Stock Code:4555

TAIWAN CHELIC CO., LTD.

Parent Company Only Financial Statements and Independent Auditors' Report

2025 and 2024

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

Address: No. 21, Guifeng St., Taishan Dist., New Taipei, Taiwan

TEL:(02)29041235

§Table of Contents§

Item		Page	No. of notes to financial statements
I.	Cover Page	1	-
II.	Table of Contents	2	-
III.	Independent Auditors' Review Report	3~6	-
IV.	Parent Company Only Balance Sheets	7	-
V.	Parent Company Only Statement of Comprehensive Income	8~10	-
VI.	Parent Company Only Statement of Changes in Equity	11	-
VII.	Parent Company Only Statement of Cash Flow	12~13	-
VIII.	Notes to the Parent Company Only Financial Statements
	(I) Company History	14	1
	(II) Approval Date and Procedures of the Financial Statements	14	2
	(III) Application of New, Revised, and Amended Standards and Interpretations	14~17	3
	(IV) Summary of Significant Accounting Policies	17~30	4
	(V) Main Source of Significant Accounting Judgment, Estimation, and Assumption Uncertainties	30	5
	(VI) Descriptions of Material Accounting Items	31~66	6~27
	(VII) Related Party Transactions	66~69	28
	(VIII) Pledged and Mortgaged Assets	70	29
	(IX) Significant Contingent Liabilities and Unrecognized Contract Commitments	70	30
	(X) Significant Disaster Loss	-	-
	(XI) Significant Subsequent Events	70	31
	(XII) Others	70~71	32
	(XIII) Supplementary Disclosure
	1. Information on significant transactions	71, 73~76	33
	2. Information on reinvestment	71, 77	33
	3. Information on investment in mainland China	71~72, 78~80	33
	(XIV) Department Information	-	-
IX.	Schedule of Important Accounts	81~92	-

Independent Auditors' Review Report

To TAIWAN CHELIC CO., LTD.:

Audit Opinion

We have audited the accompanying parent company only balance sheets of TAIWAN CHELIC CO., LTD. (hereinafter referred to as the “Company”) as of December 31, 2025 and 2024, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years from January 1 to December 31, 2025 and 2024, and notes to the parent company only financial statements, including a summary of material accounting policies.

In our opinion, based on our audits, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of TAIWAN CHELIC CO., LTD. as of December 31, 2025 and 2024, and its financial performance and its cash flows for the years from January 1 to December 31, 2025 and 2024 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Audit Opinion

We conducted our audits in accordance with the CPA Auditing Certification Rules and auditing standards. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. The personnel of our firm who are subject to independence requirements have remained independent of TAIWAN CHELIC CO., LTD. in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China and fulfilled all other responsibilities thereunder. We believe that we have obtained sufficient and appropriate audit evidence to provide a basis for our audit opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of TAIWAN CHELIC CO., LTD.'s Parent Company Only Financial Statements of 2025. These matters were addressed in the context of our audit of the Parent Company Only Financial Statements as a whole, and in forming our opinion thereon, and we do

not provide a separate opinion on these matters.

Below is a summary of the key audit matters of TAIWAN CHELIC CO., LTD. Parent Company Only Financial Statements for the year ended December 31, 2025:

Key Audit Matters

TAIWAN CHELIC CO., LTD. has a wider customer base and is mainly engaged in production and sale of "pneumatic components". Considering marketplace competition and the obligation to fulfill shareholders' and external investors' expectations, the management should be facing the pressure to achieve the operating revenue targets. Given so, we believe that the authenticity of sales revenue from customers who constitute a relatively high proportion of sales and whose individual change in sales is greater than the average change in sales will materially impact the financial statements, so we identify the said customers as the key audit matter. For the accounting policy for the recognition of relevant revenue, please refer to Note 4 (11) of the Parent Company Only Financial Statements; for the operating revenue related information, please refer to Note 21 of the Parent Company Only Financial Statements.

The audit procedures of the CPA included:

Understand and test the design and operating effectiveness of the internal control systems related to the occurrence of the sales of the aforementioned customers.
Select appropriate samples from the sales details of the aforementioned customers to examine original orders, external supporting documents, and collection status to verify the authenticity of the sales transactions.

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Management is responsible for the preparation and fair presentation of the Parent Company Only Financial Statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of the Parent Company Only Financial Statements that are free from material misstatement, whether due to fraud or error.

During preparation of these Parent Company Only Financial Statements, the management was also responsible for evaluating TAIWAN CHELIC CO., LTD.'s ability to continue as a going concern, disclosing, as applicable, matters related to going concern, and adopting the going concern basis of accounting, unless the management intended either to liquidate TAIWAN CHELIC CO., LTD. or to terminate its operations, or had no feasible alternatives but to do so.

TAIWAN CHELIC CO., LTD.'s governance body (including the Audit Committee) was responsible for supervising the financial reporting procedures.

Auditors' Responsibilities for the Audit of the Parent Company Only Financial Statements

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

In conducting the audit in accordance with auditing standards, we exercise professional judgment and maintained professional skepticism. The CPA also performed the following tasks:

Identify and assess the risks of material misstatement of the Parent Company Only Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. Due to fraud potentially involving collusion, forgery, intentional omissions, misrepresentations, or the override of internal control, the risk of not detecting a material misstatement resulting from fraud is higher than that from error.
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 TAIWAN CHELIC CO., LTD.'s internal control.
Evaluate the appropriateness of the accounting policies used by management and the reasonableness of the accounting estimates and related disclosures.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on TAIWAN CHELIC CO., LTD.'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 Parent Company Only Financial Statements or, if such disclosures are inadequate, to modify our opinion. The CPA's conclusion is based on the audit evidence obtained up to the date of the audit report. However, future events or conditions may cause TAIWAN CHELIC CO., LTD. to cease to continue as a going concern.
Evaluate the overall presentation, structure, and content of the Parent Company Only Financial Statements (including relevant notes), and whether the Parent Company Only Financial Statements fairly represent the underlying transactions and events.
5 -

Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within TAIWAN CHELIC CO., LTD. to express an opinion on the Parent Company Only Financial Statements. We are responsible for the direction, supervision, and execution of the audit of TAIWAN CHELIC CO., LTD. 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 relevant ethical requirements regarding independence under The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and communicate to them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of TAIWAN CHELIC CO., LTD.'s 2025 Parent Company Only Financial Statements and are therefore the key audit matters. We describe these matters in the audit report unless law or regulation precludes public disclosure or, in extremely rare circumstances, we determine that a specific matter should not be communicated in the report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits.

Deloitte & Touche Taiwan
CPA: Li-Wei Liu
CPA: Cheng-Chuan Yu

Approval Document No. by the Financial Supervisory Commission
Financial-Supervisory-Securities-Auditing No. 1110348898

Approval Document No. by the Securities and Futures Commission
Taiwan-Financial-Securities-Sixth No. 0930128050

March 26, 2026

TAIWAN CHELIC CO., LTD.
Parent Company Only Balance Sheets
December 31, 2025 and 2024
Unit: In Thousands of New Taiwan Dollars

Code	Assets	December 31, 2025		December 31, 2024
		Amount	%	Amount	%
CURRENT ASSETS
1100	Cash and cash equivalents (Notes 4 and 6)	$ 474,218	12	$ 443,736	11
1110	Financial assets at fair value through profit or loss - current (Note 7)	450	-	-	-
1150	Notes receivable, net (Notes 4, 9 and 21)	7,526	-	8,637	-
1170	Accounts receivable, net (Notes 4, 9 and 21)	37,080	1	39,105	1
1180	Accounts receivable from related parties (Notes 4, 9, 21 and 28)	61,742	2	61,094	2
1200	Other receivables (Notes 4 and 9)	59	-	38	-
1210	Other receivables due from related parties (Notes 4 and 28)	10,238	-	-	-
1220	Current tax assets (Notes 4 and 23)	8,175	-	9,624	-
130X	Inventories (Notes 4 and 10)	222,507	5	253,853	6
1479	Other current assets (Note 14)	9,205	-	5,736	-
11XX	Total current assets	831,200	20	821,823	20
NON-CURRENT ASSETS
1520	Financial assets at FVTOCI (Notes 4 and 8)	1,523	-	-	-
1550	Investments accounted for using equity method (Notes 4 and 21)	2,567,888	63	2,497,173	62
1600	Net of property, plant and equipment (Notes 4, 12, 28 and 29)	639,141	16	653,702	17
1821	Intangible assets (Notes 4 and 13)	5,097	-	4,905	-
1840	Deferred income tax assets (Notes 4 and 23)	43,442	1	41,866	1
1990	Other non-current assets (Note 14)	9,813	-	2,312	-
15XX	Total non-current assets	3,266,904	80	3,199,958	80
1XXX	Total assets	$ 4,098,104	100	$ 4,021,781	100
Code	Liabilities and equity
CURRENT LIABILITIES
2100	Short-term loans (Note 15)	$ 150,000	4	$ 180,000	4
2130	Contract liabilities (Notes 4 and 21)	1,592	-	1,992	-
2150	Notes payable (Note 17)	-	-	218	-
2170	Accounts payable (Note 17)	43,641	1	40,053	1
2180	Accounts payable to related parties (Note 28)	20,149	1	13,527	-
2219	Other payables (Note 18)	36,456	1	34,601	1
2230	Current tax liabilities (Notes 4 and 23)	332	-	885	-
2322	Long-term borrowings due within one year (Notes 15 and 29)	51,439	1	59,831	2
2321	Bonds payable, current portion (Notes 4, 16 and 29)	-	-	556,139	14
2399	Other current liabilities (Note 18)	1,904	-	1,546	-
21XX	Total current liabilities	305,513	8	888,792	22
NON-CURRENT LIABILITIES
2530	Bonds payable (Notes 4, 16 and 29)	474,789	11	-	-
2540	Long-term borrowings (Notes 15 and 29)	476,593	12	309,476	8
2570	Deferred income tax liabilities (Notes 4 and 23)	-	-	746	-
2670	Other non-current liabilities (Note 18)	2	-	2	-
25XX	Total non-current liabilities	951,384	23	310,224	8
2XXX	Total liabilities	1,256,897	31	1,199,016	30
Equity (Note 20)
3110	Capital stock	699,876	17	699,840	17
3200	Capital surplus	735,215	18	729,041	18
Retained earnings
3310	Legal reserve	314,038	8	314,038	8
3320	Special reserve	104,621	2	190,924	5
3350	Unappropriated retained earnings	1,075,164	26	975,298	24
3300	Total retained earnings	1,493,823	36	1,480,260	37
Other equity interest
3410	Exchange differences from the translation of financial statements of foreign operations	( 92,207 )	( 2 )	( 101,957 )	( 2 )
3420	Unrealized Gain (Loss) on Financial Assets at FVTOCI	26,833	-	15,581	-
3400	Total other equity interests	( 65,374 )	( 2 )	( 86,376 )	( 2 )
3500	Treasury stock	( 22,333 )	-	-	-
3XXX	Total equity	2,841,207	69	2,822,765	70
Total liabilities and equity		$ 4,098,104	100	$ 4,021,781	100

The accompanying notes are an integral part of the Parent Company Only Financial Statements.
ChairmanYU, PING-CHENG
Executive officers: YU, PING-CHENG
Accounting Supervisor: SU, CHIH-AN

TAIWAN CHELIC CO., LTD.

Parent Company Only Statement of Comprehensive Income

January 1 through December 31, 2025 and 2024

Unit: NT$1000, except earnings (losses) per share, which is expressed in NT$1

Code		2025		2024
		Amount	%	Amount	%
4100	Revenue
	Sales revenue (Notes 4, 21, and 28)	$ 440,267	100	$ 434,692	100
5110	COST OF REVENUE
	Cost of goods sold (Notes 10, 22 and 28)	( 315,061 )	( 71 )	( 307,063 )	( 71 )
5900	GROSS PROFIT	125,206	29	127,629	29
5910	Unrealized gains on sales to subsidiaries, associates, and joint venture (Notes 4 and 11)	( 16,093 )	( 4 )	( 21,485 )	( 5 )
5920	Realized gains on sales to subsidiaries, associates, and joint venture (Note 4)	21,485	5	24,262	6
5950	Realized gross profit	130,598	30	130,406	30
	Operating expenses (Notes 22 and 28)
6100	Selling expenses	( 44,087 )	( 10 )	( 46,253 )	( 11 )
6200	Administrative expenses	( 63,279 )	( 15 )	( 57,069 )	( 13 )
6300	Research and development expenses	( 35,059 )	( 8 )	( 31,923 )	( 7 )
6000	Total operating expenses	( 142,425 )	( 33 )	( 135,245 )	( 31 )
6900	Operating Losses	( 11,827 )	( 3 )	( 4,839 )	( 1 )
	Non-operating income and expenses (Notes 4, 22, and 28)
7100	Interest revenue	3,672	1	2,615	1
7010	Other income	279	-	1,778	-
7020	Other gains and losses	( 5,432 )	( 1 )	5,769	1
7050	FINANCE COSTS	( 26,797 )	( 6 )	( 24,742 )	( 6 )

(Continued)

Code		2025		2024
		Amount	%	Amount	%
7070	Share of profit and loss in subsidiaries, associates, and joint ventures recognized using the equity method	51,983	12	( 43,896 )	( 10 )
7000	Total non-operating income and expenses	23,705	6	( 58,476 )	( 14 )
7900	Profit (loss) before income tax	11,878	3	( 63,315 )	( 15 )
7950	Income tax benefit (Notes 4 and 23)	1,685	-	3,407	1
8000	Net profit (loss) for the year	13,563	3	( 59,908 )	( 14 )
	OTHER COMPREHENSIVE INCOME (LOSS) (Notes 4 and 20)
8310	Items not reclassified to profit or loss
8316	Unrealized gain/ (loss) on investments in equity instruments at FVTOCI	443	-	-	-
8330	Share of other comprehensive income in subsidiaries accounted for using the equity method	10,809	3	15,874	4
		11,252	3	15,874	4
8360	Items that may be reclassified subsequently to profit or loss
8361	Exchange differences from the translation of financial statements of foreign operations	12,187	3	88,036	20
8399	Income tax related to items that might be reclassified to profit or loss (Note 23)	( 2,437 )	( 1 )	( 17,607 )	( 4 )
		9,750	2	70,429	16

(Continued)

Code		2025		2024
		Amount	%	Amount	%
8300	Other comprehensive income for the year, net of income tax	21,002	5	86,303	20
8500	Total comprehensive income for the year	$ 34,565	8	$ 26,395	6
	Earnings (Losses) per share (Notes 2 and 4)
9710	Basic	$ 0.19		($ 0.86)
9810	Diluted	$ 0.19

The accompanying notes are an integral part of the Parent Company Only Financial Statements.

Chairman: YU, PING-CHENG

Executive officers: YU, PING-CHENG

Accounting Supervisor: SU, CHIH-AN

TAIWAN CHELIC CO., LTD.

Parent Company Only Statement of Changes in Equity

January 1 through December 31, 2025 and 2024

Unit: In Thousands of New Taiwan Dollars

Code		Share capital	Capital surplus	Retained earnings			Other equity interest		Treasury stock	Total equity
				Legal reserve	Special reserve	Unappropriated retained earnings	Exchange differences from the translation of financial statements of foreign operations	Unrealized Gain (Loss) on Financial Assets at FVTOCI
A1	Balance as of January 1, 2024	$ 693,132	$ 733,519	$ 314,038	$ 155,050	$ 1,071,080	($ 172,386)	($ 293)	$ -	$ 2,794,140
B3	Appropriation and distribution of earnings in 2023 (Note 20)
	Special reserve	-	-	-	35,874	(35,874)	-	-	-	-
C15	Cash dividends distributed from capital surplus (Note 20)	-	(34,830)	-	-	-	-	-	-	(34,830)
I1	Conversion of convertible corporate bonds (Notes 16 and 20)	6,708	30,352	-	-	-	-	-	-	37,060
D1	Net Loss for 2024	-	-	-	-	(59,908)	-	-	-	(59,908)
D3	Other comprehensive income (loss) after tax for 2024	-	-	-	-	-	70,429	15,874	-	86,303
D5	Total comprehensive income for 2024	-	-	-	-	(59,908)	70,429	15,874	-	26,395
Z1	Balance as of December 31, 2024	699,840	729,041	314,038	190,924	975,298	(101,957)	15,581	-	2,822,765
B3	Appropriation and distribution of earnings in 2024 (Note 20)
	Special reserve	-	-	-	(86,303)	86,303	-	-	-	-
C15	Cash dividends distributed from capital surplus (Note 20)	-	(34,992)	-	-	-	-	-	-	(34,992)
C5	Recognizing the equity component of issued convertible corporate bonds (Notes 16 and 20)	-	41,002	-	-	-	-	-	-	41,002
I1	Conversion of convertible corporate bonds (Notes 16 and 20)	36	164	-	-	-	-	-	-	200
D1	Net profit for 2025	-	-	-	-	13,563	-	-	-	13,563
D3	Other comprehensive income (loss) after tax for 2025	-	-	-	-	-	9,750	11,252	-	21,002
D5	Total comprehensive income for 2025	-	-	-	-	13,563	9,750	11,252	-	34,565
L1	Treasury stock acquired (Note 20)	-	-	-	-	-	-	-	(22,333)	(22,333)
Z1	Balance as of December 31, 2025	$ 699,876	$ 735,215	$ 314,038	$ 104,621	$ 1,075,164	($ 92,207)	$ 26,833	($ 22,333)	$ 2,841,207

Chairman: YU, PING-CHENG

The accompanying notes are an integral part of the Parent Company Only Financial Statements.

Executive officers: YU, PING-CHENG

Accounting Supervisor: SU, CHIH-AN

TAIWAN CHELIC CO., LTD.

Parent Company Only Statement of Cash Flow

January 1 through December 31, 2025 and 2024

Unit: In Thousands of New Taiwan Dollars

Code		2025	2024
	CASH FLOWS FROM OPERATING ACTIVITIES
A10000	Profit (loss) before income tax	$ 11,878	($ 63,315)
A20010	Profit and loss items
A20100	Depreciation expense	32,319	35,177
A20200	Amortization expenses	2,693	2,511
A20400	Net loss on financial assets and liabilities at FVTPL	441	-
A20900	Finance costs	26,797	24,742
A21200	Interest revenue	( 3,672 )	( 2,615 )
A22400	Share of profit in subsidiaries, associates, and joint ventures recognized using the equity method	( 51,983 )	43,896
A22500	Gain on disposal of property, plant and equipment	( 1,357 )	-
A23900	Unrealized sales gains	16,093	21,485
A24000	Realized sales gains	( 21,485 )	( 24,262 )
A24100	Unrealized foreign currency exchange losses (profits)	8,757	( 3,866 )
A30000	Net changes in operating assets and liabilities:
A31130	Notes receivable	1,111	( 789 )
A31150	Accounts Receivable	1,983	( 6,270 )
A31160	Accounts receivable from related parties	( 2,724 )	( 10,531 )
A31180	Other receivables	-	( 2 )
A31200	Inventories	31,346	56,621
A31240	Other current assets	( 3,469 )	1,664
A32125	Contract liabilities	( 400 )	479
A32130	Notes payable	( 218 )	218
A32150	Accounts payable	3,588	14,601
A32160	Accounts payable to related parties	6,143	3,321
A32180	Other payables	1,335	( 5,796 )
A32230	Other current liabilities	358	233
A33000	Cash generated from operations	59,534	87,502
A33100	Interest received	3,651	2,592
A33300	Interest paid	( 14,890 )	( 15,237 )
A33500	Income tax paid	( 834 )	( 7,350 )
AAAA	Net cash generated by operating activities	47,461	67,507

(Continued)

Code		2025	2024
	CASH FLOWS FROM INVESTING ACTIVITIES
B00010	Acquisition of financial assets at fair value through other comprehensive income	( 1,080 )	-
B02200	Acquisition of subsidiaries (Note 11)	-	( 24,142 )
B02700	Acquisition of property, plant and equipment	( 13,182 )	( 13,232 )
B02800	Proceeds from disposal of property, plant and equipment	1,716	-
B04300	Additions to Other receivables due from related parties	( 10,238 )	-
B04500	Purchase of intangible assets	( 1,370 )	( 500 )
B06700	Increase (decrease) in other non-current assets	( 205 )	505
B07100	Increase in prepayments for equipment	( 13,279 )	( 1,430 )
B07600	Dividends received from subsidiaries	9,656	136,269
BBBB	Net cash inflow (outflow) from investing activities	( 27,982 )	97,470
	CASH FLOWS FROM FINANCING ACTIVITIES
C00200	Decrease in short-term loans	( 30,000 )	( 20,000 )
C01200	Convertible bonds issuance	514,385	-
C01300	Repayment of bonds	( 561,900 )	-
C01600	Proceeds from long-term bank loans	490,000	-
C01700	Repayments of long-term borrowings	( 331,275 )	( 33,529 )
C04500	Cash dividends paid	( 34,992 )	( 34,830 )
C04900	Cost of treasury stock acquired	( 22,333 )	-
C09900	Payments for transaction costs attributable to the issuance of bonds	( 6,722 )	-
CCCC	Net cash inflow (outflow) from financing activities	17,163	( 88,359 )
DDDD	Effect of exchange rate changes on cash and cash equivalents	( 6,160 )	3,520
EEEE	Increase in cash and cash equivalents	30,482	80,138
E00100	CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	443,736	363,598
E00200	CASH AND CASH EQUIVALENTS, END OF PERIOD	$ 474,218	$ 443,736

The accompanying notes are an integral part of the Parent Company Only Financial Statements.

Chairman: YU, PING-CHENG Executive officers: YU, PING-CHENG Accounting Supervisor: SU, CHIH-AN

TAIWAN CHELIC CO., LTD.
Notes to the Parent Company Only Financial Statements
January 1 to December 31, 2025 and 2024
(Otherwise Specified, amounts are in NT$ Thousands.)

I. Company History

(I) TAIWAN CHELIC CO., LTD. (the "Company" hereinafter) was duly incorporated on November 19, 1986 under the approval of the Ministry of Economic Affairs, with a registered capital of NT$2,000 thousand. The registered capital amounted to NT$699,876 thousand at present after instances of capital increase over the past years. The Company is mainly engaged in the design, production, and trading of pneumatic and hydraulic equipment for a variety of machinery, and the parts thereof, and electronic parts.

(II) Since October 27, 2015, The Company's shares have been listed and traded on the Taiwan Stock Exchange (TWSE).

(III) The Parent Company Only Financial Statements are stated in the functional currency of the Company, which is New Taiwan Dollars.

II. Approval Date and Procedures of the Financial Statements

These Parent Company Only Financial Statements were approved by the Board of Directors on March 4, 2026.

III. Application of New, Revised, and Amended Standards and Interpretations

(I) Initial application of the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC) and SIC Interpretations (SIC) (collectively "IFRS" (International Financial Reporting Standards) hereinafter) endorsed and put into effect by the Financial Supervisory Commission ("FSC" hereinafter)

Amendments to IAS 21 - "Lack of Exchangeability"

Application of the Amendments to IAS 21 - "Lack of Exchangeability" will not cause significant changes to the Company's accounting policy.

14 -

(II) The IFRS Accounting Standards endorsed by the FSC applicable in 2026

New, Amended and Revised Standards and Interpretations	Effective Date Issued by IASB
Revised IFRS 9 and IFRS 7: "Revised the Classification and Measurement of Financial Instruments"	January 1, 2026
Revised IFRS 9 and IFRS 7: "Contracts Involving Naturally Dependent Power"	January 1, 2026
Annual Improvements to IFRS Accounting Standards – Volume 11	January 1, 2026
IFRS 17 "Insurance Contracts" (including the 2020 and 2021 amendments)	January 1, 2023

As of the date the individual financial statements were approved for issuance, the Company assessed that the amendments to other standards would not have a material impact on its financial position and performance.

(III) IFRS Accounting Standards Issued by the IASB but Not Yet Endorsed and Issued into Effect by the FSC

New, Amended and Revised Standards and Interpretations	Effective Date Issued by IASB (Note 1)
Revised IFRS 10 and IAS 28, "Sale or Contribution of Assets between an Investor and its Associate or Joint Venture"	To be determined by IASB
IFRS 18: "Presentation and Disclosure in Financial Statements"	January 1, 2027 (Note 2)
IFRS 19: "Subsidiaries with No Public Accountability: Disclosure" (including the 2025 amendments)	January 1, 2027
Revised IAS 21 - "Translation to Presentation Currency under Hyperinflationary Economies"	January 1, 2027

Note 1: Unless otherwise stated, the aforementioned New, Amended and Revised Standards and Interpretations are effective for annual reporting periods beginning after the respective dates.

Note 2: On September 25, 2025, the FSC announced that companies in our country should apply IFRS 18 starting from January 1, 2028. Early application is also permitted after the FSC endorses IFRS 18.

IFRS 18: "Presentation and Disclosure in Financial Statements" and related accompanying amendments

IFRS 18 will replace IAS 1 "Presentation of Financial Statements." The main changes in this standard include:

The Company should assess whether it has specific principal operating activities that involve investing in certain types of assets and providing financing to customers, and classify the income and expense items in the statement of profit or loss into operating, investing, financing, income tax, and discontinued operations categories.
The statement of profit or loss shall present totals and subtotals for operating profit or loss, profit or loss before financing and income taxes, as well as subtotals and totals for profit or loss.
Provide guidance to strengthen the aggregation and segmentation requirements: the company should identify assets, liabilities, equity, income, expenses, and cash flows arising from individual transactions or other matters, and classify and aggregate them based on common characteristics, ensuring that each line item presented in the primary financial statements has at least one similar characteristic. Items with dissimilar characteristics should be further segmented in the primary financial statements and notes. The company should label such items as "Other" only when a more informative classification cannot be determined.
Enhance disclosure of performance measures defined by management: When the company engage in public communication outside of the financial statements, or when communicating management's perspective on a particular aspect of the overall financial performance to financial statement users, they should disclose in a single note to the financial statements the performance measures defined by management. This should include a description of the measure, how it is calculated, its reconciliation with subtotals or totals defined by IFRS standards, and the impact of related adjustments on income tax and non-controlling interests.
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In addition, the following accompanying amendments have been made to IAS 7: "Statement of Financing Cash Flows":

When The Company prepares the CASH FLOWS FROM OPERATING ACTIVITIES using the indirect method, it should use the operating Profit or loss as the starting point for adjustments.
Interest received and dividends received by the Company should be classified as investing activities, while interest paid and dividends paid should be classified as financing activities. If the Company assesses that it has specific principal operating activities, it must consider the classification of dividend income, interest income, and interest expense presented in the profit or loss statement to determine the classification of dividends received, interest received, and interest paid in the cash flow statement. However, each of the above cash flows can only be classified into a single activity in the cash flow statement.

Apart from the aforementioned effects, as of the date the individual financial statements were approved for issuance, the Company continued to assess the effects of the amendments to various standards and interpretations on its financial position and performance. The relevant effects will be disclosed once the assessment is completed.

IV. Summary of Significant Accounting Policies

(I) Compliance Statement

These Parent Company Only Financial Statements were prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(II) Basis of Preparation

The Parent Company Only Financial Statements have been prepared on the historical cost basis, except for financial instruments measured at fair value.

Fair value measurement inputs are classified into Level 1, 2, and 3 inputs based on the degree to which an input is observable and the significance of the input:

Level 1 inputs are quoted prices (unadjusted) for identical assets or liabilities in active markets that can be accessed on the measurement date.
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 inputs are unobservable inputs for the asset or liability.

When preparing the Parent Company Only Financial Statements, the Company accounted for its investment in subsidiaries using the equity method. To make the profit or loss, other comprehensive income, and equity in these Parent Company Only Financial Statements for this year consistent with the profit or loss, other comprehensive income, and equity attributable to owners of the Company in the Consolidated Financial Statements for the same year, the Company adjusted for the differences arising from the difference in accounting treatment on a consolidated basis and that on a parent company only basis through "Investments accounted for using equity method", "Share of profit or loss in subsidiaries, associates, and joint ventures recognized using the equity method", "Share of other comprehensive income in subsidiaries accounted for using the equity method".

(III) Criteria for classification of assets and liabilities as current or non-current

Current assets include:

Assets that are held mainly for trading purposes;
Assets expected to be realized within 12 months after the balance sheet date; and
Cash and cash equivalents (excluding those restricted for settlement or exchange of liabilities beyond 12 months after the balance sheet date).

Current liabilities include:

Liabilities held primarily for trading purposes;
Liabilities due for settlement within 12 months after the balance sheet date (even if a long-term refinancing or rescheduling payment agreement has been completed after the balance sheet date and before the authorization of financial statements are still classified as current liabilities), and
Liabilities for which there is no substantive right to defer settlement for at least 12 months after the balance sheet date.

Assets or liabilities that do not belong to the above current assets or current liabilities are classified as non-current assets or non-current liabilities.

(IV) Foreign Currencies

When preparing the Parent Company Only Financial Statements, the Company converted the transactions denominated in currencies other than its functional currency (i.e., foreign currencies) into its functional currency by applying the exchange rate prevailing on the transaction date.

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Foreign currency monetary items are translated at the closing exchange rate on each balance sheet date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise.

Non-monetary items in foreign currencies measured at fair value are translated using the exchange rate on the date the fair value is determined, and the resulting exchange differences are recognized in current profit or loss, except for those changes in fair value recognized in other comprehensive income or loss, where the resulting exchange differences are included in other comprehensive income.

Non-monetary items in foreign currencies measured at historical cost are translated using the exchange rate at the date of transaction and are not retranslated.

During preparation of the Parent Company Only Financial Statements, the assets and liabilities of foreign operations are converted into NTD at the exchange rate prevailing on each balance sheet date. The income and expense items are converted at the average exchange rate of the period, and the exchange differences resulting therefrom are recognized in other comprehensive income.

(V) Inventories

Inventories include raw materials, finished goods, work in process, and merchandise. Inventories are measured at the lower of cost and net realizable value. When comparing cost with net realizable value, it is based on an item by item basis, except for inventories of the same category. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. The Cost of inventories is calculated using the weighted average method.

(VI) Investment in subsidiary

The Company accounted for its investment in subsidiaries using the equity method.

Subsidiary means an entity over which the Company has control.

Under the equity method, the investment is initially recognized at its costs and the amount of increase or decrease in the carrying amount of such investment after the date of acquisition depends on the Company's shares of profit/loss and other comprehensive income in the subsidiaries and the distributed profits. In addition, changes in the Company's share of other equity in subsidiaries are recognized in proportion to its shareholding percentage in the subsidiaries.

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When the Company's change in the ownership interest in a subsidiary does not result in the loss of control, such change is accounted for as an equity transaction. The differences between the book value of investments and the fair value of the consideration paid or received are recognized directly in equity.

For the purpose of assessing impairment losses, the Company takes the cash generating units in the financial statements as a whole and compares their book value and recoverable amount. If the recoverable amount of the asset increases later, the reversed impairment loss will be recognized as gains. However, the increased book value of an asset attributable to a reversal of an impairment loss shall not exceed the book value that would have been determined (net of amortization) had no impairment loss been recognized for the asset.

The unrealized gains and losses from downstream transactions between the Company and its subsidiaries are eliminated in the Parent Company Only Financial Statements. The gains or losses from upstream or sidestream transactions between the Company and its subsidiaries are recognized in the Parent Company Only Financial Statements only to the extent that such gains or losses are not related to the Company's interests in the subsidiaries.

(VII) Property, plant and equipment

Property, plant and equipment are initially recognized at cost and subsequently measured at cost less accumulated depreciation and accumulated impairment.

Except for land, which is not depreciated, property, plant, and equipment are depreciated on a straight-line basis over their useful lives, with each significant component being depreciated separately. The Company reviews the estimated useful life, residual value, and method of depreciation at least once before the end of each year and prospectively recognizes the effect from changes in accounting estimates.

When property, plant and equipment are derecognized, the difference between the net proceeds from disposal and the asset carrying amount is recognized in profit or loss.

(VIII) Intangible assets

Acquired separately

Separate acquisitions of intangible assets with finite useful lives are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment. Intangible assets are amortized on

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a straight-line basis over their useful lives. The Company reviews the estimated useful life, residual value, and method of amortization at least once before the end of each year and prospectively recognizes the effect from changes in accounting estimates.

Derecognition

When an intangible asset is derecognized, the difference between the net disposal proceeds and the asset's carrying amount is recognized in profit or loss for the current period.

(IX) Impairment of property, plant, and equipment and intangible assets

The Company assesses whether there are any signs indicating that any property, plant, and equipment or intangible assets might be impaired on each balance sheet date. If any indication of impairment exists, the recoverable amount of the asset is estimated. When the recoverable amount of an individual asset cannot be estimated, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The recoverable amount is the higher of the fair value less costs of sale and the value in use. When the recoverable amount of an individual asset or a cash-generating unit is less than its carrying amount, the carrying amount of that asset or cash-generating unit is adjusted down to its recoverable amount, and the impairment loss is recognized in profit or loss.

When an impairment loss is reversed in subsequent periods, the carrying amount of the asset or cash-generating unit is adjusted up to the revised recoverable amount. However, the increased carrying amount should not exceed the carrying amount that would have been determined (net of amortization or depreciation) had no impairment loss been recognized in prior years. The reversal of impairment loss is recognized in profit or loss.

(X) Financial instruments

Financial assets and financial liabilities are initially recognized in the parent company only balance sheet when the Company becomes a party to the financial instrument contract.

Financial assets or financial liabilities other than those measured at fair value through profit or loss are initially recognized at the fair value plus the transaction costs that can be directly attributable to acquisition or issuance of such financial assets or liabilities. Any transaction cost directly attributable to the acquisition or

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issuance of the financial assets or financial liabilities measured at fair value through profit or loss is immediately recognized in profit or loss.

Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a settlement date basis.

(1) Type of measurement

The Company's financial assets include financial assets at FVTPL, financial assets measured at amortized cost, and Investments in equity instruments at FVTOCI.

A. Financial assets measured at FVTPL

Financial assets at FVTPL are measured at fair value, and any gains or losses arising from remeasuring are recognized in other gains and losses. For the determination of Fair Value, please refer to Note 27.

B. Financial assets measured at cost after amortization

When the Company's invested financial assets meet both of the following two conditions, they are classified as financial assets measured at amortized cost:

a. The financial assets are held within a business model whose objective is collecting contractual cash flows; and
b. The contractual terms give rise on specified date to cash flow that are solely payments of principal and interest on the principal amount outstanding.

After the initial recognition, the financial assets measured at amortized cost (including notes receivable and accounts receivable[ [including those due from related parties], other receivables excluding tax refund receivable], and guarantee deposits paid) are measured at the amortized cost equal to the total book value determined under the effective interest method less any impairment losses, and any gain or loss from foreign currency translation is recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except under the following two circumstances:

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a. For purchased or originated credit-impaired financial assets, interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of the financial assets.

b. For financial assets that are not purchased or originated credit-impaired financial assets but somehow become impaired subsequently, the interest revenue is calculated as the effective interest rate times the amortized cost of the financial assets.

Cash equivalents include highly liquid commercial paper that is within 3 months of the date of acquisition, can be converted into a fixed amount of cash at any time, and has a very small risk of value change. It is used to meet short-term cash commitments.

C. Investments in equity instruments at FVTOCI

At initial recognition, the Company may make an irrevocable election to measure the investment in equity instruments that are held not for trading, that are not recognized by the acquirer in a business merger, and that have no consideration, at fair value through other comprehensive income.

Investment in equity instruments measured at fair value through other comprehensive income is measured at fair value. Subsequent changes in the fair value are recognized in other comprehensive income and accumulated in other equity. Upon disposal of investments, the cumulative gain or loss is transferred directly to retained earnings and is not reclassified to profit or loss.

The dividends derived investment in equity instruments measured at fair value through other comprehensive income are recognized in profit or loss when the Company's right to receive dividends is determined, except under the circumstance that such dividends apparently represent a partial return of the investment cost.

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(2) Impairment of financial assets

The Company assesses impairment losses on the financial assets (including accounts receivable) measured at amortized cost, based on the expected credit losses on each balance sheet date.

Loss allowance for accounts receivable is recognized based on the lifetime expected credit losses (ECL). Other financial assets are first assessed to determine if there has been a significant increase in credit risk since initial recognition. If there is no significant increase, a loss allowance is recognized based on the 12 months expected credit loss. If there is a significant increase, a loss allowance is recognized based on the lifetime expected credit loss.

Expected credit losses are a probability-weighted estimate of credit losses, with the respective risks of default used as the weighting. 12-month expected credit losses represent the expected credit losses that result from default events on a financial instrument that are possible within 12 months after the reporting date, whereas lifetime expected credit losses represent the expected credit losses that result from all possible default events over the expected life of the financial instrument.

For the purpose of internal credit risk management, the contract of any financial assets is deemed by the Company to be breached when any of the following circumstance occurs, without consideration of the collateral held:

A. There is internal or external information indicating that the debtor is unlikely to repay the debt.

B. More than 180 days past due, unless there is reasonable and verifiable information indicating that a delayed default criterion is more appropriate.

The impairment loss of all financial assets is reduced from their carrying amount through an allowance account.

(3) Derecognition of financial assets

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the financial asset expire, or when it transfers substantially all of the risks and rewards of ownership of the financial asset to other entities.

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When financial assets at amortized cost are fully derecognized, the difference between their carrying amount and the received considerations is recognized in profit or loss. For derecognition of the entire investments in equity instruments measured at fair value through other comprehensive income, the cumulative gain or loss is directly transferred to retained earnings and not reclassified as profit or loss.

Equity instruments

Debt and equity instruments issued by the Company are classified as financial liabilities or equity according to the substance of the contract agreement and the definition of financial liabilities and equity instruments.

Equity instruments issued by the Company are recognized at the amount of consideration received, less the direct cost of issuance.

The re-acquisition of the Company's own equity instruments is recognized and deducted under equity. Purchases, sales, issuance, or cancellation of the Company's own equity instruments are not recognized in profit or loss.

Financial liabilities

(1) Subsequent measurement

All financial liabilities are measured at amortized cost using the effective interest method.

(2) Derecognition of financial liabilities

When Financial liabilities are derecognized, the difference between their carrying amount and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

Convertible corporate bonds

The components of the compound financial instrument (convertible corporate bonds) issued by the Company are classified into financial liabilities and equity upon initial recognition of such bonds according to the substance of the contract agreement and the definition of financial liabilities and equity instruments.

At initial recognition, the Fair Value of the liability component is estimated using the prevailing market interest rate of a similar non-convertible instrument and is subsequently measured at amortized cost using

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the effective interest method until conversion or the maturity date. The liability component containing an embedded derivative that is not an equity component is measured at fair value.

The conversion option classified as equity is determined as the residual amount, being the difference between the fair value of the compound instrument as a whole and the fair value of the liability component determined separately. It is recognized in equity, net of income tax, and is not subsequently remeasured. When the conversion option is exercised, the related liability component and the amount in equity will be transferred to share capital and capital surplus - premium on stock. If the conversion option of the convertible bonds remain unexercised at the maturity date, the amount recognized in equity will be transferred to capital surplus - premium on stock.

The related transaction costs of the issuance of convertible bonds are allocated to the liability component (included in the carrying amount of the liability) and the equity component (included in equity) in proportion to the allocated total proceeds.

Derivatives

The derivative instrument entered into by the Company is the option whose underlying assets are the Company's convertible corporate bonds.

Derivative financial instruments are initially recognized at fair value when the derivative contract is entered into, and subsequently remeasured at fair value at each balance sheet date. Any gains or losses from subsequent measurement are directly recognized in profit or loss. However, for derivative financial instruments designated as and qualifying for effective hedging instruments, the timing of recognition in profit or loss depends on the nature of the hedging relationships. When the fair value of derivative financial instruments is positive, they are categorized as financial assets; when the fair value is negative, they are categorized as financial liabilities.

If derivative financial instruments are embedded in host contracts of assets within the scope of IFRS 9 "Financial Instruments," the classification of financial assets is determined based on the entire contract. If derivative financial instruments are embedded in host contracts of assets not within the scope of IFRS 9 for financial assets (e.g., as embedded in host contracts of financial liabilities), and the embedded derivative instruments meet the

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definition of derivative financial instruments, with risks and characteristics that are not closely related to those of the host contract, and the hybrid contract is not measured at any level through profit or loss, such derivative financial instruments are treated as separate derivative.

(XI) Recognition of revenue

After identifying the performance obligations under a contract with customers, the Company allocates the transaction price to each performance obligation and recognizes the allocated amount as revenue when a performance obligation is fulfilled.

Net revenue from sale of goods

Net revenue from sale of goods mainly comes from the sale of pneumatic equipment. Since the time point at which products are shipped is the time point at which the customer has the right to the pricing and use of the products and bears the risk of obsolescence of the product, the Company recognizes revenue and accounts receivable at such a time point. Advance receipts are recognized as contract liabilities before the goods are delivered.

For materials sent out for processing, the significant risks and rewards of ownership of the processed goods are not transferred, the delivery of materials for processing is not accounted for as sales.

(XII) Leases

At inception of a contract, the Company assesses whether the contract is, or contains, a lease.

The Company as a lessor

Leases are classified as finance leases when the terms of the lease transfer substantially all the risks and rewards incidental to ownership of the underlying asset to the lessee. All other leases are classified as operating leases.

The Company as a lessee

Except for lease payments on low-value underlying asset leases and short-term leases, to which recognition exemptions apply and are recognized as expenses on a straight-line basis over the lease term, other leases are recognized as right-of-use assets and lease liabilities on the lease commencement date.

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Right-of-use assets are initially measured at cost (including the original measurement amount of lease liabilities) and subsequently measured at cost less accumulated depreciation and accumulated impairment, adjusted for any remeasurement of the lease liabilities.

Right-of-use assets are subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use assets or the end of the lease term.

Lease liabilities are initially measured at the present value of lease payments (including fixed payments). If the lease implied interest rate is easy to determine, the lease payment is discounted according to the said implied interest rate. If the rate is not readily determinable, the lessee's incremental borrowing rate is used.

Subsequently, lease liabilities are measured on an amortized cost basis using the effective interest method, and interest expense is allocated over the lease term.

(XIII) Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets until substantially all the activities necessary to prepare the assets for their intended use or sale are complete.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on a qualifying asset is deducted from the borrowing costs eligible for capitalization.

Apart from the aforementioned, all other borrowing costs are recognized in profit or loss in the period in which they are incurred.

(XIV) Government grants

A government grant is recognized only when there is reasonable assurance that (a) the Company will comply with any conditions attached to the grant and (b) the grant will be received.

If the government grants are intended to make up the expenses or losses that have occurred, or immediately finance the Company without incurring any future cost, such subsidies are recognized in profit or loss during the period when they can be received.

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(XV) Employee benefits

Short-term employee benefits

The liabilities related to short-term employee benefits are measured at the undiscounted amount expected to be paid in exchange for employee services.

Retirement benefits

The pension contributed under the Defined Contribution Pension Plan is recognized in expenses during the period when employees provide services.

(XVI) Income tax

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current income tax

The Company determines the income (loss) for the current period in accordance with the laws and regulations prevailing in each taxation jurisdiction and, based on this, calculates the income tax payable (recoverable).

The additional levy on undistributed earnings calculated according to the Income Tax Act of the Republic of China is recognized in the year when the resolution is made at the shareholders' meeting.

Income tax adjustments on prior years are included in the current income tax.

Deferred income tax

Deferred income tax arises from temporary differences generated between the carrying amounts of assets and liabilities and the tax bases used to calculate taxable income.

Deferred income tax liabilities are generally recognized for all taxable temporary differences, while deferred income tax assets are recognized when it is highly probable that there will be taxable income available to utilize deductible temporary differences.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deductible temporary differences related to such investments are recognized as deferred

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income tax assets only to the extent that it is highly probable that there will be sufficient taxable income to realize the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date, and it is reduced to the extent that it is no longer highly probable there will be sufficient taxable income to recover all or part of the assets. The previously unrecognized deferred income tax assets are also reviewed at each balance sheet date and are increased to the extent that it is highly probable that future taxable income will be available to recover all or part of the assets.

Deferred income tax assets and liabilities are measured at the tax rates expected to apply in the period in which the liability is settled or the asset realized, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects to recover or settle the carrying amount of its assets and liabilities on the balance sheet date.

3. Current and deferred income tax

Current and deferred income tax is recognized in profit or loss, except for current and deferred income tax related to items recognized in other comprehensive income or loss or directly in equity, which are recognized respectively in other comprehensive income or loss or directly in equity.

V. Main Source of Significant Accounting Judgment, Estimation, and Assumption Uncertainties

For adoption of the accounting policies, the Company's management, based on historical experience and other relevant factors, must make judgments, estimates, and assumptions related to the information that cannot be readily acquired from other sources. Actual results may differ from the estimates.

The Company takes into account the possible impact of inflation, market interest rates, and exchange rate fluctuations when making significant accounting estimates for financing cash flows, growth rate, discount rate, and profitability. The management will continue to review the estimates and basic assumptions.

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VI. Descriptions of Material Accounting Items

Cash and cash equivalents

	December 31, 2025	December 31, 2024
Cash on hand and revolving fund	$ 242	$ 124
Check deposits and demand deposits	402,948	393,110
Cash equivalents (with original maturities within 3 months)
Commercial paper	51,028	50,502
Bank time deposits	20,000	-
	$ 474,218	$ 443,736

The Interest Rate ranges for bank demand deposits, commercial paper, and bank time deposits on the balance sheet date are as follows:

	December 31, 2025	December 31, 2024
Bank demand deposits	0.01%~0.785%	0.002%~0.800%
Commercial paper	1.24%	1.170%
Bank time deposits	1.72%	-
Financial instruments at FVTPL
	December 31, 2025	December 31, 2024
Financial assets - current
Derivative financial instruments mandatorily measured at FVTPL (not designated as hedging)
- Convertible corporate bond option (Note 16)	$ 450	$ -
Financial assets measured at FVOCI
	December 31, 2025	December 31, 2024
Non-current
Investments in domestic equity instruments
Unlisted shares	$ 1,523	$ -

The Company invests in the capital stock of the aforementioned company for medium to long-term strategic purposes and expects to profit through long-term investment. The management of the Group believes that including short-term fair value fluctuations of these investments in profit or loss would not be consistent with the

aforementioned long-term investment plans. Therefore, they have elected to designate these investments to be measured at fair value through other comprehensive income.

In November 2025, the Company participated in a capital increase of an unlisted domestic company for NT$1,080 thousand, and designated it as a financial asset at FVTOCI due to its medium to long-term strategic investment purposes.

Notes receivable, accounts receivable, and other receivables

	December 31, 2025	December 31, 2024
Notes receivable
Amortized cost
Total book value	$ 7,526	$ 8,637
Less: loss allowance	-	-
	$ 7,526	$ 8,637
Accounts Receivable
Amortized cost
Total book value	$ 37,080	$ 39,105
Less: loss allowance	-	-
	$ 37,080	$ 39,105
Accounts receivable from related parties	$ 61,742	$ 61,094
Overdue receivables
Overdue receivables	$ 250	$ 250
Less: loss allowance	( 250 )	( 250 )
	$ -	$ -
Other receivables
Interests receivable	$ 57	$ 36
Others	2	2
	$ 59	$ 38

(I) Notes receivable

The aging analysis of the Company's notes receivable and the allowance loss provided using the provision matrix are as follows:

| | December 31, 2025
Not overdue | December 31, 2024
Not overdue |
| --- | --- | --- |
| Expected Credit Loss Ratio | 0% | 0% |
| Total book value | $ 7,526 | $ 8,637 |
| Less: Allowance for
uncollectible accounts
(Allowance for expected
lifetime credit losses) | - | - |
| Amortized cost | $ 7,526 | $ 8,637 |

(II) Accounts receivable/Accounts receivable from related parties

The Company's average credit period for commodity sales is 30 to 180 days; no interest will accrue on receivables. The Company assesses the major customers by leveraging other accessible financial data and past transaction records. The Company continuously monitors its credit risk exposure and the credit rating of the counterparty, and apportions the total transaction amount among those customers with a qualified credit rating. The Company also reviews and approves the credit limit assigned to a counterparty every year to manage credit risk exposure.

The Company provides loss allowance for accounts receivable based on the lifetime ECL. Lifetime expected credit losses are calculated using a provision matrix that takes into account the customer's past default records, current financial conditions, industry economic conditions, as well as GDP forecasts and industry outlooks. Since the Company's historical credit loss experience indicates no significant loss patterns among the various customer groups, the provision matrix is not customer-specific but rather features an ECL rate devised based on the number of days receivables past due.

When there is any evidence showing that the trading counterparty is facing serious financial difficulties and the Company cannot estimate a reasonable recoverable amount, the Company directly writes off related receivables, but will continue recourse activities. Any recovered amount through the recourse activities is recognized in profit or loss.

The allowance loss provided for the Company's accounts receivable based on the provision matrix is as follows:

December 31, 2025

	Not overdue	1 – 30 days post due	31 – 60 days post due	61 – 90 days post due	91 – 120 days post due	121 – 150 days post due	151 – 180 days post due	More than 180 days post due, unless there is reasonable and verifiable information indicating that a delayed default criterion is more appropriate.	Total
Expected Credit	-	-	-	-	-	-	-	-
Loss Ratio
Total book value	$ 98,822	$ -	$ -	$ -	$ -	$ -	$ -	$ -	$ 98,822
Less: Allowance for unsolicited accounts (Allowance for expected lifetime credit losses)
Amortized cost	$ 98,822	$ -	$ -	$ -	$ -	$ -	$ -	$ -	$ 98,822

December 31, 2024

	Not overdue	1 – 30 days post due	31 – 60 days post due	61 – 90 days post due	91 – 120 days post due	121 – 150 days post due	151 – 180 days post due	More than 180 days post due, unless there is reasonable and verifiable information indicating that a delayed default criterion is more appropriate.	Total
Expected Credit	-	-	-	-	-	-	-	-
Loss Ratio
Total book value	$ 100,199	$ -	$ -	$ -	$ -	$ -	$ -	$ -	$ 100,199
Less: Allowance for unsolicited accounts (Allowance for expected lifetime credit losses)
Amortized cost	$ 100,199	$ -	$ -	$ -	$ -	$ -	$ -	$ -	$ 100,199

(III) Overdue receivables

The movements in the loss allowance on overdue receivables are as follows:

	2025	2024
Beginning balance	$ 250	$ 250
Add: Provision for impairment loss for the year	-	-
Ending balance	$ 250	$ 250

(IV) Other receivables / Other receivables due from related parties

According to its policy, the Company only trades with reputational counterparties and requires provision of collateral where necessary to reduce the risk of financial loss due to default. Credit rating information is assessed based on historical transaction records of the counterparties. The Company continuously monitors its credit risk exposure and the credit rating of the counterparty.

The Company considers the current financial condition of the debtor to evaluate the 12-month expected credit loss or lifetime expected credit loss on investments in debt instruments. As of December 31, 2025 and 2024, the loss allowance rate for other receivables was 0%.

Inventories

	December 31, 2025	December 31, 2024
Raw materials	$ 31,105	$ 34,959
Finished goods	22,296	28,330
Work in process	148,910	169,002
Merchandise	20,196	21,562
	$ 222,507	$ 253,853

The nature of cost of revenue related to inventories is as follows:

	2025	2024
Cost of inventories sold	$ 313,710	$ 292,827
Unallocated manufacturing overhead	1,351	14,236
	$ 315,061	$ 307,063

Investments accounted for using equity method

Investment in subsidiary	December 31, 2025	December 31, 2024
Unlisted companies (not listed on an exchange or OTC)
FULL ASSET GROUP L.L.C.	$ 1,396,225	$ 1,371,931
FULLTEK GROUP L.L.C.	26,349	26,990
Smart Technology
Investment Co., Ltd.	141,628	150,873
CHELIC (BVI) Corp.	1,004,508	946,135
CHELIC TECHNOLOGY (THAILAND) CO., LTD.	15,271	22,729
Less: Unrealized gross profit from sales to subsidiaries	( 16,093 )	( 21,485 )
	$ 2,567,888	$ 2,497,173

The Company's ownership interest and voting rights percentages in subsidiaries at the balance sheet date are as follows:

Company Name	December 31, 2025	December 31, 2024
FULL ASSET GROUP L.L.C.	100%	100%
FULLTEK GROUP L.L.C.	100%	100%
Smart Technology Investment Co., Ltd.	100%	100%
CHELIC (BVI) Corp.	100%	100%
CHELIC TECHNOLOGY (THAILAND) CO., LTD.	99.8%	99.8%

CHELIC TECHNOLOGY (THAILAND) CO., LTD. completed its registration in September 2024. As of December 31, 2025, the company has invested a total of NTD24,142 thousand.

The Company's share of profit or loss and share of other comprehensive income in subsidiaries accounted for using the equity method for 2025 and 2024 were recognized based on the financial statements of each subsidiary for the same period that have been audited by CPAs.

Property, plant and equipment

Assets used by the Company

	Self-owned land	Buildings	Machinery and equipment	Transport equipment	Office equipment	Other equipment	Total
Cost
Balance as of January 1, 2025	$ 274,665	$ 473,532	$ 102,208	$ 533	$ 21,957	$ 320,842	$ 1,193,737
Addition	-	2,383	265	-	519	10,482	13,649
Disposal	-	-	( 26,748 )	-	( 194 )	( 20,818 )	( 47,760 )
Reclassification (Note)	-	629	-	-	3,800	39	4,468
Balance as of December 31, 2025	274,665	476,544	75,725	533	26,082	310,545	1,164,094
Accumulated depreciation
Balance as of January 1, 2025	-	145,861	83,156	533	21,569	288,916	540,035
Depreciation expense	-	12,072	4,880	-	837	14,530	32,319
Disposal	-	-	( 26,487 )	-	( 194 )	( 20,720 )	( 47,401 )
Balance as of December 31, 2025	-	157,933	61,549	533	22,212	282,726	524,953
Net amount at December 31, 2025	$ 274,665	$ 318,611	$ 14,176	$ -	$ 3,870	$ 27,819	$ 639,141
Cost
Balance as of January 1, 2024	$ 274,665	$ 472,796	$ 102,208	$ 533	$ 21,959	$ 312,749	$ 1,184,910
Addition	-	736	-	-	329	11,094	12,159
Disposal	-	-	-	-	( 331 )	( 3,972 )	( 4,303 )
Reclassification (Note)	-	-	-	-	-	971	971
Balance as of December 31, 2024	274,665	473,532	102,208	533	21,957	320,842	1,193,737
Accumulated depreciation
Balance as of January 1, 2024	-	133,524	76,657	533	21,480	276,967	509,161
Depreciation expense	-	12,337	6,499	-	420	15,921	35,177
Disposal	-	-	-	-	( 331 )	( 3,972 )	( 4,303 )
Balance as of December 31, 2024	-	145,861	83,156	533	21,569	288,916	540,035
Net amount at December 31, 2024	$ 274,665	$ 327,671	$ 19,052	$ -	$ 388	$ 31,926	$ 653,702

Note: Reclassification from "other non-current assets - prepayment for business facilities" to each category of property, plant, and equipment.

The Company had no impairment of property, plant and equipment in 2025 and 2024.

Property, plant, and equipment is depreciated on a straight-line basis over their useful lives as follows:

Buildings
Main buildings	20-55 Years
Others	5-50 Years
Machinery and equipment	7-12 Years
Transport equipment	5 years
Office equipment	2-9 Years
Other equipment	2-15 Years

For property, plant, and equipment the Company pledged as collateral against borrowings, see Note 29.

Intangible assets

	Computer software	Technology license	Total
Cost
Balance as of January 1, 2025	$ 33,691	$ 1,114	$ 34,805
Addition	1,370	-	1,370
Reclassification (Note)	1,515	-	1,515
Balance as of December 31, 2025	$ 36,576	$ 1,114	$ 37,690
Accumulated amortization and impairment
Balance as of January 1, 2025	$ 29,057	$ 843	$ 29,900
Amortization expenses	2,443	250	2,693
Balance as of December 31, 2025	$ 31,500	$ 1,093	$ 32,593
Net amount at December 31, 2025	$ 5,076	$ 21	$ 5,097
Cost
Balance as of January 1, 2024	$ 33,691	$ 614	$ 34,305
Addition	-	500	500
Balance as of December 31, 2024	$ 33,691	$ 1,114	$ 34,805

(Continued)

	Computer software	Technology license	Total
Accumulated amortization and impairment
Balance as of January 1, 2024	$ 26,775	$ 614	$ 27,389
Amortization expenses	2,282	229	2,511
Balance as of December 31, 2024	$ 29,057	$ 843	$ 29,900
Net amount at December 31, 2024	$ 4,634	$ 271	$ 4,905

Note: Transferred from other non-current assets - prepayments for equipment.

Amortization expense is recognized on a straight-line basis over the following useful lives:

Computer software 3-7 Years

Technology license 1.5-2 Years

Other assets

	December 31, 2025	December 31, 2024
Current
Prepayments	$ 8,114	$ 5,147
Excess business tax paid	891	389
Advance payments	200	200
	$ 9,205	$ 5,736
	December 31, 2025	December 31, 2024
Non-current
Prepayments for equipment	$ 8,925	$ 1,629
Refundable deposits	101	101
Others	787	582
	$ 9,813	$ 2,312

Loans

(I) Short-term loans

	December 31, 2025	December 31, 2024
Unsecured loans
- Credit facility loans	$ 150,000	$ 180,000

The annual interest rates on short-term bank loans as of December 31, 2025 and December 31, 2024 were 1.81%~1.85% and 1.85%~1.95%, respectively.

(II) Long-term borrowings

	December 31, 2025	December 31, 2024
Secured loans (Note 29)
Bank loans	$ 428,032	$ 369,307
Unsecured loans
Bank loans	100,000	-
Subtotal	528,032	369,307
Less: Current portion within 1 year	(51,439)	(59,831)
Long-term borrowings	$ 476,593	$ 309,476

The Company's loans include:

	Maturity date	Material terms	Effective interest rate	December 31, 2025	December 31, 2024
Chang Hwa Bank
Secured bank loans	2030.05.02	Secured loan, with a term from May 2, 2023 to May 2, 2030. The interest rate is 2.025%, with interest paid monthly, and the principal is to be repaid in 60 installments starting from May 2, 2025. However, the Company has fully repaid in advance.	2.025%	$ -	$ 230,000
Secured bank loans	2032.09.15	Mortgage loan, with a duration between 2025.09.15-2032.09.15. An interest rate of 2.025%; with interest paid monthly; principal repaid in 60 installments starting from September 15, 2027.	2.025%	230,000	-
Bank of Taiwan
Secured bank loans	2028.05.02	Secured loans, with a term from May 2, 2023 to May 2, 2028. The interest rate is 2.0455%, with interest paid monthly, and the principal is to be repaid in 60 installments starting from May 2, 2025. However, The Company has fully repaid in advance.	2.0455%	-	83,272
Secured bank loans	2030.02.02	Mortgage loan, with a duration between 2015.02.02-2030.02.02. An interest rate of 2.0249%; interest paid monthly and the principal is to be repaid in 144 installments starting from February 2, 2018.	2.0249%	45,637	56,035
Secured bank loans	2030.09.05	Mortgage loan, with a duration between 2025.09.05-2030.09.05. An interest rate of 2.1512%; interest paid monthly; principal to be repaid in 60 installments starting from October 5, 2025.	2.1512%	152,395	-
Entie Bank
Unsecured loans:	2027.08.25	Credit loan, with a duration between 2025.08.25-2027.08.25. An interest rate of 2.197%; interest paid monthly; principal repaid in 3 installments starting from August 25, 2026.	2.197%	100,000	-
Balance of bank loans				$ 528,032	$ 369,307

39 -

Bonds payable

	December 31, 2025	December 31, 2024
Domestic secured convertible bonds	$ 474,789	$ 556,139
Less: due within one year	-	( 556,139)
	$ 474,789	$ -

(I) The Company issued domestic third secured convertible bonds on September 5, 2022, with a total amount of NT$600,000 thousand, issued at 104.1977% of the face value, with a coupon rate of 0%, and a maturity period of 3 years. The major issuance terms are as follows:

Issuance Period: September 5, 2022 to September 5, 2025.
Material redemption terms:

(1) From the day following three months after the issuance of the convertible bonds to 40 days before the maturity date, if the closing price of the Company's common share exceeds the then-current conversion price by 30% (inclusive) for 30 consecutive trading days, the Company may redeem the outstanding convertible bonds in cash at their face value.
(2) From the day following three months after the issuance of the convertible bonds to 40 days before the maturity date, if the outstanding balance of the convertible bonds is less than 10% of the original total amount issued, the Company may redeem the outstanding convertible bonds in cash at their face value.

Conversion method:

(1) Except during the suspension period for conversion, the bonds can be converted into the Company's common share from the day following three months after the issuance of the convertible bonds until the maturity date (i.e., from December 6, 2022, to September 5, 2025).
(2) Conversion Price and Adjustments: The conversion price for common share at the time of issuance was TWD 60.0 per share. The subsequent conversion price is adjusted according to the formula stipulated in the issuance terms. As of December 31, 2025, the conversion price was TWD 55.3 per share.

Regarding the collateral for the Company's corporate bonds, please refer to note 29.
This convertible bond includes liability and equity components, with the equity component expressed under equity as capital surplus - convertible bonds subscription rights. The effective interest rate at initial recognition of the liability component was approximately 1.5994%.

As of September 5, 2025, convertible bonds with an aggregate principal amount of NT$38,100 thousand had been converted and the related registration procedures completed, of which NT$6,744 thousand was reclassified to share capital.

In addition, upon the exercise of the conversion rights, capital surplus - conversion options of convertible bonds originally recognized decreased by NT$3,106 thousand, and the discount on bonds payable decreased by NT$840 thousand.

The excess of the net carrying amount over the par value of the common shares issued upon conversion was recognized in capital surplus - share premium from conversion of convertible bonds, amounting to NT$33,622 thousand.

In September 2025, the Company repaid with an aggregate principle amount of NT$561,900 thousand in cash for the matured outstanding convertible bonds and reclassified the equity component to "capital surplus - expired stock options" of NT$45,925 thousand.

Issuance price (less transaction cost of 5,307 thousands)	$ 619,879
Equity component	( 49,031 )
Deferred tax assets	1,061
Liability component at the issuance date	571,909
Interest calculated at an effective interest rate of 1.5994%	12,319
Liability component at January 1, 2024	584,228
Interest calculated at an effective interest rate of 1.5994%	8,971
Conversion of corporate bonds into common shares	( 37,060 )
Liability component at January 1, 2025	556,139
Interest calculated at an effective interest rate of 1.5994%	5,961
Conversion of corporate bonds into common shares	( 200 )
Redeemed at maturity on September 5, 2025	( 561,900 )
Liability component at December 31, 2025	$ -

41 -

(II) The Company issued domestic fourth secured convertible bonds on June 9, 2025, with a total amount of NT$500,000 thousand, issued at 102.877% of the face value, with a coupon rate of 0%, and a maturity period of 3 years. The major issuance terms are as follows:

Issuance period: June 9, 2025 to June 9, 2028.
Material redemption terms:

(2) From the day following three months after the issuance of the convertible bonds to 40 days before the maturity date, if the outstanding balance of the convertible bonds is less than 10% of the original total amount issued, the Company may redeem the outstanding convertible bonds in cash at their face value.

Conversion method:

(2) Conversion Price and Adjustments: The conversion price for common share at the time of issuance was TWD 44.0 per share. The subsequent conversion price is adjusted according to the formula stipulated in the issuance terms. As of December 31, 2025, the conversion price was TWD 43.4 per share.

Regarding the collateral for the Company's corporate bonds, please refer to note 29.
This convertible bond includes liability and equity components, with the equity component expressed under equity as capital surplus - convertible bonds subscription rights. The effective interest rate at initial recognition of the liability component was approximately 2.1428%.
42 -

Issuance proceeds (less transaction cost of 6,722 thousands) $ 507,663
Equity component (41,002)
Financial assets measured at FVTPL 891
Deferred tax assets 1,344
Liability component at the issuance date 468,896
Interest calculated at an effective interest rate of 2.1428% 5,893
Liability component at December 31, 2025 $ 474,789

Accounts payable
| | December 31, 2025 | December 31, 2024 |
| --- | --- | --- |
| Notes payable | | |
| Arising from operations | $ - | $ 218 |
| Accounts payable | | |
| Arising from operations | $ 43,641 | $ 40,053 |
| Other liabilities | | |
| | December 31, 2025 | December 31, 2024 |
| Current | | |
| Other payables | | |
| Salary and bonus payable | $ 21,940 | $ 24,732 |
| Insurance fees payable | 2,146 | 1,944 |
| Service fees payable | 1,758 | 1,978 |
| Pension payable | 1,485 | 1,421 |
| Accrued compensation to employees and remuneration to directors | 986 | - |
| Payables to contractors and equipment suppliers | 682 | 215 |
| Others | 7,459 | 4,311 |
| | $ 36,456 | $ 34,601 |
| Other current liabilities | | |
| Collections on behalf of others | $ 1,054 | $ 1,032 |
| Others | 850 | 514 |
| | $ 1,904 | $ 1,546 |
| Non-current | | |
| Other liabilities | | |
| Deposits received | $ 2 | $ 2 |

Retirement benefits plan

Defined contribution pension plan

The pension system that is specified in the "Labor Pension Act" and adopted by the Company is a defined contribution pension plan managed by the government. A pension contribution equal to 6% of employee's monthly wage is contributed to the personal labor pension account with the Bureau of Labor Insurance. For contribution appropriations in 2025 and 2024, please refer to Note 22 (6) Employee Welfare Expenses.

Equity

(I) Capital stock

	December 31, 2025	December 31, 2024
Authorized shares (in thousands)	100,000	100,000
Authorized capital	$1,000,000	$1,000,000
Issued and paid shares (in thousands)	69,987	69,984
Issued capital	$699,876	$699,840

A holder of issued common shares with par value of NT$10 is entitled to vote and to receive dividends.

(II) Capital surplus

	December 31, 2025	December 31, 2024
May be used to offset a deficit, distributed in cash, or transferred to share capital (note)
Additional paid-in capital	$ 465,230	$ 500,222
From convertible bonds	135,507	135,327
Additional paid-in capital (Transferred employee stock options)	570	570
May only be used to offset a deficit
Convertible corporate bonds expired stock options (Note 16)	92,906	46,982
May not be used for any purpose
Convertible corporate bonds expired stock options (Note 16)	41,002	45,940
	$ 735,215	$ 729,041

44 -

Note: Such capital surplus may be used to offset a deficit and, if the Company has no deficit, may also be distributed as cash dividends or transferred to share capital. However, when transferring to share capital, it is limited to a certain percentage of the Company's paid-in capital each year.

(III) Retained earnings and dividend policy

The Company amended its Articles of Incorporation as approved by the shareholders' meeting on May 30, 2024, to stipulate its policy on the distribution of earnings. If there is a profit in a fiscal year, the Company shall first pay all applicable taxes, offset accumulated losses, and then appropriate 10% of the remaining balance as legal reserve. The remaining amount shall be appropriated or reversed as special reserve in accordance with applicable laws and regulations.

Any remaining balance, together with accumulated undistributed earnings, shall be proposed by the Board of Directors as a distribution plan and submitted to the shareholders' meeting for approval. Where dividends and bonuses to be distributed, or all or part of the legal reserve and capital surplus as provided under Paragraph 1, Article 241 of the Company Act, are to be distributed in cash, the Board of Directors is authorized to resolve such distribution by a special resolution and report the same to the shareholders' meeting. For the policy governing distribution of employee and director compensation that is prescribed in the Company's Articles of Incorporation, please refer to Note 22 (7) Compensation to employees and directors.

According to the Company's Articles of Incorporation, the distribution ratio of cash dividends to shareholders is in principle not less than 10%. However, this ratio may be adjusted based on the current operating status of the Company, as proposed by the Board of Directors, and subject to approval by the shareholders' meeting.

Legal reserve shall be provided until reaching the Company's paid-in capital. The legal capital reserve may be used to offset a deficit. When the Company has no deficit, the portion of the legal reserve exceeding 25% of the total paid-in capital may be distributed in cash in addition to being transferred to share capital.

The appropriations and deficits compensation plans for the years ended December 31, 2024 and 2023 are as follows:

	2024	2023
Reversal of special reserve appropriated	($ 86,303)	$ 35,874

The appropriation of earnings and losses for 2023 was approved at the annual shareholders' meeting on May 30, 2024. In addition, the shareholders resolved on May 30, 2024 to distribute cash of NT$34,830 thousand from capital surplus arising from share premium, equivalent to NT$0.5 per share. The appropriations of earnings and losses for 2024 were approved at the annual shareholders' meeting on May 29, 2025. In addition, the Board of Directors resolved on March 4, 2025 to distribute cash of NT$34,992 thousand from capital surplus arising from share premium, equivalent to NT$0.5 per share.

The appropriations of earnings for 2025 of the Company are as follows:

	2025
Legal reserve	$ 1,501
Reversal of special reserve	($ 21,002 )
Cash dividends to shareholders	$ 13,898
Cash dividends per share (NT$)	$ 0.2

In addition, the Board of Directors approved to distribute cash from capital surplus on March 4, 2026, distributing NT$20,846 thousand, at a rate of NT$0.3 per share.

The aforementioned cash dividend has been resolved by the Board of Directors, with the remainder subject to approval at the annual shareholders' meeting to be held on May 29, 2026.

(IV) Special reserve

The Company has established and reversed special surplus reserves in accordance with the Financial Supervisory Commission's letter No. 1090150022 and the "Questions and Answers on the Application of Special Surplus Reserves After Adopting IFRS." The details of the special surplus reserves for the Company for the years 2025 and 2024 are as follows:

	2025	2024
Adjustments arising from first-time adoption of IFRSs	$ 18,245	$ 18,245
Amounts recognized as deductions from other equity components	86,376	172,679
	$ 104,621	$ 190,924

(V) Other equity items

Exchange differences from the translation of financial statements of foreign operations

	2025	2024
Beginning balance	($ 101,957)	($ 172,386)
Generated in the current year
Share of exchange differences of subsidiaries accounted for using the equity method	12,187	88,036
Related income tax	( 2,437)	( 17,607)
Ending balance	($ 92,207)	($ 101,957)

Unrealized Gain (Loss) on Financial Assets at FVTOCI

	2025	2024
Beginning balance	$ 15,581	($ 293)
Generated in the current year
Unrealized gain or loss
Equity instruments	443	-
Share in subsidiaries accounted for using the equity method	10,809	15,874
Ending balance	$ 26,833	$ 15,581

(VI) Treasury stock

Relevant information on treasury stock held by the Company is as follows:

| Reason for inflow | Unit: (In Thousands)
Transfer shares to employees |
| --- | --- |
| Number of shares at January 1, 2025 | - |
| Additions in the period | 500 |
| Decrease in the period | - |
| Number of shares at December 31, 2025 | 500 |

The Company's board of directors approved the first treasury stock buyback for employee transfer on September 26, 2025. A total of 500 thousand shares were repurchased from October to November 2025, with a repurchase amount of TWD 22,333 thousand.

The treasury stock held by the Company, in accordance with the Securities Exchange Act, cannot be pledged and does not enjoy rights such as dividend distribution and voting rights. The subsidiaries holding treasury shares are bestowed shareholders' rights, except the rights to participate in any share issuance for cash and to vote.

Revenue

	2025	2024
Revenue from contracts with customers
Pneumatic components	$ 360,866	$ 365,093
Others	79,401	69,599
	$ 440,267	$ 434,692

(I) Contract balances

	December 31, 2025	December 31, 2024	January 1, 2024
Notes receivable and accounts receivable (Note 9)	$ 44,606	$ 47,742	$ 40,578
Accounts receivable to related parties (Note 28)	$ 61,742	$ 61,094	$ 50,455
Contract liabilities
Sales of goods	$ 1,592	$ 1,992	$ 1,513

The changes in the contract liability balances primarily result from the timing difference between the satisfaction of performance obligation and the customer's payment.

Revenue recognized in the current year that was included in contract liabilities at the beginning of the year and from performance obligations satisfied in prior periods is as follows:

	2025	2024
Sales of goods	$ 1,992	$ 1,513

(II) Disaggregation of revenue from contracts with customers

The Company is engaged in a single industry; all revenue comes from sale of products.

Net profit of continuing operations

(I) Interest revenue

	2025	2024
Bank deposits	$ 3,672	$ 2,615

(II) Other income

	2025	2024
Government grants	$ 118	$ 1,667
Others	161	111
	$ 279	$ 1,778

(III) Other gains and losses

	2025	2024
Foreign currency exchange (losses) gains	($ 6,330)	$ 5,784
Gain on disposal of property, plant and equipment	1,357	-
Loss on financial assets at FVTPL	( 441)	-
Others	( 18)	( 15)
	($ 5,432)	$ 5,769

(IV) Finance costs

	2025	2024
Interest on bank loans	$ 14,943	$ 15,771
Interest on convertible bonds	11,854	8,971
	$ 26,797	$ 24,742

50 -

(V) Depreciation and amortization

	2025	2024
Property, plant and equipment	$ 32,319	$ 35,177
Intangible assets	2,693	2,511
Total	$ 35,012	$ 37,688
Depreciation expenses summarized by function
Cost of revenue	$ 24,693	$ 28,162
Operating expenses	7,626	7,015
	$ 32,319	$ 35,177
Amortization expense summarized by function
Operating expenses
Selling expenses	$ -	$ 46
Administrative expenses	2,443	1,487
Research and development expenses	250	978
	$ 2,693	$ 2,511

(VI) Employee benefits expenses

	2025	2024
Short-term employee benefits	$ 120,199	$ 114,378
Retirement benefits
Defined contribution pension plan	5,793	5,743
Total employee benefits expenses	$ 125,992	$ 120,121
Summarized by function
Cost of revenue	$ 51,610	$ 50,872
Operating expenses	74,382	69,249
	$ 125,992	$ 120,121

(VII) Employee compensations and directors' remuneration

In accordance with the Company's Articles of Incorporation, the Company appropriates directors' remuneration at a rate not exceeding 5% and employees' remuneration at a rate ranging from 0.5% to 5% of profit before tax for the current

year, before deducting such remuneration. In accordance with the amendment to the Securities Exchange Act in August 2024, the Company resolved at the shareholders' meeting in 2025 to amend its Articles, specifying that no greater than 5% of the pre-tax profits before distributing employee compensations and directors' remuneration is allocated as remuneration to directors, and 0.5% ~ 5% is allocated as compensation to employees. Of the employees' compensation to be appropriated, no less than 30% shall be allocated to non-executive (entry-level) employees. The Company had a net loss before tax for 2024, therefore, employee compensations and directors' remuneration were not accrued. Employee compensations and directors' remuneration for the Years Ended December 31, 2025 were resolved by the Board of Directors on March 4, 2026 as follows:

Estimated Ratio

	2025
Compensation to employees	3.00%
Remuneration to directors	4.66%

Amount

	2025
Compensation to employees	$ 386
Remuneration to directors	$ 600

Any amount that changes after the approval and publication date of the annual parent company only financial statements is accounted for as changes in accounting estimates, and will be adjusted and recognized in the following year.

The information about compensation to employees and directors determined by the Board of Directors may be viewed at TWSE's Market Observation Post System (MOPS).

(VIII) Foreign exchange gain or loss

	2025	2024
Total foreign exchange gain	$ 17,541	$ 10,589
Total foreign exchange loss	( 23,871 )	( 4,805 )
Gain(loss)	($ 6,330)	$ 5,784

Income tax attributable to continuing operations

(I) Income tax recognized in the profit or loss

The major components of income tax benefit are as follows:

	2025	2024
Current income tax
Generated in the current year	$ -	$ 20,446
Additional tax on undistributed earnings	1,319	-
Adjustments for the previous years	1,484	( 7,301 )
Current credit for repatriated overseas earnings toward tax payments	( 1,073 )	( 15,137 )
Investment tax credits utilized in the current period	-	( 6,134 )
	1,730	( 8,126 )
Deferred income tax
Generated in the current year	( 3,415 )	4,719
Income tax benefit recognized in profit or loss	($ 1,685 )	($ 3,407 )

The difference between accounting income and current income tax expense (benefit) is reconciled as follows:

	2025	2024
Profit (losses) before income tax of continuing operations	$ 11,878	($ 63,315)
Income tax derived from applying the statutory tax rate to income (losses) before tax	$ 2,375	($ 12,663)
Expense and loss not deductible from tax	2,460	1,795

(Continued)

	2025	2024
Additional tax on
undistributed earnings	1,319	-
Unrecognized deductible
temporary differences	( 8,250 )	36,033
Current income tax expense
from prior years adjusted
in the current year	1,484	( 7,301 )
Current credit for repatriated
overseas earnings toward
tax payments	( 1,073 )	( 15,137 )
Investment tax credits
utilized in the current
period	____ -	( 6,134 )
Income tax benefit
recognized in profit or
loss	($ 1,685 )	($ 3,407 )

(II) Income tax recognized in the other comprehensive income

	2025	2024
Deferred income tax
Generated in the current year
Financial statement
translation differences
of foreign operations	($ 2,437 )	($ 17,607 )

(III) Current tax assets and liabilities

	December 31, 2025	December 31, 2024
Current tax assets
Tax refund receivables	$ 8,175	$ 9,624
Current income tax liabilities
Income tax payable	$ 332	$ 885

(IV) Deferred income tax assets and liabilities

The changes in deferred income tax assets and liabilities are as follows:

2025

	Beginning balance	Recognized in the profit or loss	Recognized in the other comprehensive income (loss)	Other Changes (Note)	Ending balance
Deferred tax assets
Temporary differences
Write-downs of inventories	$ 11,842	( $ 374 )	$ -	$ -	$ 11,468
Unrealized exchange loss	-	905	-	-	905
Unrealized gross profit on sales with subsidiary	4,301	( 1,078 )	-	-	3,223
Foreign currency exchange difference of foreign operations	25,488	-	( 2,437 )	-	23,051
Convertible bonds issuance costs	235	( 497 )	-	1,344	1,082
	41,866	( 1,044 )	( 2,437 )	1,344	39,729
Loss carryforwards	-	3,713	-	-	3,713
	$ 41,866	$ 2,669	( $ 2,437 )	$ 1,344	$ 43,442
Deferred income tax liabilities
Temporary differences
Unrealized exchange gains	$ 746	( $ 746 )	$ -	$ -	$ -

2024

	Beginning balance	Recognized in the profit or loss	Recognized in the other comprehensive income (loss)	Ending balance
Deferred tax assets
Temporary differences
Write-downs of inventories	$ 14,655	( $ 2,813 )	$ -	$ 11,842
Unrealized exchange loss	251	( 251 )	-	-
Unrealized gross profit on sales with subsidiary	4,856	( 555 )	-	4,301
Foreign currency exchange difference of foreign operations	43,095	-	( 17,607 )	25,488
Convertible bonds issuance costs	589	( 354 )	-	235
	$ 63,446	( $ 3,973 )	( $ 17,607 )	$ 41,866
Deferred income tax liabilities
Temporary differences
Unrealized exchange gains	$ -	$ 746	$ -	$ 746

Note: Among them, NT$1,344 thousand of Deferred income tax assets are accounted as a deduction from bonds payable.

(V) The aggregated amount of temporary differences associated with investments for which deferred income tax liabilities have not been recognized.

As of December 31, 2025 and 2024, the taxable temporary differences associated with investments in Subsidiaries for which deferred income tax liabilities have not been recognized amounted to NT$1,141,468 thousand and NT$1,100,215 thousand, respectively.

(VI) Income tax examination

The profit-seeking enterprise income tax returns filed by the Company have been approved by the tax competent authority through 2023; the amount approved did not deviate significantly from the amount filed.

Earnings (Loss) Per Share

	2025	Unit: NT$1 per share
Basic earnings (loss) per share		2024
From continuing operations	$ 0.19	($ 0.86)
Diluted earnings per share
From continuing operations	$ 0.19

The profit (loss) for the year and weighted average number of common shares used in the computation of earnings (loss) per share are as follows:

Net profit (loss) for the year

	2025	2024
Net profit (loss) for the year	$ 13,563	($ 59,908)
Interest on convertible bonds after tax	-
Net income used in the computation of diluted EPS	$ 13,563

Number of shares

	Unit: in thousands of shares
	2025	2024
Weighted average number of common shares used for calculating basic earnings (losses) per share	69,889	69,747
Effect of potentially dilutive ordinary shares:
Profit sharing bonus to employees	10
Convertible bonds (Note)	-
Weighted average number of common shares used in the computation of diluted EPS (in thousands)	69,899

Note: The Convertible bonds of the Company for the fiscal year 2025 have an anti-dilutive effect and thus are not included in the calculation of diluted EPS. Due to post-tax net loss for the Company in the fiscal year 2024, which has an anti-dilutive effect, diluted earnings per share are not calculated.

When having an option to distribute shareholder compensation in shares or in cash, the Company assumes that employee compensation is entirely settled in shares and counts the resulting potential common shares towards the weighted average number of outstanding shares when such potential common shares are deemed dilutive, so as to calculate the diluted earnings per share. When calculating the diluted EPS prior to the Board of Directors' resolution on the number of shares to be distributed as employees' compensation in the following year, the dilutive effect of these potential ordinary shares is also considered.

Cash flow information

The Company carried out the following investing activities and financing activities other than cash transactions in 2025 and 2024:

(I) Investing activities via cash transactions

	2025	2024
Partially paid cash to acquire property, plant and equipment.
Acquisition of property, plant and equipment	$ 13,649	$ 12,159
Net changes in payables for equipment	( 467)	1,073
Cash payments	$ 13,182	$ 13,232

(II) Reconciliation of liabilities arising from financing activities 2025

	Non-cash Changes
	Beginning balance	Financing Cash Flow	Equity component	Assets component	Interest expense amortization amount	Ending balance
Short-term loans	$ 180,000	($ 30,000)	$ -	$ -	$ -	$ 150,000
Bonds payable (including those due within one year)	556,139	( 54,237)	( 41,202)	2,235	11,854	474,789
Long-term borrowings (including those due within one year)	369,307	158,725	-	-	-	528,032
	$1,105,446	$ 74,488	($ 41,202)	$ 2,235	$ 11,854	$1,152,821

2024

	Non-cash Changes
	Beginning balance	Financing Cash Flow	Equity component	Interest expense amortization amount	Ending balance
Short-term loans	$ 200,000	($ 20,000)	$ -	$ -	$ 180,000
Bonds payable (including those due within one year)	584,228	-	( 37,060 )	8,971	556,139
Long-term borrowings (including those due within one year)	402,836	( 33,529 )	-	-	369,307
	$ 1,187,064	($ 53,529 )	($ 37,060 )	$ 8,971	$ 1,105,446

Capital risk management

The Company conducts capital management to ensure the Company can continue as a going concern while maximizing shareholders' return by optimizing the liability and equity balances. The Company's overall strategy has remained the same as in recent years.

The Company's capital structure is composed of the net debt attributable to owners of the Company (i.e., borrowings less cash) and equity (i.e., share capital, capital surplus, retained earnings, and other equity items).

The Company is not subject to other external capital requirements.

The key management of the Company reviews its capital structure periodically for the cost and risks of each capital category. The Company heeds the advice of its key management and strikes a balance in its capital structure via paying dividends, issuing new shares, and taking out loans from financial institutions.

Financial instruments

(I) Fair value of financial instruments that are not measured at fair value

Except as described below, the management of the consolidated company believes that the carrying amounts of financial assets and financial liabilities not measured at fair value approximate their fair values.

December 31, 2025

	Fair value
	Book value	Level 1	Level 2	Level 3	Total
Financial liabilities
Financial liabilities at amortized costs:
- Convertible corporate bonds	$ 474,789	$	$	$ 481,150	$ 481,150

December 31, 2024

	Fair value
	Book value	Level 1	Level 2	Level 3	Total
Financial liabilities
Financial liabilities at amortized costs:
- Convertible corporate bonds	$ 556,139	$ -	$ -	$ 556,538	$ 556,538

The fair value measurement of the Level 3 convertible bond component mentioned above uses the binomial tree convertible bond valuation model. This model reflects the fair value of convertible bonds by incorporating market risks and significant unobservable inputs, such as stock price volatility, risk-free interest rate, risk discount rate, and liquidity risk.

(II) Fair value of financial instruments that are measured at fair value on a recurring basis

59 -
Fair value hierarchy

December 31, 2025

	Level 1	Level 2	Level 3	Total
Financial assets measured at FVTPL
Options related to convertible bonds	$ -	$ -	$ 450	$ 450
Financial assets measured at FVOCI
Investments in equity instruments
- Domestic unlisted ordinary share	$ -	$ -	$ 1,523	$ 1,523

Reconciliation of financial instruments measured at fair value using Level 3 inputs

2025

Financial assets measured at FVTPL	Derivative financial instruments - Options related to convertible bonds
Beginning balance	$ -
Additions - Issuance of convertible bonds	891
Recognized in profit or loss (Other gains and losses)	( 441 )
Ending balance	$ 450
	Equity instruments measured at fair value through other comprehensive income financial assets
Financial assets
Beginning balance	$ -
Additions	1,080
Recognized in other comprehensive income (unrealized gains or losses on financial assets at fair value through other comprehensive income)	443
Ending balance	$ 1,523

60 -
Valuation Techniques and Inputs for Level 3 Fair Value Measurements

Categories of financial instruments	Valuation Technique and Inputs
Options related to convertible bonds	Binomial tree model for convertible bond valuation: The model considers factors including the term of the bonds, the price and volatility of the underlying shares, the conversion price, the risk-free interest rate, the discount rate reflecting credit risk, and the liquidity risk of the convertible bonds.
Domestic unlisted ordinary share	The fair value is estimated based on the net asset value from the recent financial statements of the investee company and the market approach while considering a discount for liquidity. This assessment takes into account the valuations of similar companies and the operating performance of the investee.

(III) Categories of financial instruments

	December 31, 2025	December 31, 2024
Financial assets
Measured at amortized cost (Note 1)	$ 590,964	$ 552,711
FVTPL
Mandatorily measured at fair value through profit or loss	450	-
	December 31, 2025	December 31, 2024
Investments in equity instruments at FVTOCI	$ 1,523	$ -
Financial liabilities
Measured at amortized cost (Note 2)	1,226,512	1,165,750

Note 1: The balance includes financial assets measured at amortized cost, such as cash and cash equivalents, notes receivable, accounts receivable (including related parties), other receivables (including related parties; excluding refundable tax amounts), and refundable deposits.

Note 2: The balance includes financial liabilities measured at amortized cost, e.g., short-term borrowings, accounts payable (including related parties),

bonds payable (including the current portion), other payables (excluding salary and bonus payable, pension payable, labor and health insurance payable, business tax payable, insurance expense payable), long-term borrowings (including the current portion), and guarantee deposits.

(IV) Financial risk management objectives and policies

The Company's major financial instruments include cash and cash equivalents, notes receivable, receivables, short-term borrowings, payables, bonds payable, and long-term borrowings. The financial risks associated with operations in the above financial instruments include market risk (including currency risk, interest rate risk, and other price risk), credit risk, and liquidity risk.

1. Market Risk

The financial risks inherent in the Company's operations are mainly foreign currency exchange rate change risk (see (1) below) and interest rate change risk (see (2) below).

(1) Exchange rate risk

The Company is engaged in sale and purchase denominated in foreign currency, thus exposing itself to the exchange rate fluctuation risk. The Company manages its exchange rate risk exposure by hedging such risk using its net position in foreign reserves, to an extent permitted by its policy.

For the carrying amount of the Company's monetary assets and monetary liabilities denominated in a currency other than the functional currency on the balance sheet date, refer to Note 32.

Sensitivity Analysis

The Company is mainly impacted by any changes in the USD and CNY exchange rates.

The following table is an analysis of the Company's sensitivity to an increase/decrease of 1% in TWD (i.e., functional currency) against each relevant foreign currency. 1% is the level of sensitivity that is adopted by the Company when reporting to its key management on exchange rate risks, and denotes the management's estimate of a reasonable range within which foreign exchange rate may vary. The sensitivity analysis includes only the outstanding foreign currency monetary items, and their conversion at the end of the period is adjusted

61 -

for a 1% change in the exchange rate. The positive numbers in the table indicate the amount by which profit before tax or equity would increase when the New Taiwan dollar depreciates by 1% against each relevant foreign currency; conversely, when the New Taiwan dollar appreciates by 1% against each relevant foreign currency, the impact on profit before tax or equity would be the same amount but negative.

	Impact of USD		Impact of RMB
	2025	2024	2025	2024
Profit or loss	$ 255 (i)	$ 324 (i)	$ 340 (ii)	$ 2,080 (ii)

(i) Mainly comes from the Company's USD-denominated cash, cash equivalents, receivables, and payables that are still in outstanding at the balance sheet date and not covered by any cash flow hedge.
(ii) Mainly comes from the Company's CNY-denominated cash, cash equivalents, receivables, and payables that are still in outstanding at the balance sheet date and not covered by any cash flow hedge.

(2) Interest rate risk

The carrying amount of the financial assets and liabilities of the Company that were exposed to the interest rate risk on the balance sheet date is as follows:

	December 31, 2025	December 31, 2024
Fair value interest rate risk
- Financial assets	$ 81,266	$ 50,502
- Financial liabilities	624,789	656,139
Cash flow interest rate risk
- Financial assets	396,631	386,557
- Financial liabilities	528,032	449,307

Sensitivity Analysis

The following sensitivity analysis is determined by the interest rate risk exposure of non-derivative instruments on the reporting date. For liabilities with floating interest rates, the analysis assumes that the amount of liabilities outstanding on the balance sheet date has been

outstanding throughout the reporting period. 1% is the level of sensitivity that is adopted by the Company when reporting to its key management on interest rate risks, and denotes the management's estimate of a reasonable range within which interest rate may vary.

If the annual interest rate increases/decreases by 1%, held all other variables constant, the Company's net profit (losses) before tax in 2025 and 2024 will decrease/increase by NT$1,314 thousand and NT$628 thousand, respectively, mainly due to the interest rate risk exposure from the Company's floating-rate bank deposits and bank loans.

The increase in interest rate sensitivity for the current period is due to the increase in long-term borrowings with floating interest rates.

(3) Other price risk

The Company is exposed to equity price risk due to its investment in equity securities. The equity investment is not held for trading but is a strategic investment, and the Group is not actively trading these investments.

Sensitivity Analysis

The following sensitivity analysis is conducted based on the equity price risk as of the balance sheet date.

If equity prices rise/fall by 5%, the Company's pre-tax other comprehensive income loss) for 2025 will increase/decrease by NT$76 thousand due to Changes in fair value of financial assets at FVTOCI.

Credit Risk

The credit risk means the risk of causing financial loss to the Company because the trading counterparty defaults on contractual obligations. As of the balance sheet date, the Company's maximum credit risk exposure to the financial loss caused by a trading counterparty's defaulting on his/her performance obligations mainly lies in the carrying amount of the financial assets recognized on the parent company only balance sheet.

According to its policy, the Company only trades with reputational counterparties and requires provision of collateral where necessary to reduce the risk of financial loss due to default. The Company ranks the creditworthiness of major customers by referring to credit rating reports provided by independent rating agencies, other publicly available financial

63 -

information, transaction records between the Company and such customers. The Company continuously monitors its credit risk exposure and the credit rating of transaction counterparties, and controls the credit risk by having authorized officers review and approve the credit limit assigned to counterparties.

The Company continuously assesses the financial position of customers from which accounts receivable are due. In addition, the Company reviews the recoverable amount of receivables item by item on the balance sheet date to ensure that proper impair loss has been provided for uncollectable receivables.

The Company's credit risk mainly comes from its five largest customers. As of December 31, 2025 and 2024, the proportion of total accounts receivable from the five largest customers was respectively 66% and 65% for each year.

3. Liquidity Risk

The Company manages and maintains sufficient cash and cash equivalents to fund its business operations and reduce the effect of the fluctuating cash flow. The management of the Company monitors the use of bank financing facilities and ensures compliance with the terms of the loan contract.

Bank loans are one of the Company's important sources of liquidity reserves. As of December 31, 2025 and 2024, for the bank credit facility that the Company has not used, refer to relevant descriptions in (2) Credit facilities. In addition, the Company plans to issue corporate bonds to repay bank borrowings, which is expected to reduce current liabilities and achieve the goal of managing liquidity risk as of December 31, 2025.

(1) Liquidity and interest rate risk for non-derivative financial liabilities

The table of maturity analysis of the Company's outstanding contracts of non-derivative financial liabilities is compiled based on undiscounted cash flows (including principal and estimated interest) arising from the financial liabilities on the earliest possible date on which the Company will be demanded to repay. Therefore, the banks loans that the Company is able to repay on demand are those listed in the earliest period in the following table, without considering the

64 -

possibility that banks will immediately call the loans. The table of maturity analysis of other non-derivative financial assets is based on repayment date specified in contracts.

December 31, 2025

	Payable on demand or due within 1 month	1-3 months	3 months –1 year	1-5 Years	Over 5 year
Non-derivative financial liabilities
Non-interest-bearing liabilities	$ 13,675	$ 36,113	$ 23,901	$ 2	$ -
Short-term loans	152,473	-	-	-	-
Long-term borrowings (including those due within one year)	4,335	8,670	51,754	414,733	84,712
Bonds payable (including those due within one year)	-	-	-	500,000	-
	$ 170,483	$ 44,783	$ 75,655	$ 914,735	$ 84,712

December 31, 2024

	Payable on demand or due within 1 month	1-3 months	3 months –1 year	1-5 Years	Over 5 year
Non-derivative financial liabilities
Non-interest-bearing liabilities	$ 10,676	$ 32,465	$ 17,161	$ 2	$ -
Short-term loans	183,310	-	-	-	-
Long-term borrowings (including those due within one year)	3,420	6,840	67,879	288,898	22,072
Bonds payable (including those due within one year)	-	-	562,100	-	-
	$ 197,406	$ 39,305	$ 647,140	$ 288,900	$ 22,072

The amount of floating-rate non-derivative financial liabilities are subject to changes in interest rates, as the floating rates may differ from the interest rates estimated at the reporting date.

(2) Credit line of financing facilities

	December 31, 2025	December 31, 2024
Secured bank loans
credit line
- Amount utilized	$ 428,032	$ 369,307
- Amount
unutilized	-	-
	$ 428,032	$ 369,307
Unsecured bank loans
credit line
- Amount utilized	$ 250,000	$ 180,000
- Unutilized
amount	680,000	700,000
	$ 930,000	$ 880,000

The Company issued the third and fourth tranche of domestic convertible corporate bonds on September 5, 2022 and June 9, 2025 respectively with a total amount of NT$600,000 thousand and NT$500,000 thousand each guaranteed by banks.

VII. Related Party Transactions

The transactions between the Company and related parties are as follows.

(I) Related party name and categories

Name	Related Party Categories
CHELIC TECHNOLOGY (THAILAND)
CO., LTD.	Subsidiary
SHANGHAI CHELIC PNEUMATIC
CORP.	Sub-subsidiary
SHENZHEN CHELIC PNEUMATIC
CORP.	Sub-subsidiary
Air Automatic Corporation	Substantial related party
Shanghai Bangye Pneumatic & Hydraulic
Components Co., Ltd.	Substantial related party

67 -

(II) Revenue

Item	Relationship with the Company/ Related Party	2025	2024
Sales	Subsidiary
	Others	$ 8,454	$ 6
	Sub-subsidiary
	SHANGHAI CHELIC PNEUMATIC CORP.	142,381	153,459
	SHENZHEN CHELIC PNEUMATIC CORP.	85,029	85,350
	Substantial related party
	Others	26,955	19,193
		$ 262,819	$ 258,008

Sales to related parties for standard specifications are priced on a cost-plus basis, while the price for special specifications are determined through negotiation, with payment terms of T/T 120 to 180 days. Pricing for non-related parties is determined through negotiation, with payment terms of net 30 to 180 days from the end of the month of the invoice date.

(III) Purchase

Relationship with the Company/ Related Party	2025	2024
Sub-subsidiary
SHANGHAI CHELIC PNEUMATIC CORP.	$ 78,564	$ 56,425
Substantial related party
Others	24	79
	$ 78,588	$ 56,504

Purchase is priced on a cost-plus basis; the payment term is T/T 90 days. Pricing for non-related parties is determined through negotiation, with payment terms of net 45 to 90 days from the end of the month of the invoice date.

(IV) Receivables from related parties (excluding loans to related parties)

Item	Relationship with the Company/ Related Party	December 31, 2025	December 31, 2024
Accounts receivable from related parties	Subsidiary
	Others	$ 5,559	$ 6
	Sub-subsidiary
	SHANGHAI CHELIC PNEUMATIC CORP.	27,982	33,714
	SHENZHEN CHELIC PNEUMATIC CORP.	17,584	20,722
	Substantial related party
	Air Automatic Corporation	10,617	6,652
		$ 61,742	$ 61,094

No security was requested for the outstanding receivables due from related parties. No impairment loss has been recognized for receivables from related parties in 2025 and 2024, as the credit policy does not require it.

(V) Payables to related parties (excluding loans from related parties)

Item	Relationship with the Company/ Related Party	December 31, 2025	December 31, 2024
Accounts payable to related parties	Sub-subsidiary
	SHANGHAI CHELIC PNEUMATIC CORP.	$ 20,149	$ 13,527

The outstanding payables to related parties balance is not secured against collateral.

(VI) Acquisitions of property, plant and equipment

	Acquisition price
Relationship with the Company/ Related Party	2025	2024
Sub-subsidiary
SHANGHAI CHELIC PNEUMATIC CORP.	$ 2,576	$ -

(VII) Disposal of property, plant and equipment

	Proceeds from Disposal		Gain on disposal (loss)
Relationship with the Company/ Related Party	2025	2024	2025	2024
Sub-subsidiary SHANGHAI CHELIC PNEUMATIC CORP.	$ 310	$ -	$ 48	$ -

(VIII) Loans to related parties

Relationship with the Company/ Related Party	December 31, 2025	December 31, 2024
Subsidiary
CHELIC TECHNOLOGY (THAILAND) CO., LTD.	$ 10,238	$ -

Interest revenue

Relationship with the Company/ Related Party	2025	2024
Subsidiary
CHELIC TECHNOLOGY (THAILAND) CO., LTD.	$ 238	$ -

The Company's loan to CHELIC TECHNOLOGY (THAILAND) CO., LTD. is an unsecured loan, with an interest rate similar to the market rate. The aforementioned loans are expected to be recovered within 1 year, with no expected credit loss after assessment.

(IX) Compensation of key management personnel

	2025	2024
Short-term employee benefits	$ 15,176	$ 13,965
Retirement benefits	618	489
	$ 15,794	$ 14,454

The remuneration to directors and other key management was decided by the Remuneration Committee according to personal performance and market trends.

VIII. Pledged and Mortgaged Assets

The following assets have been provided as collateral for financing borrowings and bonds payable:

	December 31, 2025	December 31, 2024
Property, plant and equipment
Self-owned land	$ 262,264	$ 262,264
Buildings	306,387	323,233
	$ 568,651	$ 585,497

IX. Significant Contingent Liabilities and Unrecognized Contract Commitments

Except as stated in other notes, the Company had the following significant commitments on the balance sheet date:

The Company's unrecognized contractual commitments are as follows:

	December 31, 2025	December 31, 2024
Acquisition of property, plant and equipment	$ 3,429	$ -

X. Significant Subsequent Events: None.
XI. Information on foreign currency assets and liabilities with significant influence

The following information was summarized according to the foreign currencies other than the functional currency of the Company. The exchange rates disclosed were used to translate the foreign currencies into the functional currency. Foreign currency assets and liabilities with significant influence are as follows:

December 31, 2025

	Foreign Currencies (In Thousands)	Exchange rate	Book value
Financial assets
Monetary items
USD	$ 812	31.4300 (USD: NTD)	$ 25,503
RMB	11,903	4.4960 (RMB: NTD)	53,515
Non-monetary items
Investment accounted for using the equity method
USD	49,256	31.4300 (USD: NTD)	1,548,109
RMB	223,423	4.4960 (RMB: NTD)	1,004,508
THB	13,900	1.1001 (THB: NTD)	15,291
Financial liabilities
Monetary items
RMB	4,351	4.4960 (RMB: NTD)	19,563

December 31, 2024

Financial assets	Foreign Currencies (In Thousands)	Exchange rate	Book value
Monetary items
USD	$ 987	32.7850 (USD: NTD)	$ 32,379
RMB	49,476	4.4780 (RMB: NTD)	221,553
Non-monetary items
Investment accounted for using the equity method
USD	46,616	32.7850 (USD: NTD)	1,528,309
RMB	211,285	4.4780 (RMB: NTD)	946,135
THB	23,619	0.9623 (THB: NTD)	22,729
Financial liabilities
Monetary items
RMB	3,021	4.4780 (RMB: NTD)	13,526

The foreign exchange gains (losses) (realized and unrealized) of the Company for the years 2025 and 2024 were NT$(6,330) thousand and NT$5,784 thousand, respectively. Since there were varieties of functional currencies, the Company was unable to disclose foreign exchange gains (losses) towards each foreign currency with significant impact.

XII. Supplementary Disclosure

(I) Information on Significant Transactions:

Financings provided to others (Table 1)
Endorsement/ guarantee provided: None
Significant Marketable Securities Held as of September 30, 2025 (Excluding Investment in Subsidiaries, Associates, and the Control Portion in a Joint Venture). (Table 2)
RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL. (Table 3)
RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL. (Table 4)

(II) Information on Investees Companies (Table 5)
(III) Information on investment in mainland China:

The name of the investee in mainland China, the main businesses activities and products, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, investment income or loss, carrying amount of the investment at the end of the period, repatriations of

investment income, and limit on the amount of investment in the mainland China area. (Table 6)

Any of the Following Significant Transactions with Investee Companies in the Mainland Area, Either Directly or Indirectly through a Third Area, and Their Prices, Payment Terms, and Unrealized Gains or Losses: Tables 6

(1) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period.

(2) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period.

(3) The amount of property transactions and the amount of the resultant gains or losses.

(4) The balance, end of period, of notes endorsed/guaranteed or collaterals provided and their purpose.

(5) The maximum balance of financial accommodation, end of year balance, interest rate range, and total interest for the period.

(6) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receipt of services.

72 -

TAIWAN CHELIC CO., LTD.

Loans to External Parties

January 1 to December 31, 2025

Table 1
Unit: In Thousands of New Taiwan Dollars and Foreign Currencies

No. (Note 1)	Lender of funds	Borrower of funds	Transaction title	Are they related parties	Maximum balance for the Period (Note 2)	Ending Balance (Note 2)	The actual disbursed Amount	Range of Interest Rates (%)	Nature for Financing (Note 3)	Business transaction amount	Reasons for necessity of short-term financing	Allowance for Bad Debts	Collateral		Loan limit amount for each individual	Total limit on financing amount
													Name	Value
0	TAIWAN CHELIC CO., LTD.	CHELIC TECHNOLOGY (THAILAND) CO., LTD.	Other receivables due from related parties	Yes	$ 20,000	$ 20,000	$ 10,000	4.00%	2	$ -	Operating capital	$ -	None	-	$ 284,121 (Note 4)	$ 1,136,483 (Note 4)
1	SHANGHAI CHELIC PNEUMATIC CORP.	CHELIC TECHNOLOGY (ZHEJIANG) CO. LTD	Other receivables due from related parties	Yes	134,880 RMB 30,000	134,880 RMB 30,000	134,880 RMB 30,000	2.50%	2	-	Operating capital	-	None	-	567,014 (Note 4)	567,014 (Note 4)
1	SHANGHAI CHELIC PNEUMATIC CORP.	ZHEJIANG BANGYE AUTOMATION TECHNOLOGY CO.,LTD.	Other receivables due from related parties	Yes	89,920 RMB 20,000	44,960 RMB 10,000	5,395 RMB 1,200	3.60%	2	-	Operating capital	-	None	-	141,753 (Note 5)	567,014 (Note 5)

Note 1: For the column of the issuer, please fill in "0."
Investee is numbered starting from number 1.
Note 2: The maximum balance for the period and the ending balance has been approved by the board of directors.
Note 3: 1. A company that has business dealings with the lender.
2. A company with short-term financing needs.
Note 4: For foreign companies in which the Company directly and indirectly holds 100% of the voting shares, engaging in inter-company lending requires the need for short-term financing and is limited to one year. The amount of financing and the total amount of loans to any individual companies shall not exceed 40% of the net worth of the lending company as stated in its most recent financial statements audited or reviewed by a CPA. The total amount of loans to related enterprises in need of short-term financing shall not exceed 40% of the net worth of the lending company as stated in the most recent financial statements audited or reviewed by a CPA. For related parties of the Company requiring short-term financing, the amount of loans to an individual company shall not exceed 10% of the worth value of the lending company as stated in its most recent financial statements audited or reviewed by a CPA. The total amount of loans shall not exceed 40% of the net worth of the lending company as stated in its most recent financial statements of audited or reviewed by a CPA.
Note 5: For foreign companies in which the Company does not directly and indirectly hold 100% of the voting shares, engaging in inter-company lending requires the need for short-term financing. The lending amount to an individual company shall not exceed 10% of the net worth of the lending company as stated in its most recent financial statements audited or reviewed by a CPA. The total amount of lending shall not exceed 40% of the net worth of the lending company as stated in its most recent financial statements audited or reviewed by a CPA.

TAIWAN CHELIC CO., LTD.
Significant marketable securities held at the end of the period
December 31, 2025

Table 2
(Shares in Thousands, In Thousands of New Taiwan Dollars)

Holding company	Type and name of marketable security	Relationship with the securities issuer	Accounts in books	End of period				Note
				Number of Shares	Book value	Shareholding ratio	Fair value
TAIWAN CHELIC CO., LTD.	Air Automatic Corporation	The directors of the Company is also the directors of that company.	Financial assets at FVTOCI - non-current	324	$ 1,523	18%	$ 1,523	Note 1
SHANGHAI CHELIC PNEUMATIC CORP.	Shanghai Bangye Pneumatic & Hydraulic Components Co., Ltd.	Substantial related party	"	-	50,029	18%	50,029	Note 1

Note 1: If there is no market price available for unlisted shares, the estimated market price is determined based on the fair value valuation method.
Note 2: This table lists securities that the company must disclose based on the principle of materiality.
Note 3: For information on investment in subsidiaries, please refer to Table 5 and Table 6.

74 -

TAIWAN CHELIC CO., LTD.

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL

January 1 to December 31, 2025

Table 3
Unit: In Thousands of New Taiwan Dollars

Company Name	Related Party	Relationship	Transaction Details				Abnormal Transaction		Notes/ Accounts Payable or Receivable
			Purchases/ Sales	Amount	% to Total Purchases or Sales	Payment term	Unit Price	Payment term	Ending Balance	% to Total Notes/Accounts Receivable or Payable
TAIWAN CHELIC CO., LTD.	SHANGHAI CHELIC PNEUMATIC CORP.	Sub-subsidiary	Sales	($ 142,381)	( 32% )	T/T 120 days	Note 1	Note 2	$ 27,982	26%
CHELIC TECHNOLOGY (ZHEJIANG) CO. LTD	SHENZHEN CHELIC PNEUMATIC CORP.	Affiliated company	Sales	( 148,671)	( 89% )	T/T 120 days	Note 1	Note 2	37,814	89%
SHANGHAI CHELIC PNEUMATIC CORP.	CHELIC TECHNOLOGY (ZHEJIANG) CO. LTD	Affiliated company	Sales	( 144,641)	( 21% )	T/T 120 days	Note 1	Note 2	36,785	16%
SHANGHAI CHELIC PNEUMATIC CORP.	TAIWAN CHELIC CO., LTD.	The ultimate parent of the Company	Purchase	142,381	37%	T/T 120 days	Note 1	Note 2	( 27,982)	( 26% )
SHENZHEN CHELIC PNEUMATIC CORP.	CHELIC TECHNOLOGY (ZHEJIANG) CO. LTD	Affiliated company	Purchase	148,671	58%	T/T 120 days	Note 1	Note 2	( 37,814)	( 65% )
CHELIC TECHNOLOGY (ZHEJIANG) CO. LTD	SHANGHAI CHELIC PNEUMATIC CORP.	Affiliated company	Purchase	144,641	95%	T/T 120 days	Note 1	Note 2	( 36,785)	( 92% )

Note 1: General specification transactions between related parties are priced on a cost-plus basis, while special specifications are determined through negotiation. For non-related parties, pricing is also determined through negotiation.
Note 2: Sales to non-related parties are settled with payment terms of net 30 to 180 days from the end of the month of when the invoice is issued for sales, while purchases from non-related parties are settled with payment terms of net 45 to 90 days from the end of the month of when the invoice is issued.

TAIWAN CHELIC CO., LTD.
RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL.
December 31, 2025

Table 4
Unit: In Thousands of New Taiwan Dollars

Company Name	Related Party	Relationship	Ending Balance from Related Parties	Turnover Rate	Overdue Receivables from Related Parties		Amounts Received in Subsequent Period	Allowance for Bad Debts
					Amount	Methods of treatment
SHANGHAI CHELIC PNEUMATIC CORP.	CHELIC TECHNOLOGY (ZHEJIANG) CO. LTD	Subsidiary to subsidiary	$ 135,742 (Including interest receivable)	Note	$ -	-	$ 862	$ -

Note: As receivables from loans provided, it is not applicable for calculating turnover days.

76 -

TAIWAN CHELIC CO., LTD.

NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES

January 1 to December 31, 2025

Table 5
(Shares in Thousands, Amounts are Presented in Thousands)

Name of investors	Investee Company	Location	Primary Business Activities	Original Investment Amount		Balance as of September 30, 2023			Net Profit or Loss of the Investee	Investment Income (Loss)	Note
				December 31, 2025	December 31, 2024	Number of Shares	Percentage of Ownership	Book value
TAIWAN CHELIC CO., LTD.	FULL ASSET GROUP L.L.C.	United States	Holding company	USD 11,635	USD 11,635	-	100	$ 1,380,132	$ 8,840	$ 7,452	Note 1 and Note 2
	FULLTEK GROUP L.L.C.	United States	Holding company	USD 5,000	USD 5,000	-	100	26,349	( 901 )	( 901 )	Note 2
	Smart Technology Investment Co., Ltd.	British Virgin Islands	Holding company	USD 4,218	USD 4,218	50	100	141,628	822	822	Note 2
	CHELIC (BVI) Corp.	British Virgin Islands	Holding company	RMB 179,500	RMB 179,500	27	100	1,004,508	52,591	52,591	Note 2
	CHELIC TECHNOLOGY (THAILAND) CO., LTD.	Thailand	Manufacture and sale of pneumatic equipment	24,142	24,142	2,495	99.8	15,271	( 7,998 )	( 7,981 )	Note 2

Note 1: Investment income of NT$8,840 thousand plus realized gross profit on upstream transactions of NT$698 thousand at the beginning of the period, less unrealized gross profit on upstream transactions of NT$2,086 thousand at the end of the period
Note 2: The related investment profit (loss) was calculated based on financial statements audited by CPAs.
Note 3: For information on investees in mainland China, see Table 6.

TAIWAN CHELIC CO., LTD.
INFORMATION ON INVESTMENT IN MAINLAND CHINA
January 1 to December 31, 2025

Table 6
Unit: In Thousands of New Taiwan Dollars and Foreign Currencies

The name of the investee in mainland China, the main businesses activities and products, paid-in capital, method of investment, inward and outward remittance of funds, percentage of ownership, investment income or loss, carrying amount of investment, and repatriations of investment income:

Investee Company	Primary Business Activities	Paid-in Capital	Method of Investment	Accumulated amount of investments from Taiwan at the beginning of the year	Investment Flows		Accumulated amount of investments from Taiwan at the end of the year	Net Profit or Loss of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) in the current period	Carrying Amount at the end of the period	Accumulated Inward Remittance of Earnings as of September 30, 2023
					Outflow (US$ in Thousands)	Inflow
SHANGHAI CHELIC PNEUMATIC CORP.	Manufacture and sale of pneumatic equipment	$ 375,600	Note 2(II)(1)	$ 360,437	$ -	$ -	$ 360,437	$ 8,936 (RMB 2,062)	100	$ 8,936 (RMB 2,062) Note 1(II)(2)	$ 1,417,535 (RMB 315,288)	$ 216,869 (RMB 48,565)
GENTEK AUTOMATION (SHANGHAI) CORP	Manufacture of pneumatic equipment	151,375	Note 2(II)(2)	151,375	-	-	151,375	(RMB -208)	100	(RMB -208) Note 1(II)(2)	26,231 (RMB 5,834)
SHANGHAI SHINNING ELECTRONICS CO., LTD.	Real estate leases	164,999	Note 2(II)(3)	127,700	-	-	127,700	5,551 RMB 1,281	100	5,551 RMB 1,281 Note 1(II)(2)	213,513 (RMB 47,490)	9,656 (RMB 2,247)
SHENZHEN CHELIC PNEUMATIC CORP.	Sale of pneumatic equipment	99,900 (Note 3)	Note 2(III)(1)	-	-	-	-	(RMB -287)	100	(RMB -287) Note 1(II)(2)	103,128 (RMB 22,938)
CHELIC TECHNOLOGY (ZHEJIANG) CO. LTD	Manufacture and sale of pneumatic equipment	807,715	Note 2(II)(4)	807,715	-	-	807,715	52,591 (RMB 12,137)	100	52,591 (RMB 12,137) Note 1(II)(2)	1,003,908 (RMB 223,289)
ZHEJIANG BANGYE AUTOMATION TECHNOLOGY CO.,LTD.	Precision metal manufacturing	271,504 (Note 3)	Note 2(III)(2)	-	-	-	-	74,313 (RMB 17,151)	80	61,085 (RMB 14,098) Note 1(II)(2) and Note 4	441,252 (RMB 98,143)

Note 1: Where the column of investment gains recognized in the current period is involves,
(I) If it is still in the preparation stage and no investment income (loss) yet has been recognized, it should be noted.
(II) The basis for recognizing investment income (loss) is classified into the following three categories and should be noted.
(1) The financial statements were audited by an international accounting firm in partnership with the CPA firms of the Republic of China.
(2) The financial statements audited by the independent auditors of the parent company in Taiwan.
(III) Others.

Note 2: Investment methods are classified into the following three categories, specified by numbers:
(I) Directly invest in a company in mainland China.

(II) Investment in mainland companies through a holding company registered in a third region (please specify the investment company in that third region).

(1) Investment in mainland companies through a holding company registered in a third region (FULL ASSET Group L.L.C. and FULLTEK Group L.L.C. reinvest in GENTEK AUTOMATION (SHANGHAI) CORP).

(2) Investment in mainland companies through a holding company registered in a third region (FULLTEK Group L.L.C. to reinvest in China).

(3) Investment in mainland companies through a holding company registered in a third region (Smart Technology Investment Co., Ltd., FULL ASSET Group L.L.C., and FULLTEK Group L.L.C. to reinvest in GENTEK AUTOMATION (SHANGHAI) CORP, which reinvests in SHANGHAI CHELIC PNEUMATIC CORP.).

(4) Investment in mainland companies through a holding company registered in a third region (CHELIC (BVI) Corp. to reinvest in China).

(III) Other methods.

(1) Reinvestment is done through SHANGHAI CHELIC PNEUMATIC CORP.

(2) Reinvestment is done through CHELIC TECHNOLOGY (ZHEJIANG) CO. LTD.

Note 3: The source of funds for SHENZHEN CHELIC PNEUMATIC CORP. is reinvestment by SHANGHAI CHELIC PNEUMATIC CORP.; the source of funds for ZHEJIANG BANGYE AUTOMATION TECHNOLOGY CO.,LTD. is reinvestment by CHELIC TECHNOLOGY (ZHEJIANG) CO. LTD, with an 80% shareholding.

Note 4: Recognized 80% investment income of NT$59,451 thousand plus realized gross profit on side-stream transactions of NT$1,634 thousand.

Upper Limit on the Amount of Investment in Mainland China
Unit: In Thousands of New Taiwan Dollars

Accumulated Outward Remittance for Investments from Taiwan to Mainland China at the end of the period	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment in Mainland China as stipulated by the Investment Commission, MOEA
$ 1,447,227 (USD 48,488)(Note)	$ 1,311,057 (USD 44,275)	$ 1,770,930

Note: Does not deduct the accumulated inward remittance of investment gains of NT$226,525 thousand.

Significant transactions occurring directly or indirectly with the investment company in mainland China through businesses in a third region:

Purchases amount and percentage, and the ending balance and percentage of the related payables.
Sales amount and percentage, and the ending balance and percentage of the related payables.

Unit: In Thousands of New Taiwan Dollars

Name	Nature of Relationships between the Company and Related Parties	Transaction type	Amount	% to Total Purchases or Sales	Terms and conditions			Notes/ Accounts Payable or Receivable		Unrealized gain
					Price	Payment terms	Comparison with general transactions	Ending Balance	Percentage (%)
SHANGHAI CHELIC PNEUMATIC CORP.	Sub-subsidiary	Sales	$ 142,381	( 32% )	Special specifications are negotiated individually.	T/T 120 days	Proceeds collected on a net 30~180 end of month (EOM) basis for general non-related parties	$ 27,982	26%	$ 12,537
n	n	Purchase	78,564	44%	Cost-plus pricing	T/T 90 days	Proceeds paid on a net 45~90 end of month (EOM) basis for general non-related parties	( 20,149 )	( 32% )	-
SHENZHEN CHELIC PNEUMATIC CORP.	Sub-subsidiary	Sales	85,029	( 19% )	Cost-plus pricing	T/T 120 days	Proceeds collected on a net 30~180 end of month (EOM) basis for general non-related parties	17,584	17%	3,556

The amount of property transactions and the amount of the resultant gains or losses: No significant transactions.

The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes: None.

The highest balance, the end of period balance, the interest rate range, and total interest of the current period with respect to financing of funds: None.

Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receiving of services: None.

§Table of Contents of Schedules of Important Accounts§

Item	Code/Index
Schedule of Assets, Liabilities and Equity Items
Cash and cash equivalent schedule	Schedule 1
Schedule of Notes Receivable	Schedule 2
Schedule of Accounts Receivable	Schedule 3
Inventories schedule	Schedule 4
Schedule of Other Current Assets	Note 14
Schedule of Changes in Investment Accounted for Using Equity Method	Schedule 5
Schedule of Changes in Property, Plant, and Equipment	Note 12
Schedule of Changes in Accumulated Depreciation of Property, Plant, and Equipment	Note 12
Schedule of Changes in Intangible Assets	Note 13
Schedule of Deferred Tax Asset/Liability	Note 23
Schedule of Other Non-current Assets	Note 14
Schedule of Short-term Borrowings	Note 15
Schedule of Accounts Payable	Schedule 6
Schedule of Other Payables	Note 18
Schedule of Other Current Liabilities	Note 18
Schedule of Bonds payable	Note 16
Schedule of Long-term Borrowings	Note 15
Schedule of Other Non-current Liabilities	Note 18
Schedule of Profit or Loss Items
Schedule of Operating Revenue	Schedule 7
Schedule of Operating Costs	Schedule 8
Schedule of Operating Expenses	Schedule 9
Schedule of Other Income and Expenses, Net	Note 22
Summary table of employee benefits, depreciation, and amortization occurring in this period by function	Schedule 10

81 -

TAIWAN CHELIC CO., LTD.
Cash and cash equivalent schedule
December 31, 2025

Schedule 1

Unit: In NT$1,000, unless otherwise stated, In Thousands of New Taiwan Dollars

Item	Summary	Amount
Cash dividends	Cash on hand and revolving fund	$ 242
Bank deposits
Check deposits		6,317
Demand deposits	Including Foreign Currencies (In Thousands) 795 USD @31.43; 369 JPY @0.2008; 1 HKD @4.038; 16,906 RMB @4.496; 16 EUR @36.90	396,631
Cash equivalent
Commercial paper		51,028
Bank time deposits		20,000
		$ 474,218

82 -

TAIWAN CHELIC CO., LTD.
Schedule of Notes Receivable
December 31, 2025

Schedule 2
Unit: In Thousands of New Taiwan Dollars

Customer name	Summary	Amount
CHIA MAO SCIENCE
TECHNOLOGIES CO., LTD.	Trade proceeds	$ 1,145
HANSEA DEVELOPMENT CO.,
LTD.	〃	1,005
JIN TAI AUTOMATIC
CONTROL CO., LTD.	〃	640
Other Changes (Note)	〃	4,736
		$ 7,526

Note: The balance of each customer does not exceed 5% of the balance of this account.

83 -

TAIWAN CHELIC CO., LTD.
Schedule of Net Accounts Receivable
December 31, 2025

Schedule 3
Unit: In Thousands of New Taiwan Dollars

Customer name	Summary	Amount
Related party
SHANGHAI CHELIC PNEUMATIC CORP.	Trade proceeds	$ 27,982
SHENZHEN CHELIC PNEUMATIC CORP.	〃	17,584
Air Automatic Corporation	〃	10,617
CHELIC TECHNOLOGY (THAILAND) CO., LTD.	〃	5,559
		$ 61,742
Non-related party
HANSEA DEVELOPMENT CO., LTD.	Trade proceeds	$ 3,210
Other Changes (Note)	〃	33,870
		$ 37,080

Note: The balance of each customer does not exceed 5% of the balance of this account.

84 -

TAIWAN CHELIC CO., LTD.
Inventories schedule
December 31, 2025
Schedule 4
Unit: In Thousands of New Taiwan Dollars

Item	Cost	Market price (Note)
Merchandise	$ 26,387	$ 20,196
Raw materials	40,143	31,105
Work in process	183,963	148,910
Finished goods	29,363	22,296
Less: Allowance for inventories valuation decline	( 57,349 )	—
	$ 222,507	$ 222,507

Note: The market price is calculated based on the net realizable value, and an allowance for inventories valuation decline and obsolescence loss is provided.

85 -

TAIWAN CHELIC CO., LTD.

Schedule of Changes in Investment Accounted for Using Equity Method

2025

Unit: Except for the unit price in yuan, the number of shares is in thousands.

Except for the shares, the amount is in thousands of NTD

Schedule 5

	Beginning balance		Additions in the period		Decrease in the period		Gains (Losses) on investment accounted for using the equity method	Exchange differences from the translation of financial statements of foreign operations	Unrealized gain or loss on financial products of inventees accounted for using the equity method	Ending balance			Market price or net equity value (Note 1)
	Number of Shares	Amount	Number of Shares	Amount	Number of Shares	Amount				Number of Shares	Shareholding percentage %	Amount	Unit price (NT$1)	Total price	Valuation basis	State of provision of collateral or pledges
FULL ASSET GROUP L.L.C.	-	$ 1,371,931	-	$ -	-	$ -	$ 7,452	$ 6,216	$ 10,626	-	100	$ 1,396,225	120.00	$ 1,396,225	Equity method	None
FULLTEK GROUP L.L.C.	-	26,990	-	-	-	-	( 901 )	77	183	-	100	26,349	5.27	26,349	Equity method	None
Smart Technology Investment Co., Ltd.	50	150,873	-	-	-	( 9,656 )	822	( 411 )	-	50	100	141,628	2832.56	141,628	Equity method	None
CHELIC (BVI) CORP.	27	946,135	-	-	-	-	52,591	5,782	-	27	100	1,004,508	37.56	1,004,508	Equity method	None
CHELIC TECHNOLOGY (THAILAND) CO., LTD.	2,495	22,729	-	-	-	-	( 7,981 )	523	-	2,495	99.8	15,271	6.12	15,271	Equity method	None
Less: Unrealized gross profit from sales to subsidiaries	-	( 21,485 )	-	5,392	-	-	-	-	-	-	-	( 16,093 )	-	( 16,093 )
		$ 2,497,173		$ 5,392		($ 9,656 )	$ 51,983	$ 12,187	$ 10,809			$ 2,567,888		$ 2,567,888

Note 1: Calculated based on the 2025 financial statements audited by CPAx.
Note 2: The period decrease is due to the investee's cash dividends distributed of NTS9,656 thousand.

TAIWAN CHELIC CO., LTD.
Schedule of Accounts Payable
December 31, 2025

Schedule 6
Unit: In Thousands of New Taiwan Dollars

Name	Summary	Amount
Related party
SHANGHAI CHELIC PNEUMATIC CORP.	Trade proceeds	$ 20,149
Non-related party
KITA SENSOR TECH. CO., LTD.	Trade proceeds	$ 5,344
UNITECH HYDRO-PNEUMATIC CO., LTD.	〃	3,571
Da Jin Rubber Co., Ltd.	〃	2,178
HENG-LIEN EXACT INDUSTRY CO., LTD.	〃	2,686
Other Changes (Note)	〃	29,862
		$ 43,641

Note: The balance of each customer does not exceed 5% of the balance of this account.

87 -

TAIWAN CHELIC CO., LTD.
SCHEDULE OF OPERATING REVENUE
YEAR ENDED DECEMBER 31, 2025

Schedule 7
Unit: In Thousands of New Taiwan Dollars

Item	Amount
Sales
Pneumatic components	$ 361,376
Others	79,460
	440,836
Sales returns	( 510 )
Sales discounts and allowances	( 59 )
	$ 440,267

88 -

TAIWAN CHELIC CO., LTD.
SHCEDULE OF OPERATING COSTS
YEAR ENDED DECEMBER 31, 2025

Schedule 8
Unit: In Thousands of New Taiwan Dollars

Item	Amount
Raw materials (supplies) - opening balance	$ 44,463
Add: Purchase of raw materials in the year (net)	40,152
Less: transferred to expenses	( 967 )
Raw materials (supplies) - ending balance	( 40,143 )
Loss on physical inventory and retirement	( 311 )
Direct raw material consumption	43,194
Direct labor	23,082
Manufacturing expenses	84,124
Manufacturing cost	150,400
Add: Work in progress at the beginning of the year	205,090
Goods purchased in the year (net)	67,758
Gain on physical inventories	115
Less: Work in progress at the end of the period	( 183,963 )
Transferred to expenses	( 55 )
Cost of finished goods	239,345
Add: finished goods at the beginning of the year	35,532
Less: transferred to expenses	( 1,256 )
Finished goods at the end of period	( 29,363 )
Loss on physical inventory and retirement	( 26 )
Production and sale cost	244,232
Goods inventories at the beginning of the year	27,985
Plus: Goods purchased this year	70,476
Less: Merchandise inventory at the end of period	( 26,387 )
Loss on physical inventory and retirement	( 17 )
Transferred to expenses	( 2,641 )
Cost of purchase and sale	69,416
R&D transferred to cost	227
Revenue from sale of inventories waste and scraps	( 547 )
Loss on physical inventory and retirement	294
Others	88
Unallocated manufacturing overhead	1,351
Cost of Sales	$ 315,061

89 -

TAIWAN CHELIC CO., LTD.
SCHEDULE OF OPERATING EXPENSES
YEAR ENDED DECEMBER 31, 2025

Schedule 9
Unit: In Thousands of New Taiwan Dollars

Item	Marketing	Administrative expenses	Research and development expenses
Wages and salaries (including directors' compensation)	$ 19,552	$ 24,926	$ 14,440
Import and export fees	3,442	-	-
Insurance expense	2,381	3,392	1,672
Depreciation	4,228	1,944	1,454
Freight	1,927	3	57
Other expenses (Note)	12,557	33,014	17,436
	$ 44,087	$ 63,279	$ 35,059

Note: None of the amounts exceeds 5% of this account.

90 -

TAIWAN CHELIC CO., LTD.

Schedule of Employee Benefits, Depreciation, and Amortization Expenses Incurred in the Current Period

Years Ended December 31, 2025 and 2024

Schedule 10

Unit: In Thousands of New Taiwan Dollars

	2025			2024
	Operating Costs	Operating Expenses	Total	Operating Costs	Operating Expenses	Total
Employee benefits expenses
Salaries and wages	$ 41,370	$ 58,918	$ 100,288	$ 40,941	$ 54,881	$ 95,822
Labor insurance and national health insurance	5,639	6,963	12,602	5,624	6,558	12,182
Pension expenses	2,407	3,386	5,793	2,494	3,249	5,743
Directors' remuneration	-	2,760	2,760	-	2,160	2,160
Other employee benefits expenses	2,194	2,355	4,549	1,813	2,401	4,214
Total	$ 51,610	$ 74,382	$ 125,992	$ 50,872	$ 69,249	$ 120,121
Depreciation expense	$ 24,693	$ 7,626	$ 32,319	$ 28,162	$ 7,015	$ 35,177
Amortization expenses	$ -	$ 2,693	$ 2,693	$ -	$ 2,511	$ 2,511

Note:

The number of employees in this year and the previous year was 191 and 183, respectively, among whom the number of directors who were not concurrently an employee was 4 for both years.

(1) The average employee benefit expenses in the current year amounted to NT$664 thousand ("Total employee welfare expenses for this year - Total directors' remuneration" / "Number of employees for this year - Number of directors who are not concurrently an employee").

The average employee benefit expenses in the previous year amounted to NT$659 thousand ("Total employee welfare expenses for the previous year - Total directors' remuneration" / "Number of employees for the previous year - Number of directors who are not concurrently an employee").

(2) The average employee salary expenses for this year amounted to NT$536 thousand (Total salary expenses for this year/"Number of employees for this year - Number of directors who are not concurrently an employee"). The average employee salary expenses for the previous year amounted to NT$535 thousand (Total salary expenses for the previous year/"Number of employees for the previous year - Number of directors who are not concurrently an employee").

Adjustment of average employee salary expenses amounted to 0.19% ("Average employee salary expenses for the current year - Average employee salary expenses for the previous year"/Average employee salary expenses for the previous year).
The Company's Audit Committee consisted of independent directors replaces supervisors.

The Company's remuneration policy

Principles for formulation of remuneration policy

(1) Employee salary: Employee remuneration mainly includes basic salary (including base salary, food allowance), annual salary adjustment for personal performance, and year-end bonus. Salary is approved by referring to the salary paid by industry peers, the salary payment prevailing on the market, job category, education and experience, professional knowledge and technology, and professional seniority and experience, aiming to surpassing the average salary payment in the industry.

(2) Policy on managers' remuneration is based on factors such as the Company's business strategy, profits, business performance, and job and contribution, taking into account the salary level prevailing on the market, and is enforced after being proposed by the Remuneration Committee and approved by the Board of Directors.

(3) Annual salary adjustment: The Company adjusts salary every year based on the macro economic environment, operating profit, employee performance evaluation results, and incentives aiming to facilitate long-term development of employees, and by considering the salary level and salary adjustment of industry peers.

The correlation between business performance and employee remuneration

If the Company has earnings at the closing of accounts in a given year, it shall first allocate 0.5% to 5% of such earnings as employee compensation; eligible employees may include the employees of the affiliates who meet certain criteria. The Company may also allocate no greater than 5% of the said earnings as director compensation through a favorable resolution from the Board of Directors. The proposals to distribute compensation to employees and directors shall be reported at the Shareholders' Meeting. However, if the Company is still in losses, an amount equal to such losses shall be reserved before such earnings can be distributed as employee compensation and director compensation in the proportion mentioned above.

92 -

AI assistant

CHELIC Audit Report / Information 2025

52405_rns_2026-05-12_88aa1160-51ba-4162-a682-cacde964c34e.pdf

Audit Opinion

Basis for Audit Opinion

Key Audit Matters

Key Audit Matters

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Auditors' Responsibilities for the Audit of the Parent Company Only Financial Statements

TAIWAN CHELIC CO., LTD.

TAIWAN CHELIC CO., LTD.

Parent Company Only Statement of Changes in Equity

TAIWAN CHELIC CO., LTD.

IV. Summary of Significant Accounting Policies

(I) Compliance Statement

(II) Basis of Preparation

3. Current and deferred income tax

V. Main Source of Significant Accounting Judgment, Estimation, and Assumption Uncertainties

Property, plant and equipment

Assets used by the Company

(IV) Special reserve

Estimated Ratio

Amount

(VIII) Foreign exchange gain or loss

Earnings (Loss) Per Share

Net profit (loss) for the year

Cash flow information

Capital risk management

Financial instruments

(IV) Financial risk management objectives and policies

1. Market Risk

(1) Exchange rate risk

Sensitivity Analysis

3. Liquidity Risk

(1) Liquidity and interest rate risk for non-derivative financial liabilities

XII. Supplementary Disclosure

Schedule 1

TAIWAN CHELIC CO., LTD.

Schedule of Changes in Investment Accounted for Using Equity Method

AI assistant

CHELIC — Audit Report / Information 2025

52405_rns_2026-05-12_88aa1160-51ba-4162-a682-cacde964c34e.pdf

Audit Opinion

Basis for Audit Opinion

Key Audit Matters

Key Audit Matters

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Auditors' Responsibilities for the Audit of the Parent Company Only Financial Statements

TAIWAN CHELIC CO., LTD.

TAIWAN CHELIC CO., LTD.

Parent Company Only Statement of Changes in Equity

TAIWAN CHELIC CO., LTD.

IV. Summary of Significant Accounting Policies

(I) Compliance Statement

(II) Basis of Preparation

3. Current and deferred income tax

V. Main Source of Significant Accounting Judgment, Estimation, and Assumption Uncertainties

Property, plant and equipment

Assets used by the Company

(IV) Special reserve

Estimated Ratio

Amount

(VIII) Foreign exchange gain or loss

Earnings (Loss) Per Share

Net profit (loss) for the year

Cash flow information

Capital risk management

Financial instruments

(IV) Financial risk management objectives and policies

1. Market Risk

(1) Exchange rate risk

Sensitivity Analysis

3. Liquidity Risk

(1) Liquidity and interest rate risk for non-derivative financial liabilities

XII. Supplementary Disclosure

Schedule 1

TAIWAN CHELIC CO., LTD.

Schedule of Changes in Investment Accounted for Using Equity Method

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CHELIC Audit Report / Information 2025