Stock Code:2393

EVERLIGHT ELECTRONICS CO., LTD.

Financial Statements

With Independent Auditors’ Report

For the Years Ended December 31, 2025 and 2024

Address: No. 6-8, Zhonghua Road, Shulin Dist., New Taipei City

Telephone: (02)2685-6688

The independent auditors’ report and the accompanying financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and financial statements, the Chinese version shall prevail.

Contents	Page
1. Cover Page	1
2. Table of Contents	2
3. Independent Auditors’ Report	3
4. Balance Sheets	4
5. Statements of Comprehensive Income	5
6. Statements of Changes in Equity	6
7. Statements of Cash Flows	7
8. Notes to the Financial Statements
(1) Company history	8
(2) Approval date and procedures of the financial statements	8
(3) New standards, amendments and interpretations adopted	8~10
(4) Summary of material accounting policies	10~29
(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty	29
(6) Explanation of significant accounts	30~63
(7) Related-party transactions	63~69
(8) Pledged assets	69
(9) Commitments and contingencies	70~74
(10) Losses Due to Major Disasters	74
(11) Subsequent Events	74
(12) Other	75~76
(13) Other disclosures
(a) Information on significant transactions	76
(b) Information on investees	76
(c) Information on investment in mainland China	76
(14) Segment information	76
9. List of major account titles	77~87

KPMG

李侃建業聯合會計師事務所

KPMG

台北市110615信義路5段7號68樓(台北101大樓)

68F., TAIPEI 101 TOWER, No. 7, Sec. 5,

Xinyi Road, Taipei City 110615, Taiwan (R.O.C.)

電話 Tel +886 2 8101 6666

傳真 Fax +886 2 8101 6667

網址 Web kpmg.com/tw

Independent Auditors' Report

To the Board of Directors of Everlight Electronics Co., Ltd.:

Opinion

We have audited the financial statements of Everlight Electronics Co., Ltd. (“the Company”), which comprise the balance sheets as of December 31, 2025 and 2024, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the financial statements, including a summary of material accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The key audit matters we judged shall be presented in the financial report as follows:

Inventory valuation

Please refer to note 4(g) for accounting policy related to valuation of inventory; note 5 for uncertainty of inventory valuation; and note 6(f) for information regarding inventory and related expenses.

Description of key audit matters:

Due to the impact of product life cycle and industrial competition in electronic industry, the price variability on the inventory of the Company is expected. Therefore, the test of inventory valuation is one of the significant assessment items in our audit procedures.

KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

KPMG

Audit procedures:

Our principal audit procedures included: assessing the allowance for inventory valuation and obsolescence losses to determine whether the policies of the Company and the accounting policies are applied accordingly, and challenging the adequacy of the Company’s provisions against inventories which we corroborated on a sample basis by testing the appropriateness of ageing listing, understanding the basis for valuation of net realized value used by the management of the Company and selecting appropriate samples to verify the reasonableness of inventory valuation.

Revenue recognition

Please refer to note 4(q) for the accounting policy of revenue; and note 6(r) for information regarding revenue recognition.

Description of key audit matters:

The main activities of the Company include manufacturing and selling of products on light-emitting and sensing components. The sales revenue is a key matter in the financial statements, and the amounts and changes of sales revenue may affect the users' understanding of the entire financial statements. Therefore, testing over revenue recognition is one of the significant assessment items in our audit procedures.

Audit Procedures:

Our principal audit procedures included: testing the related controls surrounding the aforementioned sales and collection cycle; testing to verify with relevant documents; as well as selectively conducting external confirmations in order to evaluate the accuracy of the timing of the operating revenue recognition and determine whether related accounting policies are applied appropriately by the Company.

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

Management is responsible for the preparation and fair presentation of the 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 financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance (including the Audit Committee) are responsible for overseeing the Company's financial reporting process.

KPMG

Auditor's Responsibilities for the Audit of the Financial Statements

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

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

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

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

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

KPMG

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

The engagement partners on the audit resulting in this independent auditors’ report are Hsin, Yu-Ting and Kuo, Kuan-Ying.

KPMG

Taipei, Taiwan (Republic of China)

March 11, 2026

Notes to Readers

The accompanying financial statements are intended only to present the financial position, financial performance and cash flows in accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such financial statements are those generally accepted and applied in the Republic of China.

The independent auditors’ audit report and the accompanying financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ audit report and financial statements, the Chinese version shall prevail.

(English Translation of Financial Statements Originally Issued in Chinese) EVERLIGHT ELECTRONICS CO., LTD.

Balance Sheets

December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

Assets	December 31, 2025		December 31, 2024		Liabilities and Equity	December 31, 2025		December 31, 2024
		Amount	%	Amount			%	Amount	%	Amount	%
Current assets:						Current liabilities:
1100	Cash and cash equivalents (note 6(a))	$ 2,010,860	7	1,634,482	6	2100	Short-term borrowings (note 6(k))	$ 750,000	2	750,000	3
1110	Current financial assets at fair value through profit or loss (note 6(b))	211,127	1	255,640	1	2130	Current contract liabilities (note 6(r))	32,317	-	76,851	-
1170	Notes and accounts receivable, net (note 6(d))	4,303,812	15	4,163,319	14	2170	Notes and accounts payable	1,049,086	4	1,158,336	4
1180	Accounts receivable due from related parties, net (notes 6(d) and 7)	1,098,740	4	1,219,630	4	2180	Accounts payable to related parties (note 7)	4,356,019	15	3,892,271	14
1210	Other receivables due from related parties, net (notes 6(e) and 7)	138,769	-	260,666	1	2213	Payables on machinery and equipment	54,152	-	113,503	-
1310	Inventories (note 6(f))	607,651	2	537,630	2	2220	Other payables to related parties (note 7)	247,419	1	253,721	1
1470	Other current assets	106,202	-	137,292	-	2230	Current tax liabilities	568,591	2	284,765	1
1476	Other current financial assets (notes 6(a) and 6(e))	4,167,989	14	4,336,517	15	2280	Current lease liabilities (note 6(l))	6,625	-	7,358	-
		12,645,150	43	12,545,176	43	2300	Other current liabilities (note 6(b))	1,392,007	5	1,347,718	5
Non-current assets:						2250	Current provisions (note 6(m))	159,162	1	214,117	-
1510	Non-current financial assets at fair value through profit or loss (note 6(b))	124,842	-	-	-			8,615,378	30	8,098,640	28
1517	Non-current financial assets at fair value through other comprehensive income (note 6(c))	1,407,635	5	1,165,412	4	2527	Non-current liabilities:
1550	Investments accounted for using the equity method, net (note 6(g))	10,059,546	35	9,902,456	34	2550	Non-current contract position (note 6(m))	129,144	1	3,564	-
1560	Non-current contract assets (note 6(r))	103,329	-	107,511	1	2570	Deferred tax liabilities (note 6(o))	107,764	-	172,931	1
1600	Property, plant and equipment (notes 6(i) and 7)	3,440,886	12	3,636,120	13	2580	Non-current lease liabilities (note 6(l))	275,704	1	282,531	1
1755	Right-of-use assets (note 6(j))	269,888	1	279,300	1	2640	Non-current provisions for employee benefit (note 6(n))	46,233	-	37,632	-
1780	Intangible assets	24,953	-	17,864	-	2670	Other non-current liabilities, others (note 6(g))	54,465	-	62,882	-
1840	Deferred tax assets (note 6(o))	494,629	2	567,446	2			613,354	2	559,585	2
1900	Other non-current assets	26,263	-	26,263	-			9,228,732	32	8,658,225	30
1980	Non-current other financial assets (notes 6(a), (d) and 13)	602,693	2	677,483	2
		16,554,664	57	16,379,855	57	3110	Ordinary shares	4,433,931	15	4,433,931	15
						3200	Capital surplus	8,818,972	30	8,818,763	30
							Retained earnings:
						3310	Legal reserve	3,503,833	12	3,208,061	11
						3320	Special reserve	655,408	2	842,843	3
						3350	Unappropriated earnings	3,187,443	11	3,618,616	13
								7,346,684	25	7,669,520	27
						3400	Other equity interests	(628,505)	(2)	(655,408)	(2)
							Total equity	19,971,082	68	20,266,806	70
Total assets		$ 29,199,814	100	28,925,031	100		Total liabilities and equity	$ 29,199,814	100	28,925,031	100

See accompanying notes to financial statements.

(English Translation of Financial Statements Originally Issued in Chinese)

EVERLIGHT ELECTRONICS CO., LTD.

Statements of Comprehensive Income

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars Except for Earnings Per Share, which is expressed in New Taiwan Dollars)

	2025		2024
		Amount	%	Amount	%
4000	Operating revenue (notes 6(r) and 7)	$ 17,604,435	100	17,808,985	100
5110	Cost of sales (notes 6(f), 6(n), 7 and 12)	13,101,368	74	13,170,552	74
5900	Gross profit	4,503,067	26	4,638,433	26
	Operating expenses (notes 6(n), 7 and 12):
6100	Selling expenses	990,856	6	1,061,945	6
6200	Administrative expenses	824,436	5	965,530	5
6300	Research and development expenses	687,794	4	709,523	4
6450	Expected credit loss (note 6(d))	24,714	-	32,467	-
		2,527,800	15	2,769,465	15
6900	Net operating income	1,975,267	11	1,868,968	11
	Non-operating income and expenses:
7100	Interest income (notes 6(i) and 7)	151,654	1	151,451	1
7190	Other income (notes 6(i) and 7)	59,831	-	212,957	1
7210	Net (losses) gains on disposals of property, plant and equipment (notes 6(i) and 7)	5,416	-	(10,618)	-
7225	Gains on disposals of investments, net (note 6(g))	-	-	89,387	1
7230	Foreign exchange (losses) gains, net (note 6(u))	(38,718)	-	284,041	2
7070	Share of (loss) profit of subsidiaries, associates and joint ventures accounted for using the equity method (note 6(g))	484,755	3	1,087,597	6
7235	Losses on financial assets (liabilities) at fair value through profit or loss, net	(36,002)	-	(66,175)	-
7050	Finance costs (notes 6(l) and 6(t))	(23,062)	-	(15,437)	-
7590	Other expenses and losses (note 6(l))	(84,016)	(1)	(91,567)	(1)
		519,858	3	1,641,636	10
7900	Profit before tax	2,495,125	14	3,510,604	21
7950	Less: Income tax expenses (note 6(o))	456,868	2	566,109	3
	Profit	2,038,257	12	2,944,495	18
8300	Other comprehensive income:
8310	Items that will not be reclassified to profit or loss
8311	Gains (losses) on remeasurements of defined benefit plans (note 6(n))	(9,045)	-	15,632	-
8330	Share of other comprehensive income (loss) of subsidiaries, associates and joint ventures accounted for using equity method, items that will not be reclassified to profit or loss	1,300	-	(2,442)	-
8349	Less: income tax related to items that will not be reclassified to profit or loss (note 6(o))	(1,809)	-	3,126	-
		(5,936)	-	10,064	-
8360	Items that will be reclassified to profit or loss
8361	Exchange differences on translation of foreign financial statements	(43,435)	-	439	-
8367	Unrealized gains (losses) from investments in debt instruments measured at fair value through other comprehensive income	(881)	-	(39,511)	-
8380	Share of other comprehensive income (loss) of subsidiaries, associates and joint ventures accounted for using equity method, items that will be reclassified to profit or loss	61,792	-	230,098	1
8399	Less: income tax related to items that will be reclassified to profit or loss (note 6(o))	(8,687)	-	88	-
	Items that will be reclassified to profit or loss	26,163	-	190,938	1
8300	Other comprehensive income	20,227	-	201,002	1
	Total comprehensive income	$ 2,058,484	12	3,145,497	19
	Earnings per share (note 6(q))
9750	Basic earnings per share	$ 4.60		6.64
9850	Diluted earnings per share	$ 4.53		6.55

See accompanying notes to financial statements.

(English Translation of Financial Statements Originally Issued in Chinese) EVERLIGHT ELECTRONICS CO., LTD.

Statements of Changes in Equity

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

Balance at January 1, 2024

Appropriation and distribution of retained earnings:

Legal reserve

Special reserve

Cash dividends of ordinary share

Cash dividends from capital surplus distributed

Profit for the year

Other comprehensive income for the year

Total comprehensive income for the year

Changes in equity of associates and joint ventures accounted for using equity method

Others

Balance at December 31, 2024

Appropriation and distribution of retained earnings:

Legal reserve

Special reserve

Cash dividends of ordinary share

Profit for the year

Other comprehensive income for the year

Total comprehensive income for the year

Others

Balance at December 31, 2025

Ordinary shares	Capital surplus	Retained earnings			Other equity interest			Total equity
		Legal reserve	Special reserve	Unappropriated earnings	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	Total
$ 4,433,931	9,095,266	3,061,434	677,359	2,125,833	(858,886)	16,043	(842,843)	18,550,980
-	-	146,627	-	(146,627)	-	-	-	-
-	-	-	165,484	(165,484)	-	-	-	-
-	-	-	-	(1,152,822)	-	-	-	(1,152,822)
-	(266,036)	-	-	-	-	-	-	(266,036)
-	(266,036)	146,627	165,484	(1,464,933)	-	-	-	(1,418,858)
-	-	-	-	2,944,495	-	-	-	2,944,495
-	-	-	-	13,567	230,449	(43,014)	187,435	201,002
-	-	-	-	2,958,062	230,449	(43,014)	187,435	3,145,497
-	(10,935)	-	-	(346)	-	-	-	(11,281)
-	468	-	-	-	-	-	-	468
4,433,931	8,818,763	3,208,061	842,843	3,618,616	(628,437)	(26,971)	(655,408)	20,266,806
-	-	295,772	-	(295,772)	-	-	-	-
-	-	-	(187,435)	187,435	-	-	-	-
-	-	-	-	(2,354,417)	-	-	-	(2,354,417)
-	-	295,772	(187,435)	(2,462,754)	-	-	-	(2,354,417)
-	-	-	-	2,038,257	-	-	-	2,038,257
-	-	-	-	(6,676)	27,087	(184)	26,903	20,227
-	-	-	-	2,031,581	27,087	(184)	26,903	2,058,484
-	209	-	-	-	-	-	-	209
$ 4,433,931	8,818,972	3,503,833	655,408	3,187,443	(601,350)	(27,155)	(628,505)	19,971,082

See accompanying notes to financial statements.

(English Translation of Financial Statements Originally Issued in Chinese) EVERLIGHT ELECTRONICS CO., LTD.

Statements of Cash Flows

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

	2025	2024
Cash flows from (used in) operating activities:
Profit before tax	$ 2,495,125	3,510,604
Adjustments:
Adjustments to reconcile profit (loss):
Depreciation and amortization expense	361,035	375,829
Expected credit loss	24,714	32,467
Net loss (gain) on financial assets or liabilities at fair value through profit or loss	(9,864)	20,451
Interest expense	23,062	15,437
Interest income	(151,654)	(151,451)
Share of profit of subsidiaries, associates and joint ventures accounted for using the equity method	(484,755)	(1,087,597)
Net loss (gain) on disposal of property, plant and equipment	(5,416)	10,618
Gain on disposal of investments	-	(89,387)
Others	(4,711)	(15,776)
Total adjustments to reconcile profit (loss)	(247,589)	(889,409)
Changes in operating assets and liabilities:
Increase in financial assets at fair value through profit or loss, mandatorily measured at fair value	(73,672)	(44,235)
Decrease in contract assets	4,182	30,987
Decrease (increase) in notes and accounts receivable (including related parties)	4,148	(1,391,274)
(Increase) decrease in inventories	(70,021)	30,837
Decrease (increase) in other current assets	37,845	(14,751)
(Decrease) increase in contract liabilities	(44,535)	36,028
Increase in notes and accounts payable (including related parties)	354,498	906,296
Increase in provisions	70,625	13,674
Increase in other current liabilities	26,311	314,706
Decrease in net defined benefit liabilities	(444)	(5,446)
Total changes in operating assets and liabilities	308,937	(123,178)
Cash inflow generated from operations	2,556,473	2,498,017
Interest received	150,323	134,702
Interest paid	(23,789)	(14,164)
Income taxes paid	(161,651)	(630,537)
Net cash flows from operating activities	2,521,356	1,988,018
Cash flows from (used in) investing activities:
Acquisition of financial assets at fair value through other comprehensive income	(242,665)	(500,000)
Proceeds from disposal of financial assets at fair value through other comprehensive income	-	125,995
Acquisition of investments accounted for using the equity method	(35,293)	-
Proceeds from disposal of investments accounted for using equity method	-	136,237
Acquisition of property, plant and equipment	(223,377)	(285,246)
Proceeds from disposal of property, plant and equipment	50,215	59,779
Decrease (increase) in refundable deposits	15,096	(9,846)
Decrease (increase) in other receivables due from related parties	75,827	(167,210)
Acquisition of intangible assets	(41,916)	(32,592)
Decrease (increase) in other financial assets	169,859	(820,928)
Decrease in restricted assets	11,229	15,284
Dividends received	432,821	100,646
Net cash flows used in investing activities	211,796	(1,377,881)
Cash flows from (used in) financing activities:
Increase in short-term borrowings	-	500,000
Increase in guarantee deposits received	10,966	19,358
(Decrease) increase in other payables due to related parties	(6,302)	100,984
Payment of lease liabilities	(7,230)	(8,578)
Cash dividends paid	(2,354,417)	(1,418,858)
Other financing activities	209	468
Net cash flows used in financing activities	(2,356,774)	(806,626)
Net increase (decrease) in cash and cash equivalents	376,378	(196,489)
Cash and cash equivalents at beginning of year	1,634,482	1,830,971
Cash and cash equivalents at end of year	$ 2,010,860	1,634,482

See accompanying notes to financial statements.

(English Translation of Financial Statements Originally Issued in Chinese)
EVERLIGHT ELECTRONICS CO., LTD.
Notes to the Financial Statements
December 31, 2025 and 2024
(Expressed in Thousands of New Taiwan Dollars unless otherwise specified)

(1) Company history

Everlight Electronics Co., Ltd. (the "Company") was incorporated in May 1983 as a company limited by shares under the Company Act of the Republic of China (ROC). The major business activities of the Company are the manufacture and sale of LEDs. The Company's common shares were listed on the Taiwan Stock Exchange (TWSE) in November 1999.

(2) Approval date and procedures of the financial statements

These financial statements were authorized for issue by the Board of Directors on March 11, 2026.

(3) New standards, amendments and interpretations adopted:

(a) The impact of the IFRS Accounting Standards endorsed by the Financial Supervisory Commission, R.O.C. which have already been adopted.

The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from January 1, 2025:

Amendments to IAS21 "Lack of Exchangeability"

(b) The impact of IFRS Accounting Standards endorsed by the FSC but not yet effective

The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2026, would not have a significant impact on its financial statements:

IFRS 17 "Insurance Contracts" and amendments to IFRS 17 "Insurance Contracts"
Amendments to IFRS 9 and IFRS 7 "Amendments to the Classification and Measurement of Financial Instruments"
Annual Improvements to IFRS Accounting Standards—Volume 11
Amendments to IFRS 9 and IFRS 7 "Contracts Referencing Nature-dependent Electricity"

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

The following new and amended standards, which may be relevant to the Company, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Standards or Interpretations	Content of amendment	Effective date per IASB
IFRS 18 “Presentation and Disclosure in Financial Statements”	The new standard introduces three categories of income and expenses, two income statement subtotals and one single note on management performance measures. The three amendments, combined with enhanced guidance on how to disaggregate information, set the stage for better and more consistent information for users, and will affect all the entities.

• A more structured income statement: under current standards, companies use different formats to present their results, making it difficult for investors to compare financial performance across companies. The new standard promotes a more structured income statement, introducing a newly defined ‘operating profit’ subtotal and a requirement for all income and expenses to be allocated between three new distinct categories based on a company’s main business activities.

• Management performance measures (MPMs): the new standard introduces a definition for management performance measures, and requires companies to explain in a single note to the financial statements why the measure provides useful information, how it is calculated and reconcile it to an amount determined under IFRS Accounting Standards.

• Greater disaggregation of information: the new standard includes enhanced guidance on how companies group information in the financial statements. This includes guidance on whether information is included in the primary financial statements or is further disaggregated in the notes. | January 1, 2027
note: On September 25, 2025, the FSC issued a press release announcing that Taiwan will adopt IFRS 18 beginning in 2028. Entities that need to adopt the new standard earlier may do with the endorsement of the FSC. |

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

The Company is evaluating the impact on its financial position and financial performance upon the initial adoption of the abovementioned standards or interpretations. The results thereof will be disclosed when the Company completes its evaluation.

The Company does not expect the following other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its financial statements:

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”
IFRS 19 “Subsidiaries without Public Accountability: Disclosures” and amendments to IFRS 19 “Subsidiaries without Public Accountability: Disclosures”
Amendments to IAS 21 “Translation to a Hyperinflationary Presentation Currency”

(4) Summary of material accounting policies

The material accounting policies presented in the financial statements are summarized below. Except for those specifically indicated, the following accounting policies were applied consistently throughout the periods presented in the financial statements.

(a) Statement of compliance

These financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(b) Basis of preparation

(i) Basis of measurement

Except for the following significant accounts, the financial statements have been prepared on the historical cost basis:

1) Financial instruments at fair value through profit or loss are measured at fair value;
2) Financial assets at fair value through other comprehensive income are measured at fair value; and
3) The defined benefit liabilities (assets) are measured at fair value of the plan assets less the present value of the defined benefit obligation.

(ii) Functional and presentation currency

The functional currency of the Company is determined based on the primary economic environment in which the Company operates. The financial statements are presented in New Taiwan dollar (NTD), which is the Company's functional currency. All financial information presented in NTD has been rounded to the nearest thousand.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(i) Foreign currency transaction

Transactions in foreign currencies are translated into the respective functional currencies of the Company at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date.

Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss, except for those differences relating to an investment in equity securities designated as at fair value through other comprehensive income, which is recognized in other comprehensive income.

(ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into the presentation currency at average exchange rate. Exchange differences are recognized in other comprehensive income.

When a foreign operation is disposed to such that control, significant influence, or joint control is lost; the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Company disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interest. When the Company disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, exchange differences arising from such a monetary item that are considered to form part of a net investment in the foreign operation are recognized in other comprehensive income.

(d) Classification of current and non-current assets and liabilities

The Company classifies the asset as current under one of the following criteria, and all other assets are classified as non-current.

(i) It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;

(ii) It is held primarily for the purpose of trading;

(iii) It expected to realize within twelve months after the reporting period; or

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(iv) The asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

The Company classifies the liability as current under one of the following criteria, and all other liabilities are classified as non-current.

(i) It is expected to be settled in the normal operating cycle;
(ii) It is held primarily for the purpose of trading;
(iii) It is due to be settled within twelve months after the reporting period; or
(iv) It does not have the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period.

(e) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits and bonds purchased under resale agreements which meet the above definition and are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

(f) Financial instruments

Accounts receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is an accounts receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. An accounts receivable without a significant financing component is initially measured at the transaction price.

(i) Financial assets

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

On initial recognition, a financial asset is classified as measured at: amortized cost; Fair value through other comprehensive income (FVOCI) – debt investment; FVOCI – equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

2) Fair value through other comprehensive income (FVOCI)

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment's fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income is recognized in profit or loss on the date on which the Company’s right to receive payment is established.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

3) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets. Accounts receivables that the Company intends to sell immediately or in the near term are measured at FVTPL; however, they are included in the accounts receivable line item. On initial recognition, the Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

4) Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, 'principal' is defined as the fair value of the financial assets on initial recognition. 'Interest' is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs, as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Company considers:

contingent events that would change the amount or timing of cash flows;
terms that may adjust the contractual coupon rate, including variable rate features;
prepayment and extension features; and
terms that limit the Company's claim to cash flows from specified assets (e.g. non-recourse features).

5) Impairment of financial assets

The Company recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, notes and accounts receivable, other receivables, leases receivable, guarantee deposit paid and other financial assets), debt investments measured at FVOCI and contract assets.

The Company measures loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL:

debt securities that are determined to have low credit risk at the reporting date; and

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for accounts receivable, other receivables and contract assets are always measured at an amount equal to lifetime ECL.

Lifetime ECL are the ECL that result from all possible default events over the expected life of a financial instrument.

12-month ECL are the portion of ECL that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECL is the maximum contractual period over which the Company is exposed to credit risk.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company’s historical experience and informed credit assessment as well as forward-looking information.

The Company considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of 'investment grade which is considered to be BBB- or higher per Standard & Poor's, Baa3 or higher per Moody's or twA or higher per Taiwan Ratings'.

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

The Company considers a financial asset to be in default when the financial asset is more than 365 days past due or the borrower is unlikely to pay its credit obligations to the Company in full.

ECL are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive). ECL are discounted at the effective interest rate of the financial asset.

At each reporting date, the Company assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is 'credit-impaired' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data:

significant financial difficulty of the borrower or issuer;

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

a breach of contract such as a default or being more than 365 days past due;
the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;
it is probable that the borrower will enter bankruptcy or other financial reorganization; or
the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is change to profit or loss and is recognized in other comprehensive income instead of reducing the carrying amount of the asset.

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

6) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Company enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

(ii) Financial liabilities and equity instruments

1) Classification of debt or equity

Debt or equity instruments issued by the Company are classified as financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

2) Equity instrument

An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

3) Compound financial instrument

Compound financial instruments issued by the Company comprise convertible bonds denominated in NTD that can be converted to ordinary shares at the option of the holder, when the number of shares to be issued is fixed and does not vary with changes in fair value.

The liability component of compound financial instruments is initially recognized at the fair value of a similar liability that does not have an equity conversion option. The equity component is initially recognized at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortized cost using the effective interest method. The equity component of a compound financial instrument is not remeasured.

Interest related to the financial liability is recognized in profit or loss. On conversion at maturity, the financial liability is reclassified to equity and no gain or loss is recognized.

4) Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

5) Derecognition of financial liabilities

The Company derecognizes a financial liability when its contractual obligation is discharged or cancelled, or expired. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

6) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(iii) Derivative financial instruments and hedge accounting

The Company holds derivative financial instruments to hedge its foreign currency and interest rate exposures. Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met. Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognized in profit or loss.

(g) Inventories

Inventories are measured at the lower of cost and net realizable value. Raw material are stated at actual purchase costs, while the calculation of costs of work in process and finished goods adopt the standard cost method and include expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their existing location and condition. Net realizable value is the estimated selling price in the ordinary course of business, less, the estimated costs of completion and selling expenses. The differences between standard and actual costing are fully classified as operating costs.

(h) Investment in associates

Associates are those entities in which the Company has significant influence, but not control or joint control, over the financial and operating policies. Significant influence is presumed to exist when the Company holds between 20% and 50% of the voting power of another entity.

Investment in associates is accounted for using the equity method and are recognized initially at cost. The cost of the investment includes transaction costs. The carrying amount of the investment in associates includes goodwill arising from the acquisition less any accumulated impairment losses.

The financial statements include the Company's share of the profit or loss and other comprehensive income of those associates, after adjustments to align the accounting policies with those of the Company, from the date on which significant influence commences until the date on which significant influence ceases. The Company recognizes any changes of its proportionate share in the investee within capital surplus, when an associate’s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in actual proportionate share.

Gains and losses profits resulting from the transactions between the Company and an associate are recognized only to the extent of the Company's interest in the associate.

When the Company's share of losses of an associate equals or exceeds its interests in an associate, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(i) Investments in subsidiaries

When preparing the parent-company-only financial statements, investment in subsidiaries which are controlled by the Company is accounted for using the equity method. Under the equity method, the amounts net income, other comprehensive income and equity attributable to shareholders of the Company in the parent-company-only financial statement, are equal to those in the consolidated financial statements.

Change in the Company’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

(j) Joint arrangements

A joint arrangement is an arrangement of which two or more parties have joint control. The IFRS classifies joint arrangements into two types — joint operations and joint ventures, which have the following characteristics: (a) the parties are bound by a contractual arrangement; and (b) the contractual arrangement gives two or more of those parties joint control of the arrangement. IFRS 11 “Joint Arrangements” defines joint control as the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities (i.e. activities that significantly affect the returns of the arrangement) require the unanimous consent of the parties sharing control.

A joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. The Company accounts for the assets, liabilities, revenues and expenses in relation to its interest in a joint operation in accordance with the IFRS Accounting Standards applicable to the particular assets, liabilities, revenues and expenses.

When assessing whether a joint arrangement is a joint operation or a joint venture, the Company considers the structure and legal form of the arrangement, the terms agreed by the parties in the contractual arrangement and, when relevant, other facts and circumstances.

(k) Investment property

Investment property is the property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services, or for administrative purposes. Investment property is measured at cost on initial recognition and subsequently at cost, less accumulated depreciation and accumulated impairment losses. Depreciation expense is calculated based on the depreciation method, useful life, and residual value which are the same as those adopted for property, plant and equipment.

Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount) is recognized in profit or loss.

Rental income from investment property is recognized as other revenue on a straight-line basis over the term of the lease. Lease incentives granted are recognized as an integral part of the total rental income, over the term of the lease.

When the use of a property changes such that it is reclassified as property, plant and equipment, the carrying amount at the date of reclassification becomes its cost for subsequent accounting.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(l) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

(ii) Reclassification to investment property

A property is reclassified to investment property at its carrying amount when the use of the property changes from owner-occupied to investment property.

(iii) Subsequent cost

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

(iv) Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

The estimated useful lives for the current and comparative years of significant items of property, plant and equipment are as follows:

1) Buildings: 21~60 years
2) Building improvements: 2~16 years
3) Machinery and equipment: 2~9 years
4) Modeling equipment: 1~5 years
5) Office and other equipment: 1~11 years

Buildings and equipment constitute mainly building, mechanical and electrical power equipment and its related facilities, etc. Each such part depreciates based on its useful life.

Depreciation methods, useful lives, and residual values are reviewed at each annual reporting date and adjusted if appropriate.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(m) Lease

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

(i) As a leasee

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is 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 asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise of the following:

1) fixed payments, including in-substance fixed payments;
2) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
3) amounts expected to be payable under a residual value guarantee; and
4) payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

1) there is a change in future lease payments arising from the change in an index or rate; or
2) there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee; or
3) there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset, or
4) there is a change of its assessment on whether it will exercise a purchase, extension or termination option; or
5) there is any lease modification

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Company presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases of offices and transportation equipment that have a lease term of 12 months or less and leases of low-value assets, including office and transportation equipment. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

For sale-and-leaseback transactions, the Company applies the requirements for determining when a performance obligation is satisfied in IFRS 15 to determine whether the transfer of an asset is accounted for as a sale of the asset. If the transfer of an asset satisfies the requirement of IFRS 15 to be accounted for as a sale of the asset, the Company measures the right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the asset that relates to the right of use retained. Accordingly, the Company recognizes only the amount of any gain or loss that relates to the rights transferred to the buyer-lessor. If the transfer of an asset does not satisfy the requirement of IFRS 15 to be accounted for as a sale of the asset, the Company will continue to recognize the transferred asset and shall recognize the financial liability equal to the transfer proceeds.

(ii) As a lessor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, the Company applies IFRS 15 to allocate the consideration in the contract.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

The Company recognizes a finance lease receivable at an amount equal to its net investment in the lease. Initial direct costs, such as lessors to negotiate and arrange a lease, are included in the measurement of the net investment. The interest income is recognized over the lease term based on a pattern reflecting a constant periodic rate of return on the lessor’s net investment in the lease. The Company recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘rental income’.

(n) Intangible assets

(i) Recognition and measurement

Goodwill arising on the acquisition of subsidiaries is measured at cost, less accumulated impairment losses.

Expenditure on research activities is recognized in profit or loss as incurred.

Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Company intends to, and has sufficient resources to, complete development and to use or sell the asset. Otherwise, it is recognized in profit or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost, less accumulated amortization and any accumulated impairment losses.

Other intangible assets that are acquired by the Company and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

(ii) Subsequent Expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.

(iii) Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use.

1) Patents: the shorter of contract period and estimated useful lives
2) ERP software system: 1~3 years

Amortization methods, useful lives and residual values are reviewed at each annual reporting date and adjusted if appropriate.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(o) Impairment – non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories, contract assets, deferred tax assets and assets arising from employee benefits) to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units (CGUs). Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(p) Provisions

A provision is recognized if, as a result of a past event, the Company has a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and those risks specific to the liability. The increase in the provision due to the passage of time is recognized as an interest expense.

A provision for warranties is recognized when the underlying products or services are sold, based on historical warranty data and a weighting of all possible outcomes against their associated probabilities.

A provision for onerous contracts is recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognizes any impairment loss on the assets associated with that contract.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(q) Revenue from contracts with customers

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Company's main types of revenue are explained below.

(i) Sale of goods–electronic components

The Company manufactures and sells of LEDs, LCDs and pendants. The Company recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer's acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied.

A receivable is recognized when the goods are delivered as this is the point in time that the Company has a right to an amount of consideration that is unconditional.

(ii) Construction contracts

The Company enters into contracts to illuminating construction. Because its customer controls the asset as it is constructed, the Company recognizes revenue over time on the basis of completion of a physical proportion of the contract work. The consideration promised in the contract includes fixed and variable amounts. The customer pays the fixed amount based on a payment schedule. For some variable considerations (for example, a penalty payment calculated based on delay days), accumulated experience is used to estimate the amount of variable consideration, using the expected value method. For other variable considerations (for example, completion bonus if a construction is completed by a specified date), the Company estimates the amount of variable consideration using the most likely amount. The Company recognizes revenue only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. If the Company has recognized revenue, but not issued a bill, then the entitlement to consideration is recognized as a contract asset. The contract asset is transferred to receivables when the entitlement to payment becomes unconditional.

If the Company cannot reasonably measure its progress towards complete satisfaction of the performance obligation of a construction contract, the Company shall recognize revenue only to the extent of the costs expected to be recovered.

A provision for onerous contracts is recognized when the Company expects the unavoidable costs of performing the obligations under a construction contract exceed the economic benefits expected to be received under the contract.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances that give rise to the revision become known by management.

For illuminating construction, the Company offers a standard warranty to provide assurance that it complies with agreed-upon specifications, and has recognized warranty provisions for this obligation.

(iii) Financing components

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.

(iv) Contract costs

1) Costs to fulfil a contract

If the costs incurred in fulfilling a contract with a customer are not within the scope of another Standard (for example, IAS 2 Inventories, IAS 16 Property, Plant and Equipment or IAS 38 Intangible Assets), the Company recognizes an asset from the costs incurred to fulfil a contract only if those costs meet all of the following criteria:

General and administrative costs, costs of wasted materials, labor or other resources to fulfil the contract that were not reflected in the price of the contract, costs that relate to satisfied performance obligations (or partially satisfied performance obligations), and costs for which the Company cannot distinguish whether the costs relate to unsatisfied performance obligations or to satisfied performance obligations (or partially satisfied performance obligations), the Company recognizes these costs as expenses when incurred.

(r) Employee benefits

(i) Defined contribution plans

Obligations for contributions to the defined contribution plans are expensed as the related service is provided.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(ii) Defined benefit plans

The Company’s net obligation in respect of defined benefit plans is calculated separately for each the plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in the future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(iii) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(s) Income taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes shall be recognized in profit or loss.

The Company has determined that interest and penalties related to income taxes, including uncertain tax treatment, do not meet the definition of income taxes, and therefore accounted for them under IAS37.

The Group has determined that the global minimum top-up tax – which it is required to pay under Pillar Two legislation – is an income tax in the scope of IAS 12. The Group has applied a temporary mandatory relief from deferred tax accounting for the impacts of the top-up tax and accounts for it as a current tax when it is incurred.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes shall not be recognized for the following:

(i) Temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and at the time of the transaction (i) affects neither accounting nor taxable profits(losses) and (ii) does not give rise to equal taxable and deductible temporary differences;

(ii) temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

(iii) taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves.

The surtax on unappropriated earnings of the Company will be recognized as current tax expense in the following year after the resolution of appropriate retained earnings is approved in the shareholders' meeting.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date, and reflect uncertainty related to income taxes, if any.

Deferred tax assets and liabilities are offset if the following criteria are met:

(i) the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and

(ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

1) the same taxable entity; or

2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(t) Earnings per share

The Company discloses the basic and diluted earnings per share attributable to ordinary equity holders of the Company. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares, such as convertible bonds, employee stock options, remuneration to employees not yet approved by the shareholders, and restricted employee shares.

(u) Operating segments

The Company has disclosed the operating segment information in the consolidated financial statements. Therefore, the Company will not disclose the operating segment information in the parent-company-only financial statements.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty

In preparing these financial statements, management has made judgments and estimates about the future, including climate-related risks and opportunities, that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis and are consistent with the Company's risk management and climate-related commitments where appropriate. Revisions to estimates are recognized prospectively in the period of the change and future periods.

There are no critical judgments in applying the accounting policies that have significant effects on the amounts recognized in the financial statements.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is as follows:

Valuation of inventories

As inventories are stated at the lower of cost or net realizable value, the Company writes down the cost of inventories to net realizable value. The net realizable value of the inventory is mainly determined based on assumptions as to future sales price. Due to the transformation in industry and market, there may be changes in the net realizable value of inventories. Please refer to note 6(f) for further description on the valuation of inventories.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(6) Explanation of significant accounts

(a) Cash and cash equivalents

	December 31, 2025	December 31, 2024
Cash, checking accounts and demand deposits	$ 947,946	800,720
Time deposits	1,062,914	833,762
	$ 2,010,860	1,634,482

(i) Time deposits with maturities within three months or less from the acquisition date that are readily convertible to a known amount of cash are subject to an insignificant risk of changes in their fair value, and are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes. Therefore, time deposits are classified as cash and cash equivalents. Time deposits with maturities over three months from the acquisition date are recorded as other current financial assets amounting to $4,109,760 and $4,282,718 as of December 31, 2025 and 2024, respectively. The non-current portion of the time deposits with maturities over three months from the acquisition date as recorded as other non-current financial assets amounting to $166,094 and $177,323 as of December 31, 2025 and 2024, respectively.

(ii) Please refer to note 6(u) for the fair value sensitivity analysis of the financial assets and liabilities of the Company.

(b) Financial assets and liabilities at fair value through profit or loss

	December 31, 2025	December 31, 2024
Mandatorily measured at fair value through profit or loss:
Derivative instruments not used for hedging	$ 2,670	2,492
Listed convertible bonds	29,475	76,192
Structured deposits	124,842	-
Beneficiary certificate-Funds	124,614	125,300
Stocks listed on domestic markets	54,368	51,656
	$ 335,969	255,640
Current	$ 211,127	255,640
Non-current	124,842	-
	$ 335,969	255,640
	December 31, 2025	December 31, 2024
Current financial liabilities held-for-trading (recorded as other current liabilities):
Derivative instruments not used for hedging	$ 6,930	10,137

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(i) Listed convertible bonds are hybrid instruments. Even though it is required to record the host contract and embedded derivative separately, they are recognized as financial assets designated as at fair value through profit or loss because those investments cannot be reliably measured at fair value as of the acquisition date.

(ii) If there is an increase (decrease) in equity price by 5% on the reporting date, the increase (decrease) in net income pre-tax for 2025 and 2024 will be $8,949 and $8,848, respectively. These analyses are performed on the same basis for both years and assume that all other variables remain the same.

(iii) The Company holds principal protected financial products (structured deposits). However, the related interest does not represent consideration for the time value of money of the outstanding principal amount. Accordingly, such products are classified as financial assets mandatorily measured at fair value through profit or loss.

(iv) The Company uses derivative financial instruments to hedge certain foreign exchange and interest risk the Company is exposed to, arising from its operating and financing activities. The following derivative instruments, without the application of hedge accounting, were classified as mandatorily measured at fair value through profit or loss and held-for-trading financial assets and liabilities:

1) Forward exchange contracts

	December 31, 2025
	Contract amount (in thousands)		Currency	Maturity date
Financial assets:
Forward exchange sold	USD	4,000	USD to TWD	2026.02.05~2026.02.10
Forward exchange sold	USD	10,000	USD to RMB	2026.01.13~2026.02.10
Forward exchange sold	EUR	1,500	EUR to USD	2026.01.29~2026.02.12
Financial liabilities:
Forward exchange sold	USD	27,000	USD to TWD	2026.01.08~2026.02.12
Forward exchange sold	EUR	2,000	EUR to USD	2026.01.08~2026.01.27
	December 31, 2024
	Contract amount (in thousands)		Currency	Maturity date
Financial assets:
Forward exchange sold	EUR	3,250	EUR to USD	2025.01.07~2025.02.11
Financial liabilities:
Forward exchange sold	USD	30,000	USD to TWD	2025.01.07~2025.02.06
Forward exchange sold	USD	11,000	USD to RMB	2025.01.09~2025.02.18

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

2) Other derivative financial instrument contracts

December 31, 2025
Contract amount (in thousands)		Rate	Maturity Period
Financial assets:
TWD	4,000	4.60%~5.15%	2030.09.16~2030.10.15

(v) The Company did not provide any financial assets as collateral for its loan.

	December 31, 2025	December 31, 2024
Debt instruments at fair value through other comprehensive income:
Domestic and foreign corporate bonds	$ 1,407,635	1,165,412

(i) Debt instruments measured at fair value through other comprehensive income

The Company has assessed that the securities are held within a business model whose objective is achieved by both collecting the contractual cash flows and selling financial assets; therefore, they have been classified as financial assets at fair value through other comprehensive income.

(ii) For credit risk (including the impairment of debt instrument investments) and market risk, please refer to note 6(u).

(d) Notes and accounts receivable (including related parties)

	December 31, 2025	December 31, 2024
Accounts receivable-measured as amortized cost	5,617,100	5,611,310
Installment receivable	474,527	525,872
Less: Unrealized interest income on installment receivable	(41,251)	(43,693)
	6,050,376	6,093,489
Less: Allowance for uncollectible accounts	(262,906)	(277,157)
	$ 5,787,470	5,816,332
Notes and accounts receivable, net	$ 4,303,812	4,163,319
Accounts receivable due from related parties, net	1,098,740	1,219,630
Long-term receivables (recorded as other non-current financial assets)	384,918	433,383
	$ 5,787,470	5,816,332

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(i) Impairment loss on notes and accounts receivables

The Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, notes and accounts receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information, including the reasonable prediction of historical credit loss experience and future economic situation.

The loss allowance provisions were determined as follows:

	December 31, 2025
	Gross carrying amount	Weighted-average loss rate	Loss allowance provision
Not overdue	$ 5,780,917	0.02%	1,293
Overdue 0-90 days	4,349	7.63%	332
Overdue 91-180 days	4,247	32.61%	1,385
Overdue 181-270 days	2,008	51.84%	1,041
Overdue 271-365 days	8,296	100%	8,296
Overdue over one year	250,559	100%	250,559
	$ 6,050,376		262,906
	December 31, 2024
	Gross carrying amount	Weighted-average loss rate	Loss allowance provision
Not overdue	$ 5,807,820	0.05%	2,860
Overdue 0-90 days	7,259	8.76%	636
Overdue 91-180 days	5,746	33.57%	1,929
Overdue 181-270 days	1,949	52.18%	1,017
Overdue 271-365 days	-	0%	-
Overdue over one year	270,715	100%	270,715
	$ 6,093,489		277,157

(ii) The movements in the allowance for impairment loss with respect to notes and accounts receivable in 2025 and 2024 were as follow:

	2025	2024
Balance on January 1	$ 277,157	244,690
Impairment loss recognized	24,714	32,467
Amounts written off	(38,965)	-
Balance on December 31	$ 262,906	277,157

(iii) As of December 31, 2025 and 2024, the Company did not provide any notes and accounts receivable as collateral for its loans.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(e) Other current financial assets

	December 31, 2025	December 31, 2024
Time deposits with maturities over three months	$ 4,109,760	4,282,718
Other receivables	58,229	53,799
Other receivables due from related parties	711,963	787,790
Less: Long-term investments on equity method-credit balance	(573,194)	(527,124)
	$ 4,306,758	4,597,183
Other current financial assets	$ 4,167,989	4,336,517
Other receivables due from related parties	$ 138,769	260,666
	December 31, 2025	December 31, 2024
Other receivables	$ 196,998	314,465
Less: Loss allowance	-	-
	$ 196,998	314,465

For the years ended December 31, 2025 and 2024, no expected credit losses on other receivables classified as financial assets were recognized by the Company.

As of December 31, 2025 and 2024, the Company did not provide any other receivables as collateral for its loan.

(f) Inventories

	December 31, 2025	December 31, 2024
Raw materials	$ 99,852	77,622
Work in progress	99,252	109,796
Finished goods	408,547	350,212
	$ 607,651	537,630

The details of the cost of sales recognized by the Company in 2025 and 2024 were as follows:

	2025	2024
Inventory that has been sold	$ 12,959,293	13,063,457
Losses from inventory obsolescence and write-downs	5,631	3,259
Sales of scraps	(20,582)	(21,686)
Construction costs	157,026	125,522
	$ 13,101,368	13,170,552

As of December 31, 2025 and 2024, the Company did not provide any inventories as collateral for its loans.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(g) Investments accounted for using equity method

A summary of the Company's financial information for equity-accounted investees at the reporting date were as follows:

	December 31, 2025	December 31, 2024
Subsidiaries	$ 9,435,155	9,328,271
Associates	-	-
	9,435,155	9,328,271
Recorded as deduction of assets:
Other receivables-related parties	573,194	527,124
Recorded as other non-current liabilities, others:
Credit balance of investments in equity method	51,197	47,061
Total	$ 10,059,546	9,902,456

(i) A summary of the Company’s financial information for the share of profit of subsidiaries and associates for the years ended December 31, 2025 and 2024 were as follow:

	December 31, 2025	December 31, 2024
Subsidiaries	$ 484,755	1,086,946
Associates	-	651
	$ 484,755	1,087,597

(ii) Subsidiaries

1) Please refer to the consolidated financial statements for the year ended December 31, 2025.

2) In January 2025, the Company invested in and established a subsidiary, Everlight Electronics (Thailand) Co., Ltd. (“ELTH”), in which the Company holds a 98% equity interest. ELTH’s principal business activities are the manufacturing and sale of light-emitting diodes (LEDs). Subsequently, capital increases in cash were carried out in June and October 2025. The total amount of the above investments aggregated to $35,293 (THB 37,500 thousand), and the capital increase and company registration procedures have been completed.

3) On December 31, 2025 and 2024, the Company's long-term investment in WOFI Leuchten GmbH (WOFI), a subsidiary, generated a credit balance of $624,391 and $574,185, respectively. Since there were accounts receivable for WOFI on the Company's account in 2025 and 2024, the credit balances of $573,194 and $527,124, respectively, were recorded as decreases in other receivables due from related parties. Please refer to note 7 for details. The remaining balance of $51,197 and $47,061 on December 31, 2025 and 2024, respectively, were recognized as other non-current liabilities, other (the credit balance of long-term investment).

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

4) The Company had invested its subsidiary, WOFI Leuchten GmbH, with cash injection of $489,717 and $368,794 in 2022 and 2020, respectively. The investment was recorded as investments accounted for using equity method, and the registration procedures of the cash injection had not been completed as of December 31, 2025.

(iii) Associates

1) The Company's associate accounted for using equity method, Tekcore Co., Ltd. (Tekcore), was individually insignificant, fully disposed of in 2024. The summarized financial informatim were as follows:

	December 31, 2024
Summarized ending balances of the equity interest in individual insignificant associates:
Carring amounts	$ -
	2024
Attributable to the Company:
Profit (loss) from continuing operations	$ 651
Other comprehensive income	(944)
	$ (293)

The conversion right of convertible corporate bonds of Tekcore Co., Ltd. (Tekcore) was exercised in March 2024, and the Company recognized an increase in capital surplus of $6,082 in accordance with the equity method. Then the Company disposed all the remaining shares of Tekcore with an amount of $136,237 through the block trade system in April 2024. The gain on disposal amounting to $89,387 was recorded as a net gain on disposal of investments.

(iv) For the years ended December 31, 2025 and 2024, the Company received cash dividend of $432,821 and $100,646, respectively.

(v) Pledges

As of December 31, 2025 and 2024, the Company did not provide any investment accounted for using the equity method as collaterals for its loans.

(h) Joint operation

The Company cooperated with the A3 Commerce LLP and Altocom Asia LLP in the joint operation of the government's streetlight project in the Republic of Kazakhstan. The joint operation ratio between the Company and the joint operators is 53.6%, 36.4% and 10%.

The Company cooperated with Altocom Asia LLP in the joint operation of the government's streetlight project in the Republic of Kazakhstan. The joint operation ratio between the Company and the joint operators is 53.6% and 46.4%.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

The joint operators account for the input costs incurred in proportion, and share the income incurred by the project settlement and the expenses incurred jointly. The Company recognizes its direct rights (and its share) to the joint operation’s assets, liabilities, income and expenses, which are included in the financial statements.

Disputes over the aforementioned joint operation projects had occurred. Please refer to note 9(b) for details. As of December 31, 2025 and 2024, the Company accumulatively recognized losses $320,929 for both years.

(i) Property, plant and equipment

The movements in the property, plant and equipment of the Company were as follows:

	Land	Buildings and construction	Machinery and equipment	Modeling equipment	Office and other equipment	Constructions in progress and testing equipment	Total
Cost or deemed cost:
Balance on January 1, 2025	$ 599,610	4,775,601	5,785,061	1,087,919	559,684	92,084	12,899,959
Add: additions	-	4,239	66,860	41,631	6,751	44,545	164,026
Add: reclassification	-	4,680	21,256	-	57,734	(83,670)	-
Less: sales	-	-	(335,835)	(17,755)	(1,097)	(10,346)	(365,033)
Less: retirement	-	(14,748)	(101,539)	(36,662)	(8,533)	-	(161,482)
Balance on December 31, 2025	$ 599,610	4,769,772	5,435,803	1,075,133	614,539	42,613	12,537,470
Balance on January 1, 2024	$ 599,610	4,778,498	6,221,936	1,119,213	547,225	19,637	13,286,119
Add: additions	-	29,281	79,961	75,540	28,248	108,681	321,711
Add: reclassification	-	892	33,584	608	1,051	(36,135)	-
Less: sales	-	-	(459,889)	(73,527)	(103)	(99)	(533,618)
Less: retirement	-	(33,070)	(90,531)	(33,915)	(16,737)	-	(174,253)
Balance on December 31, 2024	$ 599,610	4,775,601	5,785,061	1,087,919	559,684	92,084	12,899,959
Depreciation and impairments loss:
Balance on January 1, 2025	$ -	2,285,425	5,515,331	957,339	505,744	-	9,263,839
Add: depreciation for the year	-	121,534	96,542	61,220	35,165	-	314,461
Less: sales	-	-	(310,661)	(8,631)	(1,075)	-	(320,367)
Less: retirement	-	(14,740)	(101,451)	(36,628)	(8,530)	-	(161,349)
Balance on December 31, 2025	$ -	2,392,219	5,199,761	973,300	531,304	-	9,096,584
Balance on January 1, 2024	$ -	2,175,998	5,919,560	971,159	502,456	-	9,569,173
Add: depreciation for the year	-	123,857	115,992	72,007	20,284	-	332,140
Add: reclassification	-	-	179	-	(179)	-	-
Less: sales	-	-	(429,924)	(51,915)	(103)	-	(481,942)
Less: retirement	-	(14,430)	(90,476)	(33,912)	(16,714)	-	(155,532)
Balance on December 31, 2024	$ -	2,285,425	5,515,331	957,339	505,744	-	9,263,839
Carrying amounts:
Balance on December 31, 2025	$ 599,610	2,377,553	236,042	101,833	83,235	42,613	3,440,886
Balance on January 1, 2024	$ 599,610	2,602,500	302,376	148,054	44,769	19,637	3,716,946
Balance on December 31, 2024	$ 599,610	2,490,176	269,730	130,580	53,940	92,084	3,636,120

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(i) Since there was no indication that the property, plant and equipment may be impaired in 2025 and 2024, no impairment test was required.

(ii) As of December 31, 2025 and 2024, the aforesaid property, plant and equipment were not pledged as collateral.

(j) Right-of-use assets

The Company leases many assets including land, vehicles equipment and office and other equipment. Information about leases for which the Company as a lessee is presented below:

	Land	Vehicles equipment	Office and other equipment	Total
Cost:
Balance on January 1, 2025	$ 315,069	5,589	1,110	321,768
Acquisitions	-	-	-	-
Disposal and cancellation	-	(4,830)	(1,110)	(5,940)
Balance on December 31, 2025	$ 315,069	759	-	315,828
Balance on January 1, 2024	$ 263,762	5,920	1,046	270,728
Acquisitions	51,307	758	513	52,578
Disposal and cancellation	-	(1,089)	(449)	(1,538)
Balance on December 31, 2024	$ 315,069	5,589	1,110	321,768
Accumulated depreciation and impairment losses:
Balance on January 1, 2025	$ 37,436	4,491	541	42,468
Depreciation for the year	8,061	782	242	9,085
Disposal and cancellation	-	(4,830)	(783)	(5,613)
Balance on December 31, 2025	$ 45,497	443	-	45,940
Balance on January 1, 2024	$ 29,375	3,453	648	33,476
Depreciation for the year	8,061	2,127	342	10,530
Disposal and cancellation	-	(1,089)	(449)	(1,538)
Balance on December 31, 2024	$ 37,436	4,491	541	42,468
Carrying amount:
Balance on December 31, 2025	$ 269,572	316	-	269,888
Balance on January 1, 2024	$ 234,387	2,467	398	237,252
Balance on December 31, 2024	$ 277,633	1,098	569	279,300

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(k) Short-term borrowings

The Company's short-term borrowings are summarized as follows:

	December 31, 2025	December 31, 2024
Unsecured bank loans	$ 750,000	750,000
Unused short-term credit lines	$ 10,901,490	11,318,692
Annual interest rates	1.660%~1.725%	1.64%~1.80%

(i) For information on the Company's foreign currency risk, please refer to note 6(u) for details.
(ii) The Company did not provide any assets as collateral for its loans.

(l) Lease liabilities

The carrying amount of lease liabilities were as follows:

	December 31, 2025	December 31, 2024
Current	$ 6,625	7,358
Non-current	$ 275,704	282,531

For the maturity analysis, please refer to note 6(u).

The amounts recognized in profit or loss were as follows:

	2025	2024
Interest on lease liabilities	$ 4,894	5,019
Expenses relating to short-term leases	$ 7,186	5,984

The amounts recognized in the statements of cash flows for the Company were as follows:

	2025	2024
Total cash outflow for leases	$ 19,310	19,581

(i) Real estate leases

The Company leases land for its office space and factory. The leases of land typically run for a period for 3 years to 20 years. Some leases include an option to renew the lease for an additional period of the same duration after the end of the contract term.

(ii) Other leases

The Company leases vehicles equipment and office equipment, with lease terms of 2 to 4 years. In some cases, the Company has options to purchase the assets at the end of the contract term.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

The Company also leases a part of office equipment with contract terms of 1 year. These leases are short-term items. The Company has elected not to recognize right-of-use assets and lease liabilities for these leases.

(m) Provisions

(i) The carrying amounts of current provisions were as follows:

	December 31, 2025	December 31, 2024
Provisions - current	$ 159,162	214,117
Provisions - non-current	129,144	3,564
	$ 288,306	217,681

(ii) The movements in the provisions of the Company in 2025 and 2024 were as follows:

	Provisions for onerous contract	Warranty	Litigation and others	Total
Balance on January 1, 2025	$ 98,533	3,564	115,584	217,681
Provisions made during the year	-	57,277	128,773	186,050
Provisions reversed during the year	(1,293)	-	(58,440)	(59,733)
Provisions derecognized during the year	-	(177)	(55,515)	(55,692)
Balance on December 31, 2025	$ 97,240	60,664	130,402	288,306
Balance on January 1, 2024	$ 105,311	5,022	36,000	146,333
Provisions made during the year	-	3,334	79,584	82,918
Provisions reversed during the year	(6,778)	(601)	-	(7,379)
Provisions derecognized during the year	-	(4,191)	-	(4,191)
Balance on December 31, 2024	$ 98,533	3,564	115,584	217,681

(iii) The provision for onerous contracts is recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The mentioned above provisions for the onerous contract, including the amount of provisions estimated by Kazakh Joint Operation Project, as of December 31, 2025 and 2024, were both $89,777.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(n) Employee benefits

(i) Defined benefit plans

The present value of the defined benefit obligations and the fair value of the plan assets of the Company were as follows:

	December 31, 2025	December 31, 2024
Present value of defined benefit obligations	$ (136,903)	(128,599)
Fair value of plan assets	90,670	90,967
Net defined benefit obligations liabilities	$ (46,233)	(37,632)

The Company makes defined benefit plan contributions to the pension fund account at Bank of Taiwan that provides pensions for employees upon retirement. The plans (covered by the Labor Standards Law) entitle a retired employee to receive an annual payment based on the years of service and average salary for the six months prior to retirement.

1) Composition of plan assets

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Labor Pension Fund Supervisory Committee. With regard to the utilization of the funds, minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with interest rates offered by local banks.

The labor pension reserve account balance of the Company with Bank of Taiwan amounted to $90,670 at the end of the reporting period. For information on the utilization of the labor pension fund assets including the asset allocation and yield of the fund, please refer to the website of the Labor Pension Fund Supervisory Committee.

2) Movements in present value of the defined benefit obligations

The movements in present value of defined benefit obligations for the Company were as follows:

	2025	2024
Defined benefit obligation at January 1	$ (128,599)	(136,879)
Benefits paid by the plan	11,867	4,380
Current service costs and interest	(5,267)	(4,812)
Remeasurement in net defined benefit liabilities	(14,904)	8,712
Defined benefit obligation at December 31	$ (136,903)	(128,599)

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

3) Movements of defined benefit plan assets

The movements in the fair value of the defined benefit plan assets for the Company were as follows:

	2025	2024
Fair value of plan assets at January 1	$ 90,967	78,169
Contributions made	3,883	8,994
Benefits paid from the plan assets	(11,867)	(4,380)
Expected return on plan assets	1,828	1,264
Actuarial gain (loss)	5,859	6,920
Fair value of plan assets at December 31	$ 90,670	90,967
Actual return on plan assets	$ 7,687	8,184

4) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Company in 2025 and 2024 were as follows:

	2025	2024
Current service cost	$ 2,729	2,620
Interest cost	2,538	2,192
Expected return on plan assets	(1,828)	(1,264)
	$ 3,439	3,548

5) Actuarial assumptions

The following are the principal actuarial assumptions of present value of defined obligations on the financial reporting date of the Company:

	December 31, 2025	December 31, 2024
Discount rate	1.750 %	2.000 %
Future salary increasing rate	3.500 %	3.500 %

The expected allocation payment made by the Company to the defined benefit plans for the one-year period after the reporting date was $3,747.

The weighted-average duration of the defined benefit obligation of the Company is 13.55 years.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

6) Sensitivity analysis

If the actuarial assumptions had changed, the impact on the present value of the defined benefit obligation shall be as follows:

	Influences of defined benefit liabilities
	Increased 0.25%	Decreased 0.25%
December 31, 2025
Discount rate	$ (4,180)	4,349
Future salary increasing rate	4,200	(4,050)
December 31, 2024
Discount rate	(3,877)	4,036
Future salary increasing rate	3,901	(3,755)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions remain constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of pension liabilities in the balance sheets.

There is no change in the method and assumptions used in the preparation of sensitivity analysis for both periods.

(ii) Defined contribution plans

The Company allocates 6% of each employee's monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. They also make payments for life insurance based on the Company policy. Under this defined contribution plan, the Company allocates a fixed rate of salaries to the Bureau of the Labor Insurance and insurance company without additional legal or constructive obligations.

The pension costs under the defined contribution method of the Company for the years ended December 31, 2025 and 2024 amounted to $39,455 and $45,025, respectively. The pension costs have been allocated to the Bureau of the Labor Insurance and provision of life insurance account.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(o) Income taxes

(i) Income tax expenses

1) The amount of income tax for the years ended December 31, 2025 and 2024 were as follows:

	2025	2024
Current tax expense
Recognized during the period	$ 440,637	453,536
Adjustment for prior periods	(1,915)	(5,253)
	438,722	448,283
Deferred tax expense
Recognition and reversal of temporary differences	18,146	117,826
	18,146	117,826
Income tax expense	$ 456,868	566,109

2) The amount of income tax (profit) recognized in other comprehensive income for the years ended December 31, 2025 and 2024 were as follows:

	2025	2024
Items that may not be reclassified subsequently to profit or loss:
Remeasurements from defined benefit plans	$ (1,809)	3,126
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations	$ (8,687)	88

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

3) Reconciliations of income tax and profit before tax for the years ended December 31, 2025 and 2024 were as follows:

	2025	2024
Profit before income tax	$ 2,495,125	3,510,604
Income tax using the Company's domestic tax rate	$ 499,025	702,121
Tax exemption of investment disposal income	(1,443)	(18,292)
Investment tax credits	(20,829)	(25,845)
Surtax on unappropriated earnings	19,525	-
Net gains or losses on domestic investments	(18,196)	(99,747)
Changes in unrecognized deferred tax assets and liabilities	(22,072)	1,984
Adjustment for prior periods and others	858	5,888
	$ 456,868	566,109

(ii) Deferred tax assets and liabilities

1) Unrecognized deferred tax assets and liabilities

The Company is able to control the timing of the reversal of the part of temporary differences associated with investments in subsidiaries as of December 31, 2025 and 2024. Also, the management of the Company considered it probable that the temporary differences will not be reversed in the foreseeable future. Hence, such temporary differences were not recognized under deferred tax liabilities. Furthermore, deferred tax assets are not recognized when the Company has considered that the future taxable profit will not be available against which the unused tax credits and deductible temporary differences can be utilized.

Details of unrecognized deferred tax assets were as follow:

	December 31, 2025	December 31, 2024
Deductible temporary differences	$ 193,900	83,728

Details of unrecognized deferred tax liabilities were as follow:

	December 31, 2025	December 31, 2024
Temporary differences related to investments in subsidiaries	$ 731,186	598,942

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

2) Recognized deferred tax assets and liabilities

Changes in the amount of deferred tax assets and liabilities for 2025 and 2024 were as follows:

	Defined benefit Plans	Investment loss accounted for using equity method	Loss for market price decline and obsolete inventories	Others	Total
Deferred tax assets:
Balance on January 1, 2025	$ 7,588	386,820	28,381	144,657	567,446
Recognized in profit or loss	(89)	(110,788)	1,127	26,437	(83,313)
Recognized in other comprehensive income	1,809	-	-	8,687	10,496
Balance on December 31, 2025	$ 9,308	276,032	29,508	179,781	494,629
Balance on January 1, 2024	$ 11,804	414,121	28,421	129,744	584,090
Recognized in profit or loss	(1,090)	(27,301)	(40)	15,001	(13,430)
Recognized in other comprehensive income	(3,126)	-	-	(88)	(3,214)
Balance on December 31, 2024	$ 7,588	386,820	28,381	144,657	567,446
		Investment gain accounted for using equity method		Others	Total
Deferred tax liabilities:
Balance on January 1, 2025		$ 103,176		69,755	172,931
Recognized in profit or loss		(60,781)		(4,386)	(65,167)
Balance on December 31, 2025		$ 42,395		65,369	107,764
Balance on January 1, 2024		$ 27,051		41,484	68,535
Recognized in profit or loss		76,125		28,271	104,396
Balance on December 31, 2024		$ 103,176		69,755	172,931

3) Assessment of tax

The tax authorities have examined the Company's income tax returns through 2023.

(p) Capital and other equities

As of December 31, 2025 and 2024, the authorized common stocks amounted to $10,000,000 (of which $400,000 were reserved for the exercising of employee share options); face value of each share is $10, which means there were 1,000,000 thousand ordinary shares, in total of which 443,393 thousand shares were issued. All issued shares were paid up upon issuance.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(i) Capital surplus

The balances of capital surplus of the Company were as follows:

	December 31, 2025	December 31, 2024
Additional paid-in capital	$ 7,551,109	7,551,109
Difference between consideration and carrying amount of subsidiaries disposed	74,117	74,117
Treasury stock resulting from the redemption of convertible bonds	1,071,632	1,071,632
Share-based payment – employee stock options	119,974	119,974
Others	2,140	1,931
	$ 8,818,972	8,818,763

In accordance with the ROC Company Act, realized capital surplus can only be capitalized and distributed as share capital or distributed as cash dividends after offsetting losses. The aforementioned capital surplus include share premiums and donation gains. In accordance with the Securities Offering and Issuance Guidelines, the amount of capital surplus to be reclassified under share capital shall not exceed 10 percent of the actual share capital amount.

The Company’s annual shareholder’s meeting resolved to distribute cash dividends of $266,036 (NTD 0.6 per share) using capital surplus on June 12, 2024. The related information can be accessed through the Market Observation Post System Website.

The Company's Board of Directors resolved to distribute cash of $159,622 (NTD 0.36 per share) using capital surplus on March 11, 2026. The related information can be accessed through the Market Observation Post System Website.

(ii) Retained earnings

In accordance with the Company's articles net earnings should first be used to offset the prior years' deficits, if any, before paying any income taxes, of the remaining balance, 10% is to be appropriated as legal reserve, and the Company should appropriate the same amount as special reserve from retained earnings in accordance with legal authorities and legislations. The remainder, accumulated with the unappropriated earnings of prior years, is distributed as additional dividends to shareholders, which cannot be lower than 50% of the total accumulated unappropriated earnings. The distribution rate is based on the proposal of the Company's board of directors and should be approved in the shareholders' meeting.

Cash dividends cannot be lower than 10% of the total cash and stock dividends. However, stock dividends instead of cash dividends are declared if the cash dividends per share are less than NT$0.2 (dollars).

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

1) Legal reserve

When a company incurs no loss, it may, pursuant to a resolution by a shareholders' meeting, distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of capital may be distributed.

2) Special reserve

By choosing to apply the exemptions granted under IFRS 1 "First-time Adoption of International Financial Reporting Standards" during the Company's first-time adoption of the International Financial Reporting Standards approved by the Financial Supervisory Commission (IFRSs), the unrealized land revaluation increment and foreign currency translation adjustments under shareholders' equity shall be reclassified as retained earnings at the adoption date. According to the regulations, the retained earnings increased by $283,890 on the adoption date. In accordance with the requirements issued by the FSC, an increase in retained earnings due to the first-time adoption of the IFRSs shall be reclassified as special reserve, and when the relevant assets were used, disposed of, or reclassified, this special reserve shall be reserved as distributable earnings proportionately. As of December 31, 2025 and 2024, the carrying amount of special reserve amounted to $259,694 and $283,890, respectively.

In accordance with the ruling issued by FSC, a portion of current-period earnings and undistributed prior-period earnings shall be reclassified as special reserve during earnings distribution. The amount to be reclassified should be equal to the difference between the total net current-period reduction of the carrying amount of other shareholders' equity and the special reserve. The amount to be reclassified to special reserve shall be a portion of current-period earnings plus other line items in the retained earnings movements and undistributed prior-period earnings. A portion of the undistributed prior-period earnings shall be reclassified as special reserve (which does not qualify for earnings distribution) to account for the cumulative changes to other shareholders' equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders' equity shall qualify for additional distributions.

3) Earnings distribution

Based on a resolution of the annual shareholder's meeting held on June 11, 2025 and June 12, 2024, the appropriations of dividends from the earnings distribution for 2024 and 2023 were as follows:

	2024		2023
	Amount per share (dollars)	Total amount	Amount per share (dollars)	Total amount
Dividends distributed to common shareholders:
Cash	$ 5.31	2,354,417	2.60	1,152,822

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

On March 11, 2026, the Company's Board of Directors resolved to appropriate the 2025 earnings. These earnings were appropriated as follows:

	2025
	Amount per share (dollars)	Total amount
Dividends distributed to ordinary shareholders:
Cash	$ 4.14	1,835,647

(iii) Other equity (net of tax)

	Foreign exchange differences arising from foreign operation	Unrealized gain (loss) from financial assets at fair value through other comprehensive income	Total
Balance of January 1, 2025	$ (628,437)	(26,971)	(655,408)
Exchange differences on foreign operations	(34,748)	-	(34,748)
Unrealized gains or losses on financial assets measured at fair value through other comprehensive income arising from subsidiaries and associates accounted for using the equity method	-	697	697
Exchange differences on investments accounted for using equity method	61,835	-	61,835
Unrealized gains or losses on financial instruments measured at fair value through other comprehensive income	-	(881)	(881)
Balance on December 31, 2025	$ (601,350)	(27,155)	(628,505)

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

	Foreign exchange differences arising from foreign operation	Unrealized gain (loss) from financial assets at fair value through other comprehensive income	Total
Balance of January 1, 2024	$ (858,886)	16,043	(842,843)
Exchange differences on foreign operations	351	-	351
Exchange differences on investments accounted for using equity method	230,098	-	230,098
Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income from subsidiaries using equity method	-	(3,503)	(3,503)
Unrealized gains or losses on financial instruments measured at fair value through other comprehensive income	-	(39,511)	(39,511)
Balance on December 31, 2024	$ (628,437)	(26,971)	(655,408)

(q) Earnings per share

The Company's basic and diluted earnings per share are calculated as follows:

	2025	2024
Basic earnings per share:
Profit attributable to ordinary shareholders of the Company	$ 2,038,257	2,944,495
Weighted-average number of outstanding ordinary shares (thousands)	443,393	443,393
Basic earnings per share	$ 4.60	6.64
Diluted earnings per share:
Profit attributable to ordinary shareholders of the Company (basic) (equal to profit attributable to ordinary shareholders of the Company (diluted))	$ 2,038,257	2,944,495
Weighted-average number of outstanding ordinary shares (thousands) (basic)	443,393	443,393
Dilutive effect of potential ordinary shares:
Employee stock bonus	6,311	5,893
Weighted-average number of outstanding ordinary shares (thousands) (diluted)	449,704	449,286
Diluted earnings per share	$ 4.53	6.55

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(r) Revenue from contracts with customers

(i) Disaggregation of revenue

	2025
	LED	Illumination	Others	Total
Primary geographical markets:
Asia	$ 15,408,170	423,566	8,867	15,840,603
Europe	1,288,511	-	-	1,288,511
Others	475,321	-	-	475,321
	$ 17,172,002	423,566	8,867	17,604,435
Major products
Construction revenue	$ -	173,519	-	173,519
Sales revenue	17,172,002	250,047	8,867	17,430,916
	$ 17,172,002	423,566	8,867	17,604,435
	2024
	LED	Illumination	Others	Total
Primary geographical markets:
Asia	$ 15,844,599	233,603	14,266	16,092,468
Europe	1,235,263	16,515	-	1,251,778
Others	464,739	-	-	464,739
	$ 17,544,601	250,118	14,266	17,808,985
Major products
Construction revenue	$ -	161,492	-	161,492
Sales revenue	17,544,601	88,626	14,266	17,647,493
	$ 17,544,601	250,118	14,266	17,808,985

(ii) Contract balance

	December 31, 2025	December 31, 2024	January 1, 2024
Notes receivable	$ -	-	529
Accounts receivables (including long-term)	6,050,376	6,093,489	4,686,005
Less: allowance for impairment	(262,906)	(277,157)	(244,690)
	$ 5,787,470	5,816,332	4,441,844
Contract assets-illumination	$ 110,239	114,421	145,408
Less: allowance for impairment	(6,910)	(6,910)	(6,910)
	$ 103,329	107,511	138,498
Non-current contract liabilities-illumination	$ 44	45	48
Current contract liabilities-advance receipt	4,107	18,855	3,552
Current contract liabilities-illumination	28,210	57,996	37,268
	$ 32,361	76,896	40,868

For details on accounts receivable and allowance for impairment, please refer to note 6(d).

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

The amount of revenue recognized for the years ended December 31, 2025 and 2024 that was included in the contract liability balance at the beginning of the periods were $1,242 and $1,437, respectively.

The major change in the balance of contract assets and contract liabilities is the difference between the time frame in the performance obligation to be satisfied and the payment to be received.

(s) Remuneration of employees and directors

On June 11, 2025, the Company resolved at the shareholders' meeting to amend its Articles of Incorporation. According to the amended Articles, if the Company has a profit in a given fiscal year, the Company shall allocate 6% to 12% as remuneration to employees and no more than 1% as remuneration to directors and supervisors. The recipients of the employee remuneration, whether in the form of shares or cash, may include employees of subsidiaries who meet certain specific requirements, which were formulated by the Board of Directors. The amount of employees remuneration mentioned above includes an allocation of no less than 20%, as required by the Securities and Exchange Act, designated for distribution to entry-level employees.

Prior to the amendment, the Articles of Incorporation stipulated that, if the Company has profit in a given fiscal year, the Company shall allocate 6%~12% as remuneration to employees and remuneration to directors not exceeding 1%. However, if the Company has accumulated deficits, the after-tax earnings shall first be used to offset such deficits. The recipients of the employees remuneration, whether in the form of shares or cash, may include employees of subsidiaries who met certain specific requirements, which were formulated by the Board of Directors.

However, if the Company has accumulated deficits, the after-tax earnings shall first be used to offset such deficits before allocating employee and director remuneration in accordance with the aforementioned percentages.

The remuneration to employees amounted to $284,560 (including base-level employee remuneration) and $435,952, and the remuneration to directors amounted to $28,078 and $39,864, in 2025 and 2024, respectively. These amounts are calculated using the Company's profit before tax without the remuneration to employees and directors for the period, and are determined using the earnings allocation method which was stated under the Company's article. These remunerations are expensed under operating expenses for the period. If the board of directors decides to pay the employees compensation in stock, the basis for calculating the number of shares will be the closing price one day before the shareholders' meeting. The amounts, as stated in the financial statements are identical to those of the actual distributions for 2025 and 2024. The related information can be accessed through the Market Observation Post System website.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(t) Non-operating income and expenses

The interest income and finance costs in 2025 and 2024 were as follows:

(i) Interest income

	2025	2024
Cash in banks	$ 101,995	93,553
Corporate bonds	46,943	52,889
Others	2,716	5,009
	$ 151,654	151,451

(ii) Finance costs – interest expenses

	2025	2024
Loans	$ 18,168	10,416
Lease liabilities	4,894	5,019
Other	-	2
	$ 23,062	15,437

(iii) Other income

	2025	2024
Gains on disposal of intangible assets	$ -	132,875
Grant income	18,861	23,288
Rental income	8,655	10,066
Compensation income and others	32,315	46,728
	$ 59,831	212,957

(iv) Other expense

	2025	2024
Losses on customer complaint and litigation compensation	$ 83,834	66,135
Losses on oherous contracts	-	21,911
Others	182	3,521
	$ 84,016	91,567

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(u) Financial Instruments

(i) Credit risk

1) Exposure to credit risk

The carrying amount of financial assets represents the maximum amount exposed to credit risk.

2) Credit risk of receivables

For credit risk and credit impairment of note and accounts receivable, please refer to note 6(d).

For credit impairment of other receivable, please refer to note 6(e).

(ii) Liquidity Risk

The following are the contractual maturities of financial liabilities, including estimated interest payments.

	Carrying Amount	Contractual cash flows	Within 1 year	1 ~ 2 years	Over 2 years
December 31, 2025
Non-derivative financial liabilities:
Short-term borrowings	$ 750,000	(753,024)	(753,024)	-	-
Notes and accounts payable (including related parties)	5,405,105	(5,405,105)	(5,405,105)	-	-
Payable on construction and equipment	54,152	(54,152)	(54,152)	-	-
Lease liabilities (including current and non-current)	282,329	(377,581)	(11,401)	(11,078)	(355,102)
Other payables to related parties	247,419	(247,419)	(247,419)	-	-
Other payables (recorded as other current liabilities)	1,167,893	(1,167,893)	(1,167,893)	-	-
Guaranteed deposits received	175,884	175,884	175,027	-	857
Derivative financial liabilities:
Forward exchange contracts not used for hedging:	6,930
Outflow	-	(922,649)	(922,649)	-	-
Inflow	-	916,369	916,369	-	-
	$ 8,089,712	(7,835,570)	(7,470,247)	(11,078)	(354,245)

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

	Carrying Amount	Contractual cash flows	Within 1 year	1 ~ 2 years	Over 2 years
December 31, 2024
Non-derivative financial liabilities:
Short-term borrowings	$ 750,000	(753,367)	(753,367)	-	-
Notes and accounts payable (including related parties)	5,050,607	(5,050,607)	(5,050,607)	-	-
Payable on construction and equipment	113,503	(113,503)	(113,503)	-	-
Lease liabilities (including current and non-current)	289,889	(390,040)	(12,255)	(11,576)	(366,209)
Other payables to related parties	253,721	(253,721)	(253,721)	-	-
Other payables (recorded as other current liabilities)	1,141,030	(1,141,030)	(1,141,030)	-	-
Guaranteed deposits received	164,918	(164,918)	(153,114)	-	(11,804)
Derivative financial liabilities:
Forward exchange contracts not used for hedging:	10,137
Outflow	-	(1,344,021)	(1,344,021)	-	-
Inflow	-	1,333,917	1,333,917	-	-
	$ 7,773,805	(7,877,290)	(7,487,701)	(11,576)	(378,013)

The Company is not expecting that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amounts.

(iii) Currency risk

1) Exposure to foreign currency risk

The Company's significant financial assets and liabilities exposure to foreign currency risk were as follow:

	December 31, 2025			December 31, 2024
	Foreign currency (in thousands)	Exchange rate	TWD	Foreign currency (in thousands)	Exchange rate	TWD
Financial assets
Monetary items
USD	$ 164,224	USD/TWD =31.438	5,162,878	127,051	USD/TWD =32.781	4,164,854
RMB	403,774	RMB/TWD =4.4959	1,815,327	354,474	RMB/TWD =4.491	1,591,944
HKD	371,449	HKD/TWD =4.0397	1,500,541	402,007	HKD/TWD =4.2201	1,696,510
Financial liabilities
Monetary items
USD	19,627	USD/TWD =31.438	617,020	16,667	USD/TWD =32.781	546,375
RMB	1,005,591	RMB/TWD =4.4959	4,521,039	914,821	RMB/TWD =4.491	4,108,463

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

2) Sensitivity analysis

The Company's exposure to foreign currency risk of monetary items arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, notes and accounts receivable, other receivables, loans and borrowings, notes and accounts payables and other payables that are denominated in foreign currency. A 5% of appreciation (depreciation) of each major foreign currency against the Company's functional currency as of December 31, 2025 and 2024 would have increased (decreased) the profit before tax by $212,303 and $187,748 for the years ended December 31, 2025 and 2024, respectively. The analysis is performed on the same basis for both periods.

3) Exchange gains and losses of monetary items

As the Company deals in diverse foreign currencies, gains or losses on foreign exchange were summarized as a single amount. For the years ended December 31, 2025 and 2024, the foreign exchange gains or losses, including both realized and unrealized, amounted to losses of $38,718 and gains of $284,041, respectively.

(iv) Interest rate analysis

The details of financial assets and liabilities exposed to interest rate risk were as follows:

Carrying amount
	December 31, 2025	December 31, 2024
Variable rate instruments:
Financial assets	$ 946,548	804,198

The following sensitivity analysis is based on the risk exposure to interest rate on the derivative and non-derivative financial instruments on the reporting date. Regarding the assets and liabilities with variable interest rates, the analysis is on the basis of the assumption that the amount of assets and liabilities outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 0.25% when reporting to management internally, which also represents management of the Company's assessment on the reasonably possible interval of interest rate change.

If the interest rate had increased or decreased by 0.25%, the effects of the net profit before tax for the years ended December 31, 2025 and 2024, were as following, which would be mainly resulted from cash in banks with variable interest rates.

	2025	2024
Increase by 0.25%	$ 2,366	2,010
Decrease by 0.25%	(2,366)	(2,010)

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(v) Fair value

1) The kinds of financial instruments and fair value

The fair value of the Company's financial assets and liabilities at fair value through profit or loss and financial assets at fair value through other comprehensive income are measured on a recurring basis. The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. They shall not include fair value information of the financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value, and lease liabilities, disclosure of fair value information is not required.

	December 31, 2025
	Book value	Fair Value
		Level 1	Level 2	Level 3	Total
Financial assets at fair value through profit or loss:
Derivative financial assets	$ 2,670	-	2,670	-	2,670
Non derivative financial assets mandatorily measured at fair value through profit or loss	333,299	208,457	124,842	-	333,299
	335,969
Financial assets at fair value through other comprehensive income:
Foreign and domestic corporate bonds	1,407,635	1,407,635	-	-	1,407,635
Financial assets measured at amortized cost
Cash and cash equivalents	2,010,860	-	-	-	-
Notes and accounts receivable (including related parties)	5,402,552	-	-	-	-
Other receivables due from related parties	138,769	-	-	-	-
Other current financial assets	4,167,989	-	-	-	-
Other non-current financial assets	602,693	-	-	-	-
	12,322,863	-	-	-	-
	$ 14,066,467

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

	December 31, 2025
	Book value	Fair Value
		Level 1	Level 2	Level 3	Total
Financial liabilities at fair value through profit or loss:
Derivative financial liabilities (recorded as other current liabilities)	$ 6,930	-	6,930	-	6,930
Financial liabilities measured at amortized cost:
Short-term borrowings	750,000	-	-	-	-
Notes and accounts payable (including related parties)	5,405,105	-	-	-	-
Payable on construction and equipment	54,152	-	-	-	-
Lease liabilities	282,329	-	-	-	-
Other payables to related parties	247,419	-	-	-	-
Other payables (recorded as other current liabilities)	1,167,893	-	-	-	-
Guaranteed deposits received (recorded as other non-current liabilities, others)	175,884	-	-	-	-
	8,082,782	-	-	-	-
	$ 8,089,712
	December 31, 2024
	Book value	Fair Value
		Level 1	Level 2	Level 3	Total
Financial assets at fair value through profit or loss:
Derivative financial assets	$ 2,492	-	2,492	-	2,492
Non derivative financial assets mandatorily measured at fair value through profit or loss	253,148	253,148	-	-	253,148
	255,640
Financial assets at fair value through other comprehensive income:
Foreign corporate bonds	1,165,412	1,165,412	-	-	1,165,412
Financial assets measured at amortized cost
Cash and cash equivalents	1,634,482	-	-	-	-
Notes and accounts receivable (including related parties)	5,382,949	-	-	-	-
Other receivables due from related parties	260,666	-	-	-	-
Other current financial assets	4,336,517	-	-	-	-
Other non-current financial assets	677,483	-	-	-	-
	12,292,097	-	-	-	-
	$ 13,713,149

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

	December 31, 2024
	Book value	Fair Value
		Level 1	Level 2	Level 3	Total
Financial liabilities at fair value through profit or loss:
Derivative financial liabilities (recorded as other current liabilities)	$ 10,137	-	10,137	-	10,137
Financial liabilities measured at amortized cost:
Short-term borrowings	750,000	-	-	-	-
Notes and accounts payable (including related parties)	5,050,607	-	-	-	-
Payable on construction and equipment	113,503	-	-	-	-
Lease liabilities	289,889	-	-	-	-
Other payables to related parties	253,721	-	-	-	-
Other payables (recorded as other current liabilities)	1,141,030	-	-	-	-
Guaranteed deposits received (recorded as other non-current liabilities, others)	164,918	-	-	-	-
	7,763,668	-	-	-	-
	$ 7,773,805

2) Fair value valuation technique of financial instruments not measured at fair value

The Company estimates instruments that are not measured at fair value by method and presumption as follows:

a) The book value of financial assets and liabilities at amortized cost are similar to their fair value.

3) Fair value valuation technique of financial instruments measured at fair value

a) The fair value of financial assets and liabilities traded in active markets, including listed stocks, fund beneficiary certificates, emerging stocks and listed convertible bonds, etc., is based on quoted market prices.

b) The fair value of unlisted shares without an active market is assessed by using the net asset value per share approach, P/E ratio approach, and P/B ratio approach.

c) The fair value of derivative instruments is based on quoted prices. When quoted prices are unavailable, the fair value is estimated by adapting a valuation technique using the estimates and hypothesis referred from those used by financial instruments, or the binomial options pricing model which is generally accepted by the market participants.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

d) For all other financial assets and financial liabilities, the fair value is determined using a discounted cash flow analysis based on expected future cash flows.

4) There was no transfer from one level to another of the Company in 2025 and 2024.

(v) Financial risk management

(i) Briefings

The Company is exposed to the following risks arising from financial instruments:

1) Credit risk
2) Liquidity risk
3) Market risk

In this note expressed the information on risk exposure and objectives, policies and process of risk measurement and management. For detailed information, please refer to the related notes of each risk.

(ii) Structure of risk management

The Company's finance department provides business services for the overall internal department. It sets the objectives, policies and processes for managing the risk and the methods used to measure the risk arising from both the domestic and international financial market operations.

The Company minimizes the risk exposure through derivative financial instruments. The Board of Directors regulated the use of derivative and non-derivative financial instruments in accordance with the Company's policy about risks arising from financial instruments such as currency risk, interest rate risk, credit risk, the use of derivative and non-derivative financial instruments and the investments of excess liquidity. The internal auditors of the Company continually review the amount of the risk exposure and the compliance with the Company's policies. The Company has no transactions in financial instruments (including derivative financial instruments) for the purpose of speculation.

(iii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's receivables from customers and investment securities.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

1) Accounts receivable and other receivables

The Company has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company's standard payment and delivery terms and conditions are offered. The Company's review includes external ratings, when available, and bank references in some cases. Credit limits that are established for each customer are reviewed periodically. Customers that fail to meet the Company's benchmark creditworthiness may transact with the Company only on a prepayment basis.

The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the demographics of the Company's customer base, including the default risk of the industry and country in which customers operate, as these factors may have an influence on credit risk. The Company's customers are from many different industries. The Company does not concentrate on a specific customer, thus, there should be no concern on the significant concentrations of accounts receivable credit risk. In order to mitigate account receivable credit risk, the Company constantly assesses the financial status of the customers.

The Company set the allowance for bad debt account to reflect the estimated losses for accounts receivables, other receivables, and investments. The allowance for bad debt account consists of specific losses relating to individually significant exposure and the unrecognized losses arising from similar assets groups. The allowance for bad debt account is recognized based on historical collection records of similar financial assets.

2) Investment

The credit risk exposure in the bank deposits, fixed income investments and other financial instruments are measured and monitored by the Company's finance department. Since the Company's transaction counterparties and contractually obligated counterparties are banks, investment grade above financial institutions, and corporate organizations with good credit standing, there are no compliance issues, and therefore, there is no significant credit risk.

3) Guarantees

The Company's policy to provide financial guarantees is only permissible to subsidiaries. As of December 31, 2025 and 2024, the Company had not provide any financial guarantees.

(iv) Liquidity risk

The Company manages sufficient cash and cash equivalents so as to cope with its operations and mitigate the effects of fluctuations in cash flows. The Company's management supervises the banking facilities to ensure they are in compliance with the terms of the loan agreements.

The borrowings from the bank form an important source of liquidity for the Company. Please refer to note 6(k) for the unused credit lines of short-term and long-term borrowings as of December 31, 2025 and 2024.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(v) Market risk

Market risk is the risk that will affect the Company's income or the value of its financial instruments arising from the changes in market prices, such as foreign exchange rates, interest rates and equity prices. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

The Company buys and sells derivatives, and also incurs financial liabilities, in order to manage market risks.

1) Currency risk

The Company is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the respective functional currencies. The currencies used in these transactions are denominated in TWD, HKD, EUR, USD, and RMB.

The Company hedges accounts receivable denominated in a foreign currency. The Company uses forward exchange contracts to hedge its currency risk, with a maturity of less than one year from the reporting date.

2) Interest rate risk

The Company borrows funds on fixed and floating interest rate; and the Company bears the cash flow risks related to floating rate loans.

3) Other market value risk

The Company is exposed to equity price risk arising from listed stock investments. This is a strategic investment and is not held for trading. The Company does not actively trade in these investments. The material investments of investment portfolio are managed individually and their purchase decision must be approved by the finance department.

(w) Capital management

The Company maintains the capital based on the current operating characteristics of the industry, future development, and changes in external environment, to assure there are financial resources and operating plans to support working capital, capital expenditures, research and development expenses, debt redemptions and dividend payments, and so on. The management decides the optimized capital by using appropriate debt-to-equity ratio, interest-bearing liabilities-to-equity ratio or other financial ratios. To maintain a strong capital base, the Company enhances the return on equity by optimizing debt-to-equity ratio. The Company's debt-to-equity ratio at the end of the reporting date was as follows:

	December 31, 2025	December 31, 2024
Total liabilities	$ 9,228,732	8,658,225
Total equity	19,971,082	20,266,806
Interest-bearing liabilities	750,000	750,000
Debt-to-equity ratio	46 %	43 %
Interest-bearing liabilities to equity ratio	4 %	4 %
		(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(x) Investing and financial activities not affecting current cash flow

The Company’s investing and financing activities which did not affect the current cash flow for the years ended December 31, 2025 and 2024, were acquisition of right-of-use assets by lease; please refer to note 6(j).

Reconciliations of liabilities arising from financing activities were as follows:

	January 1, 2025	Cash flows	Non-cash changes		December 31, 2025
			Acquisition	Other
Short-term borrowings	$ 750,000	-	-	-	750,000
Other payables to related parties	253,721	(6,302)	-	-	247,419
Lease liabilities	289,889	(7,230)	-	(330)	282,329
Guaranteed deposits received (including current and non-current)	164,918	10,966	-	-	175,884
Total liabilities from financing activities	$ 1,458,528	(2,566)	-	(330)	1,455,632
	January 1, 2024	Cash flows	Non-cash changes		December 31, 2024
			Acquisition	Foreign exchange movement
Short-term borrowings	$ 250,000	500,000	-	-	750,000
Other payables to related parties	152,737	100,984	-	-	253,721
Lease liabilities	245,889	(8,578)	52,578	-	289,889
Guaranteed deposits received (including current and non-current)	145,560	19,358	-	-	164,918
Total liabilities from financing activities	$ 794,186	611,764	52,578	-	1,458,528

(7) Related-party transactions

(a) Names and relationship with related parties

The followings are entities that have had transactions with related party during the periods covered in the financial statements.

Name of related party	Relationship with the Company
Pai-yee Investment Co., Ltd. (Pai-yee)	The Company’s subsidiary
Everlight(BVI) Co., Ltd. (Everlight BVI)	The Company’s subsidiary
Everlight Electronics (Europe) GmbH (Everlight Europe)	The Company’s subsidiary
Everlight Americas, Inc. (ELA)	The Company’s subsidiary
Everlight Optoelectronics Korea Co., Ltd. (ELK)	The Company’s subsidiary
Forever Investment Co., Ltd. (Forever)	The Company’s subsidiary
Everlight Intelligence Technology Co., Ltd. (ELIT)	The Company’s subsidiary
Wofi Leuchten GmbH (WOFH Holding)	The Company’s subsidiary (Note 1)
Everlight Electronic India Private Limited (ELI)	The Company’s subsidiary
Evlite Electronics Co., Ltd. (Evlite)	The Company’s subsidiary

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

Name of related party	Relationship with the Company
Everlight Electronics Singapore Pte. Ltd. (ELS)	The Company’s subsidiary
Everlight Japan Corporation (ELJ)	The Company’s subsidiary
Everson Electronics Co., Ltd. (Evervision TW)	The Company’s subsidiary
Everlight Optoelectronics (M) SDN.BHD. (Everlight Malaysia)	The Company’s subsidiary
Everlight Electronics (China) Co., Ltd. (Everlight China)	The Company’s subsidiary
Everlight Lighting (China) Co., Ltd. (Everlight Lighting China)	The Company’s subsidiary
Everlight Electronics (Guangzhou) Co., Ltd. (Everlight Electronics (Guangzhou))	The Company’s subsidiary
Everlight Electronics (Zhongshan) Co., Ltd. (Everlight Zhongshan)	The Company’s subsidiary
Zhongshan Everlight Lighting Co., Ltd. (Zhongshan Everlight Lighting)	The Company’s subsidiary (Note 4)
Everlight Intelligence Technology KZ LLP (ELIT KZ)	The Company’s subsidiary
WOFI Leuchten Wortmann & Filz GmbH (WOFI W&F GmbH)	The Company’s subsidiary (Note 2)
Euro Technics Trade GmbH (ETT)	The Company’s subsidiary (Note 3)
WOFI Technics Trade Limited (WTT)	The Company’s subsidiary (Note 7)
Action GmbH (Action)	The Company’s subsidiary (Note 3)
WOFI Verkaufsgesellschaft mbH (WOFI VG)	The Company’s subsidiary (Note 3)
Lamp For Less GmbH (LFL)	The Company’s subsidiary (Note 3)
Evervision Electronics (B.V.I.) Limited (Evervision BVI)	The Company’s subsidiary (Note 8)
VBest GmbH (VBest)	The Company’s subsidiary
VBest Electronics (Kunshan) Ltd. (VBest Kunshan)	The Company’s subsidiary (Note 6)
Evervision Electronics (H.K.) Limited (Evervision HK)	The Company’s subsidiary (Note 7)
Tekcore Co. Ltd (Tekcore)	The Company’s associate (Note 5)
Anhui Hongming Technology Co., Ltd. and its subsidiaries (Anhui Hongming)	Everlight China’s and Everlight Zhongshan's associate
LeadTech Electronics Inc. (LeadTech)	Evervision TW’s associate

Note 1: WOFI Holding approved the dissolution and liquidation procedures in August 2022.
Note 2: WOFI W&F GmbH was declared bankruptcy by German district court in April 2023.
Note 3: ELT, Action, WOFI VG and LFL were declared bankruptcy by German district court in May 2023.
Note 4: Zhongshan Everlight Lighting completed its liquidation procedure in June 2024.
Note 5: The Company disposed of all its ownership in Tekcore after Tekcore re-elected its directors during its in shareholders' meeting held on June 19, 2024. Thereafter, Tekcore is no longer a related party of the Company, and the amount listed above was from January 1 to June 19, 2024.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

Note 6: Evervision BVI disposed all of its ownership in VBest Electronics (Kunshan) Ltd. (VBest Kunshan) to a third party in December 2024, resulting in VBest Kunshan to become a non-related party of the Company.

Note 7: WTT and Evervision HK completed their liquidation procedures in May 2025.

Note 8: Evervision BVI completed its liquidation procedures in July 2025.

(b) Significant related party transactions

(i) Sales

The amounts of significant sales by the Company to related parties were as follows:

	2025	2024
Subsidiaries	$ 2,112,931	2,472,729
Associates	1,194,007	917,614
	$ 3,306,938	3,390,343

The Company sells instruments (production molds) to Everlight China and Everlight Zhongshan, and only sells end products to other related parties and other customers. There are no significant differences in the sales price of end product between the related parties and other customers. The payment term of sales to Everlight China and Everlight Zhongshan was OA 120 days. The payment term of sales to Everlight Lighting China was depending on the payment term of the end customer. The payment term of domestic sales and oversea sales to other related parties and other customers were 60 to 120 days and 30 to 165 days, respectively.

(ii) Purchase

The amounts of purchase by the Company from related parties were as follows:

	2025	2024
Subsidiaries:
Everlight China	$ 8,820,973	8,213,969
Others	748,708	763,456
	9,569,681	8,977,425
Associates	180,263	336,997
	$ 9,749,944	9,314,422

1) Processing trade

The Company purchases finished products and semi-finished products directly from Everlight China and Everlight Zhongshan. The amounts of purchase from triangular trade included the amounts of the Company's sales of raw materials and semi-finished products. The aforementioned amounts had been eliminated in the financial statements, and were not regarded as sales and purchase transactions.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

2) Sell-and-repurchase of finished goods

The finished goods partially sold to Anhui Hongming by the Company were repurchased after being processed and manufactured by Anhui Hongming, at the purchase amount of $284,219 and $198,386, which had been eliminated in the financial statements, and was not regarded as sales and purchase transactions, in 2025 and 2024, respectively.

Purchase prices from Everlight China, Everlight Zhongshan and Tekcore are not comparable to other general trading price. There are no significant differences in purchase prices between other related parties and third-party suppliers. The payment terms for Everlight China and Everlight Zhongshan were both OA 120 days. The payment terms for other related parties and third-party suppliers were OA 90 to 150 days.

(iii) Accounts receivable from related parties

The accounts receivable due from related parties were as follows:

Related party categories	December 31, 2025	December 31, 2024
Subsidiaries
Everlight Lighting China	$ 9,564	12,207
Evlite	141,796	386,502
Everlight Europe	226,258	197,370
ELA	62,199	81,003
Others	23,947	24,971
	463,764	702,053
Associates	634,976	517,577
	$ 1,098,740	1,219,630

(iv) Accounts payables to related parties

The accounts payable to related parties were as follows:

Related party categories	December 31, 2025	December 31, 2024
Subsidiaries
Everlight China	$ 3,736,515	3,399,012
Everlight Zhongshan	220,848	229,181
Others	124,365	124,815
	4,081,728	3,753,008
Associates	274,291	139,263
	$ 4,356,019	3,892,271

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(v) Property transaction

1) Disposals of property, plant and equipment

Details of machinery and equipment sold to related parties were as follows:

Related parties Categories	2025		2024
	Sale price	Net gain (loss) on sale	Sale price	Net gain (loss) on sale
Subsidiaries:
Everlight China	$ 53,059	5,788	111,927	9,434
Everlight Zhongshan	7,253	991	3,969	523
Eversion Taiwan	-	-	2,205	2,205
	$ 60,312	6,779	118,101	12,162

The aforementioned sale price included the amounts that the Company purchased fixed assets on behalf of related parties, which amounted to $18,318 and $58,322 in 2025 and 2024, respectively.

2) Disposals of other assets

In March 2024, the Company sold intangible assets to Anhui Hongming for a total consideration of $132,875. As of December 31, 2024, the transfer was completed. The gain on disposal of intangible assets of $132,875 was recognized based on fair value and recorded as other income.

3) Acquisition of property, plant, and equipment

In 2024, the Company purchased machinery and equipment from its subsidiary for a total consideration of $57,142, which was recorded as prepayments for equipment. For information on property, plant, and equipment, please refer to Note 6(i) for details.

(vi) Commissions expenses

In order to develop overseas market, the Company signed commission contracts with subsidiaries. The commissions fees were calculated in a certain percentage of the sales prices. Details of commissions' expenses were as follows:

Related parties Categories	2025	2024
Subsidiaries:
Everlight Lighting China	$ 137,758	157,348
Evlite	33,225	52,859
ELK	92,468	89,103
ELA	65,440	72,439
ELJ	28,284	32,907
ELEU	35,514	31,275
Others	38,523	35,987
	$ 431,212	471,918

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(vii) Services expenses

ELIT were commissioned to manage projects and to implement warranty services by the Company. The services expenses due to these services amounted to $18,298 and $7,601 in 2025 and 2024, respectively.

(viii) Loans to other parties

In order to support the operational funding demands of subsidiaries, the Company signed financing contracts with subsidiaries. Loans to other parties were recorded as other receivables—related parties. The amounts of loans to other parties were $573,194 and $527,124 as of December 31, 2025 and 2024, respectively. The actual usage amounts were as follows:

	Highest balance of financing to other parties		Interest income
	2025	2024	2025	2024
Subsidiaries:
WOFI	$ 583,200	536,326	-	-

(ix) Others

1) As of December 31, 2025 and 2024, the amounts which were not remitted to the Company by the related parties due to collecting accounts receivable in China region on behalf of the Company, interest receivables, purchasing fixed assets from the Company, loans to other parties were recorded as other receivables—related parties. The details were as follows:

Related party categories	December 31, 2025	December 31, 2024
Subsidiaries:
Everlight China	$ 57,958	121,667
Evlite	77,196	134,826
WOFI	573,194	527,124
Others	3,615	4,173
Less: credit balances of investments in equity method	(573,194)	(527,124)
	$ 138,769	260,666

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

2) As of December 31, 2025 and 2024, the unpaid amounts to related parties due to related parties paying freight on behalf of the Company, the Company collecting receivables on behalf of related parties, payables for equipment to subsidiaries, commissions payables and services payables, were recorded as other payables—related parties. The details were as follows:

Related party categories	December 31, 2025	December 31, 2024
Subsidiaries:
Everlight China	$ 142,016	117,620
ELIT	14,822	63,996
Everlight Lighting China	58,389	48,490
Others	32,169	23,608
Associates	23	7
	$ 247,419	253,721

Key management personnel compensation comprised:

	2025	2024
Short-term employee benefits	$ 65,837	73,908
Others	412	296
	$ 66,249	74,204

There are no termination benefits and other long-term benefits.

(8) Pledged assets

The carrying amounts of the pledged assets are as follows:

Assets	Objectives	December 31, 2025	December 31, 2024
Time deposits (recorded as other non-current financial assets)	Guarantee for contract grant and guarantee for construction contracts	$ 166,094	177,323

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(9) Commitments and contingencies

(a) Litigation with Nichia Corporation (Nichia)

(i) Patent Case No. DE69702929

On April 18, 2012, Nichia filed a lawsuit against the Company and its subsidiary, Everlight Europe, at the Dusseldorf District Court of Germany for infringement of Nichia's German patent DE69702929, concerning the white light LEDs using specific phosphors, wherein the district court ruled in favor of Nichia on September 3, 2013. Dissatisfied with the decision, the Group appealed to the Dusseldorf Higher Regional Court of Germany on October 2, 2013, in which it lost the case on December 22, 2016. In response to this, Group filed an appeal to the German Federal Supreme Court on January 18, 2017. However, since the patent DE69702929 expired on July 29, 2017, and thus, had no impact on the existing products of the Group. In addition, the lawsuit only targeted a few old products of the Company and its subsidiary, Everlight Europe. The Group had assessed that there was no significant impact on the current operation and product sales, and to avoid the waste of judicial resources caused by frivolous lawsuits, the Group had withdrawn the lawsuit from the German Federal Supreme Court.

On March 12, 2025, Nichia filed a lawsuit against the Company and its subsidiary, Everlight Europe, to the Dusseldorf District Court of Germany for the damage of infringement of Nichia's European patent EP0936682 (German patent number DE69702929), requesting for the compensation of EUR2,500 thousand. The damage dispute is an extension of said patent lawsuit between the Group and Nichia in Germany from 2012 to 2017. On March 31, 2025, the Group received a lawsuit notice from the German regional court, wherein it appointed a lawyer to handle the case, which was still in progress as of the reporting date. After evaluating the final judgment and the amount of the possible claims, the Group estimated a liability provision of EUR1,900 thousand (approximately $68,190), which will not have a significant impact on the operations of the Group.

In addition, Nichia Corporation filed a damage compensation lawsuit with the Dusseldorf District Court in Germany on July 15, 2021 against WOFI, alleging infringement of patent EP0936682 (DE69702929). On October 31, 2022, the Dusseldorf District Court rendered a first-instance judgment requiring WOFI to pay Nichia Corporation damages in the amount of EUR 3,225 thousand. WOFI subsequently filed an appeal with the Higher Regional Court Dusseldorf on November 30, 2022.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(ii) Patent Case No. EP2276080

In September 2015, Nichia filed a lawsuit against the Company’s sub-subsidiary, WOFI, for infringement of patent EP2276080 with the District Court of Dusseldorf, Germany. On December 15, 2016, the District Court of Dusseldorf, Germany, ruled against WOFI in the first instance. On January 12, 2017, WOFI filed an appeal with the High Court of Justice in Dusseldorf, Germany. In October 2017, a ruling notice had been received from the European Patent Office, which found that the original scope of patent EP2276080 was invalid and that the revised scope of the patent was valid. However, in April 2022, patent EP2276080 was judged valid by the European Patent Office and the infringement lawsuit was reopened. On December 16, 2022, the High Court of Justice in Dusseldorf, Germany ruled against WOFI in the second trial. Thereafter, the case proceeded to the execution of the litigation order.

The Company’s subsidiary, WOFI, assessed the outcome of the final judgment and the potential amount of claims that may be required to be paid, and accordingly recognized a provision for liabilities of EUR 4,500 thousand (NTD 141,316). As the subsidiary, WOFI, has entered into bankruptcy liquidation process, the final conclusion of this case will only be completed after the bankruptcy administrator has finalized the liquidation process and the distribution of assets. Based on the current assessment, the outcome of the final judgment is not expected to have a material impact on the Company’s operations.

(b) Kazakhstan Joint Contracting Project

(i) Pavlodar Regional Government Project

In 2017, the Company, together with A3 Commerce LLP and Altocom Asia LLP (hereinafter referred to as “Alliance A”), was jointly contracted for a smart street light installation and maintenance project for the Pavlodar State Government in Pavlodar of the Republic of Kazakhstan for a period of six years, with a total contract cost of approximately USD8,967 thousand. The installation of the light fixtures was completed and accepted by the Pavlodar State Government on January 4, 2019. However, the Pavlodar State Government later found that some equipment for the smart control systems that should have been installed by A3 Commerce LLP, a member of Alliance A, was shortage, thus suspended the payment for the second quarter of 2020 as well as the subsequent project payment. On October 26, 2020, the Pavlodar State Government requested in writing to Alliance A to complete the installation of the shortage smart control systems as soon as possible and in accordance with the contract.

The Company believed that A3 Commerce LLP failed to fulfill its obligation to install the smart control systems and that Altocom Asia LLP failed to fulfill its maintenance management responsibilities. These two companies were deemed to be incompetent. In order to protect the Company’s interests, the Company sent a letter to the Pavlodar State Government in December 2020, demanding the removal of A3 Commerce LLP and Altocom Asia LLP from Alliance A. In January 2021, the Pavlodar State Government sent a further request in writing that the Company should correct the equipment shortage issue as described above. On February 9, 2021, the Pavlodar State Government filed a lawsuit in the Kazakhstan Court, demanding the termination of the contract with Alliance A with compensation of KZT268,883 thousand (approximately $18,203). The Company has appointed Baker McKenzie, an international business law firm and its local member firm in Kazakhstan, in the hope of negotiating a contract revision with the Pavlodar State Government to allow the Company to finish the uncompleted project independently. The local Court dismissed the lawsuit and appeal on the

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

grounds of procedural irregularities on March 10 and April 22, 2021, as the State Government failed to follow the terms of the contract regarding negotiation but instead went straight to litigation. After the dismissal of its lawsuit, the Pavlodar State Government immediately started negotiations with Alliance A.

According to the opinion report issued by the appointed attorney on March 22, 2021, as both parties were still in the process of understanding each other’s requests and the attribution of responsibilities, a solution should be negotiated to resolve the dispute. However, it was difficult to predict the outcome, and the maximum exposure for termination of the contract was approximately $141,599. As of December 31, 2020, based on a reasonably conceivable judgment, the Company estimated a loss of $58,754 and reserved the right to legal recourse against the alliance members, A3 Commerce LLP and Altocom Asia LLP, for their incomplete work that damaged the rights and interests of the Company.

In addition, on June 21, 2021, the Ministry of Energy of the Pavlodar State Government filed a lawsuit against the Transportation Department of Pavlodar, all members of Alliance A, and all contractors, requesting confirmation that the project acceptance that took place in January 2019 was invalid. The Company’s appointed attorney argued with the Court that the subject matter of the lawsuit is the same as the previous lawsuit filed by the Pavlodar State Government in December 2020. The lawsuit was dismissed by the Court due to having no legal basis. On the grounds of non bis in idem, the failure of the Ministry of Energy of the Pavlodar State Government to fulfill its pre-litigation negotiation obligations, and the lack of legal right of the Pavlodar State Government to petition for the invalidation of the acceptance of the project, the Company’s appointed attorney believes that the lawsuit should be dismissed in accordance with the law, and requested the Court to grant a transfer to a Court of competent jurisdiction. On July 21, 2021, the Court of First Instance granted the transfer of jurisdiction. The Ministry of Energy of the Pavlodar State Government filed a protest. On August 5, 2021, the Court of Second Instance revoked the decision of transfer of jurisdiction and remanded the case to the First Instance. On September 13, 2021, the Court of First Instance ruled against the Company on the grounds of non bis in idem, the failure of the Ministry of Energy of the State Government of Pavlodar to fulfill its pre-litigation negotiation obligations, and that the Pavlodar State Government had no legal right to apply for confirmation of the invalidation of the acceptance and ruled that the acceptance of the project in January 2019 was invalid. As the Company found that the decision in this case was clearly unlawful, the Company filed a protest against the decision of dismissal on October 1, 2021. The Company then filed an appeal against the decision of invalidation of the acceptance of the project as described above on October 19, 2021. On December 28, 2021, the judge of the second trial dismissed the Company’s protest and appeal and the ruling was finalized. The Company filed an appeal for the third trial against the ruling and judgment of the second trial, and this appeal was dismissed on April 4, 2022. The lawsuit only pleaded to confirm the invalidation of the acceptance of the project in January 2019, and the Pavlodar State Government did not file a claim for compensation.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

As no satisfactory outcome was achieved by either party, on February 10, 2022, the Pavlodar Statement Government filed another lawsuit against Alliance A, demanding to terminate the contract with Alliance A and compensation of KZT1,345,882 thousand (approximately $85,733). The Company has appointed an attorney to defend the best legal interests of the Company. Pursuing ongoing negotiations with the Pavlodar State Government to find a mutually beneficial solution should suffice considering termination of the contract would be in the best interests of neither party. On April 27, 2022, the Court of First Instance granted the entire request of the State Government of Pavlodar. The Company filed an appeal against the ruling as it was considered unlawful on June 2, 2022. On July 19, 2022, the Second Trial Court denied the Company’s appeal, with a final judgment entered.

(ii) Taraz Regional Government Project

In 2019, the Company, together with Altocom Asia LLP (hereinafter referred to as “Alliance B”), was jointly contracted for a smart street light installation and maintenance project for the Taraz State Government, for a period of six years, with a total contract cost of approximately USD 14,196 thousand. Alliance B carried out light fixture installation according to the contract. On March 18, 2021, the Taraz State Government filed a lawsuit to terminate the contract claiming that Alliance B has carried out the project without fully preparing the relevant design documents and did not complete the contracted work by December 30, 2020. However, the Company believed that Alliance B completed the project without any delay or deficiency. According to the opinion issued by the appointed attorney on March 22, 2021, as both parties were still in the process of understanding each other’s requests and the attribution of responsibilities, it was difficult to predict the outcome. However, the Taraz State Government failed to follow the terms of contract to first negotiate with Alliance B, instead filing a lawsuit for the termination of the contract. The appointed attorney argued that the relevant procedures were unlawful to defend against the Taraz State Government’s claim and requested the Court to grant a transfer to the Court of competent jurisdiction in order to negotiate with the State Government to resolve the dispute. On April 22, 2021, the local court granted the transfer of jurisdiction to the Commercial Court for trial. On July 21, 2021, the Commercial Court of Taraz ruled against the Company. On August 19, 2021, the Company filed an appeal, which was dismissed by the Court of Second Instance on September 23, 2021, and the ruling was finalized. As the Company believed that Alliance B had no deficiencies, the Company filed an appeal for the third trial against the ruling and judgment of the second trial. The third appeal was dismissed by the Court of Third Instance on April 18, 2022. The case was only decided on the termination of the contract, and the Taraz State Government did not request compensation. As a result, the Company will continue to assess whether to request the return of the equipment or the associated cost from the Taraz State Government.

As of the financial reporting date, with the assistance of the attorney, the Company believed that its litigation in Kazakhstan has exhausted the judicial procedures and reached the Supreme Court of Kazakhstan. Although there are special relief procedures similar to retrials in Taiwan, the Company is of the opinion that its special relief procedures may not achieve a favorable outcome for the Company, considering the local political environment and judicial peculiarities.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(iii) Overall impact

Based on the above assessment, the Company recognized an allowance for expected credit losses on accounts receivable that are expected to be uncollectible in relation to the aforementioned two cases in an aggregate amount of $73,316. In addition, inventory write-down losses of $65,672 were recognized, and a provision for other reasonably estimable obligations and compensation losses amounting to $89,777 was recorded. Furthermore, the Company has reserved its legal rights to pursue claims against alliance members A3 Commerce LLP and Altocom Asia LLP for damages to the Company’s interests arising from their construction defects.

As of December 31, 2025 and 2024, the cumulative losses recognized in connection with the aforementioned two cases amounted to $320,929. In addition, as of December 31, 2025 and 2024, the cumulative losses recognized by the Company’s subsidiary, Everlight Intelligent Technology, in relation to the aforementioned two cases amounted to $98,728, which were accounted for as the Company’s share of profit or loss of subsidiaries, associates and joint ventures accounted for using the equity method.

(c) The Company's subsidiary, WOFI Verkaufsgesellschaft mbH, was officially declared bankrupt by the local court in Germany in May 2023 and had therefore been placed under the administration of a court-appointed insolvency administrator. On December 30, 2024, the insolvency administrator filed a lawsuit with the local German court against WOFI Holding, seeking compensation for losses incurred by this subsidiary in the amount of approximately EUR1,392 thousand. The Company received the court notice of the lawsuit on January 16, 2025, and appointed a local German attorney to represent the Company in the proceedings on January 27, 2025. The Company assessed that the final ruling of this case will not have any material effects on its operations.

The Company's subsidiary, Action GmbH, was officially declared bankrupt by the local court in Germany in May 2023 and had therefore been placed under the administration of a court-appointed insolvency administrator. On December 30, 2024, the insolvency administrator filed a lawsuit with the local German court against WOFI Holding, seeking compensation for losses incurred by this subsidiary in the amount of approximately EUR763 thousand. The Company received the court notice of the lawsuit on January 16, 2025, and appointed a local German attorney to represent the Company in the proceedings on January 27, 2025. The Company assessed that the final ruling of this case will not have any material effects on its operations.

(d) Significant commitments unrecognized:

(i) As of December 31, 2025 and 2024, the Company's signed significant commitments to purchase machinery, equipment and commitments for construction contracts not yet due amounted to $136,708 and $86,734, respectively.

(ii) As of December 31, 2025 and 2024, the unused balance of the Company’s outstanding standby letters of credit amounted to $0 and $2,459, respectively.

(10) Losses Due to Major Disasters: none

(11) Subsequent Events: none

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(12) Other

(a) The followings are the summary statement of current period employee benefits, depreciation and amortization expenses by function:

| By function
By item | 2025 | | | 2024 | | |
| --- | --- | --- | --- | --- | --- | --- |
| | Cost of sales | Operating expenses | Total | Cost of sales | Operating expenses | Total |
| Employee benefits | | | | | | |
| Salary | 368,370 | 874,417 | 1,242,787 | 522,135 | 1,143,197 | 1,665,332 |
| Labor and health insurance | 32,832 | 60,177 | 93,009 | 42,389 | 66,771 | 109,160 |
| Pension | 12,254 | 30,640 | 42,894 | 14,881 | 33,692 | 48,573 |
| Remuneration of directors | - | 32,111 | 32,111 | - | 43,469 | 43,469 |
| Others | 35,033 | 48,878 | 83,911 | 45,529 | 43,832 | 89,361 |
| Depreciation | 83,181 | 240,365 | 323,546 | 106,306 | 236,364 | 342,670 |
| Amortization | 17,668 | 19,821 | 37,489 | 16,393 | 16,766 | 33,159 |

The followings are additional information of numbers of the Company’s employees and employee benefits expense:

	2025	2024
Employees	1,235	1,555
Non-employees of directors	7	7
Average employee benefit expenses	$ 1,191	1,235
Average salary expense	$ 1,012	1,076
Average salary expense adjustment	(5.95)%
Supervisor’s remuneration	$ -	-

The Company’s salary and remuneration policy (including directors, managers and employees) is as follows:

(i) The Company’s remuneration to directors:

The Board of Directors is authorized to determine the remuneration to each director, which should not exceed the maximum salary level according to the Company's Articles of the managerial salary standards, by the individual’s degree of participation in operation and individual’s contribution to the Company.

If there is annual net earnings, the Company shall appropriate an additional remuneration to directors not exceeding 1% of net earnings.

(ii) The Company’s salary and remuneration to managers and employees:

1) Base on the concern of external competition, internal fairness and legitimacy, the Company provides a diverse and competitive salary system, and adheres to the concept of profit sharing with employees, attracting and retaining talents, training and motivating employees. With the outstanding operational performance, the Company’s overall salary is maintained at a certain level.

(Continued)

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

2) The salary package of the Company includes monthly salary, various bonuses, and employee compensation from the annual profit.

3) Various bonuses and employee monthly bonuses and employee compensation are rewarding their contributions, and inspiring all employees to continue their efforts, so that the interests of employees and shareholders can be aligned to a win-win situation for the Company, shareholders and employees.

(13) Other disclosures

(a) Information on significant transactions

The following is the information on significant transactions required by the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" for the Company for the year ended December 31, 2025:

(i) Loans to other parties: Please refer to table 1.

(ii) Guarantees and endorsements for other parties: None.

(iii) Securities held as of December 31, 2025 (excluding investment in subsidiaries, associates and joint ventures): Please refer to table 2.

(iv) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: Please refer to table 4.

(v) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock: Please refer to table 5.

(b) Information on investees: Please refer to table 7.

(14) Segment information:

Please refer to consolidated financial statements for the year ended December 31, 2025.

Everlight Electronics Co., Ltd.

Statement of Cash and Cash Equivalents

December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Item	Description	Amount
Checking accounts		$ 1,398
Demand deposits		261,860
	USD13,940 thousand @31.4380, JPY 153,897 thousand @0.2007, HKD 6,348 thousand @4.0397, EUR 2,908 thousand
Foreign currency deposits	@36.9114, CNY 18,368 thousand @4.4959	684,688
	CNY 159,500 thousand, maturity date : 2026.01.05, interest rates 1.33%~1.72%
	USD 11,000 thousand, maturity date : 2026.01.01~2026.02.05, interest rate 3.90%~4.06%
Time deposits		1,062,914
		$ 2,010,860

Statement of Notes and Accounts Receivables from Third Parties

Client Name	Description	Amount
Accounts Receivable:
Company B009	Third party sales	$ 310,986
Others (Note)	n	4,255,732
		4,566,718
Less: Loss allowance		(262,906)
		4,303,812
Total		$ 4,303,812

Note: The amount of individual customer included in others does not exceed 5% of the account balance.

Everlight Electronics Co., Ltd.

Statement of Accounts Receivables from Related Parties

December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Please refer to note 7(b)(iii).

Statement of Inventories

Item	Amount
	Cost	Net Realizable Value
Finished goods	$ 559,079
Less: Allowance for inventory market decline and obsolescence	(150,532)
	408,547	491,111
Work in Process	99,252
Less: Allowance for inventory market decline and obsolescence	-
	99,252	99,252
Raw Materials	162,530
Less: Allowance for inventory market decline and obsolescence	(62,678)
	99,852	99,852
Total	$ 607,651	690,215

Everlight Electronics Co., Ltd.

Statement of Other Current Assets

December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Item	Description	Amount
Payment in advance	Prepaid of construction payments	$ 4,924
Prepaid expenses	Prepaid certification expenses, insurance expenses, and tax expenses, etc.	26,555
		31,479
Other current assets:
VAT Refund	Value-added tax refund	21,310
Temporary payment	Purchasing fixed assets on behalf of related parties	4,550
Income tax refund receivable	Withholding tax of overseas dividends received, etc.	32,036
Others (Note)	Excess business tax paid, fund of cooperation project, etc.	16,827
Total		74,723
		$ 106,202

Note: The amount of each item included in others does not exceed 5% of the account balance.

Statement of Other Current Financial Assets

Item	Description	Amount
Time deposits	Time deposits with maturities over three months from the acquisition date	$ 4,109,760
Others (Note)	Estimated interest receivable, etc.	58,229
		$ 4,167,989

Note: The amount of each item included in others does not exceed 5% of the account balance.

Everlight Electronics Co., Ltd.

Statement of Changes in Investments Accounted for Using Equity Method

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Investees Company	Balance, January 1, 2025		Increase (Note 1)		Decrease (Note 2)		Reclassification		Share of profit (loss) Recognized	Amounts for Exchanges Differences on Translation Foreign Operations	Unrealized Gains (losses) on Financial Assets	Other Adjustment Amount (Note 3)	Balance, December 31, 2025			2025.12.31 Market price or Net Value	Collaterals or pledged assets
	Shares (In Thousands)	Amounts	Shares (In Thousands)	Amounts	Shares (In Thousands)	Amounts	Shares (In Thousands)	Amounts					Shares (In Thousands)	Percentage of ownership	Amounts
Investments Accounted For Using
Equity Method :
Everlight BVI	1,540	$ 7,528,660	-	-	-	-	-	-	314,766	17,820	-	-	1,540	98.00	7,861,246	7,861,246	None
Pai-yee	23,940	647,859	-	-	-	(155,370)	-	-	23,232	10,452	164	131	23,940	100.00	526,468	539,347	None
Forever	42,488	541,996	-	-	-	(74,000)	-	-	(6,754)	17,907	284	229	42,488	100.00	479,662	479,662	None
Everlight Europe	75	168,425	-	-	-	(53,255)	-	-	83,094	16,479	-	-	75	75.00	214,743	214,743	None
Eversion TW	4,477	370,003	-	-	-	(13,432)	-	-	(1,618)	15,656	249	200	4,477	24.27	371,058	339,070	None
ELA	11,375	12,483	-	-	-	-	-	-	(8,011)	(572)	-	-	11,375	98.91	3,900	3,900	None
ELK	38	114,498	-	-	-	(66,364)	-	-	27,192	(404)	-	-	38	100.00	74,922	74,992	None
Evite	7,000	186,395	-	-	-	-	-	-	3,503	(7,935)	-	-	7,000	100.00	181,963	181,963	None
ELTH	-	-	375	35,293	-	-	-	-	(25,218)	999	-	-	375	98.00	11,074	11,074	None
ELIT	20,000	284,395	-	-	-	(70,400)	-	-	76,117	-	-	-	20,000	100.00	290,112	302,475	None
ELI	353	24,072	-	-	-	-	-	-	4,495	(2,203)	-	-	353	80.00	26,364	26,364	None
ELS	200	13,272	-	-	-	-	-	-	4,380	379	-	-	200	100.00	18,031	18,031	None
ELJ	5	10,398	-	-	-	-	-	-	(10,401)	6	-	-	5	100.00	3	3	None
WOFI	5,775	(574,185)	-	-	-	-	-	-	(22)	(50,184)	-	-	5,775	100.00	(624,391)	(624,391)	None
		9,328,271		35,293		(432,821)		-	484,755	18,400	697	560			9,435,155
Recorded as deduction of assets :
Other receivables -related parties		527,124		-		-		-	-	-	-	46,070			573,194
Credit balance of investments in equity method		47,061		-		-		-	-	-	-	4,136			51,197
Total		$ 9,902,456		35,293		(432,821)		-	484,755	18,400	697	50,766			10,059,546

Note 1: The increase for the current period was due to the establishment of new investments and cash capital injections.
Note 2: The decrease for the current period included cash dividends receiveds of $432,821.
Note 3: Other adjustments included an increase of $560 arising from actuarial gains and losses, a decrease of $46,070 related to reclassification to other receivables-related parties, and an increase of $4,136 from adjustments to the credit balance of long-term investments.

Everlight Electronics Co., Ltd.

Statement of Changes in Property, Plant and Equipment

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Please refer to note 6(i).

Statement of Right-of-use Assets

Please refer to note 6(j).

Statement of Intangible Assets

December 31, 2025

Item	Description	Amount
Intangible Assets	Patent right	$ 1,913
	ERP software system	23,040
Total		$ 24,953

Everlight Electronics Co., Ltd.

Statement of Non-current Other Financial Assets

December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Item	Description	Amount
Refundable deposits	Guarantees for tariffs, Illuminating warranty, etc.	$ 51,681
Long-term accounts receivables	Long-term accounts receivables	384,918
Pledged deposits	Pledged deposits - construction performance guarantee	166,094
		$ 602,693

Statement of short-term borrowings

Bank	Description	Contract Period	Range of Interest Rates (%)	Credit lines (Credit lines)	Amount	Collaterals or pledged assets
Citibank	Credit Loans	2025.10~2026.02	1.72%	$1,592,736	$ 200,000	None
F.C.B	〃	2025.11~2026.02	1.725%	500,000	50,000	None
HSBC	〃	2025.12~2026.03	1.66%	1,045,824	300,000	None
SCB	〃	2025.12~2026.03	1.72%	307,490	200,000	None
					$ 750,000

Everlight Electronics Co., Ltd.

Statement of Notes and Accounts Payables to Third Parties

December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Item	Description	Amount
Vendor Q	Third party operating cost	$ 114,145
Vendor S	〃	67,432
Vendor T	〃	58,363
Vendor G	〃	57,521
Others (Note)	〃	751,625
Total		$ 1,049,086

Note: The amount of individual vendor included in others does not exceed 5% of the account balance.

Statement of Accounts Payables to Related Parties

Please refer to note 7(b)(iv).

Everlight Electronics Co., Ltd.

Statement of Lease Liabilities

December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Item	Lease-term	Discount rate	Amount
Land	3~20 years	1.699%~1.71%	$ 282,009
Vehicles	2~3 years	1.998%	320
			$ 282,329
Current			$ 6,625
Non-current			275,704
			$ 282,329

Statement of Other Current Liabilities

Item	Description	Amount
Accrued payroll and bonuses	December 2025 wages and salaries expense, estimated year-end bonuses of 2025, and remuneration of employees and directors.	$ 933,316
Refundable deposits	Guarantees for goods payment	175,027
Others (Note)	Payables for professional service, patents, commissions, receipts under custody and payment on behalf of others, labor and health insurances, utilities expenses, etc..	283,664
		$ 1,392,007

Note: The amount of each item included in others does not exceed 5% of the account balance.

Everlight Electronics Co., Ltd.

Statement of Other Non-current Liabilities

December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Item	Description	Amount
Guarantee deposits received		$ 857
Credit balance of investments in equity method		51,197
Others (Note)	Unrealized intercompany profit	2,411
Total		$ 54,465

Note: The amount of each item included in others does not exceed 5% of the account balance.

Statement of Sales Revenue

For the year ended December 31, 2025

Item	Quantity (in thousands)	Net Sales
Sales Revenue:
Luminous element	16,902,135	$ 9,246,361
Sensing element	8,888,886	7,925,641
Illumination	4,533	250,047
Others	119,414	8,867
		17,430,916
Construction revenue	-	173,519
Net sales revenue		$ 17,604,435

Note: The above amount has deducted sales returns and discounts.

Everlight Electronics Co., Ltd.

Statement of Operating Costs

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Item	Amount
Raw materials, beginning of the year	$ 156,311
Add: Purchases of raw materials	2,509,608
Gains on physical counts of raw materials	8,130
Less: Raw materials, end of the year	(162,530)
Sell of sales on raw materials(including that for processing)	(397,593)
Transferred to expenses for requisition by indirect and research departments	(54,125)
Raw materials used for current period	2,059,801
Direct labor	210,615
Manufacturing expenses	541,331
Manufacturing cost for the current period	2,811,747
Add: Work in process, beginning of the year	109,796
Purchases	14,237
Less: Work in process, end of the year	(99,252)
Cost of goods manufactured	2,836,528
Add: Finished goods, beginning of the year	479,102
Purchases (including costs of raw materials and semi-finished products which from processing)	10,598,709
Less: Finished goods, end of year	(559,079)
Transferred to expenses for requisition by indirect and research department	(20,292)
Transferred to construction costs	(63,625)
Cost of selling outsourced processing finished goods	(324,625)
Cost of selling finished goods	12,946,718
Add: Costs of selling tools	7,512
Costs of selling raw materials and semi-finished products	8,673
Allowance for inventory valuation and obsolescence loss	5,631
Construction costs	157,026
Variances and others	(3,610)
Less: Income from sales of scraps	(20,582)
Total	$ 13,101,368

Everlight Electronics Co., Ltd.

Statement of Operating Expenses

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Item	Selling expense	Administrative expenses	Research and development expenses
Wages and salaries	$ 238,383	391,919	306,866
Professional service fees	47,803	64,204	835
Depreciation	1,560	171,776	67,029
Commission expenses	448,421	-	-
Export charges	127,675	1,733	-
Research expenses	-	-	164,467
Utility expense	3,651	26,841	51,561
Others (Note)	123,363	167,963	97,036
Total	$ 990,856	824,436	687,794

Note: The amount of each item include in others does not exceed 5% of the account balance.

^{}[]~88~

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

Table 1 Loans to other parties

December 31, 2025

Unit: In Thousands of New Taiwan Dollar

No	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period (Note 5)	Ending balance (Note 5)	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower	Transaction amount for business between two parties	Reasons for short term financing	Allowance for bad debt	Collateral		Individual funding loan limits	Maximum limit of fund financing
													Item	Value
0	The Company	WOFI Leuchten GmbH	Other receivables	Yes	583,200	583,200	573,193	1.0%	Short term financing	-	Financing Services	Note 5		-	$ 1,997,108	$ 7,988,432
						$ 583,200	573,193
1	Everlight China	Everlight Lighting China	Other receivables	Yes	899,180	449,590	449,590	1.5%	Short term financing	-	Financing Services	-		-	2,413,515	2,413,515
2	Forever	Pai-yee Investment	Other receivables	Yes	60,000	-	-	1.7%	Short term financing	-	Financing Services	-		-	191,864	191,864
						$ 449,590	449,590

Note 1: According to the Company's "Procedures for Lending Funds to Other Parties and Guarantees and Endorsements", the total amount of loans to others cannot exceed 40% of the net worth of the Company; and to borrowers having business relationship with the Company, the total amount for lending the borrower cannot exceed the transaction amount of business dealings between the two parties in the last fiscal year. For those companies with short term financing needs, the amount of each fund financing cannot exceed 10% of the Company's net worth.
Note 2: According to Everlight China's "Procedures for Lending Funds to Other Parties and Guarantees and Endorsements", the total amount of loans to others cannot exceed 40% of the net worth of Everlight China; and to borrowers having business relationship with Everlight China, the total amount for lending the borrower cannot exceed the transaction amount of business dealings between the two parties in the last fiscal year. For those companies with short term financing needs, the amount of each fund financing cannot exceed 40% of Everlight China's net worth.
Note 3: According to Forever's "Procedures for Lending Funds to Other Parties and Guarantees and Endorsements", the total amount of loans to others cannot exceed 40% of the net worth of Forever; and to borrowers having business relationship with Forever, the total amount for lending the borrower cannot exceed the transaction amount of business dealings between the two parties in the last fiscal year. For those companies with short term financing needs, the amount of each fund financing cannot exceed 40% of Forever's net worth.
Note 4: The amounts were translated into New Taiwan dollars at the exchange rates at the ending date of the reporting period.
Note 5: The aforementioned transactions had been eliminated in the consolidated financial statements.

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

Table 2: Information regarding material securities held at the reporting date (subsidiaries, associates and joint ventures not include December 31, 2023
Unit: In Thousands of New Taiwan Dollar, thousand share

Name of holder	Category and name of security	Relationship with security issuer	Account name	Ending balance
				Shares/Units (thousands)	Carrying value (Note 1)	Percentage of ownership (%)	Fair value
The Company	SinoPac TWD Money Market Fund	None	Current financial assets at fair value through profit or loss	5,869	$ 86,427	-%	$ 86,427
The Company	WT Microelectronics Co., Ltd. Preferred Stock A	None	Current financial assets at fair value through profit or loss	600	30,840	-%	30,840
The Company	Other	None	Current financial assets at fair value through profit or loss	-	91,190	-%	91,190
The Company	Principal-Protected Wealth Management Products	None	Non-current financial assets at fair value through profit or loss	-	124,842	-%	124,842
The Company	Bank of America Corp. Bond	None	Non-current financial assets at fair value through other comprehensive income	20	63,779	-%	63,779
The Company	Sumitomo Mitsui Financial Group Inc. Bond	None	Non-current financial assets at fair value through other comprehensive income	20	62,892	-%	62,892
The Company	AT&T Inc.Bond	None	Non-current financial assets at fair value through other comprehensive income	20	60,208	-%	60,208
The Company	HSBC holdings Plc Bond	None	Non-current financial assets at fair value through other comprehensive income	20	61,612	-%	61,612
The Company	Wells Fargo & CO.Bond	None	Non-current financial assets at fair value through other comprehensive income	19	60,843	-%	60,843
The Company	Cathay Life Insurance 2023 first unsecured accumulated secondary ordinary corporate bots	None	Non-current financial assets at fair value through other comprehensive income	2,500	252,499	-%	252,499
The Company	Fubon Life Insurance 2023 first unsecured accumulated secondary ordinary corporate bots	None	Non-current financial assets at fair value through other comprehensive income	2,500	250,622	-%	250,622
The Company	Cathay Life Insurance 2024 first unsecured accumulated secondary ordinary corporate bots	None	Non-current financial assets at fair value through other comprehensive income	3,000	301,441	-%	301,441
The Company	Fubon Life Insurance 2024 first unsecured accumulated secondary ordinary corporate bots	None	Non-current financial assets at fair value through other comprehensive income	2,000	200,396	-%	200,396
The Company	other	None	Non-current financial assets at fair value through other comprehensive income	-	93,343	-%	93,343
					$ 1,748,934
Forever	CTBC USD Corporate 10+ Year High Grade Capped Bond ETF	None	Current financial assets at fair value through profit or loss	840	28,787	-%	28,787
Forever	other	None	Current financial assets at fair value through profit or loss	-	95,369	-%	95,369
Forever	other	None	Non-current financial assets at fair value through other comprehensive income	200	-	-%	-
					$ 124,156
Pai yee	InnoFund I Co., Ltd.	Pai yee is the corporate director of this company	Non-current financial assets at fair value through profit or loss	3,000	45,357	-%	45,357
Pai yee	InnoFund VI Co., Ltd.	Pai yee is the corporate director of this company	Non-current financial assets at fair value through profit or loss	3,000	39,950	-%	39,950
Pai yee	Other	None	Current financial assets at fair value through profit or loss	1,648	23,688	-%	23,688
					$ 108,975
Everlight China	Structured deposits	None	Current financial assets at fair value through profit or loss	-	$ 211,612	-%	211,612
Evervision TW	CAPITAL ICE ESG 20+ Year BBB Corporate ETF	None	Current financial assets at fair value through profit or loss	2,970	44,788	-%	44,788
Evervision TW	Cathay BBB Corporate bond ex China Coupon 4.5% 10Yr+ 20%	None	Current financial assets at fair value through profit or loss	1,250	44,663	-%	44,663
Evervision TW	Other	None	Current financial assets at fair value through profit or loss	-	91,214	-%	91,214
Evervision TW	The Second Issue of 2025 for unsecured Cumulative Subordinated Corporate Bonds of Nan Shan Life Insurance Co., Ltd. Series J	None	Non-current financial assets at fair value through other comprehensive income	2,000	199,966	-%	199,966
Evervision TW	Fubon Life Insurance Co., Ltd. 2nd issue of Unsecured Cumulative Subordinated Corporate Bonds A in 2025	None	Non-current financial assets at fair value through other comprehensive income	2,000	199,970	-%	199,970
Evervision TW	Other	None	Non-current financial assets at fair value through other comprehensive income	5,000	11,089	-%	11,089
					$ 411,025

Note 1: The amounts were translated into New Taiwan dollars at the exchange rates at the ending date of the reporting period.

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

Table 3 Related party transactions for purchases and sales with amounts exceeding the lower of NTS100 million or 20% of the capital stock

December 31, 2023

Unit: In Thousands of New Taiwan Dollar

Name of Company	Name of Counter party	Relationship	Transaction Details				Abnormal Transaction		Notes/ Account (Payable) or Receivable		Note
			Purchase/ (Sale)	Amount (Note 1)	Percentage of total purchases /sales	Payment Terms	Unit Price	Payment Terms	Ending Balance (Note 3)	Percentage of total notes/accounts receivable (payable)
The Company	Evilite	100% owned subsidiary	(Sales)	$ (662,882)	(5%)	OA 120	No significant difference to the general customers	General export receivables in 30-120 days	Accounts Receivable 141,796	3%	Note 2
The Company	Everlight Europe	75% owned subsidiary	(Sales)	(1,071,644)	(8%)	OA 120	No significant difference to the general customers	General export receivables in 30-120 days	Accounts Receivable 226,258	4%	Note 2
The Company	ELA	99% owned subsidiary	(Sales)	(363,739)	(3%)	OA 140	No significant difference to the general customers	General export receivables in 30-120 days	Accounts Receivable 62,199	1%	Note 2
The Company	Anhui Hongming	Equity accounted investee by the Everlight China	(Sales)	(1,194,007)	(9%)	OA 120 - 150	No significant difference to the general customers	General export receivables in 30-120 days	Accounts Receivable 634,976	12%
The Company	Everlight China	100% owned sub-subsidiary	Purchases	8,820,973	98%	OA 120	Terms not comparable to other general trading price	General purchase payments in 90-120 days	Accounts Payable (3,736,515)	(69%)	Note 2
The Company	Everlight Zhongshan	100% owned sub-subsidiary	Purchases	520,922	6%	OA 120	Terms not comparable to other general trading price	General purchase payments in 90-120 days	Accounts Payable (220,848)	(4%)	Note 2
The Company	Everlight Lighting China	100% owned sub-subsidiary	Purchases	214,058	2%	OA 120	Terms not comparable to other general trading price	General purchase payments in 90-120 days	Accounts Payable (93,368)	(2%)	Note 2
The Company	Anhui Hongming	Equity accounted investee by the Everlight China	Purchases	180,263	2%	OA 120 - 150	Terms not comparable to other general trading price	General purchase payments in 120 days	Accounts Payable (274,291)	(5%)
Everlight Zhongshan	The Company	Ultimate holding company	(Sales)	(552,279)	(100%)	OA 120	Not applicable	Not applicable	Accounts Receivable 220,848	100%	Note 2
Everlight China	The Company	Ultimate holding company	(Sales)	(9,196,418)	(100%)	OA 120	Not applicable	Not applicable	Accounts Receivable 3,736,515	100%	Note 2
Everlight Lighting China	The Company	Ultimate holding company	(Sales)	(214,451)	(19%)	OA 120	Terms not comparable to other general trading price	General export payments in 90-120 days	Accounts Receivable 93,368	27%	Note 2
Everlight Lighting China	Anhui Hongming	Equity accounted investee by the Everlight China	Purchases	217,768	20%	OA 120 - 150	Terms not comparable to other general trading price	General purchase payments in 90-120 days	Accounts Payable (114,914)	(5%)
ELA	The Company	Parent company	Purchases	366,157	100%	OA 140	Not applicable	Not applicable	Accounts Payable (70,184)	(100%)	Note 2
Everlight Europe	The Company	Parent company	Purchases	1,090,326	100%	OA 120	Not applicable	Not applicable	Accounts Payable (217,387)	(99%)	Note 2
Evilite	The Company	Parent company	Purchases	661,640	100%	OA 120	Not applicable	Not applicable	Accounts Payable (141,819)	(100%)	Note 2

Note 1: The amounts were translated into New Taiwan dollars at the yearly average exchange rates in 2025.
Note 2: The transaction amounts of the subsidiaries are inconsistent with the Company since the financial statements of the subsidiaries did not consider the adjustments made by the Company for processing trade and in transit inventory.
Note 3: The accounts were translated into New Taiwan dollars at the exchange rate at the ended date of the reporting period.

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

Table 4 Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock
December 31, 2025
Unit: In Thousands of New Taiwan Dollar

Name of company	Counterparty	Nature of relationship	Ending balance	Turnover rate	Overdue		Amounts received in subsequent period (Note 1)	Allowance for bad debts
					Amount	Action taken
The Company	Evlite	100% owned subsidiary	$ 141,796	2.51	-		64,311	-
The Company	Everlight Europe	75% owned subsidiary	226,258	5.06	-		190,499	-
The Company	WOFI Leuchten GmbH	100% owned subsidiary	573,193
(Note 3)	-	-		-	-
The Company	Anhui Hongming	Equity accounted investee by the Everlight China	634,976	2.07	-		239,353	-
Everlight China	Everlight Lighting China	Same parent company	449,590
(Note 3)	-	-		-	-
Everlight China	The Company	Ultimate holding company	3,736,515	2.58	-		1,544,805	-
Everlight Zhongshan	The Company	Ultimate holding company	220,848	2.45	-		90,335	-

Note 1: Information as of March 4, 2026.
Note 2: The amounts were translated into New Taiwan dollars at the exchange rates at the reporting date.
Note 3: Lending funds (including interest).

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

Table 5 Information on investees

December 31, 2025

Unit: In Thousands of New Taiwan Dollar

Investor company	Investor company	Location	Main businesses and products	Original investment amount		Ending balance			Net income (Losses) of the Inventor	Share of profit/losses of investee	Note
				December 31, 2025	December 31, 2024	Shares (In thousands)	Percentage of ownership	Carrying value
The Company	Everlight BVI	Registered in British Virgin Islands	Investment	$ 4,762,934	$ 4,762,934	1,540	98%	$ 7,861,246	321,191	314,766	Subsidiaries
The Company	Pui yee	New Taipei City	Investment	580,253	580,253	23,940	100%	526,468	23,232	23,232	Subsidiaries
The Company	ELA and its subsidiaries	Registered in the USA	Sale of LEDs	373,396	373,396	11,375	98.91%	3,900	(8,009)	(8,011)	Subsidiaries
The Company	Evervision TW and its subsidiaries	New Taipei City	Manufacturer and sales of LEDs and LED processing	35,455	35,455	4,477	24.27%	371,058	(6,673)	(1,618)	Subsidiaries
The Company	Everlight Europe	Registered in Germany	Sale of LEDs	2,203	2,203	75	75%	214,743	110,792	83,094	Subsidiaries
The Company	ELK	Korea	Sale of LEDs	6,485	6,485	38	100%	74,922	27,192	27,192	Subsidiaries
The Company	Forever	New Taipei City	Investment	400,000	400,000	42,488	100%	479,622	(6,754)	(6,754)	Subsidiaries
The Company	ELIT	New Taipei City	Sale of LED lighting products	500,000	500,000	20,000	100%	290,112	75,004	76,117	Subsidiaries
The Company	Evlite	Kwan Tong, Kowloon, Hong Kong	Sale of LEDs	71,324	71,324	7,000	100%	181,963	3,503	3,503	Subsidiaries
The Company	ELI	Registered in India	Sale of LEDs	1,984	1,984	353	80%	26,364	5,619	4,495	Subsidiaries
The Company	ELS	Singapore	Sale of LEDs	5,989	5,989	200	100%	18,031	4,380	4,380	Subsidiaries
The Company	WOFH Holding and its subsidiaries	Germany	Sale of lighting products, products and accessories	1,333,883	1,333,883	5,775	100%	(624,391)	(22)	(22)	Subsidiaries (Note 1)
The Company	ELI	Japan	Sale of LEDs	14,911	14,911	5	100%	3	(10,401)	(10,401)	Subsidiaries
The Company	ELTH	Tailand	Manufacturing and sale of LEDs	35,293	-	375	98%	11,074	(25,733)	(25,218)	Subsidiaries
Pui yee	Everlight BVI	Registered in British Virgin Islands	Investment	120,740	120,740	37	2%	160,434	321,191	6,425	Subsidiaries
Pui yee	Evervision TW and its subsidiaries	New Taipei City	Manufacture and sales of LCDs and LED processing	61,121	61,121	2,940	15.94%	222,693	(6,673)	(1,056)	Subsidiaries
Pui yee	Everlight Malaysia	Registered in Malaysia	Business development and customer services	2,240	2,240	254	100%	5,436	1,875	1,875	Sub-subsidiaries
Pui yee	ELI	India	Sale of LEDs	493	493	88	20%	6,590	5,619	1,124	Subsidiaries
ELIT	ELIT KZ	Kazakhstan	Sale of LED lighting products	73	73	-	100%	-	-	-	Sub-subsidiaries
Forever	Evervision TW and its subsidiaries	New Taipei City	Manufacture and sales of LCDs and LED processing	30,978	30,978	5,120	27.76%	355,841	(6,673)	(1,851)	Subsidiaries
Forever	EleOcom Inc.	New Taipei City	Manufacture and sales of electronic components and communication equipment	45,000	45,000	4,500	32.14%	-	-	-	-
Evervision TW	LeadTech	Daischo County	Wafer testing service	30,000	30,000	2,500	43.48%	30,891	3,053	1,327	-
Evervision TW	Evervision (B.V.I.) Ltd.	Registered in British Virgin Islands	Investment	-	696,251	-	0.00%	0	590	590	Sub-subsidiaries
Evervision TW	Viltest GmbH	Germany	Trade Company	790	790	-	75.00%	24,264	(110)	(83)	Sub-subsidiaries
Evervision Electronics (B.V.I.) Ltd.	Evervision (H.K.) Ltd.	Hong Kong	Trade Company	-	1,179	-	0.00%	-	-	-	Sub-subsidiaries

Note 1: The Company invested in WOFH through a cash injection of EUR 11,000 thousand and EUR 16,000 thousand in July 2020 and August 2022, respectively, wherein the registration procedures have not yet to be completed.
Note 2: The amounts were translated into New Taiwan dollars at the yearly average exchange rates in 2025.

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

Table 6 Information on investment in Mainland China

December 31, 2025

(i) The names of investees in Mainland China, the main businesses and products, and other information:

Name of investee	Main businesses and products	Total amount of paid in capital (Note 6)	Method of investment	Accumulated outflow of investment from Taiwan as of December 31, 2024	Investment flows		Accumulated outflow of investment from Taiwan as of December 31, 2025	Net income (losses) of the investee	Percentage of ownership owned directly or indirectly by the company	Investment Income (losses) (Note 4)	Carrying amount as of December 31, 2025 (Note 6)	Accumulated remittance of earnings as of December 31, 2025
					Outflow	Inflow
The Company and Pai-yue:
Everlight China	Manufacture of LEDs	3,861,026 (US$113,500 - RMB65,129) (Note 7 and Note 8)	(Note 1)	3,465,498 (US$110,360)	-	-	3,465,498 (US$110,360)	349,161	100%	349,161	6,033,788	665,834
Everlight Lighting China	Sale of LEDs	314,380 (US$10,000) (Note 10)	(Note 1)	163,478 (US$5,200)	-	-	163,478 (US$5,200)	(30,202)	100%	(30,202) (Note 11)	435,541 (Note 11)	-
Everlight Electronic Guangzhou	Business development and customer services	206,340 (US$128 - RMB45,000) (Note 13)	(Note 1)	4,024 (US$128)	-	-	4,024 (US$128)	1,506	100%	1,506 (Note 14)	8,283 (Note 14)	-
Everlight Zhongshan	Manufacture of LED related components	943,140 (US$30,000)	(Note 1)	943,140 (US$30,000)	-	-	943,140 (US$30,000)	(1,639)	100%	(1,639)	933,839	14,437
Everlight China and Everlight Zhongshan Anhui Hongming	Research and Manufacture of Mini LED lighting products	969,856 (RMB215,720)	(Note 3)	-	-	-	-	99,427	33.99%	33,796	397,717	-
Everlight China Everlight New Electronics (Suzhou) Co., Ltd. (Note 16)	Manufacture of LEDs	22,480 (RMB5,000)	(Note 3)	-	-	-	-	(97)	49%	(47)	10,966	-

Unit: In Thousands of New Taiwan Dollar - Foreign currency

EVERLIGHT ELECTRONICS CO., LTD. Notes to the Financial Statements

Table 6 Information on investment in Mainland China

December 31, 2025

(ii) Limitation on investment in Mainland China:

Unit: In Thousands of New Taiwan Dollar + Foreign currency

Company Name	Accumulated Investment in Mainland China as of December 31, 2025 (Note 6)	Investment Amounts Authorized by Investment Commission of Ministry of Economic Affairs (Note 6)	Limitation on investment in Mainland China by Investment Commission of Ministry of Economic Affairs
The Company and Pai yee (Note 5)	5,571,098
(USD168,787 thousand + RMB58,892 thousand)
(Notes 9)	5,706,101
(USD170,682 thousand + RMB75,669 thousand)	11,982,649
ELIT	148,067
(USD2,723 thousand + RMB13,893 thousand)
(Notes 9)	148,067
(USD2,723 thousand + RMB13,893 thousand)	181,485
Evervision TW	98,590
(Notes 2 + 12 and 15)
(USD3,136 thousand)	98.590
(USD3,136 thousand)	838,245

Note 1 : Indirect investment in Mainland China through companies registered in a third region.
Note 2 : Evervision BVI disposed all of its ownership in VBest Electronics (Kunshan) Ltd. (VBest Kunshan) to a third party in December 2024. The aforementioned investment amounts included the investment amounts of USD 18,000 thousand that has yet to be applied for elimination.
Note 3 : Indirect investment in Mainland China through an existing company in Mainland China.
Note 4 : Except for Everlight China and Everlight Lighting, which recognized their gains and losses on investment in accordance with the investees' self-reported financial statements, the gains and losses on investment of the remaining companies were recognized according to the investees' financial statements audited by the certified public accountants of Taiwan parent company and other accountants, wherein the amounts were translated into New Taiwan Dollars at the yearly average exchange rate in 2025.
Note 5 : Including the investment amount of USD 3,790 thousand approved by Pai yee.
Note 6 : The amounts were translated into New Taiwan dollars at the exchange rates at the end of the reporting period.
Note 7 : The difference from the Company's outflow of investment was due to the retained earnings transferred to the capital of Everlight China amounting to USD 3,140 thousand and RMB 65,129 thousand in 2007 and 2015, respectively.
Note 8 : Including the remittance amounting to USD 10,140 thousand from Guangzhou Everlight to Everlight BVI to be invested in Everlight China by Everlight BVI in 2007.
Note 9 : The liquidation of Yi Yao, Everlight Electronics (Guangzhou), Everlight Yi Guang Technology (Shanghai), Everlight Lighting Management Consulting (Shanghai), Shanghai Yaming Lighting, and Everlight Fujian, were completed. The aforesaid investments amounting to USD23,099 thousand and RMB58,892 thousand were included in the Company's accumulated outflow of investment from Taiwan; as well as the investments of USD2,723 thousand and RMB13,893 thousand were included in the ELIT's accumulated outflow of investment from Taiwan.
Note 10 : The difference from the Company's outflow of investment was due to the amount of USD 4,800 thousand invested in Everlight Lighting China from Everlight China's owned fund.
Note 11 : Including the gains or losses on investment and ending balance of the carrying value of investment in Everlight Lighting China by Everlight China.
Note 12 : Including the investment amount of the factory in Mainland China written off in 2012 amounting to USD 2,750 thousand.
Note 13 : The difference from the Company's outflow of investment was due to the amount of RMB 45,000 thousand invested in Everlight Electronic (Guangzhou) from Everlight China's owned fund.
Note 14 : Including the gains or losses on investment and ending balance of the carrying value of investment in Everlight Electronic (Guangzhou) by Everlight China
Note 15 : The liquidation of Debao was completed in June 2017; and the aforesaid investment amounting to USD 386 thousand was included in the Evervision company's accumulated outflow of investment from Taiwan.
Note 16 : Everlight China invested in a company in mainland China, using its owned fund in 2025.

(iii) Significant transactions:

Please refer to "Information on significant transactions" and "Business relationships and significant intercompany transactions" for the information on significant direct or indirect transactions between the Company and the investee companies in Mainland China for the year ended December 31, 2025.

AI assistant

EVERLIGHT — Audit Report / Information 2025

52052_rns_2026-05-21_00053c2c-db70-4191-9adc-de4f3894d13b.pdf

Table of contents

Independent Auditors' Report

Opinion

Basis for Opinion

Key Audit Matters

Auditor's Responsibilities for the Audit of the Financial Statements

Notes to Readers

(English Translation of Financial Statements Originally Issued in Chinese) EVERLIGHT ELECTRONICS CO., LTD.

Balance Sheets

(English Translation of Financial Statements Originally Issued in Chinese)

EVERLIGHT ELECTRONICS CO., LTD.

Statements of Comprehensive Income

(English Translation of Financial Statements Originally Issued in Chinese) EVERLIGHT ELECTRONICS CO., LTD.

Statements of Changes in Equity

Balance at January 1, 2024

(English Translation of Financial Statements Originally Issued in Chinese) EVERLIGHT ELECTRONICS CO., LTD.

Statements of Cash Flows

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(4) Summary of material accounting policies

(a) Statement of compliance

(b) Basis of preparation

(i) Basis of measurement

(ii) Functional and presentation currency

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

(6) Explanation of significant accounts

(a) Cash and cash equivalents

(b) Financial assets and liabilities at fair value through profit or loss

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

EVERLIGHT ELECTRONICS CO., LTD.

Notes to the Financial Statements

EVERLIGHT Audit Report / Information 2025