CHAINTECH — Annual Report 2022

Nov 10, 2022

Chaintech Technology Corporation

Parent Company Only Financial Statements and Independent Auditors' Report

For the Years Ended December 31, 2022 and 2021 (Stock Code: 2425)

Company Address: 3F., No. 48-3, Minsheng Road, Xindian District, New Taipei City

Tel.: (02)2913-8833

Notice to Readers

For the convenience of readers, the independent auditors' audit report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors' audit report and consolidated financial statements shall prevail.

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Chaintech Technology Corporation

Parent Company Only Financial Statements

for the Years Ended December 31, 2022 and 2021 and Independent Auditors' Report

Table of Contents

Item I. Cover Page II. Table of Contents III. Independent Auditors' Report IV. Parent Company Only Balance Sheets V. Parent Company Only Statements of Comprehensive Income VI. Parent Company Only Statements of Changes in Equity VII. Parent Company Only Statements of Cash Flows VIII. Notes to Parent Company Only Financial Statements (I) Company History (II) Approval Date and Procedures of the Financial Statements (III) Application of New and Amended Standards and Interpretations (IV) Summary of Significant Accounting Policies (V) Significant Accounting Judgments and Sources of Estimation and Assumption Uncertainty (VI) Descriptions of Significant Accounting Items (VII) Related Party Transactions

Page/Number/Index

1 2 ~ 3 4 ~ 9 10 ~ 11 12 13 14 15 ~ 58 15 15 15 ~ 17 17 ~ 28 28 29 ~ 45 45 ~ 47

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Page/Number/Index

Item

(VIII) Pledged Assets	48
(IX) Significant Contingent Liabilities and Unrecognized Contract
Commitments	48
(X) Significant Disaster Loss	48
(XI) Significant Events after the End of the Financial Reporting Period	48
(XII) Others	48 ~ 57
(XIII) Supplementary Disclosures	58
(XIV) Segment information	58
IX. List of Significant Accounting Items
Statement of Cash	Statement 1
Statement of Changes in Non-current Financial Assets at Fair Value through
Other Comprehensive Income	Statement 2
Statement of Accounts Receivable (Including Related Parties)	Statement 3
Statement of Inventories	Statement 4
Statement of Changes in Investments Accounted for Using Equity Method	Statement 5
Changes in property, plant, and equipment	Note VI(VI)
Statement of Accounts Payable (Including Related Parties)	Statement 6
Statement of Operating Revenue	Statement 7
Statement of Operating Costs	Statement 8
Statement of Operating Expenses	Statement 9
Summary Statement of Current Period Employee Benefits, Depreciation,
Depletion and Amortization Expenses by Function	Statement 10

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Independent Auditors' Report (112) Cai-Shen-Bao-Zi No. 20005374

To Chaintech Technology Corporation:

Audit Opinion

The independent auditors have audited the accompanying parent company only balance sheets of Chaintech Technology Corporation (hereinafter referred to as "the Company") as of December 31, 2022 and 2021, and the related parent company only statements of comprehensive income, parent company only statements of changes in equity, and parent company only statements of cash flows for the years then ended, and the notes to the parent company only financial statements (including the summary of significant accounting policies).

In our opinions, the accompanying parent company only financial statements, in all material respects, give a true and fair view of the parent company only financial position of the Company as of December 31, 2022 and2021, and of 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 Preparation of Financial Reports by Securities Issuers."

Basis of Audit Opinion

We conducts the audit work in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountant and the GAAS of Republic of China. Our responsibilities under those standards are further described in the Responsibilities of Certified Public Accountants for Auditing the Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the "Norm"), and we have fulfilled our other ethical responsibilities in accordance with the Norm. We believe that the audit evidence we have obtained is sufficient and appropriate to serve as the foundation of our audit opinion.

Key Audit Matters

Key audit matters refer to matters that, in our professional judgment, are of most significance in our audit of the parent company only financial statement of the Company for the year ended December 31, 2022. These matters are addressed in the context of our audit of the parent company only financial statements as a whole, and in forming out opinion thereon, and we do not provide a separate opinion on these matters.

PricewaterhouseCoopers, Taiwan

27F, No. 333, Sec. 1, Keelung Rd., Xinyi Dist., Taipei 110208, Taiwan T: +886 (2) 2729 6666, F:+ 886 (2) 2729 6686, www.pwc.tw

Key audit matters for the parent company only financial statement of the Company for the year ended December 31, 2022 are stated as follows:

Sales revenue cut-off

Description

Regarding the accounting policy for recognition of sales revenues, please refer to Note IV(XXVI) to the parent company only financial statements. For the description of sales revenue, please refer to Note VI(XIV) to the parent company only financial statements.

The Company has engaged in the trading and manufacturing of computer peripherals. Sales revenue will not be recognized until customers take the delivery of goods from the warehouse and the transfer control has passed. The Company mainly relies on the statements or other information provided by the depositary of the delivery warehouse, then uses the actual shipment made by the warehouse to the customer as the basis for recognizing the income.

The recognition of the turnover from the warehouse is based on the information and report provided by the depositary as the basis for recognizing the sales revenue. These revenue recognitions generally involve a large number of manual operations. Considering that the volume of the shipments of the Company is large, and the amount of transaction before and after the financial statement date has a significant impact on the financial statements, the independent auditors have thus listed the sales revenue as the most important matter for this year's audit.

Corresponding audit procedures

We have performed the following key audit procedures for the matter mentioned above:

1. Understand revenue recognition and adjustment procedures for revenue cut-off for shipment from the depository of warehouse of the Company. Then, inspect the appropriateness of the revenue's recognition from the warehouse, including understanding of the relevant internal control procedures, obtaining information and the statements provided by the depository.

2. Carry out an internal control test for the sales revenue from the warehouse in order to make sure that the Company determines the sales recognition when the customer receives the delivery of goods and the right of control is transferred.

3. Perform a closing test for sales revenue from delivery of warehouses for a certain period before and after the balance sheet date, including the verification of shipment certificates and that revenue recognition is recorded in the appropriate period.

4. Make an written inquiry into the stock quantity in the warehouse and check if the inventory quantity on the record is correct.

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Assessment of impairment of intangible assets by Shenzhen Jinghong Digital R&D Service Co., Ltd. - investments accounted for using the equity method

Description

Regarding the accounting policy for assessment of impairment of investments accounted for using the equity method, please refer to Note IV(XVII) to the parent company only financial statements. For the estimation and assumption uncertainty in assessment of impairment of investments accounted for using the equity method, please refer to Note V(II) to the parent company only financial statements.

In 2019, the Company had a 51% equity interest in Sitonholy (Tianjin) Technology Co., Ltd. through Shenzhen Jinghong Digital R&D Service Co., Ltd. Goodwill and customer relationships were recognized in investments accounted for using the equity method according to the equity purchase contract. This has a significant impact on the parent company only financial statements of the Company.

To assess whether intangible assets are impaired, Shenzhen Jinghong Digital R&D Service Co., Ltd. estimates the future cash flows based on the cash-generating units to which the intangible assets belong, and measures the recoverable amount of such cash-generating units at an appropriate discount rate. As the estimation of future cash flow involves many assumptions that may greatly affect the recoverable amount, we identify the assessment of the impairment of intangible assets by Shenzhen Jinghong Digital R&D Service Co., Ltd. as one of the key audit matters for the year.

Corresponding audit procedures

We have performed the following key audit procedures for the matter mentioned above: We have carried out the following audit procedures based on the goodwill impairment test report issued by a third-party valuation expert appointed by management:

1. Assess the expertise, competence, and objectivity of the independent valuation experts appointed by management and verify their qualifications, and discuss with management the scope of work of the valuation experts and review the appointment conditions to verify that no conditions that may affect their objectivity or inhibit their work scope exist, and that the methods used by them are consistent with the IFRSs and industry regulations.

2. Understand and evaluate the process and the basis where management has made its projections of the growth rate of the future operations in terms of sales and profit margin.

3. Adopt the evaluation models and important assumptions (including discount rate, etc.) provided by financial experts of our firm, compare the data in assumptions made by management to market and historical data, and check the calculation to ensure the appropriateness of management's judgment.

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Responsibility 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 Preparation of Financial Reports by Securities Issuers," 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, the responsibility of management includes assessing the Company's ability to continue as a going concern, disclosing going concern related matters, as well as adopting going concern basis of accounting unless the management intends to liquidate the Company or terminate the business, or has no realistic alternative but to do so.

The governance units (including the audit committee) of the Company, are responsible for overseeing the Company's financial reporting process.

Responsibilities of Certified Public Accountants for Auditing the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the GAAS of Republic of China will always detect a material misstatement of the parent company only financial statements when it exists. Misstatements may arise from fraud or error. If it could be reasonably anticipated that the misstated individual amounts or aggregated sum could have influence on the economic decisions made by the users of the parent company only financial statements, it will be deemed as material.

We conduct the audit in accordance with the GAAS of Republic of China, and exercise professional judgment and maintain professional skepticism throughout the audit. We also execute the following tasks:

1. 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 that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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1. Obtain an understanding of internal control 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 control.

2. Evaluate the appropriateness of accounting policies adopted by management and the reasonableness of the accounting estimates and related disclosures made accordingly.

3. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, determine 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 auditors' report to the related disclosures in the parent company only financial statements; or, if such disclosures are inadequate, we are required to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or circumstances may cause the Company to no longer continue as a going concern.

4. Evaluate the overall expression, structure, and contents of the parent company only financial statements (including related notes) and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

5. Obtain sufficient and appropriate audit evidence with regard to the financial information of the entities within the Company to express an opinion about the parent company only financial statements. We are responsible for the direction, supervision, and performance of the audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, 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 the Norm regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that are of most significance in the audit of the parent company only financial statements for the year ended December 31, 2022 and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a

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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.

Pricewaterhouse Coopers

Feng, Min-Chuan Independent Auditors' Report Lin, Ya-Hui

Former Securities and Futures Bureau, Financial Supervisory Commission Approved Certification Number: Jin-Guan-Zheng-Liu-Zi No. 0960038033 Financial Supervisory Commission

Approved Certification Number: Jin-Guan-Zheng-Shen-Zi No. 1070323061

March 22, 2023

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Chaintech Technology Corporation Parent Company Only Balance Sheets For the Years Ended December 31, 2022 and 2021

Unit: NT$ thousands

Assets	Notes VI(I) VI(I) and VIII VI(III) VI(III) and VII VI(IV) VIII VI(II) VI(V)(IX) VI(VI) VI(VII) VI(VIII) VI(XX)	December31,2022 Amount % $ 601,127 26 4,621 - 190,514 9 525,568 23 118,208 5 5,094 - 1,445,132 63 142,383 6 610,557 27 8,995 - 11,033 1 2,222 - 32,561 2 31,974 1 839,725 37 $ 2,284,857 100	December31,2021	December31,2021
			Amount $ 353,911 33,847 335,199 736,800 219,114 3,978 1,682,849 200,485 557,840 9,590 2,962 - 20,770 30,353 822,000 $ 2,504,849	%
Current assets 1100 Cash and cash equivalents 1136 Financial assets measured at amortized cost -current 1170 Accounts receivable, net 1180 Accounts receivable from related parties, net 130X Inventories 1470 Other current assets 11XX Total current assets Non-current assets 1517 Non-current financial assets at fair value through other comprehensive income 1550 Investments using equity method 1600 Property, plant, and equipment 1755 Right-of-use assets 1780 Intangible assets 1840 Deferred tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets				14 1 13 30 9 -
				67
				8 22 1 - - 1 1
				33
				100

(Continued)

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Chaintech Technology Corporation Parent Company Only Balance Sheets For the Years Ended December 31, 2022 and 2021

Liabilities and equity

Unit: NT$ thousands December31,2022 December31,2021 Notes Amount % Amount % VI(X) $ - - $ 226,840 9 VI(XIV) 118 - 640 - VII 100,675 5 353,456 14 VII 74,227 3 57,771 3 73,462 3 54,160 2 5,643 - 1,544 - 223 - 103 - 254,348 11 694,514 28 VI(XX) 3,721 - - - 5,595 1 1,591 - 9,316 1 1,591 - 263,664 12 696,105 28 VI(XII) 964,988 42 1,014,988 40 100 - 100 - VI(XIII) 159,534 7 147,312 6 29,249 1 39,701 2 946,595 42 787,638 31 ( 79,273) ( 4 ) ( 29,249) ( 1) VI(XII) - - ( 151,746) ( 6) 2,021,193 88 1,808,744 72 IX XI $ 2,284,857 100 $ 2,504,849 100

Current liabilities 2100 Short-term borrowings 2130 Current contract liabilities 2170 Accounts payable 2200 Other payables 2230 Current tax liabilities 2280 Current lease liabilities 2300 Other current liabilities 21XX Total current liabilities 2570 Deferred tax liabilities 2580 Non-current lease liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity Share capital 3110 Ordinary shares 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 3500 Treasury shares 3XXX Total equity Significant Contingent Liabilities and Unrecognized Contract Commitments Significant Events after the End of the Financial Reporting Period 3X2X Total liabilities and equity

The accompanying notes are an integral part of the parent company only financial statements. Please refer to them as well.

Chairman ： Kao, Shu-Jung

Accounting Supervisor: Lai, Yu-Nu

Manager: Kao, Shu-Jung

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Chaintech Technology Corporation Parent Company Only Statements of Comprehensive Income For the Years Ended December 31, 2022 and 2021

Item

Unit: NT$ thousands (EPS in NT$) 2022 2021 Notes Amount % Amount % VI(XIV) and VII $ 3,900,444 100 $ 4,173,178 100 VI(IV)(XVIII) (XVIIII) and VII ( 3,565,324)( 92)( 3,823,074 )( 91) 335,120 8 350,104 9 VI(XVIII)(XIX) and VII ( 48,732) ( 1) ( 43,756 ) ( 1) ( 32,155) ( 1) ( 24,941 ) ( 1) ( 15,084) - ( 1,894 ) - XII(II) 2,152 - ( 8,680 ) - ( 93,819)( 2)( 79,271 )( 2) 241,301 6 270,833 7 1,650 - 126 - VI(XV) 6,295 - 6,015 - VI(IX)(XVI) 99,185 3 ( 119,713 ) ( 3) VI(XVII) ( 5,281) - ( 4,984 ) - VI(V) 44,639 1 7,362 - 146,488 4 ( 111,194 )( 3) 387,789 10 159,639 4 VI(XX) ( 67,417)( 2)( 37,415 )( 1) $ 320,372 8 $ 122,224 3 VI(II) ($ 58,102)( 1) $ 14,335 - ( 58,102)( 1) 14,335 - VI(V) 8,078 - ( 3,882 ) - 8,078 - ( 3,882 ) - ($ 50,024)( 1) $ 10,453 - $ 270,348 7 $ 132,677 3 VI(XXI) $ 3.32 $ 1.27 VI(XXI) $ 3.31 $ 1.27

4000 Operating Revenue 5000 Operating costs 5950 Gross profit from operations Operating expenses 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Expected credit gains (losses) 6000 Total operating expenses 6900 Total operating expenses Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Financial costs 7070 Share of profit or loss of subsidiaries, associates, and joint ventures accounted for using equity method 7000 Total non-operating income and expenses 7900 Profit before tax 7950 Tax expense 8200 Profit Other comprehensive income, net Items that will not be reclassified to profit or loss 8316 Unrealized valuation gain (loss) on equity instruments measured at fair value through other comprehensive income 8310 Total amount of items that will not be reclassified to profit or loss Items that may be reclassified subsequently to profit or loss 8361 Exchange differences on translation of financial statements of foreign operation 8360 Total amount of items that may be reclassified subsequently to profit or loss 8300 Other comprehensive income, net 8500 Total comprehensive income (loss) Basic earnings per share 9750 Profit Diluted earnings per share 9850 Profit

The accompanying notes are an integral part of the parent company only financial statements. Please refer to them as well.

Chairman ： Kao, Shu-Jung

Manager ： Kao, Shu-Jung

Accounting Supervisor ： Lai, Yu-Nu

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Unit: NT$ thousands

Chaintech Technology Corporation Parent Company Only Statements of Changes in Equity For the Years Ended December 31, 2022 and 2021

Notes For the Year Ended December 31, 2021 Balance as of January 1, 2021 Profit Other comprehensive income (loss) Total comprehensive income (loss) Appropriation and distribution of earnings for 2020 VI(XIII) Legal reserve appropriated Reversal of special reserve Cash dividends paid Balance as of December 31, 2021 2022 Balance as of January 1, 2022 Profit Other comprehensive income (loss) Total comprehensive income (loss) Appropriation and distribution of earnings for 2021 VI(XIII) Legal reserve appropriated Reversal of special reserve Cash dividends paid Retirement of treasury share Balance as of December 31, 2022		Ordinaryshares $ 1,014,988 - - - - - - $ 1,014,988 $ 1,014,988 - - - - - - 50,000 $ 964,988	Capital surplus - changes in the net worth of associates and joint ventures accounted for using equity method $ 100 - - - - - - $ 100 $ 100 - - - - - - - $ 100				Retained earnings			Other equityinterest	Other equityinterest	Other equityinterest	Treasuryshares $151,746 - - - - - - $151,746 $ 151,746 - - - - - - 151,746 $ -		Total equity
					Legal reserve $ 132,984 - - - 14,328 - - $ 147,312 $ 147,312 - - - 12,222 - - - $ 159,534		Special reserve $ 97,541 - - - - 57,840 - $ 39,701 $ 39,701 - - - - 10,452 - - $ 29,249		Unappropriated retained earnings $ 670,152 122,224 - 122,224 14,328 57,840 48,250 $ 787,638 $ 787,638 320,372 - 320,372 12,222 10,452 57,899 101,746 $ 946,595	Exchange differences on translation of financial statements of foreign operation $ 40,868 - 3,882 3,882 - - - $ 44,750 $ 44,750 - 8,078 8,078 - - - - $ 36,672		Unrealized gains (losses) on financial assets at fair value through other comprehensive income $1,166 - 14,335 14,335 - - - $15,501 $ 15,501 - 58,102 58,102 - - - - $42,601
															$ 1,724,317 122,224 10,453 132,677 - - 48,250 $ 1,808,744 $ 1,808,744 320,372 50,024 270,348 - - 57,899 - $ 2,021,193

The accompanying notes are an integral part of the parent company only financial statements. Please refer to them as well.

Chairman: Kao, Shu-Jung

Manager Kao, Shu-Jung

Accounting Supervisor: Lai, Yu-

Nu

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Chaintech Technology Corporation Parent Company Only Statements of Cash Flows For the Year Ended December 31, 2022 and 2021

Cash flows from operating activities Profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation expenses Depreciation expenses on right-of-use assets Expected credit losses (gains) Amortization expenses Interest income Interest expenses Dividend income Share of profit or loss of subsidiaries accounted for using equity method Impairment loss Changes in operating assets and liabilities Net changes in operating assets Accounts receivable (including related parties) Inventories Other current assets Other non-current assets Net changes in operating liabilities Accounts payable (including related parties) Contract liabilities Other payables Other current liabilities Cash inflow generated from operations Interest received Dividends received Interest paid Income tax received (paid) Net cash flows from operating activities Cash flows from investing activities Acquisition of property, plant, and equipment Decrease in financial assets measured at amortized cost -current Acquisition of Intangible assets Increase in prepayments for business facilities Increase in refundable deposits Net cash flows used in investing activities Cash flows from financing activities Decrease in short-term loans Repayments of lease liabilities Cash dividends paid Net cash flows generated used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

Unit: NT$ thousands Notes January 1, 2022 to December 31,2022 January 1, 2021 to December 31,2022 $ 387,789 $ 159,639 VI(VI)(XVIII) 10,831 22,899 VI(VII)(XVIII) 4,210 1,482 XII(II) ( 2,152 ) 8,680 VI(VIII)(XVIII) 129 - ( 1,650 ) ( 126 ) VI(XVII) 5,281 4,984 VI(XV) ( 6,100 ) ( 5,795 ) VI(V) ( 44,639 ) ( 7,362 ) VI(V)(IX)(XVI) - 97,765 358,069 51,615 100,906 ( 44,896 ) ( 1,117 ) ( 3,401 ) ( 247 ) 1,925 ( 252,781 ) 98,773 ( 522 ) 640 16,705 ( 1,962 ) 120 ( 67 ) 574,832 384,793 1,650 126 6,100 5,795 ( 5,530 ) ( 5,107 ) ( 56,184 ) 20,829 520,868 406,436 VI(VI) ( 10,236 ) - 29,226 23,040 VI(VIII) ( 2,351 ) - ( 624 ) - ( 750 ) - 15,265 23,040 ( 226,840 ) ( 175,187 ) VI(XXII) ( 4,178 ) ( 1,498 ) VI(XIII) ( 57,899 ) ( 48,250 ) ( 288,917 ) ( 224,935 ) 247,216 204,541 353,911 149,370 $ 601,127$ 353,911

The accompanying notes are an integral part of the parent company only financial statements. Please refer to them as well.

Chairman ： Kao, Shu-Jung

Manager: Kao, Shu-Jung

Accounting Supervisor : Lai, Yu-Nu

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Cash and cash equivalents at end of period Chaintech Technology Corporation Notes to Parent Company Only Financial Statements For the Years Ended December 31, 2022 and 2021

Unit: NT$ thousands (Unless specified otherwise)

I. Company History

• (I) The original East Chaintech Technology Corporation was established in November 1986, and was renamed as Chaintech Technology Corporation (hereinafter referred to as the "Company") in January 2013. Approved by the Securities and Futures Bureau as an OTC-listed company in December 1997, the Company was transferred to be a listed company and was listed at the stock exchange market on August 17, 2000. The Company is principally engaged in the business of buying and selling and manufacturing of motherboards, display cards, and computer peripherals.

• (II) Colorful Group Ltd. (hereinafter referred to as the "Colorful Group") acquired 10% equity in the Company indirectly through Zhongjie Xingye Co., Ltd., and acquired 100% equity in Yicheng International Development Co., Ltd. (which held 36.2% equity of the Company) in June 2014. Therefore, Colorful Group held 46.2% equity in the Company indirectly, and obtained more than half of the seats in the Company's Board of Directors. In June 2017, Zhongjie Xingye Co., Ltd. sold all the equity of the Company it held. In July 2016, Yicheng International Development Co., Ltd. sold the equity of the Company to 26.11%. As of December 31, 2022, the Colorful Group indirectly held 29.57% of the equity in the Company through Yicheng International Development Co., Ltd.

II. Approval Date and Procedures of the Financial Statements

The parent company only financial statements were approved by the Board of Directors on March 22, 2023.

III. Application of New and Amended Standards and Interpretations

(I) Effect of adopting new and amended International Financial Reporting Standards ("IFRSs") endorsed by the Financial Supervisory Commission (hereinafter referred to as the “FSC”)

• The following table summarizes the new, revised, and amended standards and interpretations of IFRSs endorsed by the FSC that are applicable in 2022:

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New/Revised/Amended Standards and Interpretations Amendments to IFRS 3 “Reference to the Conceptual Framework” Amendments to International Accounting Standards (“IAS”)16 “Property,Plant and Equipment: Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts — Cost of Fulfilling a Contract” Annual improvement over the 2018-2020 period	Effective date issued by the International Accounting Standards Board As of January1, 2022 As of January1, 2022 As of January1, 2022 As of January1, 2022

The above standards and interpretations have no significant impact to the Company's financial condition and financial performance based on the Company's assessment.

(II) Effect of new issuance of or amendments to the IFRSs endorsed by the FSC but not yet adopted by the Company

The following table summarizes the new, revised, and amended standards and interpretations of IFRSs endorsed by the FSC that are applicable in 2023:

New/Revised/Amended Standards and Interpretations Amendments to IAS 1 “Disclosure of Accounting Policies” Amendment to IAS8 “Definition of Accounting Estimates” Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”	Effective date issued by
	the International Accounting Standards Board As of January 1, 2023 As of January 1, 2023 As of January 1, 2023

The above standards and interpretations have no significant impact to the Company's financial condition and financial performance based on the Company's assessment.

(III) Effect of the IFRSs issued by the IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by the IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

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Effective date issued by the International Accounting Standards New/Revised/Amended Standards and Interpretations Board Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Pending decision by the Assets between an Investor and its Associate or Joint Venture” International Accounting Standards Board" Amendments to IFRS 16 “Lease Liability in a Sale and Leaseback” As of January 1, 2024 IFRSs 17 “Insurance Contracts” As of January 1, 2023 Amendments to IFRSs 17 “Insurance Contracts” As of January 1, 2023 Amendments to IFRSs 17 “ the initial application of IFRSs 17 and As of January 1, 2023 IFRSs 9 - Comparative Information” Amendments to IAS 1 “Classification of Liabilities as Current or As of January 1, 2024 Non-current” Amendments to IAS 1 “Non-current Liabilities with Covenants” As of January 1, 2024

The above standards and interpretations have no significant impact to the Company's financial condition and financial performance based on the Company's assessment.

IV. Summary of Significant Accounting Policies

The principal accounting policies applied in the preparation of the parent company only financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(I) Statement of compliance

The parent company only financial statements are prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(II) Basis of preparation

1. The parent company only financial statements have been prepared based on historical cost convention.

2. The financial statements prepared in accordance with IFRSs, international accounting standards, interpretations and interpretations (hereinafter referred to as the IFRSs) are required to be used for the preparation of financial statements. The financial statements of the Company shall also require the use of certain critical accounting estimates. Management requires the use of judgment in applying the Company’s accounting policies. For items involving a higher degree of judgment or complexity, or items where assumptions and estimates are significant to the parent company only financial statements, please refer to Note V for details.

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(III) Foreign currency translation

The Company's items listed in the parent company only financial statements are measured and presented in the currency of the primary economic environment in which the Company operates (i.e., functional currency).

1. Foreign currency transactions and balances

2. (1) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. 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.

3. (2) Foreign currency monetary assets and liabilities are translated at the exchange rate prevailing at the balance sheet date. Exchange differences arising upon the retransaction at the balance sheet date are recognized in profit or loss.

4. (3) 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. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, 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.

5. (4) All exchange gains and losses are presented in the Income Statement within "other gains and losses."

6. Translation of foreign operations

7. The results of operations 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:

8. (1) Assets and liabilities for each balance sheet presented are re-translated at the closing rate prevailing at the balance sheet date;

9. (2)Income and expenses for each Statement of Comprehensive Income are re-translated at the average exchange rates for the period;

10. (3)All resulting exchange differences are recognized in other comprehensive income.

11. (4)When a foreign operation is partially disposed of or sold, the cumulative exchange differences that were recognized in other comprehensive income are reclassified to the non-controlling interests in the foreign operation. However, if the Company still retains partial interests in the former foreign associate after losing significant influence over the former foreign associate, such transactions should be accounted for as disposal of all

~18~

interest in these foreign operations.

(IV) Standard of assets and liabilities being classified as current and non-current

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

2. (1) Assets arising from operating activities that are expected to be realized or are intended to be sold or consumed within the normal operating cycle.

3. (2) Liabilities held mainly for trading purposes.

4. (3) Assets that are expected to be realized within twelve months from the balance sheet date.

5. (4) 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.

Assets that do not meet the aforementioned conditions are classified as non-current.

1. Liabilities that meet one of the following conditions are classified as current liabilities:

2. (1) Liabilities that are expected to be paid off within the normal operating cycle.

3. (2) Liabilities held mainly for trading purposes.

4. (3) Liabilities that are to be paid off within twelve months from the balance sheet date.

5. (4) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Liabilities that do not meet the aforementioned conditions are classified as non-current.

(V) Financial assets at fair value through profit or loss

1. Financial assets at fair value through profit or loss refer to financial assets not measured at amortized cost nor measured at fair value through other comprehensive income.

2. Financial assets at fair value through profit or loss that follow regular way purchase or sale are recognized by the Company using trade date accounting.

3. At initial recognition, the Company measures the financial assets at fair value and recognizes the transaction costs in profit or loss. The Company subsequently measures the financial assets at fair value, and recognizes the gain or loss in profit or loss.

4. Dividend income is recognized in profit or loss when the right to receive payment is established, and it is probable that the economic benefits associated with the dividend will flow to the Company and the amount of dividends can be measured reliably.

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

1. Changes in fair value of investments in equity instruments that are not held for trading purpose at initial recognition presented in other comprehensive income; or, financial assets meeting the criteria listed below are classified as debt instrument:

~19~

• (1) The financial asset is held for the purpose of obtaining the contractual cash flows and the sales of the contract.

• (2) Cash flow generated form the said contractual terms of the financial asset at specific date are solely payments of principal and interest on the principal amount outstanding.

• The Company adopts trade date accounting for financial assets that follow regular way purchase or sale measured at fair value through other comprehensive income.

• At initial recognition, the Company measures the financial assets at fair value plus transaction costs; the Company subsequently measures the financial assets at fair value. The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following derecognition of the investment. Dividend income is recognized in profit or loss when the right to receive payment is established, and it is probable that the economic benefits associated with the dividend will flow to the Company and the amount of dividends can be measured reliably.

(VII) Financial assets measured at amortized cost

1. refers to an asset that meets all of the following conditions:

   • (1) The financial asset is held within a business model whose objective is achieved by collecting contractual cash flows.

   • (2) Cash flow generated form the said contractual terms of the financial asset at specific date are solely payments of principal and interest on the principal amount outstanding.

2. The Company adopts trade date accounting for financial assets that follow regular way purchase or sale measured at amortized cost.

3. The Company measures financial assets at fair value plus transaction cost at initial recognition, and subsequently recognizes interest income and impairment loss during the circulation period using the effective interest method according to the amortization procedure, and recognizes any gains or losses upon derecognition in profit or loss.

4. (VIII) Accounts receivable

5. Accounts receivable entitle the Company a legal right to receive consideration in exchange for transferred goods or rendered services.

6. Short-term accounts receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(IX) Impairment of financial assets

Considering all reasonable and provable information (including forward-looking information), the Company measured the credit risk that increased insignificantly since original recognition vie the 12-month expected credit loss amount through financial debt instrument at fair value

~20~

through other comprehensive income, financial asset at amortized cost and accounts receivable significant financial components. For those credit risk increased significantly since original recognition, the allowance loss is measured by the expected amount of credit loss during the existence period; for accounts receivable that do not contain significant financial components, the allowance loss is measured by the amount of expected credit losses during the duration of the period.

(X) De-recognition of financial assets

Financial assets are de-recognized when the Company's contractual rights to receive cash flows from financial assets are lapsed.

(XI) Operating leases - lessor

Lease income from operating leases less any incentives given to lessees is recognized in profit or loss on a straight-line basis over the term of the lease.

(XII) Inventories

Inventories are measured at the lower of cost and net realizable value, and cost is determined using the weighted average method. The cost of finished goods and work in progress includes materials, direct labor, other direct costs, and production-related manufacturing expenses, but does not include borrowing costs. The item by item approach is used in comparing the cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of the completion and applicable variable selling expenses.

(XIII) Investments accounted for using equity method - subsidiaries/associates

1. Subsidiaries refer to all entities (including structured entities) controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

2. Unrealized gains and losses resulting from transactions between the Company and its subsidiaries are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Company.

3. The share of gain or loss and other comprehensive income generated from the subsidiary was recognized as profit or loss of the period and other comprehensive income (loss), respectively. If the Company's share of loss recognized on the subsidiary is equal to or exceeds the equity interest in the subsidiary, the Company will not recognize further losses unless the Company has statutory obligations or deferred obligations or has paid for the subsidiary.

4. When the Company disposes its investment in an subsidiary and loses significant influence over the subsidiary, the amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss, on the same basis as would be

~21~

required if the relevant assets or liabilities were disposed of. If it retains significant influence over the subsidiary, the amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

1. Associates are all entities over which the Company has significant influence but does not control. In general, it is presumed that the investor has significant influence if an investor holds directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost.

2. The Company's share of its associates' post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Company's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

3. When an associate’s equity changes are not recognized in profit or loss or other comprehensive income of the associate, and such changes do not affect the Company’s ownership percentage of the associate, the Company recognizes the change in ownership interests in the associate in "capital surplus" in proportion to its ownership.

4. Unrealized gains on transactions between the Company and its associates are eliminated to the extent of the Company's interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates are adjusted, when necessary, to remain consistent with those of the Company.

5. Where an associate issues new shares and the Company does not subscribe or acquire new shares proportionately, which results in a change in the Company's ownership percentage of the associate but maintains significant influence on the associate, the "capital surplus" and "investments accounted for under the equity method" shall be adjusted for the increase or decrease of its share of equity interest. Where its investment proportion decreases, in addition to the above adjustments, the profit or loss previously recognized in other comprehensive income due to decrease in its ownership interest and the profit or loss to be reclassified to profit or loss during the disposal of assets or liabilities shall be reclassified to profit or loss based on the proportion of decrease.

6. When the Company disposes of any related enterprise, and the significant impact on the related enterprise is thereby lost, the accounting treatment provides that the Company directly dispose of the relevant assets or liabilities for all the amounts previously recognized

~22~

in other comprehensive income related to the related enterprise, on the same basis, that is, if the interests or losses previously recognized as other comprehensive income are reclassified as profit or loss when the relevant assets or liabilities are disposed, then when the significant impact on the related enterprise is lost, the benefit or loss in equity is concomitantly reclassified as profit or loss. If it retains significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

1. According to the "Rules Governing the Preparations of Financial Statements by Securities Issuers," profit for the current period and other comprehensive income for the current period reported in an entity's parent company only statement of comprehensive income shall be equal to profit for the current period and other comprehensive income attributable to owners of the parent reported in that entity's consolidated statement of comprehensive income. Total equity reported in an entity's parent company only financial statements shall be equal to equity attributable to owners of parent reported in that entity's consolidated financial statements.

(XIV) Property, plant, and equipment

1. Property, plant and equipment are recorded as the foundation of acquisition cost.

2. Subsequent costs are included in the asset's carrying amount or recognized as a 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 replacement shall be derecognized. All other repairs and maintenance are recognized as current gain or loss when incurred.

3. Property, plant and equipment apply the cost model. Except for land, other property, plant and equipment are depreciated using the straight-line method to allocate their cost over their estimated useful lives. If each component of property, plant and equipment is material, it is depreciated separately.

4. The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. 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 property, plant and equipment are as follows:

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Fixed assets 3~5 years Tooling equipment 2~3 years Other equipment 3 years

(XV) Lease transaction in the capacity of a lessee - right-of-use assets/lease liabilities

1. A right-of-use asset and a lease liability are recognized for a leased asset on the date when it becomes readily available for the Company's use. When a lease contract is a short-term lease or when it is a lease of which the underlying asset is of low value, lease payments are recognized as an expense on a straight-line basis over the lease term.

2. On the lease commencement date, the Company measures lease liabilities by the present value of outstanding lease payments, using the Company's incremental borrowing rate. Lease payments include : fixed payments less any lease incentives receivable. In subsequent periods, the Company measures lease liabilities at amortized cost using the effective interest method and recognizes interest expenses during the lease term. When a change in the lease term or lease payments occurs due to reasons other than lease modifications, lease liabilities are reassessed and the remeasurements are adjusted to the right-of-use assets.

3. Right-of-use assets are recognized at cost on the lease commencement date. The cost includes: the originally measured amount of lease liabilities. In subsequent periods, the Company measures right-of-use assets at cost and recognizes depreciation expenses at the earlier of the end of useful life of right-of-use assets or the end of the lease term. When a lease liability is reassessed, the right-of-use asset is adjusted for any remeasurements of the lease liability.

4. When a lease modification decreases the scope of a lease, the carrying value of the right-ofuse asset is decreased to reflect partial of full termination of the lease liability, and any difference resulting therefrom is immediately recognized in profit or loss.

5. (XVI) Intangible assets

The computer software is amortized using the straight-line method over an estimated useful life of three years to recognize its cost.

(XVII) Impairment of non-financial assets

The Company estimates the recoverable amount of assets with signs of impairment on the balance sheet date. When the recoverable amount is lower than its book value, the impairment loss is recognized. The recoverable amount is the higher of an asset's fair value less costs of disposal and its value in use. Where an impairment loss of assets recognized in previous years does not exist or decrease, the impairment loss is reversed. However, the carrying amount of the asset increased by the impairment loss shall not exceed the book value of the asset after abatement the depreciation or amortization if the impairment loss is unrecognized.

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(XVIII) Borrowings

Borrowings refer to short-term loans from banks. The initial recognition of loans measured at fair value less transaction cost. Any subsequent difference between the price and the redemption value after deducting the transaction cost shall be recognized as interest expense in gain and loss by applying amortization procedure of effective interest method during the circulation period.

(XIX) Accounts payable

1. Accounts payable refer to the debts incurred by purchase of materials, goods, or services on credit, and the notes payable incurred by both operating and non-operating activities.

2. Short-term accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(XX) De-recognition of financial liabilities

A financial liability is derecognized when the obligation under the liability specified in the contract is discharged or cancelled or expires.

(XXI) Offset of financial assets and liabilities

Financial assets and liabilities are offset and reported in the net amount 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.

(XXII) Employee benefits

1. 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.

1. Pension

For the defined contribution plan, the contributions are recognized as pension expenses when they are due on an accrual foundation.

1. 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 or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

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(XXIII) Income tax

1. Income tax expense comprises current and deferred income tax. Income tax is recognized in gain 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.

2. 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 country domicile where the Company operates and generates taxable income. The management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate, on the basis of amounts expected to be paid to the tax authorities are recorded in tax liability. Undistributed earnings are subject to income tax credit. After the distribution of earnings is approved by the shareholders' meeting in the following year, the Company shall recognize the distribution of earnings and expenses, and recognize the earnings and expenses for the actual earnings.

3. Deferred income tax adopts the balance sheet approach, and is recognized on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the parent company only balance sheets. Deferred income tax is not recognized, if the temporary difference arises from initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable income (loss). Deferred income tax is provided on temporary differences arising on investments in subsidiaries, 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.

4. 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.

5. Current income 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

~26~

intend to settle on a net basis or realize the asset and settle the liability simultaneously.

(XXIV)Share capital

1. Ordinary shares are classified as equity. The incremental cost directly attributable to the issue of new shares or options is deducted from the equity in equity after deducting the income tax.

2. When the Company bought back the issued stocks, the consideration paid includes any incremental costs that are directly attributable to the incremental costs, net of any directly attributable incremental costs. When the shares are subsequently reissued, the difference between the consideration received net of any directly attributable incremental costs and the carrying amount is recorded in the adjustment of stockholder's equity.

(XXV) Dividend distribution

Dividends are recognized in the Company's financial statements in the period in which they are approved by the Company's shareholders. Cash dividends are recorded as liabilities. Stock dividends are recognized as stock dividends to be distributed and transferred to ordinary shares on the base date of issuance of new shares.

(XXVI)Revenue recognition

1. Sales of goods

2. (1) The Company manufactures and sells products related to motherboards, display cards, and computer peripherals. The sales revenue is recognized when the control of the products is transferred to customers. That is, when the product is delivered to the customer, the customer has discretion in the access and price of the product, and the Company has no outstanding performance obligations that may affect the customer's acceptance of the product. When the product is shipped to a designated location, the risk of obsolete and lost risks has been transferred to the customer, and the customer is required to obtain the products in accordance with the sales contract, or when there is objective evidence that all acceptance criteria have been met, the goods are delivered.

3. (2) Sales revenue is recognized the net amount of contract price minus estimated sales allowance. The amount of revenue recognition is limited to the extent that it is very unlikely to see a significant reversal in the future, and is updated on the balance sheet date. The terms of sales transactions are mainly due to the expiry of 30 to 90 days after the transfer date. It is consistent with the market practice. Therefore, it is judged that the contact does not contain significant financial component.

4. (3) Accounts receivable are recognized when the control right of commodities is transferred to the customs; that is because the Company has unconditional rights to the contract price since that point in time, and the Company can collect the consideration from the customer once upon the contractual time is expired.

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1. Financial composition

The duration of commitment to transfer commodities or services to customer and the payment period in the contracts between the Company and customers are all less than one year. Therefore, the Company has not adjusted the transaction price to reflect the time value of money.

1. Costs to acquire contracts from customers

The Company recognizes the incremental costs incurred in the contracts with the customers and that are expected to be recoverable. However, such costs are recognized in expense as incurred since the contracts are less than one year.

(XXVII)Government grants

Government grants are recognized at their fair value when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants to compensate the Company’s expense are recognized as profit or loss on a systematic basis when the expense occurs.

V. Significant Accounting Judgments and Sources of Estimation and Assumption Uncertainty

The preparation of the Company's parent company only financial statements requires management to make critical judgments in applying the Company's accounting policies and make critical assumptions and estimates concerning future events according to the conditions on balance sheet date. Material accounting assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such estimates and assumptions possess a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Uncertainties in material accounting judgments, estimates, and assumptions are addressed below:

(I) Significant judgments in applying accounting policies

None.

(II) Significant accounting estimates and assumptions

• Assessment of goodwill impairment by Shenzhen Jinghong Digital R&D Service Co., Ltd. investments accounted for using the equity method

The assessment of goodwill impairment relies on the Company’s subjective judgment, including identifying cash-generating units and the allocation of assets and liabilities and intangible assets to the relevant cash-generating units, and determining the recoverable amount of the relevant cash-generating units.

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VI. Descriptions of Significant Accounting Items

• (I) Cash

Cash on hand and revolving funds Cheque deposits and demand deposits Transferred to financial assets measured at amortized cost -current	December 31, 2022 $ 62 605,686 605,748 ( 4,621) $ 601,127	December 31, 2021 $ 57 387,701 387,758 ( 33,847) $ 353,911

1. The Company associates with a variety of financial institutions, all with high credit quality to disperse credit risk, so it is expected that the probability of counterparty default is extremely low.

2. The demand deposits as of December 31, 2022 and 2021 provided as security,have been transferred to the “financial assets measured at amortized cost -current ” title according to their nature.

3. For more information on the Company's cash and cash equivalents are provided as collateral, please refer to Note VIII.

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

Item Non-current items: Equity Instruments Shares of publicly quoted entity Shares of non- publicly quoted entity and non- emerging shares Adjustment Sub-total Total	December 31, 2022 $ 169,634 15,350 184,984 ( 42,601) 142,383 $ 142,383	December 31, 2021 $ 169,634 15,350 184,984 15,501 200,485 $ 200,485

1. The Company elects to classify the strategic investments in equity as financial assets at fair value through other comprehensive income. The fair value of such investments was NT$142,383 and NT$200,485, respectively, for the years ended December 31, 2022 and 2021.

2. The breakdown in profit or loss and other comprehensive income of financial assets at fair value through other comprehensive income is as follows:

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Equity instruments measured at fair value through other	Equity instruments measured at fair value through other	2022	2021
		($ 58,102) $ 6,100	$ 14,335 $ 5,795
	comprehensive income Changes in fair value recognized in other comprehensive income Dividend income recognized in profit or loss Shareholding at end of period

1. For more information on the price risk and fair value of financial assets at fair value through other comprehensive income, please refer to Note XII (II) and (III).

(III) Accounts receivable

Accounts receivable Accounts receivable (related parties)		December31,2022
	Total	Loss allowance	Net
	$ 197,279 525,778 $ 723,057	($ 6,765) ( 210) ($ 6,975)	$ 190,514 525,568 $ 716,082

Accounts receivable Accounts receivable (related parties)		December31,2021
	Total	Loss allowance	Net
	$ 344,031 737,095 $ 1,081,126	($ 8,832) ( 295) ($ 9,127)	$ 335,199 736,800 $ 1,071,999

1. Aging analysis of accounts receivable is stated as follows:

Not overdue Overdue for 1-90 days	December 31, 2022 $ 700,741 22,316 $ 723,057	December 31, 2021 $ 1,056,455 24,671 $ 1,081,126

The aging analysis above is based on past due date.

1. The balance of receivables on contracts with customers as of December 31, 2022, December 31, 2021, and January 1, 2021 was NT$723,057, NT$1,081,126, and NT$1,132,741, respectively.

2. Without consideration of the collateral held or other credit enhancements, the maximum

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credit risk that best represent the Company's accounts receivable as of December 31, 2022 and 2021 amounted to NT$716,082 and NT$1,071,999, respectively.

1. For more information on the credit risk of accounts receivable, please refer to Note XII (II).

(IV) Inventories

Raw materials Work in progress Finished good		December31,2022
	Costs	Allowanceforprice decline	Carryingamount
	$ 9,792 107,801 5,535	($ 604) ( 167) ( 4,149) ($ 4,920)	$ 9,188 107,634 1,386
	$ 123,128		$ 118,208

Raw materials Work in progress Finished good		December31,2021
	Costs	Allowanceforprice decline	Carrying amount
	$ 84,616 73,637 63,305	($ 337) - ( 2,107) ($ 2,444)	$ 84,279 73,637 61,198
	$ 221,558		$ 219,114

Cost of inventories is recognized by the Company as expenses in the current period:

Cost of sold inventories Inventory falling price loss(gain on inventories)	2022 $ 3,562,848 2,476 $ 3,565,324	2021
		$ 3,827,229 ( 4,155) $ 3,823,074

Note: The Company's reported the gain on inventories in 2021 as a result of de-stocking.

(V) Investments using equity method

January 1 Share of investment gains and losses using equity method Impairment loss Other changes in equity December 31	2022 $ 557,840 44,639 - 8,078 $ 610,557	2021
		$ 652,125 7,362 ( 97,765) ( 3,882) $ 557,840

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Subsidiaries Shenzhen Jinghong Digital R&D Service Co.,Ltd Associates uSenlight Corporation	December 31, 2022 December 31, 2021 Shareholding Shareholding Listed amount Ratio (%) Listed amount Ratio (%) $ 610,557 100 $ 557,840 100 - 6.13 - 13.05 $ 610,557 $ 557,840
	Listed amount $ 610,557 - $ 610,557

1. The share of profit and loss of subsidiaries (losses) recognized by the Company using the equity method is derived from the evaluation of the financial report data from the audited financial statement for the same period. The breakdown is as follows:

Shenzhen Jinghong Digital R&D Service Co.,Ltd uSenlight Corporation	2022 $ 44,639 - $ 44,639	2021 $ 43,170 ( 35,808) $ 7,362

1. For information on the Company's subsidiaries, please refer to Note IV(III) to the consolidated financial statements for the year ended December 31, 2022.

2. On January 21, 2020, the Board of Directors of the Company resolved to pass the investment in uSenlight Corporation, and acquire a 13.70% equity interest in uSenlight Corporation at the amount of NT$150,000 in April 2020. As the Company has significant influence on uSenlight Corporation in terms of business decision-making, such investment is accounted for using equity method. As of December 31, 2022, the Company held a 13.05% equity interest in uSenlight Corporation, making the Company its single largest shareholder. As the other two largest shareholders (not the Company's related parties) held more than the Company’s shares, the Company had no ability to direct the relevant business activities of uSenlight Corporation. Accordingly, the Company had significant influence but had no control over uSenlight Corporation.

3. For the above investment accounted for using equity method in 2021, the Company carried out an impairment test based on the recoverable amount of such investment. Based on the above valuation result, the Company recognized a impairment loss on investments accounted for using equity method of NT$97,765.

4. The basic information of the associates that are material to the Company is as follows:

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Company name	Principal place of business	Shareholding ratio	Shareholding ratio	Measurement method
		December 31, 2022	December 31, 2021
uSenlight Corporation	The Republic of China	6.13%	13.05%	Equity method

• (1) uSenlight Corporation compensated for losses due to capital reduction and issued new shares for capital increase in 2022. However, the Company did not subscribe according to the shareholding ratio, resulting in our shareholding ratio decreasing from 13.05% to 6.13%. Additionally, the Company has made a full reduction to the book amount of $0 for the investment target in 2021, and we do not intend to continue supporting uSenlight Corporation in the future.

• (2) uSenlight Corporation held a board resolution on April 7, 2022 and passed a dissolution proposal for the company. It was established that April 26, 2022 would be the dissolution date, and the dissolution registration was made on May 20, 2022. The company is currently undergoing dissolution procedures.

• The summarized financial information of the associates that are material to the Group is as follows:

Balance sheet

Current assets Non-current assets Current liabilities Non-current liabilities Total net assets Proportionate share of net assets of associates Net equity difference Impairment loss recognized Book value of associates	uSenlight Corporation December 31, 2021 $ 229,391 183,046 ( 243,232) ( 141,233) $ 27,972 $ 3,650 94,115 ( 97,765) $-

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Statement of comprehensive income

Revenue Profit from continuing operations (Total comprehensive income)	uSenlight Corporation 2021 $ 88,129 ($ 274,391)

(VI) Property, plant, and equipment

As of January 1, 2022 Costs Accumulated depreciation 2022 January 1 Addition Depreciation expenses December 31 December 31, 2022 Costs Accumulated depreciation	Derivative instruments Tooling equipment	Derivative instruments Tooling equipment	$ (	Others 1,497 1,437) 60	$ (	Total 73,650 64,060) 9,590 9,590 10,236 10,831) 8,995 83,886 74,891) 8,995
	$ 3,540 ( 3,540) $- $ - 2,985 ( 373) $ 2,612 $ 6,525 ( 3,913) $ 2,612	$ 68,613 ( 59,083) $ 9,530 $ 9,530 156 ( 9,543) $ 143
			$		$
			$ (	60 7,095 915) 6,240 8,592 2,352) 6,240	$ (
			$		$
		$ 68,769 ( 68,626) $ 143	$ (		$ (
			$		$

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January 1, 2021 Costs Accumulated depreciation 2021 January 1 Depreciation expenses December 31 December 31, 2021 Costs Accumulated depreciation	Fixed assets $ 3,540 ( 3,540) $- $ - - $- $ 3,540 ( 3,540) $-	Tooling equipment	$ (	Others 1,497 1,409) 88 88 28) 60 1,497 1,437) 60	$ (	Total 73,650 41,161) 32,489 32,489 22,899) 9,590 73,650 64,060) 9,590
		$ 68,613 ( 36,212) $ 32,401 $ 32,401 ( 22,871) $ 9,530 $ 68,613 ( 59,083) $ 9,530
			$		$
			$ (		$ (
			$		$
			$ (		$ (
			$		$

(VII) Lease transaction - lessee

1. The Company's leased underlying assets are buildings, of which the lease term is usually 3- 5 years. Lease contracts are individually negotiated and include various terms and conditions. Except for the term where the leased assets cannot be used as collateral for loans, there are no other restrictions.

2. Below is the carrying amounts of right-of-use assets and their recognized depreciation expenses:

Property Property	December 31, 2022 Carrying amount $ 11,033 2022 Depreciation expenses	December 31, 2021 Carrying amount $ 2,962 2021 Depreciation expenses
	$ 4,210	$ 1,482

1. The additions to the right-of-use assets of the Company for the years ended December 31, 2022 and 2021 is $12,281 and $0, respectively.

2. Profit or loss items in connection with lease contracts are stated as follows:

~35~

2022 Items affecting profit or loss for the period Interest expenses of lease liabilities $ 296	2021 $ 118

1. The cash flows used in the Company's leases for the years ended December 31, 2022 and 2021 totaled NT$4,474 and NT$1,616, respectively.

(VIII) Intangible assets

2022

January 1 Costs Accumulated amortization and impairment January 1 Addition Amortization expenses December 31 December 31 Costs Accumulated amortization and impairment	Computer software $ - - $- $ - 2,351 ( 129) $ 2,222 $ 2,351 ( 129) $ 2,222

No balance of intangible assets as of December 31, 2021

(IX) Impairment of non-financial assets

1. The impairment loss recognized by the Company in 2021 was NT$97,765, as detailed below.

below.
		2021
	Profit or loss for the period	Other comprehensive income
	recognized	recognized
Loss-long-term equity investment
using equity method	$ 97,765	$-

1. The Company conducted a impairment test on the invested company-uSenlight Corporation,

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as of December 31, 2021. After evaluation, the recoverable amount of the invested company- uSenlight Corporation, was small. Therefore, the total impairment loss of $97,765 was recognized.

(X) Short-term borrowings

Nature of Borrowings December 31, 2021 Interest range Collateral Borrowings Collateralised borrowings $ 191,228 0.90%~1.13% Other current assets- bank deposits Credit borrowings 35,612 0.96% None $ 226,840

1. No Current borrowings as of December 31, 2022

2. Interest expenses recognized in profit or loss as of December 31, 2022 and 2021 were NT$4,985 and NT$4,866, respectively.

(XI) Pension

1. The Company has established a defined contribution retirement plan ("the New Plan") in accordance with the Labor Pension Act, which is applicable to employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees' monthly salaries and wages to the employees' individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

2. The pension costs recognized by the Company in accordance with the aforesaid pension regulations for the years ended December 31, 2022 and 2021were NT$932 and NT$769, respectively.

(XII) Share capital

1. As of December 31, 2022, the Company's authorized capital was NT$2,500,000 (of which NT$100,000 was for the issuance of stock options, preferred shares or corporate bonds with warrants), with paid-in capital of NT$964,988 and the face value of NT$10 per share, and the number of outstanding shares was 96,499 thousand.

2. Treasury shares

3. (1) The reason for repurchase and movements in the number of treasury shares are as follows:

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December 31, 2022 Number of shares (thousand shares) Carrying amount

Company name of holding securities Reason for repurchase (thousand shares) Carrying amount For the transfer of shares to The Company - - employees $

December 31, 2021 Number of shares Company name of holding shares Reason for repurchase (thousand shares) Carrying amount For the transfer of shares to The Company employees 5,000 $ 151,746

• (2) The Securities Exchange Act stipulates that the proportion of the Company's purchase of shares outstanding shall not exceed 10% of the total number of shares issued by the Company, and the total monetary amount of share purchased shall not exceed the retained earnings plus the share premium and the realized capital reserve amount.

• (3) Treasury shares held by the Company may be neither pledged nor assigned shareholder rights in accordance with the Securities and Exchange Act.

• (4) According to the Securities and Exchange Act, treasury shares should be reissued to the employees within five years from the repurchase date and shares not reissued within the five-year period are to be retired. To maintain the Company's credit and shareholders' rights to buy back shares, the registration change and elimination shall be handled within 6 months after the buy back. The Company passed a resolution by the board of directors to cancel its treasury shares on November 4, 2022, with a benchmark date of December 12, 2022. The Company completed the registration of the cancellation of 5000 thousand shares of treasury shares and the change in actual paid-in capital on January 9, 2023.

(XIII) Retained earnings

1. Under the Company's Articles of Incorporation, if there is a surplus in the annual final accounts, in addition to the income tax payable according to law, the Corporation shall first offset its losses in previous years and set aside a legal capital reserve at 10% of the earnings left over. However, when the accumulated legal capital surplus has equaled the total paidup-capital of the Company, the said restriction does not apply. After the Company has set aside or reversed the special capital reserve in accordance with relevant laws or the competent authority, along with the earnings not distributed at the beginning of the period, and after retaining part of the surplus depending on the situation, the Board of Directors may propose a surplus distribution proposal and submit it to the shareholders' meeting to distribute bonus to the shareholders.

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1. The Company is in stable growth and expands in line with sales development in the future. The future capital expenditures and capital requirement are necessary to be considered first when the Company distribute the earnings. The Board of Directors proposes the distribution plan and distributes the earnings after being approved at the shareholders' meeting. In the annual distribution of shareholder dividends, cash dividend shall not be less than 5%, but if the cash dividend is less than NT$0.1 per share, it may not be issued, and the stock dividend will be distributed instead.

2. The legal reserve shall not be used except for offsetting the loss of the Company and issuing new shares or cash in proportion to the original number of shares held by the shareholders. However, if it is issued to issue new shares or cash, the said legal reserve shall only exceed 25% at most of the paid-up capital.

4.

• (1) When the company distributes the surplus, it is required by law to provide a special surplus reserve for the debit balance of other equity items on the balance sheet date of the current year. After that, when the debit balance of other equity projects is reversed, the amount of revolving will be included in the surplus available for distribution.

• (2) When the Company adopted IFRSs at first time, for the special reserve listed in the Official Letter of the Financial Management Certificate No. 1010012865 issued on April 6, 2012, the Company reversed the original portion of the said special reserve, and when the Company subsequently uses, disposes of, or reclassifies related assets, they are reversed according to the ratio of the recognized special reserve.

• By a resolution in the shareholders' meetings on June 15, 2022 and July 29, 2021, respectively, the Company adopted the earnings distribution plan for the year ended December 31, 2021 and 2020 as follows:

Legal reserve Special reserve (Reversal) Cash Dividends	2021	2021	2020	2020
	Amount (NT$ thousand)	Dividends per share (NT$)	Amount (NT$ thousand)	Dividends per share (NT$)
	$ 12,222 ( 10,452) 57,899	$ 0.60	$ 14,328 ( 57,840) 48,250	$ 0.50

1. Please refer to Note VI(XIX) for information on employees' remuneration and directors' and supervisors' remuneration.

2. As of March 22, 2023, the Company’s Board of Directors was yet to propose the earnings distribution plan for the year ended December 31, 2022.

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(XIV) Operating Revenue

Revenue from contracts with customers		2022		2021
		$ 3,900,444		$ 4,173,178

1. Breakdown of revenue from contracts with customers

The Company derives revenue from the transfer of goods over time and at a point in time as follows:

as follows:
Sales revenue: Computer peripherals		2022		2021
		$ 3,900,444		$ 4,173,178

1. Contract assets and liabilities

The contract assets and liabilities in relation to revenue from contracts with customers recognized by the Company are as follows:

Contract liabilities: Unearned sales revenue	December 31, 2022	December 31, 2021	January 1, 2021
	$ 118	$ 640	$-

(XV) Other income

Dividend income Other income	2022 2021 $ 6,100 $ 5,795 195 220	2021
	$ 6,295 $ 6,015

(XVI) Other gains and losses

Net foreign exchange gain (loss) Other losses Impairment loss	2022	2021
	$ 99,185 - - $ 99,185	($ 19,710) ( 2,238) ( 97,765) ($ 119,713)

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(XVII) Financial costs

Interest expenses : Borrowings Lease liabilities	2022 $ 4,985 296 $ 5,281	2021
		$ 4,866 118 $ 4,984

(XVIII) Expenses by nature

Employee benefit expenses Depreciation expenses of property, plant, and equipment Depreciation expenses of leased assets Amortization expenses of intangible assets	2022	2021
	$ 44,121 10,831 4,210 129 $ 59,291	$ 29,634 22,899 1,482 - $ 54,015

(XIX) Employee benefit expenses

Wages and salaries. Labor/Health Insurance expenses Pension Other employment expenses	2022 $ 38,585 1,793 932 2,811 $ 44,121	2021
		$ 24,432 1,545 769 2,888 $ 29,634

1. According to the Company's Articles of Incorporation, after deducting the accumulated losses based on the profitability of the current year, if there are still some earnings left, the employee shall be granted no less than 0.1% as compensation, and the directors and supervisors shall not be paid more than 6% as remuneration.

2. For the years ended December 31, 2022 and 2021, the estimated amount of employees' remuneration was NT$4,039 and NT$1,663, respectively, and the estimated amount of directors' and supervisors' remuneration was NT$12,118 and NT$4,988, respectively; the aforesaid amounts were recognized as payroll expenses.

For the year ended December 31, 2022, 1% and 3% were estimated according to the profitability of the year. The resolved amounts as approved by the Board of Directors were

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NT$4,039 and $12,118, respectively. The employees' remuneration will be distributed in the form of cash.

The employees' remuneration, NT$1,663, and directors' and supervisors' remuneration, NT$4,988, for the year ended December 31, 2021 that had been resolved by the Board of Directors were the same as the amounts recognized in the financial statements for the year then ended.

1. Information regarding employees' remuneration and directors' and supervisors' remuneration approved by the Board of Directors is available on the Market Observation Post System (MOPS).

(XX) Income tax

1. Tax expense

Components of tax expense:

Current income tax: Income tax generated in the current period Additional tax on unappropriated retained earnings Underestimate provision of previous year’s income tax Total current income tax liabilities Deferred tax : The origination and reversal of temporary differences Tax expense Tax expense and accounting profit Net profit before tax is calculated as income tax at the statutory tax rate Expenses that should be excluded according to tax laws Income exempt from taxation according to tax laws Tax effects of temporary differences Additional tax on unappropriated retained earnings Underestimate provision of previous year’s income tax Tax expense	2022 $ 70,459 3,128 1,899 75,486 ( 8,069) $ 67,417 2022	2021
		$ 47,102 7,058 893 55,053 ( 17,638) $ 37,415 2021
	$ 77,558 806 ( 1,220) ( 14,754) 3,128 1,899 $ 67,417	$ 31,928 566 ( 1,159) ( 1,871) 7,058 893 $ 37,415

2. Tax expense and accounting profit

1. The amount of deferred tax assets that arise from temporary differences from the taxable

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financial assets are set out below:

Temporary differences: Deferred tax assets Allowance for inventory valuation and obsolescence losses Unrealized foreign exchange loss Investment loss Impairment loss Deferred tax liabilities Investment income Temporary differences: Deferred tax assets Allowance for inventory valuation and obsolescence losses Unrealized foreign exchange loss Impairment loss	January1 $ 169 653 - 19,948 20,770 - $ 20,770	2022	2022
		Recognized in profit or loss	Recognized in other comprehensive	December31
		$ 495 $ - 1,749 - 9,547 - - - 11,791 - ( 3,722) - $ 8,069 $- 2021		$ 664 2,402 9,547 19,948 32,561 ( 3,722) $ 28,839
	January 1	Recognized in profit or loss	Recognized in other comprehensive	December 31
	$ 997 2,135 - $ 3,132	($ 828) ( 1,482) 19,948 $ 17,638	$ - - - $-	$ 169 653 19,948 $ 20,770

1. The amounts of deductible temporary differences not recognized as deferred tax assets are as follows:

Deductible temporary differences	December 31, 2022	December 31, 2021
	$ 35,394	$ 109,139

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1. The revenue service authority has assessed the profit-seeking enterprise income tax of the Company through 2020.

(XXI) Earnings Per Share

Basic earnings per share Current net income attributable to ordinary shareholders Diluted earnings per share Effect of Dilutive potential ordinary shares Employee remuneration Current net profit attributable to ordinary shareholders plus the impact of potential ordinary shares Basic earnings per share Current net income attributable to ordinary shareholders Diluted earnings per share Effect of Dilutive potential ordinary shares Employee remuneration Current net profit attributable to ordinary shareholders plus the impact of potential ordinary shares		2022
	After-tax amount	Weighted average shares outstanding (thousand shares)	Earnings pershare (NT$)
	$ 320,372 - $ 320,372	96,499 149		$ 3.32 $ 3.31
		96,648
		2021
	After-tax amount	Weighted average shares outstanding (thousand shares)	Earnings per share (NT$)
	$ 122,224 - $ 122,224	96,499 71		$ 1.27 $ 1.27
		96,570

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(XXII) Changes in liabilities from financing activities

2022

		2022
Short-termborrowings January 1 $ 226,840 Changes in cash flows from financing( 226,840) Other non-cash charges - December 31 $- Short-termborrowings January 1 $ 402,027 Changes in cash flows from financing( 175,187) December 31 $ 226,840	Short-termborrowings	Leaseliabilities	Total liabilities from financing activities
		$ 3,135 $ 229,975 ( 4,178) ( 231,018) 12,281 12,281 $ 11,238 $ 11,238 2021
		$ 11,238
		2021
	Short-termborrowings	Leaseliabilities	Total liabilities from financing activities
	$ 402,027 ( 175,187) $ 226,840	$ 4,633 ( 1,498)	$ 406,660 ( 176,685) $ 229,975
		$ 3,135

VII. Related Party Transactions

(I) Parent company and the ultimate controller

The Company is controlled by Yicheng International Development Co., Ltd. (incorporated in the Republic of China), which owns 29.57% of the shares of the Company. The rest is held by the public. The ultimate controller of the Company is the Colorful Group.

(II) Name of related party and relationship with the Group

Name of related party Colorful Technology Co, Ltd (Colorful)

Shenzhen Colorful Yugong Technology and Development Co., Ltd.(“Yugong”) Sitonholy (Tianjin) Technology Co., Ltd.(“Tianjin Sitonholy”) uSenlight Corporation (“uSen”)

Relationship with the Company

100% reinvestment business by Colorful Group

The same person in charge as the Colorful Group Subsidiaries of the Company

Associates

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(III) Significant transactions with related parties

1. Operating Revenue

Sales of goods: Colorful	2022 $ 2,092,517	2021
		$ 2,178,925

The Company's transaction prices to related parties are not significantly different from those of the unrelated parties. The payment terms are OA 45~125 days depending on the different transaction object.

1. Purchases

Product purchase: Colorful	$	2022		2021
		3,776	$	505

The Company's transaction prices of purchases to related parties are not significantly different from those of the general manufacturers.

1. Accounts receivable

Colorful Less: Loss allowance	December 31, 2022 $ 525,778 ( 210) $ 525,568	December 31, 2021 $ 737,095 ( 295) $ 736,800

Receivables from related parties mainly arise from sales transactions. Payment for sales transactions is made in accordance with the payment terms after the date of sale. The receivables are unsecured and not interest-bearing.

4. Accounts payable

Colorful	December 31, 2022 $-	December 31, 2021 $ 335

The payables to related parties mainly arise from purchases, which are due 30 days after the purchase date. The payables are non-interest bearing.

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5. Operating expenses

Subsidiaries Jinghong	2022	2021
	$ 9,845	$ 9,050

The Company has commissioned a subsidiary to assist the Company in providing technical assistance such as market research and after-sales services and testing and business expansion. Expenses incurred in the aforementioned transactions shall be recorded in the operating expenses. The amounts not yet paid as of December 31, 2022 and 2021 were NT$1,595 and NT3,054, respectively, and recognized as "other payables."

6. Advertising expense

After the launch of the products jointly developed by the Company and Colorful, both sides have agreed to pay no more than US$60,000 per month as advertising expenses for the related parties. The amounts of advertising expense incurred in 2022 and 2021 were NT$10,333 and NT$9,041, respectively; the amounts not yet paid as of December 31, 2022 and 2021 were NT$5,899 and NT$5,951, respectively, and recognized as "other payables."

7. Endorsements and guarantees made by related parties

Subsidiaries Tianjin Sitonholy Beijing Sitonholy	December 31, 2022 $ 79,344 35,264 $ 114,608	December 31, 2021
		$ 56,472 - $ 56,472

(IV) Key management compensation information

Wages and short-term employee benefits	2022	2021
	$ 17,174	$ 10,594

VIII. Pledged Assets

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

Assets title Financial assets measured at amortized cost - current	Bookvalue	Bookvalue	Purpose ofcollateral
	December31,2022	December31,2021
	$ 4,621	$ 33,847	Balance of short-term borrowings

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IX. Significant Contingent Liabilities and Unrecognized Contract Commitments

(I) Contingencies

None.

(II) Commitments

1. As of December 31, 2022, the Company's guaranteed letter of credit for the purchase was US$1,500 thousand.

2. As of December 31, 2022, the Company issued a promissory note totaling NT$100,000 for the purchase of goods as a guarantee for the purchase of loan claims.

X. Significant Disaster Loss

None.

XI. Significant Events after the End of the Financial Reporting Period

The company completed the registration of the cancellation of 5000 thousand shares of treasury shares and the change of paid in capital on January 9, 2023.Please refer to Note VI (XII) for details.

XII. Others

(I) Capital management

The Company's objectives in capital management are to safeguard its ability to continue as a going concern in order to maintain optimal capital structure in order to minimize the cost of funding and to provide remuneration for its shareholders. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

(II) Financial instruments

1. Category of financial instruments

Financial assets Cash Accounts receivable (including related parties) Financial assets measured at amortized cost - current Refundable deposits (other non-current assets) Financial liabilities Short-term borrowings Accounts payable (including related parties) Other payables Lease liabilities	December 31, 2022 $ 601,127 716,082 4,621 756 $ 1,322,586 $ - 100,675 74,227 $ 174,902 $ 11,238	December 31, 2021 $ 353,911 1,071,999 33,847 5 $ 1,459,762 $ 226,840 353,456 57,771 $ 638,067 $ 3,135

1. Risk management policies

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• (1) The Company's daily operations are affected by a number of financial risks, including market risk (including exchange rate risk, interest rate risk, The risk management is carried out by the Company's finance department according to the policies approved by the Board of Directors.and price risk), credit risk, and liquidity risk.

• (2) The risk management is carried out by the Company's finance department according to the policies approved by the Board of Directors. The Company's finance department identifies, evaluates and hedges financial risks in close cooperation with the Company's internal operating units. The Board of Directors has established written principles for overall risk management, and provides written policies for specific areas and matters such as exchange rate risk, interest rate risk, credit risk, and investment of the remaining current capital.

• The nature and degrees of significant financial risks

• (1) Market risk

Exchange rate risk

• A. The Company is a multinational operation and is exposed to exchange rate risk, which is mainly denominated in USD and CNY. he related exchange rate risk arises from future commercial transactions and recognized assets and liabilities.

• B. Business of the Company is involved in a number of non-functional currency (the functional currency of the Company is NTD) and deeply affected by the exchange rate fluctuation. The information of significant impact affected by exchange rate fluctuation for foreign assets and liabilities is as follow:

(Foreign currency: functional currency) Financial assets Monetary items USD : NT Non-monetary items Investments using equity method CNY: NT Financial liabilities Monetary items USD : NT	December 31, 2022	December 31, 2022
	Foreign currency($ thousands)	Exchange rate	Carrying amount (NT)
	$ 42,892 $ 118,472 $ 3,197	30.710 4.439 30.710	$ 1,317,213 $ 525,897 $ 98,180

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(Foreign currency: functional currency) Financial assets Monetary items USD : NT Non-monetary items Investments using equity method CNY : NT Financial liabilities Monetary items USD NT	December 31, 2021
	Foreign currency($ thousands) Exchange rate $ 52,489 27.680 $ 128,416 4.344 $ 19,198 27.680	Carrying amount (NT)
		$ 1,452,896 $ 557,839 $ 531,401

• C. The Company's material monetary items affected by the exchange rate fluctuations were recognized as net exchange profits (losses) (including realized and unrealized), which amounted to NT$99,185 and (NT$19,710), respectively, for the years ended December 31, 2022 and 2021.

• D. The Company's foreign currency market risk analysis due to significant exchange rate fluctuations is as follows:

(Foreign currency: functional currency) Financial assets Monetary items USD: NT Non-monetary items Investments using equity method CNY: NT Financial liabilities Monetary items USD: NT		2022	2022
		Sensitivity analysis
	Degree of fluctuation	Impact on profit andloss	Impact on other comprehensive income (loss)
	1% 1% 1%	$ 13,172 $ - $ 982	$ - $ 5,259 $ -

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(Foreign currency: functional currency) Financial assets Monetary items USD: NT Non-monetary items Investments using equity method CNY: NT$ Financial liabilities Monetary items USD: NT		2021	2021
		Sensitivity analysis
	Degree of fluctuation	Impact on profit andloss	Impact on other comprehensive income (loss)
	1% 1% 1%	$ 14,529 $ - $ 5,314	$ - $ 5,578 $ -

Price risk

• A. The Company's equity instruments exposed to price risk are financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage the price risk of investments in equity instruments, the Company diversifies its portfolio with its diversification method based on limits set by the Company.

• B. The Company's equity instruments issued by the Company are mainly invested in equity instruments issued by the domestic companies, which are affected by the uncertainty of the future value of the investment underlying the investment target. If the prices of these equity instruments increase or decrease by 1%, with all other factors remaining unchanged, other comprehensive income for the years ended December 31, 2022 and 2021 will increase or decrease by NT$1,424 and NT$2,005, respectively due to the gain or loss on equity instruments at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

• A. The Company's interest rate risk arises primarily from short-term borrowings issued at variable rates, which expose the Company to cash flow interest rate risk. For the years ended December 31, 2022 and 2021, the Company's borrowings issued at variable rates were mainly denominated in USD.

• B. The Company's borrowings are measured at amortized cost and are re-priced at the contract annual rate every year. Therefore, the Company is exposed to the risk of changes in future market interest rates.

• C. If the USD borrowing interest rate increases/decreases by 1%, with all other variables held constant, profit before tax for the years ended December 31, 2022

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and 2021 will decrease or increase by NT$0 and NT$1,815, respectively. Changes in interest expense mainly result from floating-rate borrowings.

• (2) Credit risk

• A. The Company's credit risk is primarily attributable to the risk of financial loss from customers or the counterparty of financial instruments who are unable to fulfill the contract obligation. That credit risk is mainly from the fact that the counterparty is unable to pay off the accounts receivable payable on the terms of the payment and debt instruments classified as amortized cost being measured based on contract cash flows.

• B. The Company manages their credit risk taking into consideration the Company's concern. For banks and financial institutions, only those with good credit rating can be accepted as our transaction counterparties. For credit policies established internally, the individual operating entities within the Company shall undergo management and credit risk analysis before setting the terms and proposing the shipment terms and conditions for each new customer. Internal risk control is evaluated by considering its financial position, historical experience and other factors to assess the credit quality of customers. Limits on individual risks are formulated by the Board of Directors based on internal or external ratings and regularly monitored by the Board of Directors.

• C. The Company adopts IFRS 9 to make the following assumptions as to whether the credit risk on financial instruments since initial recognition has increased by the following:

  • (A) When the contract amount is overdue for more than 30 days in accordance with the agreed payment terms, the credit risk has been significantly increased since the original recognition of the financial assets.

  • (B) There are actual or expected significant changes in external credit ratings of financial instruments.

• D. The Company adopts IFRS 9 to make assumptions that if the contract amount is overdue for more than 90 days in accordance with the agreed payment terms, it is regarded that a default has taken place.

• E. The Company will group the customer's accounts receivable based on the characteristics of the customer's rating and customer type, and use the simplified method to estimate the expected credit loss based on the preparation matrix.

• F. The Company conducts individual assessments for defaulted accounts receivable and recognizes 10% to 30% allowance loss, while the remainder is estimated based on our credit conditions and forward-looking considerations to adjust the loss rate established by historical and current information for a specific period so as to estimate the allowance loss for accounts receivable by the said loss rate. The

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provision matrix as of December 31, 2022 and 2021 is as follows:

December 31, 2022 Expected loss rate Total book value Loss allowance December 31, 2021 Expected loss rate Total book value Loss allowance	Individual 30% $ 22,316 $ 6,695 Individual 10% $ 68,118 $ 8,704	Not overdue 0.04% $ 700,741 $ 280 Not overdue 0.04% $ 1,013,008 $ 423	Total
			$ 723,057
			$ 6,975
			Total
			$ 1,081,126
			$ 9,127

• G.The statement of allowance loss for accounts receivable of the Company using simplified approach is as follows:

January 1 Impairment loss ( reversal) December 31	2022	2021
	Accountsreceivable	Accountsreceivable
	$ 9,127 ( 2,152)	$ 447 8,680
	$ 6,975	$ 9,127

• (3) Liquidity risk

• A. Cash flow prediction is performed by individual operating entities within the Group and are aggregated by the Group's finance department. The Group's finance department monitors the Group's liquidity requirements predict to ensure that it has sufficient funds to support its operational needs and maintains sufficient unencumbered borrowing commitments at all times so that the Group does not violate the relevant borrowing limits or terms.

• B. The surplus cash held by each operating entity will be transferred back to the Group's finance department when it exceeds the management needs of the working capital. The Group's finance department invests the surplus funds in interestbearing demand deposits and fixed deposits, and the selected instruments have appropriate maturity dates or sufficient liquidity to meet the above forecasts and provide sufficient water and effluents.

• C. The following tables detail the Company's non-derivative financial liabilities grouped by the maturity date. Non-derivative financial liabilities are analyzed based on the remaining period from the balance sheet date to the contractual

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maturity date. The contractual cash flow amounts disclosed in the table below are undiscounted amounts.

December 31, 2022 Non-derivative financial liabilities

Lease liabilities

Within one year Within one-two years Within two-five years

$ 5,902 $ 5,714 $ -

December 31, 2021 Within one year Within one-two years Within two-five years Non-derivative financial liabilities Lease liabilities $ 1,617 $ 1,616 $ -

Except as stated above, the Company's non-derivative financial liabilities are due within one year.

• (III) Fair value information

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

   - Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company’s investment in listed stocks is included in level 1.
  
   - Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
  
   - Level 3: Unobservable inputs for the asset or liability. The Company's investment in equity instruments without active market is included.
  

• For financial instruments not measured at fair value, including cash, accounts receivable (including related parties), short-term borrowings, accounts payable, and other payables, their carrying amounts are a reasonable approximation of their fair value.

• The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities is as follows:

  • (1) The Company classifies its assets and liabilities according to the nature of assets and liabilities as follows:

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December 31, 2022 Assets Recurring Fair value Financial assets at fair value through other comprehensive income Equity securities Total December 31, 2021 Assets Recurring Fair value Financial assets at fair value through other comprehensive income Equity securities Total	Level 1 $ 127,033 $ 127,033 Level 1 $ 185,135 $ 185,135	Level 2	Level 3	Total
		$- $- Level 2	$ 15,350 $ 15,350 Level3	$ 142,383 $ 142,383 Total
		$- $-	$ 15,350 $ 15,350	$ 200,485 $ 200,485

• (2) Methods and assumptions the Company used to measure the fair value are as follow:

• A. The instruments that the Company uses market-quoted prices as their fair values (i.e., Level 1) are listed below by characteristics:

Shares of publicly quoted entity

Quoted market price

Closing market prices

• B. In addition to the aforementioned financial instruments with active markets, the fair value of the remaining financial instruments is obtained by means of evaluation techniques or reference to counterparty quotes. The fair value obtained through evaluation techniques can refer to the current fair value of other substantial financial instruments with similar conditions and characteristics, discounted cash flow method or other evaluation techniques, including calculations based on the market information utilization model available on the date of the consolidated balance sheets (e.g., the reference yield curve offered by Taipei Exchange or the average offer price of Reuters commercial paper interest rate).

• C. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Company's financial and nonfinancial instruments. Therefore, the estimated value of the evaluation model will be adjusted according to additional parameters, such as model risk or liquidity risk. According to the Company's fair value evaluation model management policy and

~55~

related control procedures, the management believes that the adjustment is appropriate and necessary to recognize the fair value of financial instruments and non-financial instruments in the consolidated balance sheet. The price information and parameter used in the valuation process are carefully evaluated and adjusted appropriately based on current market conditions.

• D. The Company absorbs the adjustment of credit risk assessment into the fair value measurement of financial and non-financial instruments to reflect the credit risk of counterparties and the credit quality of the Company.

• For the years ended December 31, 2022, and 2021, there were no transfers between Level 1 and Level 2.

• The following chart indicates the movement of Level 3 for the years ended December 31, 2022, and 2021:

January 1 (i.e. December 31)	2022	2021
	Equity Instruments	Equity Instruments
	$ 15,350	$ 15,350

1. For the years ended December 31, 2022, and 2021, there were no transfers into or out of Level 3.

2. The finance department of the Company is in charge of valuation procedures for fair value measurements being categorized within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable, and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model, and making any other necessary adjustments to the fair value.

3. Quantitative information and sensitivity analysis of significant unobservable inputs to the valuation models used in the valuation models for Level 3 fair value measurement and the sensitivity analysis of changes in significant unobservable inputs are as follows:

~56~

Fair value as of December 31, 2022 Non-derivative equity instruments : Shares of non-publicly quoted entity $ 15,350 Fair value as of December 31, 2021 Non-derivative equity instruments Shares of non-publicly quoted entity $ 15,350	Fair value as of December 31, 2022	Valuation technique	Significant unobservable input values	Relationship between input value and fair value
		Market price method Valuation technique	Lack of market liquidity discount and expected volatility of equity value Significant unobservable input values	The lack of market liquidity discount and higher expected volatility of equity value leads to lower fair values. Relationship between input value and fair value
		Market price method	Lack of market liquidity discount and expected volatility of equity value	The lack of market liquidity discount and higher expected volatility of equity value leads to lower fair values.

1. The Company carefully evaluates the valuation models and inputs used in selecting the valuation models and inputs that the valuation models may result in different valuation models. For financial assets classified as Level 3, if there are changes in evaluation parameters, the impact on other comprehensive gains and losses is as follows:

December 31, 2022

			December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022
Input value Changes Financial assets Equity Instruments Lack of market liquidity discount and expected volatility of equity value ±1% Input value Financial assets Equity Instruments Lack of market liquidity discount and expected volatility of equity value	Input value	Changes	Recognizedinothercomprehensiveincomerecognized
				Favorable changes		Adverse changes
		±1% value	$	154 $ 154 December31,2021 Othercomprehensiveincomerecognized Changes Favorable changes Adverse changes
				Changes
					Othercomprehensiveincomerecognized
					Favorable changes		Adverse changes
				±1%	$ 154		$ 154

~57~

XIII. Supplementary Disclosures

(I) Information on significant transactions

1. Capital loans to others: None.

2. Endorsements and guarantees: Please refer to Table 1.

3. Marketable securities held at the end of the period (excluding investment in subsidiaries): Please refer to Table 2.

4. Accumulated purchase or disposal of the same securities amount reaching NT$300 million or 20% of the paid-in capital: Please refer to Table 3.

5. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None.

6. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: None.

7. Purchases and sales with related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to Table 4.

8. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to Table 5.

9. Derivative transactions: None.

10. Parent-subsidiary and subsidiary-subsidiary business relations and significant transactions and amounts thereof: Please refer to Table 6.

(II) Information on investees

Information on investees (not including investees in Mainland China): Please refer to Table 7.

(III) Information on investments in Mainland China

1. Basic information: Please refer to Table 8.

2. Significant transactions between the Group and investees in Mainland China directly or indirectly through entities in a third area: Please refer to Table 9.

(IV) Information on Major Shareholders

Information on major shareholders: Please refer to Table 10.

XIV. Segment information

Exempt from disclosure.

~58~

Cash and cash equivalents at end of period Chaintech Technology Corporation Endorsements and Guarantees

Table 1

For the Year Ended December 31, 2022

Unit: NT$ thousands (Unless specified otherwise)

No. (Note 1)	Endorser/Guarantor	Subject ofendorsements and	guarantees	Ceiling limit on endorsements and guarantees for a single entity (Note 3)	Maximum balance of endorsements and guarantees for the period (Note 4)	Balance of endorsements and guarantees at end of period	Endorsements and guarantees used	Endorsements and guarantees secured with collateral	Ratio of aggregated endorsements and guarantees to net value in the most recent financial statements	Ceiling limit on endorsements and guarantees (Note 3)	Parent providing endorsements and guarantees for subsidiary (Note 5)	Subsidiary providing endorsements and guarantees for parent (Note 5)	Endorsements and guarantees involving Mainland China (Note 5)	Remarks
		Company name	Relationship (Note 2)
0 Cash and cash equivalents at end of period Chaintech Technology Corporation 0 Cash and cash equivalents at end of period Chaintech Technology Corporation Notes 1: Explanations are as follows:		Sitonholy (Tianjin) Technology Co., Ltd. Beijing Sitonholy Technology Co., Ltd.	2 2	$ 1,010,596 1,010,596	$ 79,344 35,264	$ 79,344 35,264	$ 79,344 35,264	$ - -	3.93% $ 1,010,596 1.74% 1,010,596		Y Y	N N	Y Y

(1) The issuer shall fills in 0.

(2) The investees are numbered in alphabetical order beginning with the Arabic numeral 1.

Notes 2: The relationships between endorsers/guarantors and endorsees/guarantees are categorized into the following 6 types. Please specify the type.

(1) Companies with which the Group conducts business;

(2) Subsidiaries in which the Group directly holds more than 50% of their common shares;

(3) Investee companies in which the Company and its subsidiaries collectively hold more than 50% of their common shares;

(4) The parent company which holds, directly or indirectly through a subsidiary, more than 50% of its outstanding common shares;

(5) Companies in same type of business and providing mutual endorsements/guarantees in favor of each other in accordance with the contractual obligations in order to fulfill the needs of the construction project; or

(6) Shareholders making endorsements/guarantees for their mutually invested company in proportion to their shareholding ratio.

Notes 3: The ceiling limit on endorsements and guarantees provided by the Company, on endorsements and guarantees for a single enterprise, and on endorsements and guarantees provided by the Company and its subsidiaries should be 50% of the net value in the most recent financial statements respectively. Notes 4: The maximum balance of endorsement/guarantee provided to others in the current year.

Notes 5: Fill in Y if a listed parent company provides endorsements/guarantees for its subsidiary or if a subsidiary provides endorsements/guarantees for its listed parent company or if endorsements/guarantees involve Mainland China.

Table 1 Page 1

Table 2

Cash and cash equivalents at end of period Chaintech Technology Corporation

Marketable Securities Held at the End of the Period (excluding Subsidiaries, Associates, and Joint Ventures) As of December 31, 2022

Unit: NT$ thousands

(Unless specified otherwise)

Company holding securities	Type and name of securities	Relationship with the issuer of securities	Accounting item		End of period	End of period		Remarks
				Number of shares	Carrying amount	Shareholding ratio	Fair value
Cash and cash equivalents at end of period Chaintech Technology Corporation Cash and cash equivalents at end of period Chaintech Technology Corporation Sitonholy (Tianjin) Technology Co., Ltd. Sitonholy (Tianjin) Technology Co., Ltd. Sitonholy (Tianjin) Technology Co., Ltd. Baotou Yihui Information Technology Co., Ltd.	Stocks_APAQ Technology Co., Ltd. Stocks_CloudMile Co., Ltd. (Cayman Islands) Beneficiary certificates_Industrial Bank jinxueqiu tianli express net-value wealth management product Beneficiary certificates_ ICBC “Tianlibao” No. 2” net- value wealth management product Beneficiary certificates _ Everbright Wealth Management Co.,Ltd. ""Sunshine Green Institution Profit" " wealth management product Beneficiary certificates_Industrial Bank jinxueqiu tianli express net-value wealth management product	- - - - - -	Non-current financial assets at fair value through other comprehensive income 3,050,000 Non-current financial assets at fair value through other comprehensive income 510,204 Financial asset at fair value through profit and loss - current - Financial asset at fair value through profit and loss - current - Financial asset at fair value through profit and loss - current - Financial asset at fair value through profit and loss - current -		$ 127,033 15,350 110,200 1,763 1,543 1,984	3.43% 1.81% - - - -	$ 127,033 15,350 110,200 1,763 1,543 1,984	- - - - - -

Table 2 Page 1

Cash and cash equivalents at end of period Chaintech Technology Corporation

Accumulated purchase or disposal of the same securities amount reaching NT$300 million or 20% of the paid-in capital

For the Year Ended December 31, 2022

Unit: NT$ thousands (Unless specified otherwise)

Table 3 Buying and selling company	Type and name of securities (Note 1)	Accounting item	Counterparty (Note 2)	Relationship (Note 2)	Beginning of period		Purchase (Note 3) (Note 4)				Sell		Unit: NT$ thousands (Unless specified otherwise) End of period
					Number of shares	Amount	Number of shares	Amount	Number of shares	Selling price	Book cost	Gain/ Loss on Disposal	Number of shares	Amount
Sitonholy (Tianjin) Technology Co., Ltd. Sitonholy (Tianjin) Technology Co., Ltd.	CITIC Wealth Management Happy Win Steady Daily Interest No. 2 wealth management product Industrial Bank jinxueqiu tianli express net-value wealth management product	Financial asset at fair value through profit and loss - current Financial asset at fair value through profit and loss - current	- -	- -	- -	$ - 43,440	-	$ 215,992 198,360	-	$ -	$ 215,992 132,240	$ 498 1,197	-	$ - 110,200

Notes 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities. Notes 2: Investors who use the equity method for securities accounting shall fill in these two columns, and the remaining fields may not be filled in. Notes 3: The accumulated amount of purchase or disposal shall be calculated separately based on market price, whether it reaches NT$300 million or 20% of the paid-in capital. Notes 4: The purchase price includes contingent consideration.

Table 3 Page 1

Cash and cash equivalents at end of period Chaintech Technology Corporation

Purchases and Sales with Related Parties Reaching NT$100 Million or 20% of Paid-in Capital or More

For the Year Ended December 31, 2022

Table 4 Company	Counterparty	Relations		Transaction	Transaction		Unusual trade conditions and its reasons	Unusual trade conditions and its reasons	Unit: NT$ thousands (Unless specified otherwise) Ratio of notes and accounts receivable (payable) Remarks Balance to total notes and accounts receivable (payable)	Unit: NT$ thousands (Unless specified otherwise) Ratio of notes and accounts receivable (payable) Remarks Balance to total notes and accounts receivable (payable)	Unit: NT$ thousands (Unless specified otherwise) Ratio of notes and accounts receivable (payable) Remarks Balance to total notes and accounts receivable (payable)
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit period	Unit price	Credit period	Balance	to total notes and accounts receivable (payable)
Cash and cash equivalents at end of period Chaintech Technology Corporation	Colorful Technology Co.,Ltd.	100% reinvestment business by Colorful Group	Sales	$ 2,092,517	33.76%	OA 45～125days	N/A	N/A	$ 525,778	51.02%	-

Table 4 Page 1

Cash and cash equivalents at end of period Chaintech Technology Corporation

Receivables from Related Parties Reaching NT$100 Million or 20% of Paid-in Capital or More

As of December 31, 2022

Table 5 Company	Counterparty	Relations	Balance of receivables from related parties	Turnover rate	Overdue receivables from related parties	Overdue receivables from related parties	Unit: NT$ thousands (Unless specified otherwise) Period of receivables from related parties Amount received back later Allowances for losses	Unit: NT$ thousands (Unless specified otherwise) Period of receivables from related parties Amount received back later Allowances for losses
					Amount	Handling method
Cash and cash equivalents at end of period Chaintech Technology Corporation	Colorful Technology Co.,Ltd.	100% reinvestment business by Colorful Group Accounts receivable $ 525,778		3.31	$ -	-	$ 409,682	($ 210)

Table 5 Page 1

Cash and cash equivalents at end of period Chaintech Technology Corporation

Parent-subsidiary and Subsidiary-subsidiary Business Relations and Significant Transactions and Amounts Thereof

For the Year Ended December 31, 2022

Table 6

Unit: NT$ thousands (Unless specified otherwise)

No. (Note 1)	Company	Counterparty	Relationship with counterparty (Note 2)		Transaction	status
				Accounting item	Amount	Transaction terms	Percentage of consolidated total revenue or total assets
0 0 1	Cash and cash equivalents at end of period Chaintech Technology Corporation Cash and cash equivalents at end of period Chaintech Technology Corporation Sitonholy (Tianjin) Technology Co., Ltd.	Shenzhen Jinghong Digital R&D Service Co.,Ltd Shenzhen Jinghong Digital R&D Service Co.,Ltd Baotou Yihui Information Technology Co., Ltd.	Parent company to a subsidiary Parent company to a subsidiary Sub-subsidiary company to sub- subsidiary company	Operating expenses Other payables Sales revenue	$ 9,845 1,595 11,238	Agreed by both parties Agreed by both parties Agreed by both parties	0.16% 0.05% 0.18%

Notes 1: Information of business contacts between the parent company and subsidiaries shall be specified in No. column. Please fill in the No. column following the instruction:

(1)The parent company is coded 0.

(2)The subsidiaries are coded from "1" in the order presented in the table above.

Notes 2: Regarding the percentage of transaction amount to consolidated total revenue or total assets, it is calculated based on the ending balance to consolidated total assets for balance sheet items; it is calculated based on interim accumulated amount to consolidated net revenue for profit or loss items.

Table 6 Page 1

Cash and cash equivalents at end of period Chaintech Technology Corporation

Information on Investees (Not Including Investees in Mainland China)

For the Year Ended December 31, 2022

Table 7

Unit: NT$ thousands (Unless specified otherwise)

Investor	Investee company	Location	Main businesses and products	The initial amo	unt of investment	Shareholding at end of period	Shareholding at end of period	Shareholding at end of period	Profit or loss of investee for the period	Gain (loss) on investment for the period	Remarks
				December 31, 2022	December 31, 2021	Number of shares	Percentage	Carrying amount
Cash and cash equivalents at end of period Chaintech Technology Corporation	uSenlight Corporation	The Republic of China	Electronics, computers, and peripherals	$ 150,000	$ 150,000	1,250,000	6.13%	$ -	$ -	$ -	Note 1

Notes 1: uSenlight Corporation held a board resolution on April 7, 2022 and passed a dissolution proposal for the company. It was established that April 26, 2022 would be the dissolution date, and the dissolution registration was made on

May 20, 2022. The company is currently undergoing dissolution procedures.

Table 7 Page 1

Cash and cash equivalents at end of period Chaintech Technology Corporation

Information on Investments in Mainland China - Basic Information

For the Year Ended December 31, 2022

Table 8 Investee in Mainland China	Main businesses and products	Actual paid-in capital	Method of investment (Note 1)	Accumulated investment amount remitted from Taiwan at beginning of period	Accumulated investment amount remitted or recovered Accumulated investment amount remitted from Taiwan at end of period Remittance Recovery	Profit or loss of investee for the period	Percentage of ownership (direct or indirect)	Gain (loss) on investment for the period (Note 2)	Unit: NT$ thousands (Unless specified otherwise) Carrying amount of investments at end of period Gain (loss) on investment recovered as of the period Remarks	Unit: NT$ thousands (Unless specified otherwise) Carrying amount of investments at end of period Gain (loss) on investment recovered as of the period Remarks
Shenzhen Jinghong Digital R&D Service Co.,Ltd Sitonholy (Tianjin) Technology Co., Ltd. Beijing Sitonholy Technology Co., Ltd. Baotou Yihui Information Technology Co., Ltd. Sitonholy (Shenzhen)Technology Co., Ltd.	Technology research and development and trading of electronic products, computer hardware, and peripheral devices Wholesale of electronic products, communication products, household appliances, office supplies, computer hardware and software and related spare parts Wholesale of electronic products, communication products, household appliances, office supplies, computer hardware and software and related spare parts Electronic products, communication products, computer software and hardware, data processing, storage and support services Wholesale of electronic products, communication products, household appliances, office supplies, computer hardware and software and related spare parts	$ 499,065 110,630 36,824 50,643 6,527	1 3 3 3 3	$ 499,065 - - - -	$ - $ - $ 499,065 - - - - - - - - - - - -	$ 44,639 87,943 3,336 ( 5,587) -	100 51 51 51 51	$ 44,639 44,851 1,701 ( 2,849) -	$ 610,557 636,100 51,279 20,249 6,527	$ - - - - - - - - - -

Notes 1: The method of investment in Mainland China includes the three following types:

• (1) Direct investment

(2) Investment in Mainland China through a company set up in a third area; or

(3) Others: Investment in Mainland China through an reinvestment in Mainland China.

Notes 2: The valuation is recognized in the financial statements audited by the CPAs of the parent company in Taiwan.

Table 8 Page 1

Company name	Accumulated investment amount remitted from Taiwan to Mainland China at end of period	Investment amount authorized by Investment Commission, M.O.E.A.	Ceiling on investment in Mainland China regulated by Investment Commission, M.O.E.A.
Cash and cash equivalents at end of period Chaintech Technology Corporation	$ 499,065	$ 544,794	$ 1,384,231

Notes 3: The Group's investment in Shenzhen Jinghong Digital R&D Service Co., Ltd., which was approved by the Investment Commission, Ministry of Economic Affairs on November 26, 2015, at a total amount of US$5 million, was remitted in full. Notes 4: The Group's increase in capital of Shenzhen Jinghong Digital R&D Service Co., Ltd. by US$6.4 million, which was approved by the Investment Commission, Ministry of Economic Affairs on February 1, 2019, was remitted in full.

Table 8 Page 2

Cash and cash equivalents at end of period Chaintech Technology Corporation

Information on Investments in Mainland China - Significant Transactions between the Group and Investees in Mainland China Directly or Indirectly through Entities in a Third Area

For the Year Ended December 31, 2022

Table 9

Unit: NT$ thousands

(Unless specified otherwise)

Investee in Mainland China	Sales (purchases)	Sales (purchases)	Property transactions	Property transactions	Accounts receivable (payable)	Accounts receivable (payable)	Endorsements and guarantees or collateral provided	Endorsements and guarantees or collateral provided		Financing			Others
	Amount	%	Amount	%	Balance	%	Balance at end of period	Purpose	Highest balance for the period	Balance at end of period	Interest range	Interest for the period
Shenzhen Jinghong Digital R&D Service Co.,Ltd $ - Sitonholy (Tianjin) Technology Co., Ltd. - Beijing Sitonholy Technology Co., Ltd. -		- - -	$ - - -	- - -	($ 1,595) - -	- - -	$ - 79,344 35,264	- Supplier credit limit utilization Supplier credit limit utilization	$ - - -	$ - - -	- - -	$ - - -	Operating expenses $9,845 - -

Table 9 Page 1

Cash and cash equivalents at end of period Chaintech Technology Corporation Information on Major Shareholders

As of December 31, 2022

Table 10

Name of major shareholders	Shareholding	Shareholding
	Number of shares	Shareholding ratio
Yeland International Development Ltd. Masterlink Securities (Hong Kong) Corporation Limited - Client A/C at CTBC Bank Li Sai-lung	28,532,080 8,444,841 6,000,000	29.57% 8.75% 6.22%

Notes 1: Information on major shareholders listed above is based on the information on shareholders holding more than 5% of the ordinary shares and preferred shares that have completed non-physical registration and delivery on the last business day of each quarter as calculated by the Taiwan Depository & Clearing Corporation. In addition, share capital stated in the financial statements may vary from the actual number of traded shares with the completion of non-physical registration due to different calculation bases.

Notes 2: If a shareholder delivers its shareholding information to the trust, the aforesaid information should be disclosed by the individual trustee who opened the trust account. For the shareholders' declaration of insiders holding more than 10% of the shares in accordance with the Securities and Exchange Act, the number of share held includes the shares held by the shareholders plus the shares delivered to the trust and having the right to decide on the use of trust property. For information on the declaration of insider equity, please refer to the Market Observation Post System.

Table 10 Page 1

Chaintech Technology Corporation Statement of Cash

As of December 31, 2022

Unit: NT$ thousands

	Statement of Cash As of December 31, 2022
Statement 1 Item	Summary	Un	it: NT$ thousands Amount
Cash on hand and petty cash Cheque deposits and demand deposits －NT$ －Foreign currency deposits	USD 19,184,458.92, exchange rate 30.71 HKD 169,664.77, exchange rate 3.938 CNY 17,568.63, exchange rate 4.4080		$ 62 11,164 589,156 668 77 $ 601,127

Statement 1 Page 1

Statement 2 Title		Chaintech Technology Corporation Statement of Changes in Non-current Financial Assets at Fair Value through Other Comprehensive Income From January 1,2022 to December 31,2022 Beginning of period Increase for the period Decrease for the period	Chaintech Technology Corporation Statement of Changes in Non-current Financial Assets at Fair Value through Other Comprehensive Income From January 1,2022 to December 31,2022 Beginning of period Increase for the period Decrease for the period	Chaintech Technology Corporation Statement of Changes in Non-current Financial Assets at Fair Value through Other Comprehensive Income From January 1,2022 to December 31,2022 Beginning of period Increase for the period Decrease for the period	Chaintech Technology Corporation Statement of Changes in Non-current Financial Assets at Fair Value through Other Comprehensive Income From January 1,2022 to December 31,2022 Beginning of period Increase for the period Decrease for the period	Chaintech Technology Corporation Statement of Changes in Non-current Financial Assets at Fair Value through Other Comprehensive Income From January 1,2022 to December 31,2022 Beginning of period Increase for the period Decrease for the period	Chaintech Technology Corporation Statement of Changes in Non-current Financial Assets at Fair Value through Other Comprehensive Income From January 1,2022 to December 31,2022 Beginning of period Increase for the period Decrease for the period	Chaintech Technology Corporation Statement of Changes in Non-current Financial Assets at Fair Value through Other Comprehensive Income From January 1,2022 to December 31,2022 Beginning of period Increase for the period Decrease for the period	Chaintech Technology Corporation Statement of Changes in Non-current Financial Assets at Fair Value through Other Comprehensive Income From January 1,2022 to December 31,2022 Beginning of period Increase for the period Decrease for the period	Chaintech Technology Corporation Statement of Changes in Non-current Financial Assets at Fair Value through Other Comprehensive Income From January 1,2022 to December 31,2022 Beginning of period Increase for the period Decrease for the period	Chaintech Technology Corporation Statement of Changes in Non-current Financial Assets at Fair Value through Other Comprehensive Income From January 1,2022 to December 31,2022 Beginning of period Increase for the period Decrease for the period	Chaintech Technology Corporation Statement of Changes in Non-current Financial Assets at Fair Value through Other Comprehensive Income From January 1,2022 to December 31,2022 Beginning of period Increase for the period Decrease for the period	Unit: NT$ thousands End of period Situation of collateral or pledge provided Number of shares Fair value	Unit: NT$ thousands End of period Situation of collateral or pledge provided Number of shares Fair value	Unit: NT$ thousands End of period Situation of collateral or pledge provided Number of shares Fair value	Unit: NT$ thousands End of period Situation of collateral or pledge provided Number of shares Fair value	Unit: NT$ thousands End of period Situation of collateral or pledge provided Number of shares Fair value
		Beginning of period			From January 1,2022 to December 31,2022 Increase for the period Decrease for
						Increase for the period
	Number of shares			Fair value		Number of shares		Amount	Number of shares			Amount	Number of shares			Fair value
Stocks of APAQ Technology Co., Ltd. Stocks of CloudMile Co., Ltd. (Cayman Islands) Adjustment	3,050,000 510,204			$ 169,634 15,350 184,984 15,501 $ 200,485		- -		$ - - - - $ -	- -		$ - - - ( 58,102) ( $58,102)		3,050,000 510,204		$ 169,634 15,350 184,984 ( 42,601) $ 142,383		None None

Explanation:

1. List separately by name and type of financial instrument.

2. For financial assets invested in debt instruments measured at fair value through other comprehensive income, the column of cumulative impairment shall be filled in. If there is no cumulative impairment, please fill in 0.

3. For financial assets invested in equity instruments measured at fair value through other comprehensive income, please fill in the column of cumulative impairment, which is not applicable.

Statement 2 Page 1

Chaintech Technology Corporation Statement of Accounts Receivable (Including Related Parties) As of December 31, 2022

Unit: NT$ thousands

			As of December 31, 2022
Statement 3 Customer name:	Summary		Amount	Unit: NT$ thousands Remarks
Non-related parties 16L002 16C002 16N003 10F001 Others Less: Loss allowance Related parties Colorful Technology Co.,Ltd Less: Loss allowance		$ 57,697 63,297 54,776 21,300 209 197,279 ( 6,765)		The balance of each individual customer does not exceed 5% of the balance of this account
		190,514 525,778 ( 210)
			525,568 $ 716,082

Statement 3 Page 1

Chaintech Technology Corporation Statement of Inventories As of December 31, 2022

Unit: NT$ thousands

Statement 4 Item			Amount			Unit: NT$ thousands Remarks
		Costs			Market price (note)
Raw materials Work in progress Finished good Less: Allowance for price decline in inventories		$ 9,792 107,801 5,535 123,128 ( 4,920) $ 118,208			$ 9,366 125,986 1,386 $ 136,738	Measured at replacement cost Measured at net realisable value Measured at net realisable value

Statement 4 Page 1

Chaintech Technology Corporation Statement of Changes in Investments Accounted for Using Equity Method From January 1,2022 to December 31,2022

Statement 5 Title	Balance at beginning of the period	Balance at beginning of the period	Increase for the period	Increase for the period	Decrease for the period	Decrease for the period	Gain (loss) on investment for the period	Others(Note 1)	Balance at end of	Balance at end of	period	Unit: NT$ thousands Market price or net equity Situation of collateral or pledge provided Unit price($) Total	Unit: NT$ thousands Market price or net equity Situation of collateral or pledge provided Unit price($) Total	Unit: NT$ thousands Market price or net equity Situation of collateral or pledge provided Unit price($) Total
	Number of shares	Book value	Number of shares	Amount	Number of shares	Amount			Number of shares	Equity %	Book value	Unit price($)	Total
Shenzhen Jinghong Digital R&D Service Co.,Ltd uSenlight Corporation ( Note 2)	- 5,000,000	$ 557,840 -	- -	$ - -	- -	$ - -	$ 44,639 -	$ 8,078 -	- -	100% 6.13%	$ 610,557 -	$ - -	$ 610,557 -	None None
		$ 557,840		$ -		$ -	$ 44,639	$ 8,078			$ 610,557		$ 610,557

Notes 1: The components are as follows

(1) Share of other comprehensive income of subsidiaries accounted for using equity method

Notes 2: The company was dissolved and registered on May 20, 2022, and is currently undergoing dissolution procedures.

Statement 5 Page 1

Chaintech Technology Corporation

	Chaintech Technology Corporation	Chaintech Technology Corporation	Chaintech Technology Corporation
Statement 6 Customer name	Statement of Accounts Payable (Including Related Parties) As of December 31, 2022 Summary Amount			Unit: NT$ thousands Remarks
Unrelated parties 002886 005507 002884			$ 57,567 37,832 5,276 $ 100,675

Statement 6 Page 1

Chaintech Technology Corporation Statement of Operating Revenue From January 1,2022 to December 31,2022

Statement 7

Item Operating Revenue: Computer peripherals Less: Sales returns and allowances Net operating revenue

Unit: NT$ thousands

Quantity	Amount	Remarks
4,456 thousand pcs	$ 3,993,003 ( 92,559) $ 3,900,444

Statement 7 Page 1

Chaintech Technology Corporation Statement of Operating Costs From January 1,2022 to December 31,2022

Statement 8 Item Raw materials and materials at beginning of period Add: Net amount of materials purchased in the current period Less: Raw materials sold Raw materials and materials at end of period Raw materials consumed in this period (1) Manufacturing cost - processing cost (2) Manufacturing expenses - depreciation (3) Total manufacturing costs (1)+(2)+(3) Add: Work in progress at beginning of period Less: Work in progress at end of period Finished good cost Add: Finished good at beginning of period Purchases in this period Less: Finished good at end of period Reclassified operating expenses Sales cost of finished good Inventory falling price loss Raw materials sold Total operating costs

Unit: NT$ thousands Amount $ 84,616 2,259,478 ( 543,431) ( 9,792) 1,790,871 53,359 9,530 1,853,760 73,637 ( 107,801) 1,819,596 63,305 1,142,593 ( 5,535) ( 542) 3,019,417 2,476 543,431 $ 3,565,324

Statement 8 Page 1

Chaintech Technology Corporation Statement of Operating Expenses From January 1,2022 to December 31,2022

Unit: NT$ thousands

Statement 9 Item	Selling expenses	Administrative expenses	R&Dspendings	Unit: NT$ thousands Total
Payroll expenses Advertising expense Services expenses Royalty Shipping expenses Depreciation Miscellaneous purchases Other expenses (Note)	$ 10,498 11,933 12,306 4,025 3,753 1,860 12 4,345	$ 21,070 - 5,643 - 4 495 120 4,823	$ 7,949 18 - 516 1 3,156 958 2,486	$ 39,517 11,951 17,949 4,541 3,758 5,511 1,090 11,654
	$ 48,732	$3 2,155	$ 15,084	$ 95,971

Note: The amount of each individual item does not exceed 5% of the total amount of this account

Statement 9 Page 1

Unit: NT$ thousands

Chaintech Technology Corporation Summary Statement of Current Period Employee Benefits, Depreciation, Depletion and Amortization Expenses by Function From January 1,2022 to December 31,2022

Statement 10

Statement 10						Unit: NT$ thousands
Function category Nature		2022			2021
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefit expenses
Payroll expenses	$ -	$ 26,179	$ 26,179	$ -	$ 19,161	$ 19,161
Labor/health insurance expenses	-	1,793	1,793	-	1,545	1,545
Pension expenses	-	932	932	-	769	769
Directors' remuneration	-	12,406	12,406	-	5,271	5,271
Other employment expenses	-	2,811	2,811	-	2,888	2,888
Depreciation expenses	9,530	5,511	15,041	22,871	1,510	24,381
Amortization expenses	-	129	129	-	-	-

Notes:

1. The number of employees for the current and previous years is 22 and 23, respectively, with 3 and 4 directors who are not employees.

2. Companies whose stocks have been listed on the stock exchange or traded on the OTC market shall disclose the following information:

3. (1) The average employee benefit expenses for the current year is $1,669 (the total employee benefits minus directors' remuneration for the current year, divided by “ the number of employees excluding the number of directors who are not employees for the current year ).

   • The average employee benefit expenses for the previous year is $1,282 (the total employee benefits minus directors' remuneration for the previous year, divided by “ the number of employees excluding the number of directors who are not employees for the previous year).

4. (2) The average employee payroll expenses for the current year is $1,378 (the total employee payroll expenses for the current year, divided by “ the number of employees excluding the number of directors who are not employees for the current year ).

   • The average employee payroll expenses for the previous year is $1,008(the total employee payroll expenses for the previous year, divided by “ the number of employees excluding the number of directors who are not employees for the previous year ).

5. (3) The average adjusted change of employee payroll expenses is 36.81% ( average employee payroll expenses for the current year minus average employee payroll expenses for the previous year, divided by average employee payroll expenses for the previous year).

6. (4) There is an audit committee established in the current year, so there is no remuneration for supervisors. The remuneration for supervisors in the previous year was $450.

7. (5) The remuneration policy of the Company :

The remuneration policy for directors and managers of the Company is submitted to the Remuneration Committee for review in accordance with the provisions of the " Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Taiwan Stock Exchange or the Taipei Exchange". The remuneration policy for managers mainly takes into account personal experience, performance, level of participation in company operations, value of contributions, and company performance; The remuneration policy for employees, directors, and supervisors shall be implemented in accordance with the company's articles of association for the year in which the company has earnings. Employee remuneration includes basic salary, various allowances, job bonuses, and other bonuses. The basic salary is determined based on their academic experience, professional skills, and job value, taking into account the salary level of their peers; The distribution of bonuses depends on the company's annual operating earnings and the achievement of departmental and individual performance.

Statement 10 Page 1