would be rendered on April 14, 2026.

10. Significant disaster loss

None.

11. Significant events after the balance sheet date

None.

12. Others

(1) As of December 31, 2025, the Company had accumulated losses of $350,941 thousand, and current liabilities exceeded current assets by $217,407 thousand and part of its funds were temporarily subject to provisional attachment (please refer to Note 9(4)). In response to this situation, the Company intends to take the following measures to improve its operating and financial conditions:

A. Develop differentiated mobile communication product

Building upon the foundation of previous industrial control smartphones, the Company will continue to develop differentiated mobile communication products, including:

(A) Mobile phones for blue-collar workers

A mobile phone designed for workplace communication in labor-intensive environments has been developed, featuring high-volume output, noise reduction, walkie-talkie functionality, one-touch audio and video transmission, large buttons, dustproof and waterproof capabilities, and private network applications. These features significantly enhance worker coordination and improve operational efficiency. The product has already been successfully developed in collaboration with a U.S. manufacturer and is now being actively promoted.

(B) Energy-efficient and eco-friendly mobile phones

By using electronic paper display and environmentally friendly materials to develop power-saving, thin, light, short and energy-saving environmentally friendly mobile phones. Positioned as a secondary personal phone, it has gained strong market acceptance, with sales steadily growing.

B. Changes in product development strategy

(A) Investing in non-mobile product development: smart parking system module

By using mobile phone communication technology, camera, license plate recognition and wireless transmission, build a high-efficiency and low-cost roadside parking system, which can effectively assist local governments in building roadside parking systems and achieve unmanned parking management and charging. In addition to enhancing the products commissioned by the original ODM customers, the Company has also strengthened and joined Qualcomm's 5G technology platform, invested in the design and development of mid-to-high-end products, and used new terminal product applications to attract

target customer groups and get rid of the price competition of low-priced products. Currently, the Company has cooperated with Qualcomm to develop a facial recognition payment system, with the main focus on developing a new generation of Android, secure, contactless payment system to get rid of the low-price competition of mobile phones.

Smart parking poles and image recognition technology have matured. Various cities and counties have promoted smart parking poles to fill the manpower gap and improve administrative efficiency. They also use license plate recognition to reduce the error rate of issuing tickets and reduce public complaints. After parking, multiple payment methods are used to pay upon checking, avoiding fines for forgetting to pay. This will be the trend of smart parking management in the future.

(B) High-frequency RF module development

To use mobile phone RF technology to develop high-frequency RF modules, and use military-standard RF communication modules and applications to meet some needs of the special application market. For example, the rapid development of drone products in recent years has created many new needs in both military and civilian applications. The short-range radar and communication needs on drones are increasing rapidly. Radar modules, RF modules, and communication modules in this area are the focus of our future product development.

The drones industry is rapidly advancing toward intelligence and diversified applications. With the enhancement of artificial intelligence, sensing technologies, and communication capabilities, drones are gradually shifting from traditional remote control operations to autonomous flight, capable of automatic obstacle avoidance, route planning, and task execution. In commercial applications, logistics distribution is regarded as a key development direction, improving efficiency and shortening delivery times. At the same time, drones are widely applied in agriculture, inspection, and public safety. Overall, as technology matures and policies gradually open up, drones will continue

to expand in logistics, smart agriculture, public safety, and the low-altitude economy, becoming one of the key technologies driving the development of related industries.

C. Changes in operating strategy

(A) Research and development often uses public platforms to reduce R&D costs

The Company has improved the design process and developed a shared platform modification to save the cost required by customers and the Company in the R&D process, also streamlined the R&D organization to reduce R&D expenses and overall operating costs.

(B) Switch to outsourcing to reduce factory production costs

For orders that are not economically viable, seek outsourcing to replace internal production, combining outsourcing with flexible internal production to reduce manufacturing costs, in order to maximize profits and reduce manufacturing costs.

In addition to discussing with customers to extend the sales period of existing products, also actively developing new product lines such as new model platforms and radar-related products, hoping that they will contribute to the company's revenue next year.

D. Financial improvement measures

(A) As stated in Note 6(15), the Company continues to conduct private placements. The cumulative private placement amount in 2025 was $296,860 thousand. The Company will continue to conduct private placements to increase capital and improve its financial structure.

(B) Implement cost and expense control plans to save unnecessary expenditures and significantly reduce operating expenses.

(C) Continue to seek strategic investors to collaborate with the Company in terms of products, business and capital to strengthen and enhance operational competitiveness.

(2) Capital management

The policy of the board of directors is to maintain the healthy capital base to maintain the confidence of investors, creditors and the market, and to support the development of future operations. Capital includes the share capital, capital reserves, retained earnings and other equity. The Company's capital management goal is to ensure the ability to continue operations, to continue to provide shareholder with return and other stakeholders with interests, and to maintain the optimal capital structure to reduce capital costs. The Company's debt ratio as of December 31, 2025 and 2024 is as follows:

	December 31
	2025	2024
Total liabilities	$ 374,693	$ 589,986
Total assets	$ 631,913	$ 679,388
Debt ratio	59%	87%

Upon reviewing the recent debt-to-asset ratio, as of December 31, 2025, the ratio decreased compared with December 31, 2024, primarily due to the Company's repayment of borrowings from related parties.

(3) Financial instruments

A. Financial instruments by category

	December 31,
	2025	2024
Financial assets
Financial assets at amortized cost
Cash and cash equivalents	$ 32,316	$ 37,208
Accounts receivables (including related parties)	3,422	4,668
Other receivables (including related parties)	3,758	18,742
Other current financial assets	23,759	23,763
Guarantee deposits paid	6,494	4,692
	$ 69,749	$ 89,073

	December 31,
	2025	2024
Financial liabilities
Financial liabilities at amortized cost
Current borrowings	$ 12,000	$ 12,917
Notes payable	-	-
Accounts payable (including related parties)	216,450	164,365
Other payable (including related parties)	51,381	83,038
Non-current borrowings (including current portion)	16,902	35,045
Long-term payable – related parties	48,977	262,980
Guarantee deposits received	183	-
	$ 345,893	$ 558,345
Lease liabilities (including current portion)	$ 10,631	$ 3,365

B. Financial risk management objectives and policies

The establishment of the Company's risk management policy is to identify and analyze the Company's risks, set appropriate risk limits and controls, and supervise the compliance of risks and risk limits. Risk management policies and systems are regularly reviewed to reflect market conditions and changes in the Company's operations. The Company develops a disciplined and constructive control environment through training, management standards and operating procedures, so that all employees understand their roles and responsibilities.

The Company's board of directors monitors how the management supervises the compliance of the Company's risk management policies and procedures, and reviews the appropriateness of Company's risk management structure which responds to the Company's risks. Internal auditors assist the audit committee of the Company to play a monitoring role. Internal auditors conduct regular and exceptional review of risk management controls and procedures, and report the review results to the board of directors.

(A) Market risk

i. Exchange risk

The Company's exchange rate risk is mainly related to business activities (when the currency used for income or expenses is different from the Company's functional currency) and net investment in foreign operating institutions.

The Company's foreign currency receivables and payables in foreign currencies are partly in the same currency, and a considerable part of the position will produce a natural hedging effect. This natural hedging method does not meet the requirements of hedging accounting, therefore no hedging accounting adopted. The net investment of foreign operating institutions are a strategic investment and is not hedged by the Company.

The Company's exchange rate risk mainly comes from cash denominated in foreign currencies, accounts receivable, net accounts receivable from related parties, other receivables and other receivables from related parties, bank loans, accounts payable, other payables and other payables to related parties, etc., generate foreign currency exchange gains and losses during translation.

Details of the unrealized exchange gains and losses of the Company's monetary items whose value would significantly affected by exchange rate fluctuation are as follows:

	For the year ended December 31, 2025
	Foreign currency amount (in thousands)	Exchange rate	Unrealized exchange gains and losses (NT$)
Financial assets
Monetary items
US$ : NT$	$ 1,442	31.43	( $ 10,575 )
Financial liabilities
Monetary items
US$ : NT$	$ 8,605	31.43	$ 12,346

For the year ended December 31, 2024

	Foreign currency amount (in thousands)	Exchange rate	Unrealized exchange gains and losses (NT$)
Financial assets
Monetary items
US$: NT$	$ 176	32.785	($ 90)
Financial liabilities
Monetary items
US$: NT$	$ 8,834	32.785	($ 26,769)

The sensitivity analysis of the Company's exchange risk mainly focuses on the relevant foreign currency appreciation or depreciation of main foreign currency items at the closing date of reporting period, and its impact on the Company's profit and loss and equity.

The determination of below sensitivity analysis is based on the Company's non-functional currency assets and liabilities with significant exchange rate exposure at the balance date. The relevant information is as follows:

December 31, 2025

	Foreign currency amount	Exchange rate	Carrying amount (NT$)	Sensitivity analysis
				Variation	Effect on profit or loss	Other comprehensive income (losses)
Financial assets
Monetary items
US$: NT$	$ 1,442	31.43	$ 45,324	1%	$ 453	$ -
Financial liabilities
Monetary items
US$: NT$	$ 8,605	31.43	$ 270,453	1%	$ 2,705	$ -

December 31, 2024

	Foreign currency amount	Exchange rate	Carrying amount (NT$)	Variation	Sensitivity analysis
					Effect on profit or loss	Other comprehensive income (losses)
Financial assets
Monetary items
US$: NT$	$ 176	32.785	$ 5,770	1%	$ 58	$ -
Financial liabilities
Monetary items
US$: NT$	$ 8,834	32.785	$ 289,623	1%	$ 2,896	$ -

ii. Interest rate risk

Interest rate risk is the risk of fluctuations in the fair value of financial instruments or future cash flow due to changes in market interest rates. The Company's interest rate risk mainly comes from loans with floating rates. The Company manages interest rate risk by maintaining an appropriate floating rate portfolio. The Company regularly evaluates hedging activities to make them consistent with viewpoint on interest rate and established risk appetite, to ensure that the most cost-effective hedging strategies are adopted.

The Company's exposure on financial liabilities rate risk is described in this Note for liquidity risk management below.

The following sensitivity analysis is based on interest rate risk exposure on the financial instruments at the closing date of the reporting period. Regarding the liabilities with variable interest rates, the following analysis is on the basis of the assumption that the amount of liabilities outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increase or decrease by 1% when key management report internally, which also represents the management of the Company's assessment on the reasonably possible interval of the interest rate change.

If the interest rate has increased or decreased by 1% with other variables held constant, the net loss before tax would have increased or decreased by $289 thousand and $480 thousand for the years ended December 31, 2025 and 2024, respectively, which would be mainly resulted from the Company's borrowing with variable interest rate.

(B) Credit risk

Credit risk refers to the risk that the counterparty of the transaction cannot perform the contractual obligations and cause the Company's financial loss. As of December 31, 2025 and 2024, the Company's maximum credit risk exposure that may result in financial losses due to the counterparty's failure to perform its obligations mainly comes from the book value of financial assets recognized in the parent company only balance sheets.

The Company's credit risk is caused by business activities (mainly notes and accounts receivable) and financing activities (mainly bank deposits and various financial instruments).

Business units follow the Company's customer credit risk policies, procedures and controls to manage customer credit risk. The credit risk assessment of all customers is based on a comprehensive consideration of the customer's financial status, rating of credit rating agencies, past historical transaction experience, current economic environment, and internal rating standards. In addition, the Company has insured trade credit risk for accounts receivable to reduce the credit risk of specific customers.

The finance department manages the credit risk of bank deposits and other financial instruments in accordance with the Company's policies.

(C) Liquidity risk

The Company manages and maintains sufficient cash and cash equivalent to support the Company's operations and mitigate the impact of cash flow fluctuations. The management of the Company supervises the use of bank financing lines and credits to ensure compliance with the terms of the loan contract.

Bank borrowings are an important source of liquidity for the Company. As of December 31, 2025 and 2024, the total amount of unused bank facilities of the Company was both $0 thousand.

Table of liquidity and interest rate risk

The table below analyzes the Company's non-derivative financial liabilities based on the remaining period to the contractual maturity date during the agreed repayment period and in accordance with the possible earliest required date of repayment. The financial liabilities in below table are prepared by undiscounted cash flows, cash flow that include interest and principal payments at floating rates, without regard to the probability that the bank may enforce its right to demand immediate repayment from the Company.

	December 31, 2025
	Less than 1 year	Between 1 and 3 years	Between 3 and 5 years	Over 5 years	Total of undiscounted cash flows
Non-derivative financial liabilities
Current borrowings	$ 12,000	$ -	$ -	$ -	$ 12,000
Accounts payable (includes related party)	216,450	-	-	-	216,450
Other payables (includes related party)	51,381	-	-	-	51,381
Long-term borrowings (includes current portion)	16,902	-	-	-	16,902
Lease liabilities	4,997	5,634	-	-	10,631
Long-term payable - related parties	-	48,977	-	-	48,977
	$ 301,730	$ 54,611	$ -	$ -	$ 356,341

December 31, 2024

	Less than 1 year	Between 1 and 3 years	Between 3 and 5 years	Over 5 years	Total of undiscounted cash flows
Non-derivative financial liabilities
Current borrowings	$ 12,917	$ -	$ -	$ -	$ 12,917
Accounts payable (includes related party)	164,365	-	-	-	164,365
Other payables (includes related party)	83,038	-	-	-	83,038
Long-term borrowings (includes current portion)	27,335	7,710	-	-	35,045
Lease liabilities	2,719	646	-	-	3,365
Long-term payable - related parties	-	262,980	-	-	262,980
	$ 290,374	$ 271,336	$ -	$ -	$ 561,710

(4) Fair value information

A. The different levels of valuation techniques which are used to measure the fair value of financial and non-financial instruments have been defined as follows:

Level 1: The input value of this level is the public quotation (unadjusted) of the identical asset or liability in the active market. A market is regarded as active when the goods in the market are in same nature and the price information is readily available in the public market for both buyers and sellers.

Level 2: Inputs other than the observable publicly quoted prices included within Level 1 for assets and liabilities, either directly (such as price) or indirectly (such as derived from the price).

Level 3: Unobservable inputs for the asset or liability.

B. Financial instruments not measured at fair value

The carrying amounts of cash and cash equivalents, notes receivable, accounts receivable, other receivables, other current financial assets, deposits, bank borrowings, notes payable, accounts payable and other payables and long-term payable are reasonable approximations of fair values.

C. For financial and non-financial instruments measured at fair value, the Company classifies them based on the nature, characteristics, risks, and fair value hierarchy of assets and liabilities. The relevant information is as follows:

	December 31, 2025
	Level 1	Level 2	Level 3	Total
Assets:
Recurring fair value
Financial assets measured at fair value through other comprehensive income	$ -	$ -	$ -	$ -
	December 31, 2024
	Level 1	Level 2	Level 3	Total
Assets:
Recurring fair value
Financial assets measured at fair value through other comprehensive income	$ -	$ -	$ -	$ -

D. The methods and assumptions adopted by the Company in measuring fair value are explained as follows:

The fair value of financial assets and financial liabilities is determined based on the following methods:

(A) For financial assets and financial liabilities traded in active markets with standard terms and conditions, their fair value is determined by reference to quoted market prices.

When market prices are not available for reference, valuation techniques are applied to estimate fair value. The estimates and assumptions adopted by the Company in applying valuation

techniques are consistent with the information that market participants would use in pricing financial instruments.

(B) For derivative instruments with quoted prices in active markets, fair value is determined based on such market prices. When market prices are not available, the fair value of non-option derivatives is calculated using discounted cash flow analysis with yield curves applicable over the life of the derivative. For option derivatives, fair value is determined using option pricing models. The estimates and assumptions adopted by the Company in applying valuation techniques are consistent with the information that market participants would use in pricing financial instruments.

E. There is no transfer between first and second level measured at fair value in 2025 and 2024.

13. Supplementary disclosures

(1) Significant transactions information:

No.	Items	Footnote
1	Loans to others	Table 1
2	Provision of endorsements and guarantees to others	Table 2
3	Significant marketable securities held at period-end (excluding investments in subsidiaries, associates, and joint ventures)	None
4	Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more	None
5	Receivables from related parties reaching $100 million or 20% of paid-in capital or more	Table 3
6	Significant inter-company transactions between the parent company and subsidiaries	Table 4

(2) Information on investments: Table 5
(3) Information on investments in Mainland China: Table 6

Table 1

Arima Communications Corp.

Loans to others

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan dollars)

No. (Note1)	Lender	Borrower	Financial statement account (Note2)	Related party	Maximum balance for the period (Note 3)	Ending balance (Note 8)	Actual borrowings amount	Interest rate	Nature for financing (Note 4)	Business transaction amount (Note 5)	Reason for short-term financing (Note 6)	Allowance for impairment loss	Collateral		Financing limit for each borrower (Note 7)	Aggregate financing limit (Note 7)
													Item	Value
1	Arima Communication (Cayman) Corp.	Arima Communications Corp.	Other receivables - related parties	Yes	$ 13,282	$ 12,572	$ 2,200	1.5%	2	$	Operating capital	$	-	-	$ 113,735	$ 227,470

Note 1 : The number means:
(1) The securities issuer is '0'.
(2) Invested company start from 1 consecutively.

Note 2 : Accounts receivable from related companies, receivable from related parties, current accounts with shareholders, prepayments, temporary payment, and others in similar nature, etc., must be filled in this column if they are of the nature of capital loan.

Note 3 : The highest balance of loans to others in the current year.

Note 4 : The nature of loans to others should be listed as a business transaction or if there is a need for short-term financing.

(1) Belonging to business dealings.
(2) It is necessary for short-term financing.

Note 5 : If the nature of capital loan is business transaction, the business transaction amount should be filled in. The business transaction amount refers to the business transaction amount between the lending company and the borrower in the most recent years.

Note 6: If the nature of the capital loan is necessary for short-term financing, the reasons and the purpose of the loan to the lender should be specified, such as: repayment of the loan, purchase of equipment, business turnover, etc.

Note 7 : (1) According to Arima Communication (Cayman) Corp.'s operating procedures for loaning funds to others, the limit for each lender is determined according to the loan and reasons as follows:

a. For those who have capital loan due to business relationship with other company or firm, the total amount of capital loan is limited to $10\%$ of the net value of the Company's most recent audited and certified financial statements by the CPA and within the limit of the amount of business transactions between the two parties. The said business transaction amount refers to the purchase or sale amount between the two parties, whichever is higher.

(Continued on next page)

(Continued from previous page)

b. If there is a need for short-term financing, the total amount of the loan shall be limited to 100% of the net value of the Company’s most recent audited financial statements by the CPA. The amount of individual capital loans is limited to 50% of the net value of the latest audited or reviewed financial statements.

c. Fund lending between foreign companies that directly or indirectly hold 100% of the voting shares is not subject to the restrictions in the preceding paragraph. The limit on the amount of financing shall be limited to 200% of the net value of the Company.

Note 8: If a public company submits the resolution of the board of directors for the loans to others on a case-by-case basis in accordance with Article 14(1) of the Regulations Governing Loaning of Funds and Making of Endorsement/Guarantees by Public Companies, even though the funds have not yet been allocated, the loan amount which resolved by the board of directors should still be made in the announcement, and disclose its commitment risk.

However, if the funds are repaid later, the balance after repayment shall be disclosed to reflect the risk adjustment. If the public company authorizes the chairman of the board of directors to allocate a certain amount of loans or use them recurringly within a period of one year through the resolution of the board of directors in accordance with Article 14(2) of the aforesaid regulations, the loan amount approved by the board of directors should still be made in the announcement. Although the funds will be repaid later, considering the possibility of reappropriation, the loan amount approved by the board of directors should still be made in the announcement.

Table 2

Arima Communications Corp.

Provision of endorsements and guarantees to others

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan dollars)

No. (Note 1)	Endorser/Guarantor	Endorsees		Endorsement limit for a single entity (Note 3)	Maximum balance during the year (Note 4)	Outstanding balance at December 31, 2025 (Note 5)	Actual amount drawn down (Note 3)	Balance secured by collateral	Ratio of accumulated amount to net worth of the Company	Maximum amount of endorsement (Note 3)	Provision of endorsements by parent company to subsidiary (Note 6)	Provision of endorsements by subsidiary to parent company (Note 6)	Provision of endorsement to the party in Mainland China (Note 6)
		Company name	Relationship (Note 2)
0	Arima Communications Corp.	Guang Lee Energy Corporation.	2	$ 51,444	$ 10,000	$ 10,000	$ 3,187	$ -	4%	$ 102,888	Y	N	N

Note 1: The intercompany transactions between the companies are identified and numbered as follow for indication:
(1) Parent company: 0.
(2) Invested company start from 1 consecutively.

Note 2 : There are seven types of relationship between the endorser and the endorsee, and are indicated as follows:
(1) Having business dealings.
(2) Majority owned subsidiaries.
(3) The Company directly or indirectly owns over 50% of voting rights of the investee company.
(4) A subsidiary jointly owned over 90% by the Company.
(5) Guarantee by the Company according to the construction contract.
(6) An investee company. The guarantees were provided based on the Company's proportionate share in the investee company.
(7) Joint and several guarantee by the Company according to the pre-construction contract under Customer Protection Act.

Note 3: Provision of the total amount on endorsements and guarantees provided by the Company shall keep the amount no more than 40% of net assets recorded in the latest financial statements of the Company. The amount of endorsement guarantee for a single entity shall not exceed 20% of the company's net worth as stated in its latest financial statement.

The aggregate amount of endorsements and guarantees provided by the Company and its subsidiaries shall not exceed 50% of the Company's net worth as stated in its latest financial statements, and the aggregate amount of endorsements and guarantees for any single entity shall not exceed 30% of the Company's net worth as stated in its latest financial statements.

Note 4: The maximum balance during the year for the provision of endorsement and guarantee to others.

Note 5: The amount approved by the board of directors, however, if the board of directors authorizes the chairman of the board of directors to make a decision in accordance with Article 12(8), of the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies, it refers to the amount decided by the chairman of the board.

Note 6: "Y" for the endorsement and guarantee of the listed parent company to its subsidiaries, the endorsement and guarantee of the subsidiaries to the listed parent company, and the endorsement and guarantee of the Mainland China.

Table 3

Arima Communications Corp.

Receivable from related parties reaching $100 million or 20 % of paid-in capital or more

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan dollars)

Creditors	Counter parties	Relationships with the counter party	Accounts receivable from related parties		Turnover rate	Overdue receivables		Amount collected subsequent to the balance date	Allowance of doubtful account	Note
			Type	Amount		Amount	Action taken
Technovation (Cayman) Corp.	The Company	Parent company of Technovation (Cayman) Corp.	Accounts receivables	$ 134,759	-	$ 134,759	Dunning and recovered	$ -	$ -	-

Note: Transactions between the Company and its subsidiaries were eliminated on consolidation.

Table 4

Arima Communications Corp.

Significant inter-company transactions between the parent company and subsidiaries

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan dollars)

No. (Note 1)	Transaction parties	Counter parties	Relationship (Note 2)	Transaction details
				Financial statement accounts	Amount	Payment terms	Percentage of consolidated total revenues or consolidated total assets (Note 3)
0	The Company	Technovation (Cayman) Corp.	1	Accounts payable	$ 134,759	60 days	24%

Note 1: The intercompany transactions between the companies are identified and numbered as follow for indication:
(1) Parent company: 0
(2) Subsidiaries start from 1 consecutively.

Note2: The relationship between the Company and counterparty in transactions is classified into one of the following three categories:
(1) The Company to the subsidiary
(2) The subsidiary to the Company
(3) The subsidiary to another subsidiary

Note 3: In calculating the percentage, of the transaction amount to consolidated total assets and revenue is divided that by consolidated total assets for balance sheet accounts and is divided by consolidated total revenue for income statement accounts.

Note 4: Whether the material transactions listed in this table need to be disclosed shall be determined by the Company in accordance with the principle of materiality.

Table 5
Arima Communications Corp.
Names, locations and related information of investee companies (Not including investments in Mainland China)
For the year ended December 31, 2025
(Expressed in thousands of New Taiwan dollars)

Investor companies	Investee companies	Location	Main businesses and products	Original investment amount		As of December 31, 2025			Net income (losses) of the investee	Share of profit (loss)	Note
				December 31, 2025	December 31, 2024	Number of shares (in thousand)	%	Carrying amount
The Company	Arima Communication (Cayman) Corp	British Cayman Islands	Holding company	$ 1,941,804	$ 1,941,804	60,059	100.00	$ 172,521	($ 14,824)	($ 14,824)	1, 2
The Company	Technovation (Cayman) Corp.	British Cayman Islands	Marketing company	218,228	218,228	6,645	100.00	17,863	( 5,300)	( 5,300)	2
The Company	Crown Investmet Corp.	Taiwan	Investment company	540,000	540,000	54,000	100.00	8,745	( 1,742)	( 1,742)	2
The Company	Tron San Investment Co. Ltd,	Taiwan	Investment company	70,000	70,000	7,000	48.28	65,173	182	88	-
The Company	Arima Lasers Corp.	Taiwan	Manufacturing and trading of laser diode dies	253,553	253,553	6,975	22.51	239,883	( 57,014)	( 12,834)	-
Arima Communication (Cayman) Corp.	PT Adi Reka Mandiri	Indonesia	Manufacturing, processing and sales of mobile phones and electronic components	102,998	102,998	3,900	60.00	44,462	26,326	15,795	2
Crown Investmet Corp.	Arima Energy Corporation	Taiwan	Holding company	71,236	71,236	7,150	96.92	8,452	( 1,750)	( 1,691)	2
Crown Investmet Corp.	Arima Lasers Corp.	Taiwan	Manufacturing and trading of laser diode dies	20	20	1	0.003	23	( 57,014)	( 2)	-

(Continued on next page)

(Continued from previous page)

Investor companies	Investee companies	Location	Main businesses and products	Original investment amount		As of December 31, 2025			Net income (losses) of the investee	Share of profit (loss)	Note
				December 31, 2025	December 31, 2024	Number of shares (in thousand)	%	Carrying amount
Arima Energy Corporation	Guang Lee Energy Corporation.	Taiwan	Sales of solar power plants and other businesses	70,000	70,000	7,000	100.00	8,453	(1,699)	(1,699)	2

Note 1: Arima Communication (Cayman) Corp. passed the resolution of the board of directors in November 2020 to reduce its capital in cash and refunded $54,949 thousand in advance. The registration change has not yet been completed.
Note 2: Transactions between the Company and its subsidiaries were eliminated on consolidation.

Table 6

Arima Communications Corp.

Information on investment in Mainland China

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan dollars)

Investee company	Principal business activities	Paid-in capital	Method of investment (Note 1)	Accumulated outward remittance of funds as of January 1, 2025 (Note 2)	Remittance of funds in current period
					Outflow	Inflow
Arima Communications (Jiangsu) Co., Ltd.	1. Telephone appliances, electrical appliances repair, wholesale and retail, etc.
2. (General category) mobile phones, digital mobile phones, GSM mobile phones, pan-European cordless phones (DECT), exhibition digital cordless phones, second-generation digital wireless
CT2 machines and mobile phones, wireless communication systems, digital wireless switches and telephones, internet computer communicator and international maritime satellite communications
M/B mobile system production and sales business.	$ 1,474,067
(US $46,900 thousand)	(2)	$ 986,902
(US $31,400 thousand)	$ -	$ -	$ 986,902
(US $31,400 thousand)	($ 31,777)	100%	($ 31,777)	$ 125,353	$ -	-

(Continued on next page)

(Continued from previous page)

Investor company	Accumulated investment in Mainland China as of December 31, 2025	Investment amounts authorized by the Investment Commission, Ministry of Economic Affairs	Upper limit on investment
Arima Communications Corp.	$986,902 (US$31,400 thousand) (Note 2)	$1,077,986 (US$34,298 thousand) (Note 2)	$154,332 (Note 6)

Note 1: (a) Arima Communications Corp. directly invested.
(b) Arima Communications Corp. indirectly invested in Mainland China through a third region company. (Arima Communication (Caymen) Corp.)
(c) Other

Note 2: Excluding the share dividends of US$15,500 thousand distributed to Arima Communication Cayman.

Note 3: Except the recognized investment gain and loss is converted at the average monthly exchange rate of 31.1797 from January to December 2025, the NTD figures in this table is converted at the exchange rate of 31.43 on December 31, 2025.

Note 4: Major transactions with the investees in Mainland China: No.

Note 5: Audited by the CPA of the parent company.

Note 6: The investment amount approved by the Investment Commission, Ministry of Economic Affairs exceeded the upper limit prescribed by the competent authority because the continuing loss of the Company's operation reduced the Company's net value.

14. Segment information

Please refer the consolidated financial statements of Arima Communications Corp. for the year ended December 31, 2025.

100

Arima Communications Corp.

Statement of cash and cash equivalents

December 31, 2025

(Expressed in thousands of New Taiwan dollars)

Item	Description	Amount	Note
Cash
Cash on band		$ 41
Cash in banks
Demand deposits		32,226
Foreign currency deposits (Note 1)		49
		32,275
Total		$ 32,316

Note 1: Foreign currency deposits:

US$ 1 thousand (Exchange rate 31.43)

RMB 0 thousand (Exchange rate 4.496)

JPY 0 thousand (Exchange rate 0.2008)

101

Arima Communications Corp.

Statement of accounts receivable

December 31, 2025

(Expressed in thousands of New Taiwan dollars)

Name of clients	Amount	Note
Non-related party
Client A	$ 3,422
Others	-	None of other clients individually has a balance exceeding 5% of the total balance.
Subtotal	3,422
Less: allowance for doubtful accounts	-
Net value	$ 3,422

102

Arima Communications Corp.

Statement of other receivables

December 31, 2025

(Expressed in thousands of New Taiwan dollars)

Name of clients	Amount	Note
Non-related parties
VTECH	$ 187
Qualcomm Semiconductor Corporation	877
Others	12	None of other clients individually has a balance exceeding 5% of the total balance.
Subtotal	1,076
Less: allowance for losses	( 1,064 )
Total	$ 12
Related parties:
Technovation (Cayman) Corp.	$ 1,573
Guang Lee Energy Corporation	1,733
Arima Photovoltaic & Optical Corp.	2,095
Crown Investment Corp.	210
TWR Entertainment, Inc.	42
Arima Lasers Corp.	8
Subtotal	5,661
Less: allowance for doubtful accounts	( 1,915 )
Total	$ 3,746

103

Arima Communications Corp.

Statement of prepayments

December 31, 2025

(Expressed in thousands of New Taiwan dollars)

Item	Description	Amount	Note
Prepayment
Prepaid rent		$ 86
Prepayment for purchases		27,822
Other prepaid expenses		1,714
Input tax		91
Overpaid sales tax		783
Total		$ 30,496

Statement of other financial assets - current

December 31, 2025

(Expressed in thousands of New Taiwan dollars)

Item	Description	Amount
Restricted bank deposits	Bank deposits
and court
seizure	$ 4,727
Dividend receivable subject to provisional
attachment	Provision
attachment
by Court	19,032
Total		$ 23,759

Statement of other current assets

December 31, 2025

(Expressed in thousands of New Taiwan dollars)

Item	Description	Amount	Note
Temporary debits		$ 7,699
Payments on behalf of others		40
Total		$ 7,739

104

Arima Communications Corp.

Changes in financial assets measured at fair value through other comprehensive income - non-current

December 31, 2025

(Expressed in thousands of New Taiwan dollars)

Name	Balance, January 1, 2025		Increase		Decrease		Other changes		Balance, December 31, 2025		Collateral or pledge	Note
	Number of shares (In thousands)	Amount	Number of shares (In thousands)	Amount	Number of shares (In thousands)	Amount	Number of shares (In thousands)	Amount	Number of shares (In thousands)	Amount
Arima Optoelectronics Corp.	5	$	-	$	-	$	-	$	5	$	Note 1	-
Arima Display Corp.	444	-	-	-	-	-	-	-	444	-	None	-
Arima Photovoltaic & Optical Corp.	9	-	-	-	9	-	-	-	-	-	None	Note 2

Note 1: Pledged 5,195 shares to the related party, Crown Investment Corp.
Note 2: Arima Photovoltaic & Optical Corp. carried out a capital reduction in 2025. After the capital reduction, the number of shares held by our company is 185.

Arima Communications Corp.
Statement of changes in investments accounted for using the equity method
For the year ended December 31, 2025
(Expressed in thousands of New Taiwan dollars)

Investees	Balance, January 1, 2025		Increase		Decrease		Investment income (loss)	Other comprehensive income (loss) (Note 1)	Balance, December 31, 2025			Market price/ Net equity value
	Shares (in thousands)	Amount	Shares (in thousands)	Amount	Shares (in thousands)	Amount			Share (in thousand)	Shareholding %	Amount	Unit price (NT$)	Total amount	Collateral
Airma Communication (Cayman) Corp.	60,059	$ 194,312	-	$ -	-	$ -	($ 14,824)	($ 6,967)	60,059	100	$ 172,521	$ 2.87	$ 172,521	None
Technovation (Cayman)
Corp.	6,645	23,163	-	-	-	-	( 5,300 )	-	6,645	100	17,863	2.69	17,863	None
Crown Investment Corp.	54,000	10,489	-	-	-	-	( 1,742 )	( 2 )	54,000	100	8,745	0.16	8,745	None
Tron San Investment Co.,Ltd,	7,000	65,085	-	-	-	-	88	-	7,000	48.28	65,173	9.31	65,173	None
Arima Lasers Corp.	6,975	267,311	-	-	-	-	( 12,924 )	( 14,504 )	6,975	22.51	239,883	34.39	239,883	Yes
		$ 560,360		$ -		$ -	($ 34,702 )	($ 21,473 )			$ 504,185		$ 504,185

Note 1: Others include exchange losses of $6,823 thousands in the financial statements of foreign operating entities, cash dividends of $3,487 thousand were distributed, other comprehensive loss amounted to $305 thousand, and the decrease in equity of associates was $11,468 thousand.

106

Arima Communications Corp.

Statement of short-term borrowings

December 31, 2025

(Expressed in thousands of New Taiwan dollars)

Bonds name	Purposes	Amount	Contract period	Rate	Total amount	Collateral	Note
Sunny Bank	Mortgage	$ 12,000	2025.09.16~2026.03.04	3.54%	$ 12,000	Credit insurance fund	1

Note 1: The guarantee was provided by the Small and Medium Enterprise Credit Guarantee Fund of Taiwan.

Statement of contract liabilities

December 31, 2025

(Expressed in thousands of New Taiwan dollars)

Item	Description	Amount
Contract liabilities	Light Phone	$ 12,442
	9 PARKING	1,720
	智驛	683
	微訊科技	69
Total		$ 14,914

107

Arima Communications Corp.

Statement of accounts payable

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan dollars)

Name of clients	Amount	Note
Non-related parties
Client A	$ 3,839
		None of other clients
		individually
		has a balance
		exceeding 5%
		of the total
Other	10	balance.
	$ 3,849
Related parties
Technovaion (Cayman) Corp.	$ 134,759
Arima Communication
(Jiangsu) Co., Ltd.	77,842
	$ 212,601

108

Arima Communications Corp.

Statement of other payable and long-term payable -related parties

December 31, 2025

(Expressed in thousands of New Taiwan dollars)

Name of clients	Description	Amount	Note
Non-related parties
Accrued salary and bonus payable		$ 6,220
Accrued other expenses		17,265
Total		$ 23,485
Other payables - related parties
Technovation (Cayman) Corp.		$ 13,546
Arima Communication (Cayman) Corp.		540
SilTec Instruments Limited		13,739
Aeon Biotherapeutics Corp.		71
Total		$ 27,896
Long-term payable - related parties
Arima Communication (Cayman) Corp.		$ 2,200
SilTec Instruments Limited		46,777
Total		$ 48,977

109

Arima Communications Corp.

Statement of other current liabilities

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan dollars)

Item	Description	Amount	Note
Temporary receipts		$ 232
Receipts under custody		2,023
Total		$ 2,255

Statement of long-term borrowings

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan dollars)

Banks name	Purposes	Amount	Contract period	Rate	Collateral or pledge	Note
First Bank	Credit loan	$ 1,542	2020.11.16~2026.11.16	2.72%	None	-
First Bank	Secured loan	6,168	2020.11.16~2026.11.16	2.72%	Credit Insurance Fund	Note2
Ho Jing Co., Ltd.	Secured loan	9,192	2025.04.30~2026.11.02	5.86%	1,500 thousand shares of Arima Lasers Corp.	Note1

Less: Current portion expired within an operating cycle ( 16,902 )

Total $ -

Note1: For details of pledged of assets, please refer to Note 8.

Note2: The Credit Insurance Fund guarantees 80% of the loan, and the bank is responsible for 20% of the loan.

110

Arima Communications Corp.

Statement of operating revenue

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan dollars)

Item	Description	Amount	Note
Sales revenue
Mobile phone		$ 12,374
Raw parts, semi-finished		48,679
Subtotal		61,053
Less: sales returns and discount		( 195 )
Net		60,858
Labor income		350
Other operation revenue		10,060
Total		$ 71,268

111

Arima Communications Corp.

Statement of operating costs

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan dollars)

Item	Description	Amount	Note
Raw materials
Raw materials & materials and supplies in transit - beginning balance		$ -
Add: Raw material purchase, net		14,476
Research expenses transferred in		2,988
Less: Cost of raw materials sold		( 6,326 )
Work-in-process requisition		( 2,988 )
Raw materials & materials and supplies in transit - ending balance		( 8,092 )
Reclassified to operating expenses		( 58 )
Materials consumed		-
Manufacturing costs
Add: work in process - beginning balance		-
Raw materials transferred in		2,988
Purchase		89
Less: Work in process - ending balance		( 89 )
Cost of finished goods		2,988
Add: Finished goods - beginning balance		-
Purchase		27,056
Less: Finished goods - ending balance		-
Cost of manufacturing and sales		30,444
Loss on allowance of inventory for decline in market value and obsolescence		8,181
Cost of raw materials sold		6,326
Other operation costs		4,989
Operating costs		$ 49,540

112

Arima Communications Corp.

Statement of operating costs

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan dollars)

Items	Amount	Note
Selling expenses
Salaries and wages	$ 3,713
Insurance fees	541
Import charges	900
		None of other financial accounts contained within other expenses individually has a balance exceeding 5% of the total balance.
Other expenses	2,378
Total	$ 7,532
Administrative expenses
Salaries and wages	$ 26,475
Depreciation	6,412
Professional service fees	8,952
		None of other financial accounts contained within other expenses individually has a balance exceeding 5% of the total balance.
Other expenses	16,526
Total	$ 58,365
Research expenses
Salaries and wages	$ 20,208
Research expenses	3,860
Insurance fees	2,231
Various amortization	4,888
		None of other financial accounts contained within other expenses individually has a balance exceeding 5% of the balance.
Other expenses	9,023
Total	$ 40,210

113

Arima Communications Corp.

Statement of labor, depreciation and amortization by function

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan dollars)

| Classification
Nature | For the year ended December 31, | | | | | |
| --- | --- | --- | --- | --- | --- | --- |
| | 2025 | | | 2024 | | |
| | Classified as cost of revenue | Classified as operating expenses | Total | Classified as cost of revenue | Classified as operating expenses | Total |
| Labor cost | | | | | | |
| Employee salary | $ - | $ 46,196 | $ 46,196 | $ - | $ 73,904 | $ 73,904 |
| Director's remuneration | - | 6,870 | 6,870 | - | 6,855 | 6,855 |
| Labor and health insurance | - | 4,681 | 4,681 | - | 5,837 | 5,837 |
| Pension | - | 2,892 | 2,892 | - | 3,569 | 3,569 |
| Others | - | 1,857 | 1,857 | - | 2,260 | 2,260 |
| Depreciation | - | 8,286 | 8,286 | - | 7,999 | 7,999 |
| Amortization | - | 5,008 | 5,008 | - | 6,689 | 6,689 |

For the years ended December 31, 2025 and 2024, the number of employees of the Company were 34 and 67, respectively.

For details of other income, please refer to Note 6(21).

For details of other gains and losses, please refer to Note 6(22).

For details of finance costs, please refer to Note 6(25).

AI assistant

Arima Comm. — Audit Report / Information 2025

52716_rns_2026-05-21_afbddc8a-cb59-4d46-8e26-57434748eaef.pdf

Arima Communications Corp.

Table of contents

Independent Auditors' Report

Opinion

Basis for opinion

Independent Auditors' Report (Continued)

Key audit matters

Independent Auditors' Report (Continued)

2. Related party transactions

Independent Auditors' Report (Continued)

Independent Auditors' Report (Continued)

Responsibilities of management and those charged with governance for the parent company only financial statements

Independent Auditors' Report (Continued)

Notice to Readers

Arima Communications Corp.

Parent company only balance sheets

Arima Communications Corp.

Parent company only statement of comprehensive income

Arima Communications Corp.

Parent company only statement of changes in equity

Arima Communications Corp.

Parent company only statement of cash flows

Arima Communications Corp.

Notes to the parent company only financial statements

1. History and organization

2. The date of authorization for issuance of the parent company only financial statements and procedures for authorization

3. Application of new standards, amendments and interpretations

(3) IFRSs issued by IASB but not yet endorsed by the FSC

4. Summary of significant accounting policies

A. Sales of merchandises

6. Details of significant accounts

8. Pledge of assets

9. Significant contingent liabilities and unrecognized commitments

10. Significant disaster loss

11. Significant events after the balance sheet date

12. Others

(2) Capital management

(3) Financial instruments

B. Financial risk management objectives and policies

ii. Interest rate risk

(B) Credit risk

(C) Liquidity risk

Table of liquidity and interest rate risk

13. Supplementary disclosures

Arima Communications Corp.

Arima Communications Corp.

Provision of endorsements and guarantees to others

Arima Communications Corp.

Information on investment in Mainland China

14. Segment information

Arima Communications Corp.

Statement of cash and cash equivalents

Arima Communications Corp.

Statement of accounts receivable

Arima Communications Corp.

Statement of other receivables

Arima Communications Corp.

Statement of prepayments

Statement of other financial assets - current

Statement of other current assets

Arima Communications Corp.

Changes in financial assets measured at fair value through other comprehensive income - non-current

Arima Communications Corp.

Statement of short-term borrowings

Statement of contract liabilities

Arima Communications Corp.

Statement of accounts payable

Arima Communications Corp.

Statement of other payable and long-term payable -related parties

Arima Communications Corp.

Statement of other current liabilities

Statement of long-term borrowings

Arima Communications Corp.

Statement of operating revenue

Arima Communications Corp.

Statement of operating costs

Arima Communications Corp.

Arima Comm. Audit Report / Information 2025