CHAINTECH — Annual Report 2023

Nov 13, 2023

Chaintech Technology Corporation and Subsidiaries

Consolidated Financial Statements and

Independent Auditors' Report

For the Years Ended December 31, 2023 and 2022

(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.

~1~

Chaintech Technology Corporation and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2023 and 2022 and Independent Auditors' Report

Table of Contents

Item I. Cover Page II. Table of Contents III. Declaration of Consolidated Financial Statements of Affiliated Enterprises IV. Independent Auditors' Report V. Consolidated Balance Sheets VI. Consolidated Statements of Comprehensive Income VII. Consolidated Statements of Changes in Equity VIII. Consolidated Statements of Cash Flows IX. Notes to the Consolidated Financial Statements (I) Company History (II) Approval Date and Procedures of the Consolidated 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

Page No

1 2 ~ 3 4 5 ~ 10 11 ~ 12 13 ~ 14 15 16 17 ~ 76 17 17 17 ~ 19 19 ~ 35 35 ~ 36

~2~

Item (VI) Descriptions of Significant Accounting Items (VII) Related Party Transactions (VIII) Pledged Assets (IX) Significant Contingent Liabilities and Unrecognized Contract Commitments (X) Significant Disaster Loss (XI) Significant Events after the End of the Financial Reporting Period (XII) Others (XIII) Supplementary Disclosures 1. Information on significant transactions 2. Information on investees 3. Information on investments in Mainland China 4. Information on major shareholders (XIV) Segment Information

Page No

36 ~ 59 59 ~ 62 62 62 62 62 62 ~ 73 74 74 74 74 74 74 ~ 76

~3~

Chaintech Technology Corporation and Subsidiaries

Declaration of Consolidated Financial Statements of Affiliated Enterprises

The companies required to be included in the consolidated financial statements of affiliated enterprises under the "Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises" are all the same as enterprises required to be included in the consolidated financial statements of Chaintech Technology Corporation and subsidiaries for the year ended December 31, 2023 as provided in the IFRS 10 Consolidated Financial Statements. In addition, relevant information that should be disclosed in the consolidated financial statements of affiliated enterprises has all been disclosed in the consolidated financial statements of Chaintech Technology Corporation and subsidiaries. Consequently, no consolidated financial statements of affiliated enterprises are prepared separately.

Hereby declared by

Company Name: Chaintech Technology Corporation

Person in Charge: Kao, Shu-Jung

March 13, 2024

~4~

Independent Auditors' Report (113) Cai-Shen-Bao-Zi No. 23005068

To Chaintech Technology Corporation:

Audit Opinions

The independent auditors have audited the accompanying consolidated balance sheets of Chaintech Technology Corporation and subsidiaries (hereinafter referred to as "the Group") as of December 31, 2023 and 2022, and the related consolidated statements of comprehensive income, consolidated statements of changes in equity, and consolidated statements of cash flows for the years then ended, and the notes to the consolidated financial statements (including the summary of significant accounting policies).

In our opinions, the accompanying consolidated financial statements, in all material respects, give a true and fair view of the consolidated financial position of the Group as of December 31, 2023 and 2022, and of its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" and the International Financial Reporting Standards (IFRSs), International Accounting Standards (IASs), International Financial Reporting Interpretations Committee (IFRIC) Interpretations, and Standing Interpretations Committee (SIC) Interpretations as endorsed and issued by the Financial Supervisory Commission of the Republic of China (the "FSC").

Basis of Audit Opinion

We conduct the audit work in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the GAAS of Republic of China. Our responsibilities under those standards are further described in the section of Responsibilities of Certified Public Accountants for Auditing the Consolidated Financial Statements. We are independent of the Group 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 consolidated financial statement of the Group for the year ended December 31, 2023. These matters are addressed in the context of our audit of the consolidated financial statements as a whole, and in forming out opinion thereon, and we do not provide a separate

~5~

opinion on these matters.

Key audit matters for the consolidated financial statement of the Group for the year ended December 31, 2023 are stated as follows:

Sales revenue cut-off

Description

Regarding the accounting policy for recognition of sales revenues, please refer to Notes 4 (bb) to the consolidated financial statements. For the description of sales revenue, please refer to Note 6 (q). to the consolidated financial statements.

The Group 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 Group 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. Such revenue recognition generally involves a large number of manual operations. Considering that the volume of the shipments of the Group is large, and the amount of transaction before and after the financial 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 Group. 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 Group determine 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.

~6~

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

Intangible assets- Goodwill impairment

Description

As of December 31, 2023, the balance of intangible assets -goodwill was $157,524. Please refer to Note IV(XIX) for the accounting policy on impairment assessment of non-financial assets; Please refer to Note V(II) for the estimation and assumption uncertainty in assessment of impairment of non-financial assets; Please refer to Note VI(XI) for the explanation of the assessment of impairment of non-financial assets. To assess whether intangible assets-goodwill are impaired, the Group estimates the future cash flows based on the cash-generating units to which the intangible assets-goodwill belong, and measures the recoverable amount of such cashgenerating 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 Group's assessment of the goodwill impairment of intangible assets 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.

Other Matters – Parent Company Only Financial Statements

We have also audited the parent company only financial statements of Chaintech Technology

~7~

Corporation for the years ended December 31, 2023 and 2022, for which we have issued the audit report with an unqualified opinion for reference.

Responsibility of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers," and the International Financial Reporting Standards (IFRSs), International Accounting Standards (IASs), International Financial Reporting Interpretations Committee (IFRIC) Interpretations, and Standing Interpretations Committee (SIC) Interpretations as endorsed and issued by the FSC, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the responsibility of management includes assessing the Group's ability to continue as a going concern, disclosing going concern related matters, as well as adopting going concern basis of accounting unless management intends to liquidate the Group or terminate the business, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the Group's financial reporting process.

Responsibilities of Certified Public Accountants for Auditing the Consolidated 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 auditor's 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 Auditing Standards of Republic of China will always detect a material misstatement when it exists. Misstatements may arise from fraud and 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 consolidated financial statements, it will be deemed as material.

As part of an audit in accordance with the Auditing Standards of Republic of China, we exercise professional judgment and professional skepticism throughout the audit. We also execute the following tasks:

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive

~8~

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.

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 Group's internal control.

2. Evaluate the appropriateness of accounting policies adopted by the 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 Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated 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 auditors' report. However, future events or circumstances may cause the Group to no longer continue as a going concern.

4. Evaluate the overall expression, structure, and contents of the consolidated financial statements (including related notes) and whether the consolidated 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 Group to express an opinion about the consolidated 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

~9~

matters that are of most significance in the audit of the consolidated financial statements for the year ended December 31, 2023 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 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.

PwC Taiwan

Feng, Min-Chuan

Certified Public Accountants

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 13, 2024

~10~

Chaintech Technology Corporation and Subsidiaries Consolidated Balance Sheets December 31, 2023 and 2022

Assets	Notes VI(I) VI(II) VI(I) and VIII VI(IV) VI(IV) VI(IV) and VII VI(V) VI(VI) VI(III) VI(VII) VI(VIII) VI(IX) VI(X) VI(XXIII) VI(XII) and VIII VI(XVII) VIII VII VI(XIII) and VII VI(XXIII)	December 31, 2023 Amount % $ 1,089,206 30 34,616 1 36,540 1 865 - 369,210 10 613,845 17 2,696 - 6,231 - 706,082 19 266,486 7 - - 3,125,777 85 227,325 6 - - 18,423 1 33,008 1 177,239 5 34,841 1 44,518 1 535,354 15 $ 3,661,131 100 $ 196,735 5 137,588 4 198,287 5 372,795 10 - - 128,530 4 36,904 1 17,766 1 379 - 1,088,984 30 34,920 1 16,028 - 382 - 51,330 1 1,140,314 31	Unit: NT$ thousands December 31, 2022 Amount % $ 1,061,262 33 115,490 4 31,239 1 11,831 - 455,441 14 525,568 17 3,532 - 5,636 - 401,229 13 129,049 4 2,932 - 2,743,209 86 142,383 4 - - 20,490 1 39,528 1 181,275 6 32,561 1 46,876 1 463,113 14 $ 3,206,322 100 $ 145,464 4 68,618 2 115,737 4 324,143 10 6,397 - 120,380 4 73,462 2 21,326 1 223 - 875,750 27 3,722 - 19,181 1 618 - 23,521 1 899,271 28
		Amount $ 1,089,206 34,616 36,540 865 369,210 613,845 2,696 6,231 706,082 266,486 - 3,125,777 227,325 - 18,423 33,008 177,239 34,841 44,518 535,354 $ 3,661,131 $ 196,735 137,588 198,287 372,795 - 128,530 36,904 17,766 379 1,088,984 34,920 16,028 382 51,330 1,140,314	Amount $ 1,061,262 115,490 31,239 11,831 455,441 525,568 3,532 5,636 401,229 129,049 2,932 2,743,209 142,383 - 20,490 39,528 181,275 32,561 46,876 463,113 $ 3,206,322 $ 145,464 68,618 115,737 324,143 6,397 120,380 73,462 21,326 223 875,750 3,722 19,181 618 23,521 899,271
Current assets 1100 Cash and cash equivalents 1110 Financial asset at fair value through profit and loss - current 1136 Financial assets measured at amortized cost - current 1150 Notes receivable, net 1170 Accounts receivable, net 1180 Accounts receivable from related parties, net 1200 Other receivables 1220 Current tax assets 130X Inventories 1410 Prepayments 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 Current liabilities 2100 Short-term borrowings 2130 Current contract liabilities 2150 Notes payable 2170 Accounts payable 2180 Accounts payable to related parties 2200 Other payables 2230 Current tax liabilities 2280 Current lease liabilities 2300 Other current liabilities 21XX Total current liabilities Non-current liabilities 2570 Deferred tax liabilities 2580 Non-current lease liabilities 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities

(Continued)

~11~

Chaintech Technology Corporation and Subsidiaries Consolidated Balance Sheets December 31, 2023 and 2022

Unit: NT$ thousands

Liabilities and equity

December 31, 2023 December 31, 2022 Notes Amount % Amount % VI(XV) 964,988 27 964,988 30 100 - 100 - VI(XVI) 191,571 5 159,534 5 79,273 2 29,249 1 949,236 26 946,595 29 ( 6,716 ) - ( 79,273 ) ( 2 ) VI(XV) - - - - 2,178,452 60 2,021,193 63 342,365 9 285,858 9 2,520,817 69 2,307,051 72 IX $ 3,661,131 100 $ 3,206,322 100

Equity Equity attributable to owners of the parent Share capital 3110 Ordinary shares Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity 3400 Other equity 3500 Treasury shares 31XX Total equity attributable to owners of the parent 36XX Non-controlling interests 3XXX Total equity Significant Contingent Liabilities and Unrecognized Contract Commitments 3X2X Total liabilities and equity

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

Chairman: Kao, Shu-Jung

Accounting Supervisor: Lai, Yu-Nu

Manager: Kao, Shu-Jung

~12~

Chaintech Technology Corporation and Subsidiaries Consolidated Statements of Comprehensive Income For the Years Ended December 31, 2023 and 2022

Unit: NT$ thousands (EPS in NT$)

Item

2023 2022 Notes Amount % Amount % VI(XVII) and VII $ 6,823,399 100 $ 6,198,674 100 VI(V)(XXI) (XXII) and VII ( 6,140,927 ) ( 90 ) ( 5,575,814 ) ( 90) 682,472 10 622,860 10 VI(XXI) (XXII) and VII ( 168,150 ) ( 3 ) ( 131,223 ) ( 2 ) ( 162,286 ) ( 2 ) ( 148,139 ) ( 2 ) ( 135,101 ) ( 2 ) ( 33,798 ) ( 1 ) XII(II) 8,186 - 4,386 - ( 457,351 ) ( 7 ) ( 308,774 ) ( 5) 225,121 3 314,086 5 18,510 - 3,817 - VI(XVIII) 73,990 1 17,166 - VI(XIX) ( 2,773 ) - 103,653 2 VI(XX) ( 11,330 ) - ( 7,838 ) - VI(VII) - - - - 78,397 1 116,798 2 303,518 4 430,884 7 VI(XXIII) ( 70,313 ) ( 1 )( 67,419 ) ( 1) $ 233,205 3 $ 363,465 6 VI(III) $ 84,942 1 ( $ 58,102 ) ( 1) 84,942 1 ( 58,102 ) ( 1) ( 18,717 ) - 11,629 - ( 18,717 ) - 11,629 - (Continued)

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 Gain on expected credit losses 6000 Total operating expenses 6900 Operating income Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Financial costs 7060 Share of profit or loss of 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

~13~

Chaintech Technology Corporation and Subsidiaries Consolidated Statements of Comprehensive Income For the Years Ended December 31, 2023 and 2022

Unit: NT$ thousands (EPS in NT$)

Item	Notes VI(XXIV)	2023		% 1 4 2 1 3 3 1 4 1.68 1.68	2022	% ( 1) 5 5 1 6 4 1 5 3.32 3.31
		Amount $ 66,225 $ 299,430 $ 161,901 71,304 $ 233,205 $ 234,458 64,972 $ 299,430 $			Amount ( $ 46,473 ) $ 316,992 $ 320,372 43,093 $ 363,465 $ 270,348 46,644 $ 316,992 $
8300 Other comprehensive income, net 8500 Total comprehensive income (loss) Net income attributable to: 8610 Owners of the parent 8620 Non-controlling interests Total comprehensive income attributable to: 8710 Owners of the parent 8720 Non-controlling interests Earnings per share 9750 Basic earnings per share 9850 Diluted earnings per share
		$			$

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

Manager: Kao, Shu-Jung

Chairman: Kao, Shu-Jung

Accounting Supervisor: Lai, Yu-Nu

~14~

Chaintech Technology Corporation and Subsidiaries Consolidated Statements of Changes in Equity For the Years Ended December 31, 2023 and 2022

Unit: NT$ thousands

2022 Balance as of January 1, 2022 Profit Other comprehensive income (loss) Total comprehensive income (loss) Appropriation and distribution of earnings for 2021 Legal reserve appropriated Special reserve reversed Cash dividends Retirement of treasury shares Cash dividends paid of consolidated subsidiaries Balance as of December 31, 2022 2023 Balance as of January 1, 2023 Profit Other comprehensive income (loss) Total comprehensive income (loss) Appropriation and distribution of earnings for 2022 Legal reserve appropriated Special reserve appropriated Cash dividends Cash dividends paid of consolidated subsidiaries Balance as of December 31, 2023	Notes				Equityatt	ributable to owners of th	eparent			Total	Non-controlling interests		Total equity
		Ordinaryshares	Capital surplus - changes in the net value of the equity of associates and joint venture accounted for using equity method		Retained earnings	Unappropriated retained earnings $ 787,638 320,372 - 320,372 ( 12,222 ) 10,452 ( 57,899 ) ( 101,746 ) - $ 946,595 $ 946,595 161,901 - 161,901 ( 32,037 ) ( 50,024 ) ( 77,199 ) - $ 949,236	Other e	quity Unrealized gains (losses) on financial assets at fair value through other comprehensive income	Treasuryshares
				Legal reserve	Special reserve		Exchange differences on the translation of the financial statements of foreign operations
	VI(XVI) VI(XVI)	$ 1,014,988 - - - - - - ( 50,000 ) - $ 964,988 $ 964,988 - - - - - - - $ 964,988	$ 100 - - - - - - - - $ 100 $ 100 - - - - - - - $ 100	$ 147,312 - - - 12,222 - - - - $ 159,534 $ 159,534 - - - 32,037 - - - $ 191,571	$ 39,701 - - - - ( 10,452 ) - - - $ 29,249 $ 29,249 - - - - 50,024 - - $ 79,273		( $ 44,750 ) - 8,078 8,078 - - - - - ( $ 36,672 ) ( $ 36,672 ) - ( 12,385 ) ( 12,385 ) - - - - ( $ 49,057 )	$ 15,501 - ( 58,102 ) ( 58,102 ) - - - - - ( $ 42,601 ) ( $ 42,601 ) - 84,942 84,942 - - - - $ 42,341	( $ 151,746 ) - - - - - - 151,746 - $ - $ - - - - - - - - $ -	$ 1,808,744 320,372 ( 50,024 ) 270,348 - - ( 57,899 ) - - $ 2,021,193 $ 2,021,193 161,901 72,557 234,458 - - ( 77,199 ) - $ 2,178,452	$ 248,317 43,093 3,551 46,644 - - - - ( 9,103 ) $ 285,858 $ 285,858 71,304 ( 6,332 ) 64,972 - - - ( 8,465 ) $ 342,365	$ 2,057,061 363,465 ( 46,473 ) 316,992 - - ( 57,899 ) - ( 9,103 ) $ 2,307,051 $ 2,307,051 233,205 66,225 299,430 - - ( 77,199 ) ( 8,465 ) $ 2,520,817

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

Chairman: Kao, Shu-Jung

Manager: Kao, Shu-Jung

Accounting Supervisor: Lai, Yu-Nu

~15~

Chaintech Technology Corporation and Subsidiaries Consolidated Statements of Comprehensive Income For the Years Ended December 31, 2023 and 2022

					Unit: NT$ thousands
					(EPS in NT$)
Cash flows from operating activities
Profit before tax			$	303,518 $	430,884
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expenses	VI(VIII)(XXI)			5,592	16,078
Depreciation expenses of right-of-use assets	VI(IX)(XXI)			21,361	19,444
Amortization expenses	VI(X)(XXI)			6,502	3,687
Loss (gain) on expected credit losses	XII(II)	(		8,186 ) (	4,386 )
Net gain on financial assets at fair value through	VI(II)(XIX)
profit or loss		(		1,996 ) (	2,248 )
Interest expenses	VI(XX)			11,330	7,838
Interest income		(		18,510 ) (	3,817 )
Dividend income	VI(XVIII)	(		7,015 ) (	6,100 )
Loss on disposal of property, plant, and equipment	VI(XIX)			19	3
Changes in operating assets and liabilities
Net changes in operating assets
Financial assets at fair value through profit or
loss				78,751 (	50,339 )
Notes receivable				10,748 (	11,831 )
Accounts receivable (including related parties)		(		8,426 )	448,019
Other receivables				836	3,325
Inventories		(		310,056 )	103,366
Prepayments		(		137,437 )	80,554
Other current assets				2,932 (	2,932 )
Other non-current assets				2,358	2,084
Net changes in operating liabilities
Contract liabilities				68,970 (	43,059 )
Notes payable				84,675	115,737
Accounts payable (including related parties)				46,478 (	449,144 )
Other payables				8,897	1,104
Other current liabilities				156 (	8,407 )
Other non-current liabilities				- (	3,803 )
Cash flows generated from operations				161,497	646,057
Interest received				18,510	3,817
Dividends received				7,015	6,100
Interest paid		(		11,251 ) (	8,088 )
Income tax paid		(		78,548 ) (	61,977 )
Net cash flows generated from operating
activities				97,223	585,909
Cash flows from investing activities
Acquisition of property, plant and equipment	VI(VIII)	(		3,988 ) (	13,221 )
(Increase) decrease in current financial assets measured
at amortized cost		(		5,301 )	2,608
Acquisition of Intangible assets	VI(X)	(		5,693 ) (	10,844 )
Net cash flows used in investing activities		(		14,982 ) (	21,457 )
Cash flows from financing activities
Increase (decrease) in short-term borrowings	VI(XXVI)			53,944 (	81,376 )
Decrease in guarantee deposits received	VI(XXVI)	(		225 ) (	657 )
Repayments of lease liabilities	VI(XXVI)	(		21,516 ) (	20,343 )
Cash dividends paid	VI(XVI)	(		77,199 ) (	57,899 )
Cash dividends paid of consolidated subsidiaries		(		8,465 ) (	9,103 )
Net cash flows used in financing activities		(		53,461 ) (	169,378 )
Effect of exchange rate changes		(		836 ) (	26,810 )
Net decrease in cash and cash equivalents				27,944	368,264
Cash and cash equivalents at beginning of period				1,061,262	692,998
Cash and cash equivalents at end of period			$	1,089,206 $	1,061,262

The accompanying notes are an integral part of the consolidated financial statements. Please refer to them as well. Chairman: Kao, Shu-Jung Manager: Kao, Shu-Jung Accounting Supervisor: Lai, Yu-Nu

~16~

Chaintech Technology Corporation and Subsidiaries

Notes to the Consolidated Financial Statements For the Years Ended December 31, 2023 and 2022

Unit: NT$ thousands (Unless specified otherwise)

I. Company History

• (I) The original East Chaintech Technology Co., Ltd. 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 OTClisted 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 and its subsidiaries (hereinafter referred to as the "Group") are 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, 2023, the Colorful Group indirectly held 25.40% of the equity in the Company through Yicheng International Development Co., Ltd. As of December 31, 2023, the Group had 240 employees.

II. Approval Date and Procedures of the Consolidated Financial Statements

The consolidated financial statements were approved by the Board of Directors on March 13, 2024.

III. Application of New and Amended Standards and Interpretations

• (I) Effect of adopting new and amended International Financial Reporting Standards ("IFRSs") endorsed and issued by the Financial Supervisory Commission, R.O.C ("FSC")

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

~17~

New/Revised/Amended Standards and Interpretations Amendments to IAS 1 "Disclosure of Accounting Policies" Amendments to IAS 8 “Definition of Accounting Estimates” Amendments to IAS 12 "Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction" Amendments to IAS 12 “International Tax Reform - Pillar Two Model Rules”	Effective date issued by the International Accounting Standards Board
	January 1, 2023 January 1, 2023 January 1, 2023 May 23, 2023

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

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

The following table summarizes the new, revised, and amended standards and interpretations of IFRSs endorsed by the FSC that are applicable in 2024:

New/Revised/Amended StandardsandInterpretations Amendments to IFRS 16 “Lease Liability in a Sale and Leaseback” Amendments to IAS 1 "Classify Liabilities as Current or Non-current" Amendments to IAS 1 “Non-current Liabilities with Covenants”」 Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements”	Effective date issued by the International Accounting StandardsBoard
	January 1, 2024 January 1, 2024 January 1, 2024 January 1, 2024

The above standards and interpretations have no significant impact to the Group's financial condition and financial performance based on the Group'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:

~18~

New/Revised/Amended Standards and Interpretations Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 “Insurance Contracts” Amendments to IFRS 17 “ the initial application of IFRS 17 and IFRS 9 - Comparative Information” Amendments to IAS 21 "Lack of Exchangeability"	Effective date issued by the International Accounting Standards Board
	Pending decision by the International Accounting Standards Board” January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2025

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

IV. Summary of Significant Accounting Policies

The significant accounting policies applied in the preparation of the consolidated 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 consolidated financial statements are prepared by the Group in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRS, IAS, IFRIC, and SIC Interpretations as endorsed and issued by the FSC (the "IFRSs").

(II) Basis of preparation

1. Except for the following significant items, these consolidated financial statements have been prepared under the historical cost convention:

2. (1) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

3. (2) Financial assets measured at fair value through other comprehensive income.

4. The preparation of financial statements requires the use of certain critical accounting estimates in accordance with IFRSs. It also requires the management to exercise its judgment in the process of applying the Group's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note V.

~19~

(III) Basis of consolidation

1. Principles for preparation of consolidated financial statements

2. (1) All subsidiaries are included in the Group's consolidated financial statements. Subsidiaries refer to all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group 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. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.

3. (2) Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group have been eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

4. (3) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the noncontrolling interests even if this results in the non-controlling interests having a deficit balance.

5. (4) Changes in a parent's ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.

6. (5) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. For all amounts previously recognized in other comprehensive income, they shall be reclassified from equity to profit or loss.

~20~

2. Subsidiaries included in the consolidated financial statements:

Investor Name The Company Shenzhen Jinghong Sitonholy (Tianjin) Sitonholy (Tianjin) Sitonholy (Tianjin)	Subsidiary	Nature of Business	Shareholding ratio December 31, 2023 December 31, 2022 100% 100% 51% 51% 100% 100% 100% 100% 100% 100%	Shareholding ratio December 31, 2023 December 31, 2022 100% 100% 51% 51% 100% 100% 100% 100% 100% 100%	Explanation
	Name Shenzhen Jinghong Digital R&D Service Co., Ltd. (Shenzhen Jinghong) Sitonholy (Tianjin) Technology Co., Ltd. (Sitonholy (Tianjin)) Beijing Sitonholy Technology Co., Ltd. (Beijing Sitonholy) Baotou Yihui Information Technology Co., Ltd. (Baotou Yihui) Sitonholy (Shenzhen)Technology Co., Ltd. (Sitonholy (Shenzhen))		December 31, 2023
		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	100% 51% 100% 100% 100%	100% 51% 100% 100% 100%	- - - - -

1. Subsidiaries not included in the consolidated financial statements: None.

2. Adjustments for subsidiaries with different balance sheet dates: None.

3. Significant restrictions: None.

4. Subsidiaries with significant non-controlling interests to the Group:

5. As of December 31, 2023 and 2022, the Group’s non-controlling interests totaled NT$342,365 and NT$285,858, respectively. What stated below is the information in respect of the Group’s significant non-controlling interests and the corresponding subsidiaries:

Subsidiary	Principal place of business	Non-controlling interests	Non-controlling interests	Non-controlling interests	Non-controlling interests	Explanation
		December 31, 2023		December 31, 2022
		Amount	Shareholding percentage	Amount	Shareholding percentage
Tianjin Siton	Mainland Chin	$342,365	49	$285,858	49

~21~

Summarized financial information of the subsidiaries:

Balance sheet

Sitonholy (Tianjin) Technology Co., Ltd. and its subsidiaries

Current assets Non-current assets Current liabilities Non-current liabilities Total net assets	December 31, 2023 $ 1,419,325 51,409 ( 766,635) ( 5,394) $ 698,705	December 31, 2022 $ 1,198,379 64,738 ( 670,554) ( 9,180) $ 583,383

Statement of comprehensive income

Revenue Profit before tax Tax expense Profit Other comprehensive income (net amount after tax) Total comprehensive income (loss) Total comprehensive income attributable to Non-controlling interests Dividends paid to non-controlling interests	Sitonholy (Tianjin) Technology Co., Ltd. and its subsidiaries	Sitonholy (Tianjin) Technology Co., Ltd. and its subsidiaries
	2023 $ 3,468,396 148,782 ( 3,265) 145,517 ( 12,921) $ 132,596 $ 64,972 $ 8,465	2022 $ 2,238,756 87,946 ( 3) 87,943 7,249 $ 95,192 $ 46,644 $ 9,103

~22~

Statement of cash flows

	Sitonholy (Tianjin)	Sitonholy (Tianjin)	Technology Co., Ltd. and	Technology Co., Ltd. and
		its subsidiaries
	2023			2022
Net cash flows generated from	$ 70,106		$	13,942
operating activities
Net cash flows used in investing	( 15,129)		(	20,430)
activities
Net cash flows generated from	(	8,558)		193,214
financing activities
Effects of changes in foreign exchange
rates on cash and cash equivalents
	(	9,376)		2,895
Increase in cash and cash equivalents
	37,043			189,621
Cash and cash equivalents at beginning
of period	370,802			181,181
Cash and cash equivalents at end of
period	$ 407,845		$	370,802

(IV) Foreign currency translation

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (i.e., functional currency). The consolidated financial statements are presented in New Taiwan Dollars, which is the Company's 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 re-transaction 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

~23~

currencies held at fair value through other comprehensive income are retranslated 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.

• (4) All exchange gains and losses are presented in the earnings statement of profit or loss within "other gains and losses."

• Translation of foreign operations

• The results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• (1) Assets and liabilities for each balance sheet presented are re-translated at the closing exchange rates prevailing at the balance sheet date;

• (2) Income and expenses for each composite income sheet are re-translated at the average exchange rates for the period; and

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

• (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 Group 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 interest in these foreign operations.

• (5) Goodwill and fair value adjustments arising from the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing exchange rates at balance sheet date.

(V) 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) Assets 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

~24~

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 noncurrent.

(VI) Cash equivalents

Cash equivalents refer to short-term investments with high liquidity, which can be easily converted into a fixed amount of cash at any time with minimal risk of value fluctuation. Time deposits that meet the aforementioned definition and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

(VII) 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 Group using trade date accounting.

3. At initial recognition, the Group measures the financial assets at fair value and recognizes the transaction costs in profit or loss. The Group 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 Group and the amount of dividends can be measured reliably.

~25~

(VIII) 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:

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

3. (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.

4. The Group adopts trade date accounting for financial assets measured at fair value through other comprehensive income.

5. At initial recognition, the Group measures the financial assets at fair value plus transaction costs; the Group 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 Group and the amount of dividends can be measured reliably.

(IX) 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 Group adopts trade date accounting for financial assets that follow regular way purchase or sale measured at amortized cost.

3. The Group 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. (X) Accounts and notes receivable

5. Accounts receivables and notes receivables are accounts and notes of which the

~26~

contractual right to consideration for goods sold or services rendered is unconditional.

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

(XI) Impairment of financial assets

Considering all reasonable and provable information (including forward-looking information), the Group measures the credit risk that increases insignificantly since original recognition via the 12-month expected credit loss amount through financial debt instrument at fair value through other comprehensive income and accounts receivable containing significant financial components. For those credit risk increasing 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.

(XII) De-recognition of financial assets

Financial assets are derecognized when the Group's contractual rights to receive cash flows from financial assets are lapsed.

(XIII) 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.

(XIV) 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 process comprises raw materials, direct labor, other direct costs and related production burden (allocated based on normal operating capacity). It excludes 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.

(XV) Investments accounted for using equity method - associates

1. Associates are all entities over which the Group has significant influence but has no control. Investments in associates are accounted for using the equity method and are initially recognized at cost.

2. The Group'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

~27~

income is recognized in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate (including any other unsecured receivables), the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

1. 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 Group’s ownership percentage of the associate, the Group recognizes the change in ownership interests in the associate in "capital surplus" in proportion to its ownership.

2. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. The accounting policies of related enterprises have been adjusted as necessary, and are consistent with the policies adopted by the Group.

3. Where an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group's ownership percentage of the associate but maintains significant influence on the associate, the "capital surplus" and "investments accounted for using 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.

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

(XVI) 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

~28~

• associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replacement is de-recognized. All other repairs and maintenance are recognized as current gain or loss when incurred.

• 1. 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.

• 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:

Machinery and equipment	3 ~ 5 years
Transportation equipment	5 years
Derivative instruments	3 ~ 10 years
Other equipment	2 ~ 10 years

(XVII) 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 Group'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 commencement date, the Group measures lease liabilities by the present value of outstanding lease payments, using the Group's incremental borrowing rate. Lease payments include fixed payments less any lease incentives receivable. In subsequent periods, the Group 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

~29~

periods, the Group 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.

1. When a lease modification decreases the scope of a lease, the carrying value of the right-of-use 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.

(XVIII) Intangible assets

1. Acquired in a business combination, customer relationship is recognized at fair value on the acquisition date. Customer relationship is an asset of limited and durable years as amortized over an estimated useful life of 2.7 years on a straightline basis.

2. Goodwill arises from the difference between the purchase price set in the equity purchase contract and the net identifiable assets.

3. The computer software is amortized using the straight-line method over an estimated useful life of 2 ~ 3 years to recognize its cost.

(XIX) Impairment of non-financial assets

1. The Group assesses on each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal and its value in use. Except for goodwill, When circumstances contributed to the recognition of impairment loss of an asset in the previous period do not exist or are decreased, the recognized impairment loss is reversed to the carrying amount of an asset to the extent that it does not exceed the carrying amount (net of depreciation and amortization) if the impairment loss had not been recognized.

2. The recoverable amount of goodwill shall be evaluated periodically. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss should not be reversed in the future.

3. For the purpose of impairment testing, goodwill acquired in a business merger is allocated to each of the cash-generating units. This allocation is based on the judgment of the operating units and the goodwill is allocated among cash-generating units or groups that are expected to benefit from goodwill generated in corporate mergers.

~30~

(XX) 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.

(XXI) Accounts and notes payable

1. Accounts and notes payable refers 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 and notes payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(XXII) 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.

(XXIII) 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.

(XXIV) Employee benefits

1. Short-term employee benefits

2. 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.

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

4. Employees' compensation and directors' remuneration Employees' compensation and directors' 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

~31~

resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

(XXV) 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 Group 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 Group 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 consolidated balance sheet. 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) and arises no equal taxable and deductible temporary differences. 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 Group, and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and tax 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

~32~

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

(XXVI) 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.

(XXVII) 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.

(XXVIII) Revenue recognition

1. Sales of goods

2. (1) The Group 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 Group 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

~33~

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.

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

• Labor revenue

The Group provides services related to research and development. Labor revenue is recognized as revenue at a certain point in time in which the services are rendered to customers.

1. Service revenue

The Group provides management services for internet data. Service revenue is recognized as revenue in the reporting period in which the services are rendered to customers.

1. Financial composition

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

3. Costs to acquire contracts from customers

The Group 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.

(XXIX) Business combinations

1. The Group uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities resulting from a contingent consideration arrangement. All acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. For each business acquisition case, the Group measures the components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders to the proportionate share of the entity’s net assets

~34~

in the event of liquidation at either acquisition-date fair value or the ratio of noncontrolling interests to the acquiree’s net identifiable assets. All other components of non-controlling interests shall be measured at acquisition-date fair value.

1. If the aggregate of (i) the value of consideration transferred, (ii) the amount of noncontrolling interests, and (iii) the fair value of the acquirer's previously-held equity interest in the acquiree exceeds the fair value of identifiable assets acquired and liabilities assumed, the difference is recognized as goodwill on the acquisition date. If the fair value of identifiable assets acquired and liabilities assumed exceeds the aggregate of (i) the value of consideration transferred, (ii) the amount of noncontrolling interests, and (iii) the fair value of the acquirer's previously-held equity interest in the acquiree, the difference is recognized as profit or loss on the acquisition date.

(XXX) Government grants

Government grants are recognized at their fair value only 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 Group’s expense are recognized as profit or loss on a systematic basis when the expense occurs.

(XXXI) Operating segments

The Group's operating segments are reported in a manner consistent with the internal management reporting provided to the chief operating decision makers. The chief operating decision makers, who are responsible for allocating resources to the operating segments and assessing the performance of the Group, has been identified as the members of the Board of Directors.

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

The preparation of the Group's financial statements requires management to make critical judgments in applying the Group'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 adopted by accounting policies

None.

~35~

(II) Significant accounting estimates and assumptions

Assessment of goodwill impairment

The assessment of goodwill impairment relies on the Group’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. For more information on the assessment of goodwill impairment, please refer to Note VI(XI).

VI. Descriptions of Significant Accounting Items

(I) Cash and cash equivalents

Cash on hand and revolving funds Cheque deposits and demand deposits Time deposits Transferred to financial assets measured at amortized cost - current	December 31, 2023 $ 77 1,064,259 61,410 1,125,746 ( 36,540) $ 1,089,206	December 31, 2022
		$ 62 1,092,439 - 1,092,501 ( 31,239) $ 1,061,262

1. The Group 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, 2023 and 2022 provided as security, have been transferred to the "current financial assets measured at amortized cost“ title according to their nature.

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

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

Item December 31, 2023 Financial assets at fair value through profit or loss on a mandatory basis Beneficiary certificates $ 34,616 Adjustment - Total $ 34,616	December 31, 2022
	$ 115,490 - $ 115,490

~36~

1. The breakdown of profit or loss for current financial assets at fair value through profit or loss is as follows:

Item Beneficiary certificates	2023 $ 1,996	2022
		$ 2,248

1. The Group's financial assets at fair value through profit or loss - current have never been provided as pledged assets or guarantees.

2. For information on the price risk and fair value of financial assets at fair value through profit or loss, please refer to Note XII(II)(III).

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

Item Equity Instruments Stocks of publicly quoted entity Shares of non-publicly quoted entity, non-emerging shares Adjustment Total	December 31, 2023 $ 169,634 15,350 184,984 42,341 $ 227,325	December 31, 2022
		$ 169,634 15,350 184,984 ( 42,601) $ 142,383

1. The Group elects to classify the strategic investments in equity as financial assets at fair value through other comprehensive income.

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

Equity instruments at fair value through other comprehensive income Changes in fair value recognized in other comprehensive income Dividend income recognized in profit or loss Held at end of period	2023 $ 84,942 $ 7,015	2022 ($ 58,102) $ 6,100

~37~

1. For 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).

(IV) Notes and accounts receivable

Notes receivable Accounts receivable Less: Loss allowance Accounts receivable (related parties) Less: Loss allowance	December 31, 2023	December 31 2022
	$ 865 $ 398,652 ( 29,442) $ 369,210 $ 614,091 ( 246) $ 613,845 $ 983,920	, $ 11,831 $ 492,968 ( 37,527) $ 455,441 $ 525,778 ( 210) $ 525,568 $ 992,840

1. The aging analysis of accounts receivable and notes receivable are as follows:

Not overdue Overdue for 1-90 days Overdue for 91 days Total			December	31, 2023	31, 2023		December	31, 2022
			Accounts receivable		Notes receivable		Accounts receivable $ 1,009,631 7,436 1,679 $ 1,018,746	Notes receivable
			$ 973,093 33,518 6,132 $ 1,012,743		$ 865 - - $ 865			$ 11,831 - -
								$ 11,831

The aging analysis above is based on past due date.

1. The balance of receivables on contracts with customers as of December 31, 2023, December 31, 2022, and January 1, 2022 was NT$1,013,608, NT$1,030,577, and NT$1,423,979, respectively.

2. The Group had discounted NT$0 and NT$69,426 of notes receivable on December 31, 2023 and 2022. If the drawer refuses to make payment upon maturity, the Group is obligated to settle the debt. However, in general, the Group does not expect the drawer to refuse to make payment. The Group's liabilities arising from discounting notes receivable are recorded under notes payable.

3. Without consideration of the collateral held or other credit enhancements, the maximum credit risk that best represent the Group's notes receivable as of December

~38~

31, 2023 and 2022 amounted to NT$865 and NT$11,831, respectively, and the maximum credit risk that best represent the Group's accounts receivable as of December 31, 2023 and 2022 amounted to NT$983,055 and NT$981,009, respectively.

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

(V) Inventories

Raw materials Finished good Goods Inventories in transit Raw materials Work in progress Finished good Goods Inventories in transit	Costs $ 74,128 81,744 509,855 45,939 $ 711,666 Costs $ 9,792 107,801 5,535 237,806 49,197	December 31, 2023 Allowance for price decline ($ 1,968) ( 140) ( 3,476) - ($ 5,584) December 31, 2023 Allowance for price decline ($ 604) ( 167) ( 4,149) ( 3,982) - ($ 8,902)	Carrying amount
			$ 72,160 81,604 506,379 45,939
			$ 706,082
			Carrying amount
			$ 9,188 107,634 1,386 233,824 49,197
	$ 410,131		$ 401,229

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

Costs of inventories sold (Gain from price recovery) loss on price decline of inventory (Note)	2023 $ 6,144,178 ( 3,251) $ 6,140,927	2022 $ 5,574,091 1,723 $ 5,575,814

Note: The Group's reported the gain from price recovery of inventories in 2023 as a result of de-stocking.

~39~

~40~

(VI) Prepayments

Prepayment for purchases Tax overpaid retained for offsetting the future tax payable Others (VII) Investments using equity method January 1 (i.e. December 31) Associates	December 31, 2023 $ 251,281 3,710 11,495 $ 266,486 2023 $- December 31, 2023 $-	December 31, 2023	December 31, 2022 $ 119,219 - 9,830 $ 129,049 2022 $- December 31, 2022 $-	December 31, 2022

1. On January 21, 2020, the Board of Directors 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 Group has significant influence on uSenlight Corporation in terms of business decision-making, such investment is accounted for using equity method. As of December 31, 2023, the Group held a 6.13% equity interest in uSenlight Corporation, making the Group its single largest shareholder. As the other two largest shareholders (not the Group's related parties) held more than the Group’s shares, the Group had no ability to direct the relevant business activities of uSenlight Corporation. Accordingly, the Group had significant influence but had no control over uSenlight Corporation.

2. The basic information of the associates that are material to the Group is as follows:

Company name	Principal place of business	Shareholding ratio	Shareholding ratio	Nature of relations	Measurement method
		December 31, 2023	December 31, 2022
uSenlight Corporation	Republic of China	6.13%	6.13%	Significant influence	Equity method

~41~

• (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 on the loss of $97,765 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 assets were publicly auctioned on November 16, 2022, as notified by the court. The Company is currently undergoing dissolution procedures.

(VIII) Property, plant and equipment

January 1, 2023 Costs Accumulated depreciation 2023 January 1 Addition Disposition Reclassification Depreciation expenses Net exchange differences December 31 December 31, 2023 Costs Accumulated depreciation	Machinery and equipment	Machinery and equipment		Transportation equipment		Derivative instruments		Others		Total
		$ 36,995 ( 29,792) $ 7,203 $ 7,203 1,550 - 127 ( 1,846) ( 44) $ 6,990 $ 36,195 ( 29,205) $ 6,990		$ 13,121 ( 10,052) $ 3,069 $ 3,069 - - - ( 628) ( 46) $ 2,395 $ 12,881 ( 10,486) $ 2,395		$ 7,082 ( 4,439) $ 2,643 $ 2,643 - ( 14) - ( 771) 21 $ 1,879 $ 6,312 ( 4,433) $ 1,879		$ 82,121 ( 74,546) $ 7,575 $ 7,575 2,438 ( 5) ( 127) ( 2,347) ( 375) $ 7,159 $ 14,156 ( 6,997) $ 7,159		$ 139,319 ( 118,829) $ 20,490 $ 20,490 3,988 ( 19) - ( 5,592) ( 444) $ 18,423 $ 69,544 ( 51,121) $ 18,423

~42~

January 1, 2022 Costs Accumulated depreciation 2022 January 1 Addition Disposition Depreciation expenses Net exchange differences December 31 December 31, 2022 Costs Accumulated depreciation	Machinery and equipment	Machinery and equipment		Transportation equipment		Derivative instruments		Others	Total
		$ 34,130 ( 25,538) $ 8,592 $ 8,592 2,420 ( 19) ( 3,927) 137 $ 7,203 $ 36,995 ( 29,792) $ 7,203		$ 12,931 ( 9,285) $ 3,646 $ 3,646 - - ( 632) 55 $ 3,069 $ 13,121 ( 10,052) $ 3,069		$ 4,089 ( 4,015) $ 74 $ 74 2,985 - ( 417) 1 $ 2,643 $ 7,082 ( 4,439) $ 2,643		$ 74,287 ( 63,441) $ 10,846 $ 10,846 7,816 ( 6) ( 11,102) 21 $ 7,575 $ 82,121 ( 74,546) $ 7,575	$ 125,437 ( 102,279) $ 23,158 $ 23,158 13,221 ( 25) ( 16,078) 214 $ 20,490 $ 139,319 ( 118,829) $ 20,490

The Group had no property, plant, and equipment pledged to others.

(IX) Lease transaction - lessee

1. The Group's leased underlying assets refer to buildings, of which the lease term is usually between 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:

	December 31, 2023	December 31, 2022
	Carrying amount	Carrying amount
Buildings	$ 33,008	$ 39,528
	2023	2022
	Depreciation expenses	Depreciation expenses
Buildings	$ 21,361	$ 19,444

~43~

1. For the years ended December 31, 2023 and 2022, the Group's additions of rightof-use assets amounted to NT$15,198 and NT$21,764, respectively.

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

Items affecting profit or loss for the period Interest expenses of lease liabilities Expenses under short-term lease contracts	2023 2022
	$ 850 $ 1,360 245 645

1. For the years ended December 31, 2023 and 2022, the Group's cash flows used in leases amounted to NT$22,611 and NT$22,348, respectively.

2. (X) Intangible assets

January 1, 2023 Costs Accumulated amortization and impairment 2023 January 1 Addition - sourced from separate acquisition Amortization expenses Net exchange differences December 31 December 31, 2023 Costs Accumulated amortization and impairment	Goodwill	Customer relationship $ 32,050 ( 32,050) $- $ - - - - $- $ - - $-	Computer software $ 24,477 ( 3,675) $ 20,802 $ 20,802 5,693 ( 6,502) ( 278) $ 19,715 $ 29,742 ( 10,027) $ 19,715	Total
	$ 160,473 - $ 160,473 $ 160,473 - - ( 2,949) $ 157,524 $ 157,524 - $ 157,524			$ 217,000 ( 35,725) $ 181,275 $ 181,275 5,693 ( 6,502) ( 3,227) $ 177,239 $ 187,266 ( 10,027) $ 177,239

~44~

January 1, 2022 Costs Accumulated amortization and impairment 2022 January 1 Addition - sourced from separate acquisition Reclassification (Note 1) Amortization expenses Adjustment for the period (Note 2) Net exchange differences December 31 December 31, 2022 Costs Accumulated amortization and impairment	Goodwill	Customer relationship $ 32,050 ( 32,050) $- $ - - - - - - $- $ 32,050 ( 32,050) $-	Computer software $ - - $- $ - 10,844 12,003 ( 3,687) - 1,642 $ 20,802 $ 24,477 ( 3,675) $ 20,802	Total
	$ 168,525 - $ 168,525 $ 168,525 - - - ( 6,827) ( 1,225) $ 160,473 $ 160,473 - $ 160,473			$ 200,575 ( 32,050) $ 168,525 $ 168,525 10,844 12,003 ( 3,687) ( 6,827) 417 $ 181,275 $ 217,000 ( 35,725) $ 181,275

Note 1: Transferred from inventories

Note 2: Income received from compensation, please refer to VI(XXV) 6 for information. Goodwill is allocated to the Group’s cash-generating units by operating segments:

December 31, 2023 December 31, 2022 Sitonholy (Tianjin) Technology Co., Ltd. $ 157,524 $ 160,473

(XI) Impairment of non-financial assets

Goodwill is allocated to the Group’s cash-generating units by operating segments. The recoverable amount is determined based on the value in use, and the value in use is

~45~

calculated using the pre-tax cash flow forecast of the five-year financial budget approved by management. Cash flows beyond the five-year period were estimated using the estimated growth rates stated below.

The Group’s recoverable amount calculated based on the value in use exceeded the carrying amount, so no impairment loss on goodwill was generated. Main assumptions used to calculate the value in use are as follows:

Gross profit margin Growth Rate Discount rate	Sitonholy (Tianjin) Technology Co., Ltd . 2023 2022 11%~12% 14.00% 2.00% 2.00% 19.10% 17.80%	Sitonholy (Tianjin) Technology Co., Ltd . 2023 2022 11%~12% 14.00% 2.00% 2.00% 19.10% 17.80%
	2023 11%~12% 2.00% 19.10%
		14.00% 2.00% 17.80%

Management determined the budgeted gross margin based on the past performance and its expectation for market development. The weighted average growth rates used are consistent with the forecasts included in industry reports. The discount rates used are pretax and reflect the risks specific to relevant operating segments.

(XII) Short-term borrowings

Nature of borrowings Borrowings Secured loans Credit loans Nature of borrowings Borrowings Credit loans	December 31, 2023 $ 45,290 151,445 $ 196,735 December 31, 2023 $ 145,464	Interest range 6.72% 2.50% Interest range 2.50%	Collateral
			Financial assets measured at amortized cost - current None. Collateral
			None.

Interest expenses recognized in profit or loss for the years ended December 31, 2023 and 2022 were NT$10,480 and NT$6,478, respectively.

~46~

(XIII) Other payables

Salaries payable Royalty payable Others	December 31, 2023 $ 86,593 14,154 27,783 $ 128,530	December 31, 2022 $ 51,685 33,558 35,137 $ 120,380

(XIV) 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 Company's subsidiaries in Mainland China have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People's Republic of China are based on certain percentage of employees' monthly salaries and wages. The pension funds of each employee are managed and arranged by the government, and the Group has no further obligations except the monthly contributions.

3. The pension costs recognized by the Group in accordance with the aforesaid pension regulations for the years ended December 31, 2023 and 2022 were NT$13,893 and NT$10,465, respectively.

(XV) Share capital

1. As of December 31, 2023, 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.

3. Treasury shares

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

~47~

Company name of holding securities	Reason for repurchase	December 31,	December 31,	December 31,	2023
		Number of shares (thousand shares)			Carrying amount
The Company Company name of holding securities	For the transfer of shares to employees Reason for repurchase				$- 2022
		Number of shares (thousand shares)			Carrying amount
The Company	For the transfer of shares to employees		-		$-

• (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 5,000 thousand shares of treasury shares and the change in actual paid-in capital on January 9, 2023.

(XVI) 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 Company 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 paid-up-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

~48~

distribution proposal and submit it to the shareholders' meeting to distribute bonus to the shareholders.

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.

5. (2) When the Company adopted the 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.

6. By a resolution in the shareholders' meetings on June 16, 2023 and June 15, 2022, respectively, the Company adopted the earnings distribution plan for the years ended December 31, 2022 and 2021 as follows:

Legal reserve Special reserve Provision (Reversal) Cash dividends	2022	2022	2021	2021
	Amount (NT$ thousand)	Dividends Per Share (NT$)	Amount (NT$ thousand)	Dividends Per Share (NT$)
	$ 32,037 50,024 77,199	$ 0.80	$ 12,222 ( 10,452) 57,899	$ 0.60

1. Please refer to Note VI(XX) for information on employees' compensation and

~49~

directors' remuneration.

1. As of March 13, 2024, the Company’s Board of Directors was yet to propose the earnings distribution plan for the year ended December 31, 2023.

(XVII) Operating revenue

Revenue from Contracts with Customers： Sales revenue - consumer goods Sales revenue - AI servers and related products Labor revenue Service revenue	Revenue Recognition Timing	2023	2022
	Recognized at a certain point in time Recognized at a certain point in time Recognized at a certain point in time Recognized gradually over time	$ 3,343,185 3,399,750 11,818 68,646	$ 3,343,185 3,399,750 11,818 68,646
		$ 6,823,399	$ 6,823,399

1. The Group derives revenue from providing gradual transfer over time and the transfer of goods and services over time and at a point in time.

2. The contract liabilities in relation to revenue from contracts with customers recognized by the Group are as follows:

December 31, 2023 Contract liabilities: Unearned sales revenue $ 137,588 Revenue recognized that was included in the contract liability balance at the beginning of the period: $	December 31, 2023 Contract liabilities: Unearned sales revenue $ 137,588 Revenue recognized that was included in the contract liability balance at the beginning of the period: $		December 31, 2022 $ 68,618 2023 64,179 $	December 31, 2022 $ 68,618 2023 64,179 $		January 1, 2022
						$ 111,677
			2023 64,179			2022 111,086
	$			$

~50~

(XVIII) Other income

Government subsidy income Rental income Dividend income Liquidated damages income Other income - others	2023 $ 45,334 158 7,015 9,596 11,887 $ 73,990	2022 $ 7,011 158 6,100 - 3,897 $ 17,166

(XIX) Other gains and losses

Loss on disposal of property, plant, and equipment Net foreign exchange gains (losses) Gain on financial assets at fair value through profit or loss Other losses	2023 ($ 19) ( 3,303) 1,996 ( 1,447) ($ 2,773)	2022 ($ 3) 101,506 2,248 ( 98) $ 103,653

(XX) Financial costs

Interest expenses Lease liabilities	2023 $ 10,480 850 $ 11,330	2022 $ 6,478 1,360 $ 7,838

~51~

(XXI) Additional information on expenses by nature

Employee benefit expenses Depreciation expenses of property, plant and equipment Depreciation expenses of right-of-use assets Amortization expenses of intangible assets	2023 $ 259,263 5,592 21,361 6,502 $ 292,718	2022 $ 182,080 16,078 19,444 3,687 $ 221,289

(XXII) Employee benefit expenses

Payroll expenses Labor/health insurance expenses Pension expenses Other employment expenses	2023 $ 221,561 14,802 13,893 9,007 $ 259,263	2022 $ 155,602 11,126 10,465 4,887
		$ 182,080

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 shall not be paid more than 6% as remuneration.

2. For the years ended December 31, 2023 and 2022, the accrued amount of employees' compensation was NT$2,384 and NT$4,039, respectively, and the accrued amount of directors' remuneration was NT$7,151 and NT$12,118, respectively; the aforesaid amounts were recognized as payroll expenses.

For the year ended December 31, 2023, 1% and 3% were estimated according to the profitability of the year. The resolved amounts as approved by the Board of Directors were NT$2,384 and $7,151, respectively. The employees' compensation will be distributed in the form of cash.

The employees' compensation, NT$4,039, and directors' remuneration, NT$12,118, for the year ended December 31, 2022 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.

~52~

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

(XXIII) Income tax

1. Tax expense

Components of tax expense:

2023 Current income tax： Income tax generated in the current period $ 33,470 $ Surtax on undistributed earnings 8,056 Under(over)estimate provision of previous year’s income tax ( 132) Total current income tax liabilities 41,394 Deferred income tax: The origination and reversal of temporary differences 28,919 ( Tax expense $ 70,313 $ Tax expense and accounting profit 2023 Net profit before tax is calculated as income tax at the statutory tax rate $ 49,130 Expenses that should be excluded according to tax laws ( 1,548) Income exempt from taxation according to tax laws ( 1,403) Temporary differences of assets that have not been recognized as deferred tax assets 16,210 Surtax on undistributed earnings 8,056 Under(over)estimate provision of previous year’s income tax ( 132) Tax expense $ 70,313		2022 70,458 3,128 1,899 75,485 8,066) 67,419 2022 $ 77,560 806 ( 1,220) ( 14,754) 3,128 1,899 $ 67,419
	$
	(
	$

1. Tax expense and accounting profit

2. The amount of deferred tax assets that arise from temporary differences from the taxable financial assets are set out below:

~53~

Temporary differences: Deferred tax assets Allowance for inventory valuation and obsolescence losses Impairment loss Unrealized foreign exchange loss Investment loss Deferred tax liabilities Investment income			2023	2023	2023
		January1	Recognized in profitor loss	Recognized in other comprehensive income		December31
	(	$ 664 19,948 2,402 9,547 32,561 3,721) $ 28,840	($ 562) - 2,842 - 2,280 (31,199) ($ 28,919)		$ - - - - - - $-	$ 102 19,948 5,244 9,547 34,841 ( 34,920) ($ 79)

Temporary differences: Deferred tax assets Allowance for inventory valuation and obsolescence losses Impairment loss Unrealized foreign exchange loss Investment loss Others Deferred tax liabilities Investment income		2022	2022	2022	2022
	January1	Recognized in profitor loss		Recognized in other comprehensive income		December31
	$ 169 19,948 653 - 3 20,773 - $ 20,773	(	$ 495 - 1,749 9,547 3) 11,788 3,721) $ 8,067		$ - - - - - - - $-	$ 664 19,948 2,402 9,547 - 32,561 ( 3,721) $ 28,840
		(

~54~

1. Deductible temporary differences of assets that have not been recognized as deferred tax assets:

Deductible temporary differences	December 31, 2023 $ 33,795	December 31, 2022 $ 35,394

1. The revenue service authority has assessed the profit-seeking enterprise income tax of the Company through 2021.

(XXIV) Earnings per share

Basic earnings per share Current net income attributable to ordinary shareholders of parent company Diluted earnings per share Current net income attributable to ordinary shareholders of parent company Impact of potential ordinary shares with dilutive effect Employees' compensation Current net profit attributable to ordinary shareholders of parent company plus the impact of potential ordinary shares		2023	2023
	After-tax amount	Weighted average shares outstanding (thousand shares)		Earnings per share (NT$)
	$ 161,901 $ 161,901 -		96,499 96,499 77 96,576	$ 1.68 $ 1.68
	$ 161,901

~55~

Basic earnings per share Current net income attributable to ordinary shareholders of parent company Diluted earnings per share Current net income attributable to continuing operations of parent company Impact of potential ordinary shares with dilutive effect Employees' compensation Current net profit attributable to ordinary shareholders of parent company plus the impact of potential ordinary shares		2022
	After-tax amount	Weighted average shares outstanding (thousand shares)	Earnings per share (NT$)
	$ 320,372 $ 320,372 - $ 320,372	96,499 96,499 149 $ 96,648	$ 3.32 $ 3.31

(XXV) Business combinations

1. In December 2018, the Group invested in Sitonholy (Tianjin) Technology Co., Ltd. through its subsidiary, Shenzhen Jinghong, and made a prepayment of RMB 10 million. On March 1, 2019, the Group acquired a 51% equity interest in Sitonholy (Tianjin) Technology Co., Ltd. The investment totaled RMB 86.36 million (including contingent consideration of RMB 44.36 million). The equity interest was acquired as follows:

2. (1) The Group purchased a 26% equity interest from Tianjin Daweisi Technology Center (Limited Partnership) and Tianjin Qunchuang Enterprise Management Consulting Center (Limited Partnership) at the amount of RMB 35.36 million.

3. (2) The Group acquired a 25% equity interest in Sitonholy (Tianjin) Technology Co., Ltd. through capital increase at the amount of RMB 51 million.

4. Sitonholy (Tianjin) Technology Co., Ltd. retails electronic products and communication products in China. After the acquisition, the Group expects to strengthen its presence in the retail market of electronic products and communication products in China.

5. Information on the consideration for acquiring Sitonholy (Tianjin) Technology Co., Ltd., acquisition-date fair value of assets acquired and liabilities assumed, and portion of non-controlling interests to the acquiree's net identifiable assets is stated

~56~

as follows:

Acquisition consideration Cash (Note 1) Payments for equity transfer Payments for purchase of shares Contingent consideration (Note 2) Share of non controlling interests in the identifiable net assets of the acquired party Fair value for identifiable assets acquired and liabilities and contingent liabilities Cash Accounts receivable Inventories Other current assets Intangible assets (customer relationship) Property, plant and equipment Right-of-use assets Other non-current assets (Note 3) Accounts payable Other current liabilities (Note 4) Lease liabilities Deferred tax liabilities Total identifiable assets Goodwill

$ 119,678 73,648 149,140 342,466 157,465 $ 499,931 $ 20,266 182,945 90,866 113,415 33,961 797 3,744 201,522 ( 129,566) ( 184,300) ( 3,802) ( 8,490) 321,358 $ 178,573

• Note 1: Acquisition consideration - cash includes payments for equity transfer and payments for purchase of shares.

• (1) Payments for equity transfer include prepayments of NT$44,720 (RMB 10 million) made in December 2018 and NT$74,958 (RMB 16 million) paid in March 2019.

• (2) Payments for purchase of shares amounted to RMB 16 million. The capital increase was completed in March 2019.

• Note 2: Contingent consideration is the present value of investment after taking into account performance compensation set forth in the investment agreement.

• Note 3: Other non-current assets include payments for purchase of shares

~57~

receivable, RMB 16 million, in March 2019 and payments for purchase of shares, RMB 35 million, to be received when conditions of contingent consideration are established.

• Note 4: Other current liabilities include payments for equity transfer, RMB 18.1326 million payable by Sitonholy (Tianjin) Technology Co., Ltd. due to its acquisition of a 100% equity interest in Beijing Sitonholy.

• On December 17, 2018, both parties reached an agreement on contingent consideration as follows:

• (1) If the audited net profit of Sitonholy (Tianjin) Technology Co., Ltd. and Beijing Sitonholy for the year ended December 31, 2018 (subject to the net profit attributable to parent after deduction of non-recurring profit or loss) reaches RMB 15 million, Shenzhen Jinghong should increase capital of Sitonholy (Tianjin) Technology Co., Ltd. by RMB 20 million within 15 working days, and should pay RMB 7.488 million and RMB 1.872 million to Tianjin Daweisi Technology Center (Limited Partnership) and Tianjin Qunchuang Enterprise Management Consulting Center (Limited Partnership) respectively (recognized in other non-current liabilities).

• (2) If the audited net profit of Sitonholy (Tianjin) Technology Co., Ltd. and Beijing Sitonholy for the year ended December 31, 2019 (subject to the net profit attributable to parent after deduction of non-recurring profit or loss) reaches RMB 22 million, Shenzhen Jinghong should increase capital of Sitonholy (Tianjin) Technology Co., Ltd. by RMB 15 million within 15 working days.

• (3) If Sitonholy (Tianjin) Technology Co., Ltd. and Beijing Sitonholy fail to meet the performance target for the year within the period of performance commitment, Shenzhen Jinghong has the right to defer the aforesaid contingent consideration to the next period and, based on the realization of the accumulated net profit of Sitonholy (Tianjin) Technology Co., Ltd. and Beijing Sitonholy, determine whether to pay.

• As of December 31, 2019, the audited net profit of Sitonholy (Tianjin) Technology Co., Ltd. and Beijing Sitonholy for the year ended December 31, 2018 reached the agreement on contingent consideration. According to the agreement, Shenzhen Jinghong paid RMB 20 million to Sitonholy (Tianjin) Technology Co., Ltd. for capital increase and paid RMB 7.488 million and RMB 1.872 million to Tianjin Daweisi Technology Center (Limited Partnership) and Tianjin Qunchuang Enterprise Management Consulting Center (Limited Partnership) respectively. The audited net profit of Sitonholy (Tianjin) Technology Co., Ltd. and Beijing Sitonholy for the year ended December 31, 2019 was not met. According to the agreement,

~58~

Shenzhen Jinghong deferred the contingent consideration to the next period.

1. On December 28, 2020, both parties entered into a supplemental agreement to extend the original terms of the contract for two years (to the end of 2022). Both parties also agreed that compensation should be collected from the original shareholders for the portion belonging to Shenzhen Jinghong (51%) in case of failure to meet the performance target.

The amount of compensation is calculated below:

• (1) If the performance target is met by the end of 2021: Unmet net profit target for 2018 to 2020 x 51% x 15%

• (2) If the performance target is met before June 2022: Unmet net profit target for 2018 to 2020 x 51% x (15%+10%)

• (3) If the performance target is met before the end of 2022:

• (4) Unmet net profit target for 2018 to 2020 x 51% x (15%+20%)

• The Group has received the above compensation amounted to $15,353 (RMB 3.53 million) in March 2021, and recognized compensation income amounted to $6,827 (RMB 1.51 million) and recognized a decrease in goodwill in in March 2022.

• The agreement of the net profits for contingent consideration has been reached by Sitonholy(Tianjin) technology Co., Ltd and Beijing Sitonholy technology Co., Ltd in 2021. According to the agreement, Shenzhen Jinghong has made the payment for contingent consideration and refund of compensation in the first half of the year of 2022.

~59~

(XXVI) Changes in liabilities from financing activities

January 1 Changes in cash flows from financing Impact on changes in exchange rates Impact on changes in other non-cash December 31		2023	2023
	Short-term borrowings	Guarantee deposits received	Lease liabilities	Changes in liabilities from financingactivities
	$ 145,464 53,944 ( 2,673) - $ 196,735	$ 618 ( 225) ( 11) - $ 382	$ 40,507 ( 21,516) ( 395) 15,198 $ 33,794		$ 186,589 32,203 ( 3,079) 15,198 $ 230,911

January 1 Changes in cash flows from financing Impact on changes in exchange rates Impact on changes in other non-cash December 31		2022	2022
	Short-term borrowings	Guarantee deposits received	Lease liabilities	Changes in liabilities from financingactivities
	$ 226,840 ( 81,376) - - $ 145,464	$ 1,275 ( 657) - - $ 618	$ 37,885 ( 20,343) 1,201 21,764 $ 40,507		$ 266,000 ( 102,376) 1,201 21,764 $ 186,589

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 25.40% of the shares of the Company. The rest is held by the public. The ultimate controller of the Company is the Colorful Group.

~60~

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

Name of related parties The relationship with the Group 100% reinvestment business by Colorful Colorful Technology Co., Ltd. (Colorful) Group Shenzhen Colorful Yugong Technology and The same person in charge as the Colorful Development Co., Ltd. (Yugong) Group uSenlight Corporation (uSen) Associates The chairman of the Company serves as JDX Technology Co.,Ltd. this company's supervisor.

(III) Significant transactions with related parties

1. Operating revenue

Sales of goods: Colorful	2023 $ 1,933,079	2022 $ 2,092,517

The Group'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 products.

2. Purchase

Product purchase: Yugong Colorful	2023 $ 28,195 - $ 28,195	2022 $ 24,940 3,776 $ 28,716

Goods are purchased from related parties according to general commercial terms and conditions. Purchases from related parties refer to purchases of display cards.

~61~

3. Receivables from related parties

Accounts receivable: Colorful Less: Loss allowance Total	December 31, 2023 $ 614,091 ( 246) $ 613,845	December 31, 2022 $ 525,778 ( 210) $ 525,568

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. Payables to related parties

Accounts payable: Yugong	December 31, 2023 $-	December 31, 2022
		$ 6,397

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

Other related party	December 31, 2023 $ 5,808	December 31, 2022 $-

5. Advertising expense

After the launch of the products jointly developed by the Group 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 2023 and 2022 were NT$9,024 and NT$10,333, respectively; the amounts not yet paid as of December 31, 2023 and 2022 were NT$5,001 and NT$5,899, respectively, and recognized as "other payables."

6. Endorsements and guarantees made by related parties

Yugong	December 31, 2023 $-	December 31, 2022
		$ 22,040

~62~

(IV) Key management compensation information

Wages and short-term employee benefits	2023 $ 19,044	2022 $ 17,174

VIII. Pledged Assets

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

Assetstitle	Bookvalue	Bookvalue	Purpose ofcollateral
	December31,2023	December31,2022
Financial assets measured at amortized cost - current Financial assets measured at amortized cost - current	$ 9,252 27,288 $ 36,540	$ 4,621 26,618 $ 31,239	Balance of short-term borrowings Guarantee for acceptance of bills

IX. Significant Contingent Liabilities and Unrecognized Contract Commitments

(I) Contingencies

None.

(II) Commitments

1. As of December 31, 2023, the Group's guaranteed letter of credit for the purchase was US$1,500 thousand.

2. As of December 31, 2023, the Company issued a promissory note totaling NT$100,000 thousand 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

None.

XII.Others

• (I) Capital management

The Group's objectives in capital management are to safeguard the Group's ability to

~63~

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 Group 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

December 31, 2023 December 31, 2022

	December 31, 2023	December 31, 2022
Financial assets Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets measured at amortized cost Cash Financial assets measured at amortized cost Notes receivable Accounts receivable (including related parties) Other receivables Refundable deposits (other non- current assets) Financial liabilities Short-term borrowings Notes payable Accounts payable (including related parties) Other payables Guarantee deposits received (other non-current liabilities) Lease liabilities	$ 34,616 $ 227,325 $ 1,089,206 36,540 865 983,055 2,696 9,264 $ 2,121,626 $ 196,735 198,287 372,795 128,530 382	$ 115,490 $ 142,383 $ 1,061,262 31,239 11,831 981,009 3,532 9,971 $ 2,098,844 $ 145,464 115,737 330,540 120,380 618 $ 712,739 $ 40,507
	$ 896,729
	$ 33,794

2. Risk management policies

• (1) The Group's daily operations are affected by a number of financial risks, including market risk (including exchange rate risk, interest rate risk, and price risk), credit risk, and liquidity risk.

~64~

• (2) The risk management is carried out by the Group's finance department according to the policies approved by the Board of Directors. The finance department of the Group is responsible for identifying, evaluating, and avoiding financial risks in close co-operation with the Group's 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 Group is a multinational operation and is exposed to exchange rate risk arising from transactions with the Company and its subsidiaries, which is mainly denominated in USD and RMB. The related exchange rate risk arises from future commercial transactions and recognized assets and liabilities.

• B. Business of the Group is involved in a number of non-functional currency (the functional currency of the Company is NTD; for subsidiaries, the functional currency is RMB) 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)	December 31, 2023	December 31, 2023
	Foreign currency($ thousands)	Exchange Rate	Carrying amount (NTD)
Financial assets Monetary items USD: NTD Financial liabilities Monetary items USD: NTD Financial liabilities Monetary items USD: NTD	$ 45,045 $ 7,487 $ 7,487	30.705 30.705 30.705	$ 1,383,107 $ 673,115 $ 229,888

~65~

(Foreign currency: functional currency)	December 31, 2022	December 31, 2022
	Foreign currency($ thousands)	Exchange Rate	Carrying amount (NTD)
Financial assets Monetary items USD: NTD Financial liabilities Monetary items USD: NTD	$ 42,892 $ 3,197	30.71 30.71	$ 1,383,107 $ 229,888

• C. The Group's material monetary items affected by the exchange rate fluctuations were recognized as net exchange (losses) gains (including realized and unrealized), which amounted to NT($3,303) and NT$101,506, respectively, for the years ended December 31, 2023 and 2022.

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

(Foreign currency: functional currency) Financial assets Monetary items USD: NTD Financial liabilities Monetary items USD: NTD		2023	2023
		Sensitivity analysis
	Degree of fluctuation	Impact on profit and loss	Impact on other comprehensive income (loss)
	1% 1%	$ 13,831 $ 2,299	$ - $ -

~66~

2022

		2022	2022
(Foreign currency: functional currency) Financial assets Monetary items USD: NTD Financial liabilities Monetary items USD: NTD		Sensitivityanalysis
	Degree of fluctuation	Impact on profit and loss	Impact on other comprehensive income (loss)
	1% 1%	$ 13,172 $ 982	$ - $ -

Price risk

• A. The Group'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 Group diversifies its portfolio with its diversification method based on limits set by the Group.

• B. The Group primarily invests in equity instruments and beneficiary certificates issued by domestic companies, and the price of such equity instruments is affected by the uncertainty of the future value of the investment target. If the prices of these equity instruments increase or decrease by 1%, with all other factors remaining unchanged, profit after tax for the years ended December 31, 2023 and 2022 will increase or decrease by NT$346 and NT$1,155, respectively due to the gain or loss on equity instruments at fair value through profit or loss, and other comprehensive income for the years then ended will increase or decrease by NT$2,273 and NT$1,424, 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 Group's interest rate risk arises primarily from short-term borrowings issued at variable rates, which expose the Group to cash flow interest rate risk. For the years ended December 31, 2023 and 2022, the Group's borrowings issued at variable rates were mainly denominated in NTD, USD and RMB.

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

~67~

• C. If the NTD, USD and RMB borrowing interest rate increases/decreases by 1%, with all other variables held constant, profit before tax for the years ended December 31, 2023 and 2022 will decrease or increase by NT$1,574 and NT$1,164, respectively. Changes in interest expense mainly result from floating-rate borrowings.

• (2) Credit risk

• A. The Group'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 Group has established credit risk management in the Group's corporate policy. For banks and financial institutions, only those with good credit rating can be accepted as our transaction counterparties. In accordance with the internal defined credit policy, the Group's operating entities and each new customer shall be subject to the management and credit risk analysis before making payment and delivery of the agreed payment and delivery. 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 Group adopts credit risk management procedures to make assumptions except that the contract amount is overdue for more than 90120 days in accordance with the agreed payment terms, it is regarded that a default has taken place.

• D. The Group adopts credit risk management procedures 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.

• E. The Group will group the customer's accounts receivable based on the

~68~

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 Group conducts individual assessments for accounts receivable that have already defaulted, taking into account the collection status after the reporting period, and recognizes a provision for loss allowance of 0% to 30%. 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 provision matrix as of December 31, 2023 and 2022 is as follows:

December 31, 2023 Expected loss rate Total book value Loss allowance December 31, 2022 Expected loss rate Total book value Loss allowance	Individual 0%~30% $ 10,794 $ 1,144 Individual 30%	Not overdue 0.02%~11.90% $ 963,164 $ 19,618 Not overdue 0.04%~10.48% $ 999,146 $ 28,757	Overdue for 1-90 days 9.50% $ 33,518 $ 3,185 Overdue for 1-90 days 11.22% $ 7,436 $ 834	Overdue for 91 days	Overdue for 91 days	Total
				9.50%~100%		$ 1,013,608 $ 29,688
				$ 6,132
				$ 5,741
				Overdue for 91 days Total 11.22%~100% $ 1,679 $ 1,030,577 $ 1,451 $ 37,737	Overdue for 91 days	Total
	$ 22,316 $ 6,695			$ 1,679
				$ 1,451

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

January 1 Reversal of impairment loss Effect of exchange rate changes December 31	2023 Accounts Receivable $ 37,737 ( 8,186) 137 $ 29,688	2022
		Accounts Receivable
		$ 41,638 ( 4,386) 485 $ 37,737

(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

~69~

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 interest-bearing 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 Group'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 maturity date. The contractual cash flow amounts disclosed in the table below are undiscounted amounts.

• • Less than 1 year Within 1 2 years Within 2 5 years

December 31, 2023 Non-derivative financial liabilities: Lease liabilities $ 18,594 $ 8,876 $ 7,833

• • Less than 1 year Within 1 2 years Within 2 5 years

December 31, 2022 Non-derivative financial liabilities: Lease liabilities $ 22,289 $ 14,615 $ 5,009

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

(III) Fair value information

1. 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:

~70~

• 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 Group's investment in listed stocks is of 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 fair value of the Group's investment in equity investment without active markets is of Level 3.

• For financial instruments not measured at fair value, including cash and cash equivalents, financial assets measured at amortized cost, notes receivable, accounts receivable (including related parties), other receivables, short-term borrowings, notes payable, accounts payable (including related parties), 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 Group classifies its assets and liabilities according to their nature; the information is as follows:

December 31, 2023 Assets Recurring Fair value Financial assets at fair value through profit or loss Beneficiary certificates Equity securities Total December 31, 2022 Assets Recurring Fair value Financial assets at fair value through profit or loss	Level 1 $ 34,616 211,975 $246,591 Level 1	Level 2 $ - - $- Level 2	Level 3 $ - 15,350 $ 15,350 Level 3	Total
				$ 34,616 227,325 $261,941 Total

~71~

Beneficiary certificates Financial assets at fair value through other comprehensive income Equity securities Total	$115,490 127,033 $242,523	$ - - $-	$ - 15,350 $ 15,350	$115,490 142,383 $257,873

• (2) Methods and assumptions used by the Group to measure the fair value are as follows:

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

Stocks of publicly quoted entity Beneficiary certificates Quoted market price Closing market prices Net Value

Beneficiary Stocks of publicly quoted entity certificates

Quoted market price Closing market prices Net Value

• 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 valuation of derivative instruments is based on the valuation model that is widely accepted by market users, such as the discount method. Structured interest rate derivatives are valued by the estimation of future cash flows at contractual interest rates.

• D. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group's financial and non-financial instruments. Therefore, the estimated value of the evaluation model will be adjusted according to additional parameters,

~72~

such as model risk or liquidity risk. According to the Group's fair value evaluation model management policy and 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.

E. The Group takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Group's credit quality.

1. For the years ended December 31, 2023 and 2022, there were no transfers between Level 1 and Level 2.

2. The following chart indicates the movement of Level 3 for the years ended December 31, 2023 and 2022:

January 1 (i.e. December 31)	2023 Equity Instruments $ 15,350	2022 Equity Instruments $ 15,350

1. For the years ended December 31, 2023 and 2022, there were no transfers into or out of Level 3.

2. The finance department of the Group 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 backtesting, 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:

Fair value as of Significant Relationship December 31, Valuation unobservable between input 2023 technique input values value and fair

~73~

value

Non-derivative equity instruments : Shares of non-publicly quoted entity $ 15,350 Fair value as of December 31, 2022 Non-derivative equity instruments : Shares of non-publicly quoted entity $ 15,350	Non-derivative equity instruments : Shares of non-publicly quoted entity $ 15,350 Fair value as of December 31, 2022 Non-derivative equity instruments : Shares of non-publicly quoted entity $ 15,350	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
	December 31, 2022
		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 Group 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:

Financial assets Equity Instruments Financial assets	Input value	Changes	December 31, 2023	December 31, 2023	December 31, 2023
			Recognized in other comprehensive income
			Favorable changes		Adverse changes
	Lack of market liquidity discount and expected volatility of equity value Input value	±1% Changes	$
				Recognized in other comprehensive income
			Favorable changes		Adverse changes

~74~

Equity Instruments Lack of market liquidity discount and expected volatility of equity value ±1% $	154 $	154

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: None.

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 paidin capital or more: Please refer to Table 3.

8. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to Table 4.

9. Derivative transactions: None.

10. Parent-subsidiary and subsidiary-subsidiary business relations and significant transactions and amounts thereof: Please refer to Table 5.

(II) Information on investees

Information on investees (not including investees in Mainland China): Please refer to Table 6.

(III) Information on investments in Mainland China

1. Basic information: Please refer to Table 7.

2. Significant transactions between the Group and investees in Mainland China directly or indirectly through entities in a third area: Please refer to Table 8.

3. (IV) Information on major shareholders

Information on major shareholders: Please refer to Table 9.

~75~

XIV. Segment Information

• (I) General information

The Board of Directors of the Group operates business and makes decisions by product types, which are divided into consumer electronic products and AI servers (namely, reportable segments).

• (II) Segment Information

The information for departments that should issue a report to the chief operating decision maker is as follows:

2023 Consumer goods AI servers and related products External revenue $ 3,355,003 $ 3,468,396 Internal department revenue 9,230 165,324 Segment revenue $ 3,364,233 $ 3,633,720 Segment profit or loss $ 171,131 $ 145,517 2022 Consumer goods AI servers and related products External revenue $ 3,959,918 $ 2,238,756 Internal department revenue 9,089 270,250 Segment revenue $ 3,969,007 $ 2,509,006 Segment profit or loss$ 329,461 $ 87,943	Consumer goods	Consumer goods	Consumer goods		AI servers and related products	Adjust and write off $ - ( 174,554) ($ 174,554) ($ 83,443) Adjust and write off $ - ( 279,339) ($ 279,339) ($ 53,939)	Adjust and write off	Adjust and write off
	$ 3,355,003 9,230				$ 3,468,396 165,324		$ - ( 174,554)
	$ 3,364,233				$ 3,633,720 $ 145,517		($ 174,554)
	$ 171,131						($ 83,443)
						$ - ( 279,339) ($ 279,339) ($ 53,939)

(III) Information on the adjustment of segment profit or loss

1. No reconciliation is necessary as the Group’s chief operating decision maker assesses segment performance and decide on the allocation of resources based on profit after tax.

2. The measurement method used for total amount of assets reported to the chief operating decision maker is the same as that used for the total amount of assets stated in the financial statements.

(IV) Information on products and services

Please refer to Note 6 (q).

~76~

(V) Geographical information

China Taiwan	2023 Revenue Non-current assets $ 6,821,806 $ 215,766 1,593 57,422 $ 6,823,399 $ 273,188	2023 Revenue Non-current assets $ 6,821,806 $ 215,766 1,593 57,422 $ 6,823,399 $ 273,188	2023 Revenue Non-current assets $ 6,821,806 $ 215,766 1,593 57,422 $ 6,823,399 $ 273,188	2022 Revenue Non-current assets $ 6,189,415 $ 233,945 9,259 54,224 $ 6,198,674 $ 288,169	2022 Revenue Non-current assets $ 6,189,415 $ 233,945 9,259 54,224 $ 6,198,674 $ 288,169	2022 Revenue Non-current assets $ 6,189,415 $ 233,945 9,259 54,224 $ 6,198,674 $ 288,169
	Revenue			Revenue
	$ 6,821,806 1,593		$ 215,766 57,422 $ 273,188	$ 6,189,415 9,259		$ 233,945 54,224 $ 288,169
	$ 6,823,399			$ 6,198,674

(VI) Key accounts information

10C001 16L002	2023 $ 1,993,079 505,060	202 $ 2,092,517 491,629

~77~

Chaintech Technology Corporation

Endorsements and Guarantees January 1 to December 31, 2023

Table 1

Unit: NT$ thousands (Unless specified otherwise)

No. (Note 1)	Endorser/Guarantor	Subject of endorsements and guarantees	Subject of endorsements and guarantees	Ceiling limit on endorsements and guarantees for a single entity (Note 3)	Maximum balance of endorsement s and guarantees for the period (Note4)	Balance of endorsements and guarantees at end of period	Endorsements and guarantees used	Endorsement s and guarantees secured with collateral	Ratio of aggregated endorsement s and guarantees to net value in the most recent financial statements	Ceiling limit on endorsements and guarantees (Note 3)	Parent providing endorsemen ts and guarantees for subsidiary (Note 5)	Subsidiary providing endorsement s and guarantees for parent (Note 5)	Endorsement s and guarantees involving Mainland China (Note 5)	Remark
		Company name	Relationship (Note 2)
0 0	Chaintech Technology Corporation Chaintech Technology Corporation	Sitonholy (Tianjin) Technology Co., Ltd. Beijing Sitonholy Technology Co., Ltd.	2 2	$ 1,089,226 1,089,226	$ 80,010 35,560	$ 21,635 -	$ 21,635 -	$ - -	0.99% 0.00%	$ 1,089,226 1,089,226	Y Y	N N	Y Y

Note 1: Explanations are as follows:

• (1) The issuer shall fills in 0.

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

• Note 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.

Table - Page 1

Note 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.

• Note 4: The maximum balance of endorsement/guarantee provided to others in the current year.

Note 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 - Page 2

Chaintech Technology Corporation

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

December 31, 2023

Table 2

Table 2 Companyholdingsecurities	Type and name of securities	Relationship with the issuer of securities	Accountingitem		End ofperiod		Unit: NT$ thousands (Unless specified otherwise) Fair value Remark $ 211,975 - 15,350 - 34,616 -
				Number of shares	Carryingamount	Shareholdingratio	Fair value
Chaintech Technology Corporation Chaintech Technology Corporation 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	- - -	Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Financial asset at fair value through profit and loss - current	3,050,000 510,204 -	$ 211,975 15,350 34,616	3.43% 1.81% -	$ 211,975 15,350 34,616	- - -

Table - Page 3

Chaintech Technology Corporation

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

January 1 to December 31, 2023

Table 3 Company	Counterparty	Relationship		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) Balance Percentage of total notes and accounts receivable (payable) Remark $ 614,091 60.56% -	Unit: NT$ thousands (Unless specified otherwise) Ratio of notes and accounts receivable (payable) Balance Percentage of total notes and accounts receivable (payable) Remark $ 614,091 60.56% -	Unit: NT$ thousands (Unless specified otherwise) Ratio of notes and accounts receivable (payable) Balance Percentage of total notes and accounts receivable (payable) Remark $ 614,091 60.56% -
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit period	Unit price	Credit period	Balance	Percentage of total notes and accounts receivable (payable)
Chaintech Technology Corporation	Colorful Technology Co.,Ltd.	100% reinvestment business by Colorful Group	Sales	$ 1,933,079	28.33%	OA 45～125天	不適用	不適用	$ 614,091	60.56%	-

Table - Page 4

Chaintech Technology Corporation

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

December 31, 2023

Table 4 Company	Counterparty	Relationship	Balance of receivables from related parties	Turnover rate	Overdue receivables from related parties	Overdue receivables from related parties	Unit: NT$ thousands (Unless specified otherwise) Receivables from related parties recoverable after period Allowances for losses $ 321,184 ($ 246)	Unit: NT$ thousands (Unless specified otherwise) Receivables from related parties recoverable after period Allowances for losses $ 321,184 ($ 246)
					Amount	Handling method
Chaintech Technology Corporation	Colorful Technology Co.,Ltd.	100% reinvestment business by Colorful Group	Accounts receivable $ 614,091	3.39	$ -	-	$ 321,184	($ 246)

Table - Page 5

Chaintech Technology Corporation

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

January 1 to December 31, 2023

Table 5

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	Chaintech Technology Corporation Chaintech Technology Corporation	Shenzhen Jinghong Digital R&D Service Co., Ltd. Shenzhen Jinghong Digital R&D Service Co., Ltd.	Parent company to a subsidiary Parent company to a subsidiary	Operating expenses Other payables	$ 9,821 1,513	Agreed by both parties Agreed by both parties	0.14% 0.04%

Note 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.

Note 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 - Page 6

Chaintech Technology Corporation

Information on Investees (Not Including Investees in Mainland China)

January 1 to December 31, 2023

Table 6 Investor	Investee company	Location	Main businesses and products	Initial amount	of investment	Shareholding at end of period	Shareholding at end of period	Shareholding at end of period	Investee company	Unit: NT$ thousands (Unless specified otherwise) Gain (loss) on investment for the period Remark $ - Note 1	Unit: NT$ thousands (Unless specified otherwise) Gain (loss) on investment for the period Remark $ - Note 1
				December 31, 2023	December 31, 2022	Number of shares	Percentage	Carrying amount	Current Profit and Loss
Chaintech Technology Corporation	uSenlight Corporation	Republic of China	Electronics, computers, and peripherals	$ 150,000	$ 150,000	1,250,000	6.13%	$ -	$ -	$ -	Note 1

Note 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 - Page 7

Chaintech Technology Corporation

Information on Investments in Mainland China - Basic Information

January 1 to December 31, 2023

Table 7

Unit: NT$ thousands (Unless specified otherwise)

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 or recovered	Accumulated investment amount remitted from Taiwan at end of period	Profit or loss of investee for the period	Percentage of ownership (direct or indirect)	Gain (loss) on investment for the period (Note 2)	Carrying amount of investments at end of period	Gain (loss) on investment recovered as of the period	Remark
					Remittance	Recovery
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 13,160	1 3 3 3 3	$ 499,065 - - - -	$ - - - - -	$ - - - - -	$ 499,065 - - - -	$ 74,944 145,517 ( 11,393) 29,964 ( 1,652)	100 51 51 51 51	$ 74,944 74,214 ( 5,810) 15,281 ( 843)	$ 673,115 750,452 39,121 49,375 11,355	$ - - - - -	- - - - -

Note 1: The method of investment in Mainland China includes the following three 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. Note 2: The valuation is recognized in the financial statements audited by the CPAs of the parent company in Taiwan.

Accumulated investment amount remitted from Taiwan to Mainland China at Investment amount authorized by Investment Ceiling on investment in Mainland China regulated by Investment Company name end of period Commission, M.O.E.A. Commission, M.O.E.A. Chaintech Technology Corporation $ 499,065 $ 544,794 $ 1,512,491

Note 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.

Note 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 - Page 8

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

January 1 to December 31, 2023

Table 8 Investee in Mainland China Shenzhen Jinghong Digital R&D Service Co., Ltd. Sitonholy (Tianjin) Technology Co., Ltd.	Sales (purchases) Amount % $ - - - -	Property transactions Amount % $ - - - -	Accounts receivable (payable) Balance % ($ 1,513) - - -	Endorsements and guarantees or collateral provided Balance at end of period Purpose $ - - 21,635 Supplier credit limit utilization		Financing	Financing	Unit: NT$ thousands (Unless specified otherwise) Interest for the period Others $ - Operating expenses $9,821 - -	Unit: NT$ thousands (Unless specified otherwise) Interest for the period Others $ - Operating expenses $9,821 - -
		Amount $ - -	Balance ($ 1,513) -	Balance at end of period $ - 21,635	Highest balance for the period $ - -	Balance at end of period $ - -	Interest range - -
									Operating expenses $9,821 -

Table 9 Page 1

Chaintech Technology Corporation Information on major shareholders December 31, 2023

Table 9

Table 9
Name of major shareholder Yeland International Development Ltd.	Shareholding
	Number of shares 24,517,080	Shareholding ratio
		25.40%

Yeland International Development Ltd.

• Note 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.

• Note 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 9 Page 2