FocalTech — Annual Report 2024

Nov 14, 2024

FocalTech Systems Co., Ltd.

Financial Statements for the Years Ended December 31, 2024 and 2023

Notice to Readers

The reader is advised that these financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese language financial statements shall prevail.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors and Shareholders FocalTech Systems Co., Ltd.

Opinion

We have audited the accompanying financial statements of FocalTech Systems Co., Ltd. (the “Company”), which comprise the balance sheets as of December 31, 2024 and 2023, 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 significant 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, 2024 and 2023, 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 Auditing and Attestation of Financial Statements by Certified Public Accountants and the 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 for 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 for the year ended December 31,2024. 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.

Key audit matters for the Company’s financial statements for the year ended December 31, 2024 are stated as follows:

Valuation of Inventory

Due to high market demand fluctuation and rapid technological development, the inventories may turn obsolete or have a lower net realizable value which may result in inventories being impaired. The Company has performed impairment assessment on inventories through evaluation of aging and net realizable value of inventories quarterly. The management has practiced their professional judgement in estimating the possible loss on impairment based on the sales performance of each product. Therefore, inventory valuation is considered as a key audit matter for the financial year ended December 31, 2024. Refer to Notes 4 and 11 for the accounting policy, accounting estimation and disclosure information.

Our audit procedures related to the abovementioned Key Audit Matters included the following:

1. We obtained an understanding of the Company’s accounting policies and procedures on the assessment of impairment through analyzing the net realizable value calculation report and inventory aging report prepared by the management. We have inspected the supporting documents of recent selling price, and re-calculated the net realizable value of inventory to ensure its accuracy and reasonableness of the management's estimation on impairment loss.

2. We obtained an understanding of the Company’s judgement on the estimation of impairment loss for obsolete items information and discussed recent sales performance and the reasonableness on the

3. This is the translation of the financial statements. CPAs do not audit or review on this translation.

estimates of inventory devaluation in the future. We also performed inspection on recent sales to evaluate the reasonableness of the impairment loss provided on obsolete stock.

Responsibilities of Corporate Management and Governance Hierarchy 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 level 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 members of the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditors’ 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 auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the 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 maintain professional skepticism throughout the audit. We also:

1. 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.

2. 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.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. 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.

5. 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.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

1. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Company 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.

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 for the years ended December 31, 2024 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 Huei-Min Huang and Chih-Ming Shao.

Deloitte & Touche Taipei, Taiwan Republic of China

February 21, 2025

This is the translation of the financial statements. CPAs do not audit or review on this translation.

FOCALTECH SYSTEMS CO., LTD. BALANCE SHEETS DECEMBER 31, 2024 AND 2023 (In Thousands of New Taiwan Dollars, Except Par Value)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Accounts receivables, net (Notes 4 and 10) Inventories (Notes 4 and 11) Other financial assets (Notes 4 and 9) Other current assets (Note 25) Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss (Notes 4 and 7) Financial assets at fair value through other comprehensive income (Notes 4 and 8) Investments accounted for using equity method (Notes 4 and 12) Property, plant and equipment (Notes 4 and 13) Goodwill (Notes 4 and 14) Other intangible assets (Notes 4 and 15) Deferred income tax assets (Notes 4 and 25) Refundable deposits (Note 16) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Accounts payables (Notes 18 and 31) Other payables (Note 19) Current tax liabilities (Notes 4 and 25) Current position of long-term loans (Note 17) Other current liabilities (Note 23) Total current liabilities NON-CURRENT LIABILITIES Long-term loans (Note 17) Deferred tax liabilities (Notes 4 and 25) Net defined benefit liabilities (Notes 4 and 20) Guarantee deposits received (Note 21) Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Notes 4, 22 and 27) Share capital Ordinary shares Capital surplus Retained earnings Legal reserve Undistributed earnings Total retained earnings Other equity Treasury shares Total equity TOTAL		December 31, 2024 Amount % $ 4,019,476 26 853,585 5 1,812,676 12 812,280 5 120,094 1 7,618,111 49 260,996 2 9,767 - 4,327,951 28 1,244,519 8 1,237,268 8 126,245 1 161,559 1 454,124 3 7,822,429 51 $ 15,440,540 100 $ 2,215,498 15 324,711 2 37,297 - - - 49,030 - 2,626,536 17 - - 217,109 1 10,817 - 2,464,950 16 2,692,876 17 5,319,412 34 2,192,168 14 6,150,242 40 747,512 5 1,082,065 7 1,829,577 12 112,201 1 (163,060) (1) 10,121,128 66 $ 15,440,540 100		December 31, 2023	December 31, 2023
		Amount $ 4,019,476 853,585 1,812,676 812,280 120,094 7,618,111 260,996 9,767 4,327,951 1,244,519 1,237,268 126,245 161,559 454,124 7,822,429 $ 15,440,540 $ 2,215,498 324,711 37,297 - 49,030 2,626,536 - 217,109 10,817 2,464,950 2,692,876 5,319,412 2,192,168 6,150,242 747,512 1,082,065 1,829,577 112,201 (163,060) 10,121,128 $ 15,440,540		Amount $ 2,781,182 1,368,404 1,555,548 1,688,775 94,465 7,488,374 217,670 - 3,557,725 1,238,657 1,237,268 112,465 175,545 1,852,750 8,392,080 $ 15,880,454 $ 1,500,085 229,991 127,997 26,386 11,812 1,896,271 760,454 219,167 13,955 3,682,534 4,676,110 6,572,381 2,178,900 6,031,904 712,562 757,830 1,470,392 (210,063) (163,060) 9,308,073 $ 15,880,454	%
					17 9 10 11 - 47 1 - 22 8 8 1 1 12 53 100 9 2 1 - - 12 5 1 - 23 29 41 14 38 4 5 9 (1) (1) 59 100

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

This is the translation of the financial statements. CPAs do not audit or review on this translation.

FOCALTECH SYSTEMS CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

REVENUE (Notes 4 and 23) COSTS OF SALES (Notes 4,11, 24 and 31) GROSS PROFIT OPERATING EXPENSES (Notes 24, 27, 28 and 31) Selling and marketing expenses General and administrative expenses Research and development expenses Total operating expenses OPERATIONS (LOSS) INCOME NON-OPERATING INCOME AND EXPENSES Finance costs (Note 24) Share of loss of subsidiaries and joint ventures (Note 4) Interest income (Note 4) Gain (loss) on financial assets and liabilities at fair value through profit or loss (Note 4) Other gains and losses Gain on foreign currency exchange (Note 4) Total non-operating income and expenses INCOME BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 25) NET INCOME OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans (Notes 4 and 20) Income tax related to items that will not be reclassified subsequently to profit or loss (Notes 4 and 25)		2024	% 100 (84) 16 (2) (2) (14) (18) (2) - 5 2 - 1 - 8 6 - 6 - - -		2023
		Amount $ 8,972,445 (7,505,562) 1,466,883 (154,396) (242,182) (1,242,046) (1,638,624) (171,741) (14,724) 493,896 181,693 2,771 58,691 35,034 757,361 585,620 (11,558) 574,062 2,644 (370) 2,274			Amount % $ 10,073,062 100 (8,316,026) (83) 1,757,036 17 (87,347) (1) (218,780) (2) (1,002,973) (10) (1,309,100) (13) 447,936 4 (17,051) - (190,940) (2) 155,746 2 17,038 - 9,460 - 15,632 - (10,115) - 437,821 4 (75,902) (1) 361,919 3 (861) - 120 - (741) - (Continued)	%

This is the translation of the financial statements. CPAs do not audit or review on this translation.

FOCALTECH SYSTEMS CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Items that may be reclassified subsequently to profit or loss: Unrealized loss from debt instrument investments measured at fair value through other comprehensive income (Note 4) Share of other comprehensive loss of subsidiaries (Note 4) Total other comprehensive income (loss), net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (Note 26) Basic Diluted		2024		% - 3 3 3 9		2023
		Amount $ (22) 238,433 238,411 240,685 $ 814,747 $ 2.71 $ 2.64				Amount $ - (34,675) (34,675) (35,416) $ 326,503 $ 1.74 $ 1.69		%
								- - - - 3

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

(Concluded)

This is the translation of the financial statements. CPAs do not audit or review on this translation.

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 (In Thousands of New Taiwan Dollars)

FOCALTECH SYSTEMS CO., LTD.

BALANCE, JANUARY 1, 2023 Appropriation of 2022 earnings Special reserve Net income for the year ended December 31, 2023 Other comprehensive income (loss) for the year ended December 31, 2023, net of income tax Total comprehensive income (loss) for the year ended December 31, 2023 Cash dividends distributed from capital surplus Changes in other additional paid-in capital Compensation cost of employee share options Treasury shares transferred to employees Issuance of ordinary shares from exercise of employee share options Issuance of restricted stock for employees Retirement of restricted stock employees Compensation cost of restricted stock of employees BALANCE AT DECEMBER 31, 2023 Appropriation of 2023 earnings Legal reserve Cash dividends Net income for the year ended December 31, 2024 Other comprehensive income (loss) for the year ended December 31, 2024, net of income tax Total comprehensive income (loss) for the year ended December 31, 2024 Changes in other additional paid-in capital Compensation cost of employee share options Issuance of restricted stock for employees Compensation cost of restricted stock of employees Retirement of restricted stock employees BALANCE AT DECEMBER 31, 2024		Share Capital Ordinary Shares $ 2,161,107 - - - - - - - - 463 20,330 (3,000) - 2,178,900 - - - - - - - 17,800 - (4,532) $ 2,192,168		Capital Surplus $ 6,041,988 - - - - (108,000) (1,499) 24,940 - 508 137,024 (63,057) - 6,031,904 - - - - - (2,134) 7,810 162,435 - (49,773) $ 6,150,242		Retained Earnings	Retained Earnings		Undistributed Earnings $ 196,847 211,479 361,919 (741) 361,178 - (11,674) - - - - - - 757,830 (34,950) (217,151) 574,062 2,274 576,336 - - - - - $ 1,082,065		Other Equity	Unearned employee compensation $ (335,829) - - - - - - - - - (137,024) 63,057 195,074 (214,722) - - - - - - - (162,435) 196,515 49,773 $ (130,869)	Treasury Shares $ (196,057) - - - - - - - 32,997 - - - - (163,060) - - - - - - - - - - $ (163,060)	Total Equity
						Legal Reserve $ 712,562 - - - - - - - - - - - - 712,562 34,950 - - - - - - - - - $ 747,512	Special Reserve $ 211,479 (211,479) - - - - - - - - - - - - - - - - - - - - - - $ -			Exchange Differences from Translating Financial Statement of Foreign Operations Un o O $ 52,472 - - (41,294) (41,294) - - - - - - - - 11,178 - - - 232,160 232,160 - - - - - $ 243,338	realized Gains(losses) n Financial Assets at Fair Value through ther comprehensive income $ (13,138) - - 6,619 6,619 - - - - - - - - (6,519) - - - 6,251 6,251 - - - - - $ (268)
														$ 8,831,431 - 361,919 (35,416) 326,503 (108,000) (13,173) 24,940 32,997 971 20,330 (3,000) 195,074 9,308,073 - (217,151) 574,062 240,685 814,747 (2,134) 7,810 17,800 196,515 (4,532) $ 10,121,128

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

This is the translation of the financial statements. CPAs do not audit or review on this translation.

FOCALTECH SYSTEMS CO., LTD.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax from continuing operation Adjustments for: Depreciation expenses Amortization expenses Net gain on financial assets and liabilities at fair value through profit or loss Finance costs Interest income Compensation cost of employee share options Share of (gain) loss of subsidiaries and joint ventures Gain on disposal of property plant and equipment (Gain) loss on disposal of investments (Reversal gain) loss on write-down of inventories Compensation cost of restricted stock to employees Changes in operating assets and liabilities Financial assets mandatorily classified as at fair value through profit or loss Accountsreceivables Inventories Other current assets Accountspayables Other payables Other current liabilities Net defined benefit liabilities Cash generated from operations Interest paid Income tax paid Net cash inflow (outflow) from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial asset at fair value through other comprehensive income Acquisition of property, plant and equipment Disposal of property, plant and equipment Decrease in refundable deposits Acquisition of intangible assets Decrease in other non-current assets Decrease (increase) in other financial assets Interest received Net cash inflow (outflow) inflow from investing activities		2024 $ 585,620 74,917 112,893 (2,771) 14,724 (181,693) 3,377 (493,896) (27,526) (5,334) (330,673) 163,051 (35,221) 514,819 73,545 (25,968) 715,413 94,720 37,510 (494) 1,287,013 (15,016) (110,764) 1,161,233 (9,750) (88,304) 35,051 1,398,626 (126,673) - 876,495 202,057 2,287,502		2023
				$ 437,821 62,873 91,362 (17,038) 17,051 (155,746) 8,633 190,940 - 5,942 (1,089,693) 110,775 118,886 (446,011) 3,644,072 59,302 274,353 (359,697) (31,988) (466) 2,921,371 (18,007) (153,677) 2,749,687 - (46,972) - 796,196 (145,821) 2,486 (1,504,515) 134,817 (763,809) (Continued)

This is the translation of the financial statements. CPAs do not audit or review on this translation.

FOCALTECH SYSTEMS CO., LTD.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM FINANCING ACTIVITIES Decrease in short-term loans Decrease in long-term loans Decrease in guarantee deposits received Cash dividends paid Exercise of employee share options Treasury shares transferred to employees Issuance of restricted stock for employees Retirement of restricted stock employees Other Net cash outflow from financing activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR		2024 $ - (786,840) (1,217,584) (217,151) - - 17,800 (4,532) (2,134) (2,210,441) 1,238,294 2,781,182 $ 4,019,476		2023
				$(1,400,000) (200,000) (660,402) (108,000) 971 32,997 20,330 (3,000) (1,499) (2,318,603) (332,725) 3,113,907 $ 2,781,182

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

(Concluded)

This is the translation of the financial statements. CPAs do not audit or review on this translation.

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

FOCALTECH SYSTEMS CO., LTD.

1. GENERAL INFORMATION

FocalTech Systems Co., Ltd. (“FocalTech” or “the Company”), formerly named as Orise Technology Co., Ltd., was incorporated in the Republic of China (“ROC”) in January 2006. The Company’s shares have been listed on the Taiwan Stock Exchange (“TWSE”) since July 2007. On January 2, 2015, the Company acquired FocalTech Corporation, Ltd. through a share swap and renamed on January 27, 2015. This acquisition was comprehensively considered as a reverse merger, where FocalTech Corporation, Ltd. was treated as the acquirer in the financial statements. The Company mainly engages in the research, development, design, manufacturing, and sales of Human-Machine Interface solutions, such as Display Driver IC, Touch Control IC and so on.

The financial statements are presented in the Company’s functional currency of New Taiwan dollars.

2. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved by the Company’s board of directors on February 21, 2025.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

• a. Initial application of the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC).

The initial application of the amendments to the IFRSs endorsed and issued in to effect by the FSC did not have a significant impact on the Company’s accounting policies.

• b. The IFRSs endorsed by the Financial Supervisory Commission (FSC) for application starting from 2025:

New, Revised or Amended Standards and Interpretations Amendments to IAS 21 “Lack of Exchangeability”	Effective Date **Announced by IASB **
	January 1, 2025 (Note 1)

• Note 1: An entity shall apply those amendments for annual reporting periods beginning on or after January 1, 2025. Upon initial application of the amendments to IAS 21, the Company shall not restate the comparative information and shall recognize any effect of initially applying the amendments as an adjustment to the opening balance of retained earnings or, if applicable, to the cumulative amount of translation differences in equity as well as affected assets or liabilities.

As of the date the financial statements were authorized for issue, the Company is continuously assessing the possible impact that the application of other standards and interpretations will not have significant impact on the Company’s financial position and financial performance.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

• c. The IFRSs issued by International Accounting Standards Board (IASB), but not yet endorsed and issued into effect by the Financial Supervisory Commission (FSC):

New, Revised or Amended Standards and Interpretations Annual Improvements to IFRS Accounting Standards – Volume 11 Amendments to IFRS 9 and IFRS 7 “Amendments to the Classification and Measurement of Financial Instruments” Amendments to IFRS 9 and IFRS 7 “Contracts Referencing Nature- dependent Electricity” Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IFRS 17 “Initial Application of IFRS 9 and IFRS 17- Comparative Information” IFRS 18 “Presentation and Disclosure in Financial Statements” IFRS 19 “Subsidiaries without Public Accountability: Disclosures”

Effective Date Announced by IASB (Note 1)

January 1, 2026 January 1, 2026 January 1, 2026 To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2027 January 1, 2027

• Note 1: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on or after their respective effective dates.

As of the date the financial statements were authorized for issue, the Company is continuously assessing the possible impact that the application of other standards and interpretations will have impact on the Company’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

• a. Statement of compliance

The present Financial Report has been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

• b. Basis of preparation

The financial statements have been prepared on the historical cost basis, except for financial instruments measured at fair value and the net defined benefit liabilities recognized in the amount of the present value of defined benefit obligation less the fair value of any plan assets.

The evaluation of fair value could be classified into Level 1 to Level 3 by the observable intensity and importance of related input value:

• 1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

• 2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

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

When preparing the parent company only financial statements, the Company accounts for subsidiaries by using the equity method. In order to agree with the of amount of net income, other comprehensive income and equity attributable to shareholders of the parent between then financial statements and parent company financial statements, the differences of the accounting treatment between the parent company only basis and the consolidated basis are adjusted by the accounts of investments accounted for using

This is the translation of the financial statements. CPAs do not audit or review on this translation.

equity method, share of profits of subsidiaries and share of other comprehensive income of subsidiaries in the parent company only financial statements.

• c. Standards in differentiating current and non-current assets and liabilities

Current assets include:

• 1) Assets held primarily for the purpose of trading;

• 2) Assets expected to be realized within twelve months after the reporting period; and

• 3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

Current liabilities include:

• 1) Assets expected to be realized within 12 months after the reporting period; and

• 2) Liabilities for which the Company does not have an unconditional right to defer settlement for at least 12 months after the reporting period.

Those not as aforementioned current assets or current liabilities are classified as non-current assets or non-current liabilities.

• d. Foreign currencies

In preparing the financial statements, transactions in currencies other than the Company’s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period.

Non-monetary items that are measured at historical cost in a foreign currency are not retranslated.

For the purpose of presenting financial statements, the functional currencies of the Company and the Company entities (including subsidiaries in other countries that use currency different from the currency of the Company) are translated into the presentation currency - New Taiwan dollars as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income.

e. Inventories

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

• f. Investments in subsidiaries

The Company uses the equity method to account for its investments in subsidiaries.

A subsidiary is an entity (including a structured entity) that is controlled by the Company.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

Under the equity method, an investment in a subsidiary is initially recognized at cost and adjusted thereafter to recognize the Company’s share of the profit or loss and other comprehensive income of the subsidiary. The Company also recognizes the changes in the Company’s share of equity of subsidiaries.

Changes in the Company’s ownership interest in a subsidiary that do not result in the Company losing the control of the subsidiary are accounted for as equity transactions. The Company recognizes directly in equity any difference between the carrying amount of the investment and the fair value of the consideration paid or received.

When the Company’s share of loss of a subsidiary exceeds its interest in that subsidiary (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Company’s net investment in the subsidiary), the Company continues recognizing its share of further loss, if any.

The Company assesses its investment for any impairment by comparing the carrying amount with the estimated recoverable amount as assessed based on the investee’s financial statements as a whole. Impairment loss is recognized when the carrying amount exceeds the recoverable amount. If the recoverable amount of the investment subsequently increases, the Company recognizes a reversal of the impairment loss; the adjusted post-reversal carrying amount should not exceed the carrying amount (net of amortization or depreciation) before any impairment loss recognized. An impairment loss recognized on goodwill cannot be reversed in a subsequent period.

Profit or loss resulting from downstream transactions is eliminated in full in the parent company only financial statements. Profit and loss resulting from upstream transactions and transactions between subsidiaries is recognized only to the extents that are not related to the interests between the Company and subsidiaries.

• g. Property, plant and equipment

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

Depreciation on property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

• h. Goodwill

Goodwill arising from the acquisition of a business is carried at cost, and subsequently measured at cost less accumulated impairment loss.

For the purposes of impairment testing, goodwill is allocated to each of the Company’s cash-generating units or groups of cash-generating units (referred to as cash-generating units) that is expected to benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired, by comparing its carrying amount, including the attributed goodwill, with its recoverable amount. If the recoverable amount of the cashgenerating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss is recognized directly in profit or loss. An

This is the translation of the financial statements. CPAs do not audit or review on this translation.

impairment loss recognized for goodwill is not reversed in subsequent periods.

• i. Intangible assets

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization. Amortization is recognized on a straightline basis. The estimated useful life, residual value, and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, they are measured on the same basis as intangible assets that are acquired separately.

On derecognition of an intangible asset, the difference between the net disposal proceeds and the carrying amount of the asset are recognized in profit or loss.

• j. Impairment of property, plant and equipment and intangible assets other than goodwill

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant and equipment and intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs to.

Recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

When an impairment loss is subsequently reversed, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset or cashgenerating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

• k. Financial instruments

Financial assets and financial liabilities are recognized when the company becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

• 1) Financial assets

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

i) Measurement category

The Company’s financial assets include those measured at FVTPL, at amortized cost and at FVTOCI.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

A. Financial assets at FVTPL

The equity instruments that are not specified as FVTOCI and debt instruments that do not meet the criteria of amortized cost or FVTOCI are mandatorily required to be measured at FVTPL.

Any dividends, interest earned and gain or loss arising from the remeasurement is recognized in profit or loss at fair value. The determination methodology of fair value of financial instruments states in Note 29.

B. Financial assets at amortized cost

Financial assets that meet both two following conditions will subsequently be measured at amortized cost:

• (1) The objective of the business model to hold the financial asset is to collect contractual cash flows; and

• (2) The cash flows from contractual terms of the financial asset on specified dates are solely matched for payments of principal and interests on the principal amount outstanding.

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, account receivables at amortized cost, other financial assets, and refundable deposits, are measured at amortized cost, which equals to gross carrying amount determined by the effective interest method, subtracting any impairment loss. Foreign exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset.

Cash equivalents include time deposits with original maturities within 3 months from obtaining date, high liquidation level, readily convertible to a known amount of cash at any time, and low risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

C. Investments in debt instruments at FVTOCI

Investments in debt instruments that meet both the following conditions are subsequently measured at FVTOCI:

• (1) The objective of the business model to hold the financial asset is to collect contractual cash flows and sell financial assets; and

• (2) The cash flows from contractual terms of the financial asset on specified dates are solely matched for payments of principal and interests on the principal amount outstanding.

Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment losses or reversed gains on investments in debt instruments at FVTOCI are recognized in profit or loss. Other changes in the carrying amount of these debt instruments are recognized in other comprehensive income and will be reclassified to profit or loss when these debt instruments are disposed.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

ii) Impairment of financial assets

At the end of each reporting period, the impairment loss is recognized by expected credit loss method for financial assets at amortized cost (including accounts receivables).

The loss allowance for accounts receivables is determined by the expected credit losses over the lifetime. For other financial assets at amortized cost, if the credit risk on the financial instrument has not increased significantly after initial recognition, a loss allowance is determined by the expected credit losses resulting from the possible default events within 12 months after the reporting date. If, on the other hand, there has been a significant increase in credit risk after initial recognition, a loss allowance is determined by the expected credit losses resulting from all possible default events over the expected life of a financial instrument.

Expected credit losses (ECLS) reflect the weighted average of credit losses with the respective risks of default occurring as the weights. 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date. In contrast, Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument.

All impairment loss of the financial instruments with a corresponding adjustment to their carrying amount are through an allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and does not reduce the carrying amount of the financial asset.

iii) Derecognition of financial assets

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

When a financial asset carried at amortized cost is derecognized in its entirety, the difference between the asset’s carrying amount and the consideration is recognized in profit or loss. If the financial asset is an investment in debt instruments at FVTOCI and derecognized in its entirety, the difference between the asset’s carrying amount and the sum of the consideration plus the cumulative gain or loss that had been recognized in other comprehensive income is recognized in profit or loss.

2) Equity instruments

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

Equity instruments issued by the company are recognized at the proceeds received, net of direct issue costs.

Repurchase of the Company’s own equity instruments is recognized in and deducted directly from equity. The carrying amount is calculated by weighted average of stock types. No gain or loss is recognized in profit or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments.

3) Financial liabilities

• i) Subsequent measurement

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

This is the translation of the financial statements. CPAs do not audit or review on this translation.

• ii) Derecognition of financial liabilities

The difference between the carrying amount of the financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

• l. Provisions

Provisions are measured at the best estimate of the discounted cash flows of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

• m. Revenue recognition

The Company recognizes revenue when customer’s contract obligations are satisfied.

Revenue comes from sales of Human-Machine Interface devices ICs. Revenue is recognized when the ICs start to be shipped or are delivered to the specific locations instructed by customers, at which time the customer has full discretion over the ICs. Revenue and accounts receivables are recognized concurrently.

The Company considers varying contractual terms to estimate sales returns and recognize refund liabilities, which is classified under other payables.

• n. Lease

The Company evaluates if the contract belongs to or includes the lease the commencement date.

The Company as a lessee

Except for the leases of low-value asset or short-term leases recognized as expenses on a straight-line basis, the Company recognizes right-of-use assets and lease liabilities for all leases on the balance sheets from the commencement date.

• o. Employee benefits

• 1) Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

• 2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost, including current service cost and net interest on the net defined benefit liability (asset,) is recognized as employee benefits expense in the period it occurs. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which they occur and will not be reclassified to profit or loss.

Net defined benefit liability represents the actual deficit in the Company’s defined benefit plan.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

• p. Share-based payment arrangements

Equity-settled and share-based payment arrangements granted to employees

The fair value at the grant date of the equity-settled and share-based payments is expensed on a straightline basis over the vesting period, based on the Company’s optimal estimate number of shares or options that are expected to ultimately vest, with a corresponding increase in capital surplus - employee share options.

The fair value at the grant date of the restricted shares for employees is expensed on a straight-line basis over the vesting period, based on the Company’s best estimates of the number of shares or options that are expected to ultimately vest, with a corresponding increase in other equity - unearned employee benefits. For restricted stocks where employees have to pay to acquire those stocks, the Company will return their payments on the stocks to employees when they resign. It should be recognized in payables.

When restricted shares for employees are issued, other equity - unearned employee benefits are recognized on the grant date, with a corresponding increase in capital surplus - restricted shares for employees.

At the end of each reporting period, the Company revises its estimate of the number of restricted shares for employees that are expected to vest. The impact of the revision of the original estimates is recognized in profit or loss such that the cumulative expenses reflect the revised estimate, with a corresponding adjustment to capital surplus - restricted shares for employees.

q. Taxation

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

• 1) Current tax

The tax on unappropriated earnings according to the Income Tax Law should be accrued in the year when the resolution regarding to the appropriated earnings is made in the shareholder meeting.

Any adjustment of prior years’ tax liability is counted in the current year’s tax.

• 2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit. In addition, a deferred tax liability is not recognized on taxable temporary difference arising from initial recognition of goodwill.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all

This is the translation of the financial statements. CPAs do not audit or review on this translation.

or part of the asset to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

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

• 3) Current and deferred tax for the year

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income, in which case, the deferred tax is recognized in other comprehensive income.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Company’s accounting policies, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

Impairment of inventory

Net realizable value of inventory is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. The estimation of net realizable value was based on current market conditions and the historical experience of selling products of a similar nature. Changes in market conditions may have a material impact on the estimation of net realizable value.

6. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts and demand deposits Cash equivalent (time deposits with original maturities less than three months)		**December 31 **	**December 31 **	**December 31 **
		2024 $ 545 1,487,906 2,531,025 $ 4,019,476		2023
				$ 571 803,561 1,977,050 $ 2,781,182

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Non-Current Mandatorily measured at fair value throughprofit or loss (FVTPL) Listed preferred shares Private Funds		**December 31 **	**December 31 **	**December 31 **
		2024 $ 10,285 250,711 $ 260,996		2023
				$ 10,183 207,487 $ 217,670

This is the translation of the financial statements. CPAs do not audit or review on this translation.

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Non–Current Fixed income bonds		**December 31 **	**December 31 **	**December 31 **
		2024 $ 9,767		2023
				$ -

9. OTHER FINANCIAL ASSETS

Time deposits with original maturities more than three months ACCOUNTS RECEIVABLES, NET Accountsreceivables		**December 31 **	**December 31 **	**December 31 **
		2024 2023 $ 812,280 $ 1,688,775 **December 31 **		2023
		2024 $ 853,585		2023
				$ 1,368,404

10. ACCOUNTS RECEIVABLES, NET

The average credit period on sales of goods was 30-120 days. In order to minimize credit risk, management of the Company has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Company reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate allowances are made for irrecoverable amounts. In this regard, management believes the Company’s credit risk was significantly reduced.

The Company recognizes the allowance loss for accounts receivable based on expected credit losses during the duration. The expected credit losses on accounts receivables are estimated by using an allowance matrix which references customer default records, customer’s current financial position, and general economic conditions of the industry. Due to the past experiences, there is no significant difference among the loss patterns of different customer groups. Therefore, the allowance matrix does not further distinguish the customer groups, and only sets the expected credit loss rate based on the overdue days of accounts receivable.

The following table details the loss allowance of accounts receivables based on the Company’s allowance matrix.

December 31, 2024

Expected credit loss rate Gross carrying amount and Amortized cost December 31, 2023 Expected credit loss rate Gross carrying amount and Amortized cost	Non Past Due 0% $ 853,585 Non Past Due 0% $ 1,368,404		Overdue 1-60 Days 0% $ - Overdue 1-60 Days 0% $ -	Overdue 61-180 Days 0% $ - Overdue 61-180 Days 0% $ -	Overdue Over 180 Days 0% $ - Overdue Over 180 Days 0% $ -		Total
							0% $ 853,585 Total
							0% $ 1,368,404

This is the translation of the financial statements. CPAs do not audit or review on this translation.

11. INVENTORIES

Finished goods Work in progress Raw materials and supplies		**December 31 **	**December 31 **	**December 31 **
		2024		2023
		$ 605,909 756,356 450,411 $ 1,812,676		$ 633,068 681,924 240,556 $ 1,555,548

The cost of goods sold were including amounts of which write-down inventory cost to net realizable value and reverse of write-down inventories due to sales. The amounts are illustrated below:

Reversal gain on write-down of inventories	**For the Years Ended December 31 **	**For the Years Ended December 31 **	**For the Years Ended December 31 **	**For the Years Ended December 31 **
		2024		2023
		$ 330,673		$ 1,089,693

12. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in subsidiaries FocalTech Corporation, Ltd. FocalTech Electronics, Ltd. FocalTech Smart Sensors, Ltd. Investments in subsidiaries FocalTech Corporation, Ltd. FocalTech Electronics, Ltd. FocalTech Smart Sensors, Ltd.(a)		**December 31 **	**December 31 **	**December 31 **
		2024 2023 $ 2,537,078 $ 2,350,762 1,790,750 1,205,321 123 1,642 $ 4,327,951 $ 3,557,725 Percentage of Ownership as of December 31		2023
		2024 100% 100% 9.14%	2023
			100% 100% 9.14%

a. The Company and its subsidiary hold 57.31% and 9.14% of the issued share of FocalTech Electronics Co., Ltd.. Since the Company had control over FocalTech Electronics Co., Ltd., it was listed as a subsidiary.

The share of profit or loss and other comprehensive income of these subsidiaries accounted for using the equity method recognized in 2024 and 2023 financial statements were based on the audited subsidiaries’ financial statements of the corresponding periods.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

13. PROPERTY, PLANT AND EQUIPMENT

Cost Balance at January 1, 2023 Additions Disposals Reclassification Balance at December 31, 2023 Accumulated depreciation Balance at January 1, 2023 Depreciation Disposals Balance at December 31, 2023 Carrying amounts at December 31, 2023 Cost Balance at January 1, 2024 Additions Disposals Balance at December 31, 2024 Accumulated depreciation Balance at January 1, 2024 Depreciation Disposals Balance at December 31, 2024 Carrying amounts at December 31, 2024		Land	Buildings	Buildings	Development Equipment	Development Equipment	Office Equipment	Office Equipment	Construction inprogress $ 56,640 - - ( 56,640) $ - $ - - - $ - $ - $ - - - $ - $ - - - $ - $ -		**Total **
		$ 557,110 - - - $ 557,110 $ - - - $ - $ 557,110 $ 557,110 - - $ 557,110 $ - - - $ - $ 557,110		$ 500,183 - - - $ 500,183 $ 5,001 10,004 - $ 15,005 $ 485,178 $ 500,183 - - $ 500,183 $ 15,005 10,004 - $ 25,009 $ 475,174		$ 176,675 15,204 ( 9,445) - $ 182,434 $ 77,008 38,631 ( 9,445) $ 106,194 $ 76,240 $ 182,434 86,694 ( 47,189) $ 221,939 $ 106,194 48,705 ( 39,664) $ 115,235 $ 106,704		$ 47,754 31,768 ( 133) 56,640 $ 136,029 $ 1,795 14,238 ( 133) $ 15,900 $ 120,129 $ 136,029 1,610 - $ 137,639 $ 15,900 16,208 - $ 32,108 $ 105,531			$1,338,362 46,972 ( 9,578) - $1,375,756
											$ 83,804 62,873 ( 9,578) $ 137,099 $1,238,657
											$1,375,756 88,304 ( 47,189) $1,416,871
											$ 137,099 74,917 ( 39,664) $ 172,352 $1,244,519

Property, plant and equipment were depreciated on a straight-line basis over the estimated useful lives as follows:

Buildings 50 years Development equipment 2-4 years Office equipment 4 years

Property, plant and equipment were pledged as collateral. Refer to Note 32.

14. GOODWILL

Ending balance		**December 31 **	**December 31 **	**December 31 **
		2024		2023
		$ 1,237,268		$ 1,237,268

Considering the synergy of integration of LCD driver and touch controller under the industry trend, the reverse merger was triggered by FocalTech Corporation, Ltd. on January 2, 2015, resulting the goodwill of $3,237,268 thousand. In 2018, the impacts of market improper competition and the shortage of wafer supply made the company a serious market share decline, which is expected to influence the market shares and gross margins in the future. Therefore, the recoverable amount from IDC (Integrated Driver Controller) less than the carrying value so the Company recognized the impairment loss of $2,000,000 thousand. In 2024 and 2023, based on the market growth and market share gain in smartphone market, the Company estimated cash flows from sales of IDC (Integrated Driver Controller), and the recoverable amount exceeded the carrying value. Therefore, the Company did not recognize any impairment on goodwill.

The recoverable amount is calculated by IDC projected net cash flows, discounted at 15.39% and 15.55% for the years ended December 31, 2024 and 2023, under the assumptions of management team judgments and historical experiences with regard to future growth rates and gross margin.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

15. OTHER INTANGIBLE ASSETS

Cost Balance, January 1, 2023 Additions Disposals Balance, December 31, 2023 Accumulated amortization Balance at January 1, 2023 Amortization expense Disposals Balance at December 31, 2023 Carrying amounts at December 31, 2023 Cost Balance, January 1, 2024 Additions Disposals Balance, December 31, 2024 Accumulated amortization Balance at January 1, 2024 Amortization expense Disposals Balance at December 31, 2024 Carrying amounts at December 31, 2024		Licenses and Franchises $ 23,108 - ( 18,656) $ 4,452 $ 20,883 2,225 ( 18,656) $ 4,452 $- $ 4,452 - - $ 4,452 $ 4,452 - - $ 4,452 $-			Software $ 88,989 145,821 ( 60,784) $174,026 $ 62,608 74,437 ( 60,784) $ 76,261 $ 97,765 $ 174,026 126,673 ( 24,084) $276,615 $ 76,261 98,193 ( 24,084) $ 150,370 $ 126,245		Patents $ 76,478 - - $ 76,478 $ 61,878 7,300 - $ 69,178 $ 7,300 $ 76,478 - - $ 76,478 $ 69,178 7,300 - $ 76,478 $-	Trademark $ 74,000 - - $ 74,000 $ 59,200 7,400 - $ 66,600 $ 7,400 $ 74,000 - - $ 74,000 $ 66,600 7,400 - $ 74,000 $-		**Total **
										$ 262,575 145,821 (79,440) $ 328,956 $ 204,569 91,362 (79,440) $ 216,491 $ 112,465 $ 328,956 126,673 (24,084) $ 431,545 $ 216,491 112,893 (24,084) $ 305,300 $ 126,245

Other intangible assets were amortized on a straight-line basis over the estimated useful lives as follows:

Licenses and franchises	1-5 years
Software	1-3 years
Patents	9-10 years
Trademark	10 years

This is the translation of the financial statements. CPAs do not audit or review on this translation.

16. REFUNDABLE DEPOSITS

Capacity guarantee deposits and others		**December 31 **	**December 31 **	**December 31 **
		2024 $ 454,124		2023
				$ 1,852,750

Guarantee deposits mainly consists of cash paid to suppliers to ensure stable foundry capacity.

17. LOANS

Long-term loans Secured bank loans Less: reclassification to Current position of long-term loans Annual interest rate Secured bank loans		**December **	**December **	**31 **
		2024 - - $ - -		2023
				786,840 (26,386) $ 760,454 1.75~1.875%

For secured bank loans, the principals will be paid monthly or quarterly after three years from drawdown date. The period of borrowings is from September, 2021 to September, 2036. Commercial building is pledged as collateral for the long-term loans, please refer to Note 32. This loan was fully repaid early in December 2024 .

18. ACCOUNTS PAYABLES

Accountspayables Accountspayables-related party		**December 31 **	**December 31 **	**December 31 **
		2024 $ 1,717,039 498,459 $ 2,215,498		2023
				$ 1,022,290 477,795 $ 1,500,085

The average credit period on purchases was 30-60 days. The Company has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

19. OTHER PAYABLES

Payable for salaries and bonus Payable for labor, health and social insurance Reserve for litigations Payable for professional services and others		**December 31 **	**December 31 **	**December 31 **
		2024 $ 229,481 12,450 10,727 72,053 $ 324,711		2023
				$ 170,850 12,450 1,091 45,600 $ 229,991

This is the translation of the financial statements. CPAs do not audit or review on this translation.

20. RETIREMENT BENEFIT

a. Defined contribution plans

The Company adopted a pension plan under the Labor Pension Act (the “LPA”), which is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

b. Defined benefit plans

The defined benefit plan adopted by the Company in accordance with the Labor Standards Law is operated by the government. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the six months before retirement. The Company contributes amounts equal to 2% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Company assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (“the Bureau”); the Company has no right to influence the investment policy and strategy.

The amounts included in the balance sheets in respect of the Company’s defined benefit plans were as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit liability		**December 31 **	**December 31 **	**December 31 **
		2024 $ 35,106 24,289) $ 10,817		2023
	(		(	$ 35,423 21,468) $ 13,955

Movements in net defined benefit liability were as follows:

Balance at January 1, 2023 Net interest expense (income) Recognized in profit or loss Remeasurement Return on plan assets (excluding amounts included in net interest) Actuarial loss - experience adjustments Recognized in other comprehensive income Contributions from the employer Balance at December 31, 2023 Balance at January 1, 2024 Net interest expense (income) Recognized in profit or loss Remeasurement Return on plan assets (excluding amounts included in net interest) Actuarial gain - changes in financial assumptions	Present Value of the Defined Benefit Obligation $ 33,968 425 425 - 1,030 1,030 - $ 35,423 $ 35,423 443 443 - ( 854 )	Fair Value of the Plan Assets ($ 20,408) ( 260) ( 260) ( 169 ) - ( 169) ( 631) ($ 21,468) ($ 21,468) ( 273) ( 273) ( 1,884 ) -	Net Defined Benefit Liability (Asset)
			$ 13,560 165 165 ( 169 ) 1,030 861 ( 631) $ 13,955 $ 13,955 170 170 ( 1,884 ) ( 854 )

This is the translation of the financial statements. CPAs do not audit or review on this translation.

Actuarial loss - experience adjustments 94 - 94 Recognized in other comprehensive income ( 760 ) ( 1,884 ) ( 2,644 ) Contributions from the employer - ( 664 ) ( 664 ) Balance at December 31, 2024 $ 35,106 ( $ 24,289 ) $ 10,817

Through the defined benefit plans under the Labor Standards Law, the Company is exposed to the following risks:

• 1) Investment risk: The plan assets are invested in domestic/foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.

• 2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments.

• 3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:

Discount rate Expected rate of salary increase	December 31	December 31
	2024 1.5% 4.5%	2023
		1.25% 4.5%

If possible reasonable change in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation would increase (decrease) as follows:

Discount rate 0.25% increase 0.25% decrease Expected rate of salary increase 1% increase 1% decrease		**December **	**December **	**31 **
		2024 $ 854) $ 882) ($ 3,640) ($ 3,253)		2023
	( (		( (	$ 957) $ 992) ($ 4,059) ($ 3,600)

The sensitivity analysis presented above may not be representative of the actual change in the present value of the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

The expected contributions to the plan for the next year The average duration of the defined benefit obligation		**December **	**December **	**31 **
		2024 $ 670 12.7 years		2023
				$ 600 13.5 years

This is the translation of the financial statements. CPAs do not audit or review on this translation.

21. GUARANTEE DEPOSITS RECEIVED

Capacity guarantee deposits and others		**December 31 **	**December 31 **	**December 31 **
		2024 $ 2,464,950		2023
				$ 3,682,534

Guarantee deposit mainly consists of cash received from customers to ensure they have access to the Company’s specified capacity

22. EQUITY

a. Share capital

Ordinary shares (NT$10 par value per share)

Numbers of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued		**December 31 **	**December 31 **	**December 31 **
		2024		2023
		500,000 $ 5,000,000 219,217 $ 2,192,168		500,000 $ 5,000,000 217,890 $ 2,178,900

b. Capital surplus

The categories of uses and the sources of capital surplus based on regulations were as follows:

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital(1) Additional paid-in capital Treasury stock Employee share options-expired Maybe used to offset a deficit only Other – unclaimed dividend Other –exercise the right of subrogation Maynot be used for any purpose Restricted stock for employees Employee share options			**December 31 **	**December 31 **	**December 31 **	**December 31 **
						2023
					$5,159,995 167,900 34,448 6 - 625,664 43,891 $ 6,031,904

• 1) This type of capital surplus may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or converted to share capital (at a certain percentage of the Company’s capital surplus annually).

This is the translation of the financial statements. CPAs do not audit or review on this translation.

• c. Retained earnings and dividend policy

Under the Company’s Article of Incorporation, when distributing annual earnings, the Company shall pay taxes, offset its losses, set aside 10% as legal reserve, then set aside or reverse a special reserve in accordance with relevant laws or regulations. The Board of Directors shall prepare a distribution proposal for the remaining earnings plus the unappropriated retained earnings of previous years. Earnings distribution may be made in the form of shares after an approved resolution made by the shareholders’ meeting.

Please see Note 24(d) for policy stipulated in the Articles of Incorporation regarding to the remuneration for employees and directors.

Considering current and future development plans, investment conditions, capital requirements, and market competition situations, and shareholder benefits, The Company would appropriate the dividends to the shareholders not less than 10% of the current year’s earnings. The dividends could be paid in cash or shares. The cash portion should be equal or more than 10% of the total dividends. It is allowed not to distribute any cash dividend if the cash amount per share is less than NT 0.5.

Legal reserve should be appropriated from earnings until the legal reserve equals the Company’s paid-in capital. Legal reserve may be used to offset deficit. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.

The Company is required to set aside additional special capital reserve equal to the total amount of items that are accounted for as deductions from stockholders’ equity shall be set aside from prior-year earnings.

The annual shareholders’ meeting on May 30, 2023 resolved to distribute the additional paid-in capital in the amount of $108,000 thousand, or $0.5 per share.

The appropriations of earnings for 2023 and 2022 were resolved by the annual shareholders’ meeting on June 7, 2024, and May 30, 2023, respectively. The details of the distribution are as follows:

Legal reserve Special reserve (reversed) Cash dividends Cash dividends per share	**For the Years Ended December 31 **	**For the Years Ended December 31 **	**For the Years Ended December 31 **	**For the Years Ended December 31 **
		2023 $ 34,950 $- $ 217,151 $ 1.00		2022
				$- $ (211,479) $- $-

The Board of Directors’ meeting resolved the appropriations of earnings for 2024 on February 21,2025 are as follows:

Legal reserve Cash dividends Cash dividends per share		2024
		$ 57,634 $ 378,000 $ 1.72

The appropriations of earnings will be resolved in annual shareholders’ meeting on May 26, 2025.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

d. Special reserve

Balance, beginning Special reserve (reversed) appropriated Balance, ending Treasury shares Number of shares on January 1, 2023 Decrease during the period Number of shares on December 31, 2023 Number of shares on January 1, 2024 and December 31, 2024	For the Years Ended December 31 2024 2023 $ - $ 211,479 - ( 211,479) $ - $ - Shares (In Thousands) 1,545 (260) 1,285 1,285	For the Years Ended December 31 2024 2023 $ - $ 211,479 - ( 211,479) $ - $ - Shares (In Thousands) 1,545 (260) 1,285 1,285	For the Years Ended December 31 2024 2023 $ - $ 211,479 - ( 211,479) $ - $ - Shares (In Thousands) 1,545 (260) 1,285 1,285
		$ 211,479 ( 211,479) $ - Shares (In Thousands)
			1,545 (260) 1,285 1,285

• e. Treasury shares

The detailed information for other treasury stock transferred to employee programs could be found in Note 27 (b).

The treasury shares held by the company cannot be pledged and no dividend and voting right is attached in accordance with the Regulations of Securities and Exchange Act.

• f. Unearned employee compensation

Balance, beginning Issuance of shares Retirement of shares Share-based payment expenses recognized Balance, ending	**For the Years Ended December 31 **	**For the Years Ended December 31 **	**For the Years Ended December 31 **	**For the Years Ended December 31 **
		2024 $ 214,722 ) 162,435 ) 49,773 196,515 $ 130,869)		2023
	( ( (		( ( (	$ 335,829 ) 137,024 ) 63,057 195,074 $ 214,722)

The detailed information for restricted share for employees program referred to Note 27 (c).

23. REVENUE

IC for Human-Machine Interface Solutions Contract balances Contract liabilities (classified as current liabilities) Sales of goods	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
	2024 2023 $ 8,972,445 $ 10,073,062 December 31		2023
	2024 $ 43,427		2023
			$ 6,439

This is the translation of the financial statements. CPAs do not audit or review on this translation.

24. NET INCOME

a. Finance costs

Interest on bank loans Interest on deposits	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2024 $ 14,724 - $ 14,724		2023
				$ 16,984 67 $ 17,051

b. Depreciation and amortization

Property, plant and equipment Intangible assets An analysis of depreciation and amortization by function Operating costs Operating expenses c. Employee benefits expense Post-employment benefits Defined contribution plans Defined benefit plans (see Note 20) Share-based payments (see Note 27) Other employee benefits Total employee benefits expense An analysis of employee benefits expense by function Operating costs Operating expenses	**For the Year Ended **	**For the Year Ended **	**For the Year Ended **	**December 31 **
				2023
				$ 62,873 91,362 $ 154,235 $ 25,281 128,954 $ 154,235 **December 31 **
		2024 $ 33,430 170 166,428 1,056,178 $ 1,256,206 $ 179,354 1,076,852 $ 1,256,206		2023
				$ 31,606 165 119,408 665,043 $ 816,222 $ 121,228 694,994 $ 816,222

d. The remuneration to employees and directors

According to the Company’s Articles of Incorporation, the distributable compensation to employees and remuneration to directors shall not be less than 1% and not more than 1.5%, respectively, of net profit before income tax. The accrued employees’ compensation and remuneration of directors for the year ended December 31, 2024 and 2023 are as follows:

Amount

Employees’ compensation Remuneration of directors		2024 $ 83,948 $ 2,015		2023
				$ 82,352 $ 1,042

This is the translation of the financial statements. CPAs do not audit or review on this translation.

If there is any change in the proposed amounts after the annual financial statements were authorized for issue, the differences are recorded as a change in accounting estimate.

The board of directors resolved the remuneration of employees and directors for 2023 on February 23, 2024. There is no difference between the actual amount of remuneration to employees and directors resolved and the amount of remuneration to employees and directors accounted for in 2023 financial statements. There were no employees’ compensation and remuneration of directors accrued due to loss before income tax for the year ended December 31, 2022.

Information on the employees’ compensation and remuneration to directors resolved by the Company’s board of directors is available on the Market Observation Post System website of the Taiwan Stock Exchange.

25. INCOME TAXES

a. Major components of tax expense recognized in profit or loss

Current income tax expense Other income tax adjustments Deferred income tax expense In respect of the current year Other income tax adjustments Income tax expense recognized in profit or loss		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2024 $ - 11,558 - 11,558 $ 11,558		2023
				($ 52,155) 88,098 39,959 128,057 $ 75,902

A reconciliation of accounting profit and income tax expense is as follows:

Income before tax from continuing operations Income tax expense calculated at the statutory rate and the effective tax rate Nondeductible expenses in determining taxable income Tax effect of earnings to be distributed by subsidiaries Tax exemption Unrecognized temporary differences Adjustments for prior years’ tax Income tax expense recognized in profit or loss	**For the Year Ended **	**For the Year Ended **	**For the Year Ended **	**For the Year Ended **	**December 31 **
			2024 $ 585,620 $ 81,987 - - (1,284) (69,145) - $ 11,558		2023
					$ 437,821 $ 61,295 487 4,468 (3,943) 25,791 (12,196) $ 75,902

The company’s research and development expenditure is expected to offset the corporate income tax by 30%, so the effective tax rate is 14% after considering the deduction effect.

• b. Recognized in other comprehensive income

Deferred tax Remeasurement of defined benefit plans	**For the Years Ended December 31 **	**For the Years Ended December 31 **	**For the Years Ended December 31 **	**For the Years Ended December 31 **
		2024 $ 370		2023
				$ 120)

This is the translation of the financial statements. CPAs do not audit or review on this translation.

c. Current tax assets and liabilities

Current tax assets( recorded as other current assets) Tax refund receivable Current tax liabilities Income tax payable		December	December	31
		2024 $ 32,356 $ 37,297		2023
				$ 12,292 $ 127,997

• d. Deferred tax assets and liabilities

The movements of deferred tax assets and deferred tax liabilities were as follows:

2024

Deferred tax assets Temporary differences Obsolescence loss of inventory Others Loss carryforwards Deferred tax liabilities Temporary differences Intangible assets Investment income recognized from foreign investees 2023	Beginning Balance $ 102,941 22,200 125,141 50,404 $ 175,545 $ 2,058 217,109 $ 219,167	Recognized in Profit or Loss ($ 45,758) 26,140 ( 19,618) 6,002 ($ 13,616) ($ 2,058) - ($ 2,058)	Recognized in Other Comprehensive Income	Recognized in Other Comprehensive Income		Ending Balance
				$ - ( 370) ( 370) - ($ 370) $ - - $ -		$ 57,183 47,970 105,153 56,406 $ 161,559 $ - 217,109 $ 217,109

Deferred tax assets Temporary differences Obsolescence loss of inventory Others Loss carryforwards Deferred tax liabilities Temporary differences Intangible assets Investment income recognized from foreign investees	Beginning Balance $ 283,740 17,332 301,072 - $ 301,072 $ 4,116 212,641 $ 216,757	Recognized in Profit or Loss ($ 180,799) 4,748 ( 176,051) 50,404 ($ 125,647) ($ 2,058) 4,468 $ 2,410	Recognized in Other Comprehensive Income	Recognized in Other Comprehensive Income		Ending Balance
				$ - 120 120 - $ 120 $ - - $ -		$ 102,941 22,200 125,141 50,404 $ 175,545 $ 2,058 217,109 $ 219,167

This is the translation of the financial statements. CPAs do not audit or review on this translation.

• e. Information about unused loss carryforwards and tax-exemption

Loss carryforwards as of December 31, 2024 comprised of:

Unused Amount $ 226,494 176,408 $ 402,902	**Expiry Year **
	2033 2034

• f. Income tax assessments

The Company’s tax returns until 2022 have been assessed by the tax authorities.

26. EARNINGS PER SHARE

EARNINGS PER SHARE
Basic earnings per share Diluted earnings per share	Unit: NT$ Per Share For the Year Ended December 31
		2024 $ 2.71 $ 2.64		2023
				$ 1.74 $ 1.69

The earnings and weighted average number of ordinary shares outstanding in the computation of earnings per share were as follows:

Net Profit for the Period

Earnings used in the computation of basic earnings per share	For the Year Ended	For the Year Ended	For the Year Ended	December 31
		2024 $574,062		2023
				$361,919

Weighted Average Number of Ordinary Shares Outstanding (In Thousand Shares):

Weighted average number of ordinary shares used in the computation of basic (loss) earnings per share Effect of potentially dilutive ordinary shares: Treasury shares transferred to employees Employee stock options (share) Restricted stock for employees(share) The remuneration to employees Weighted average number of ordinary shares used in the computation of diluted earnings per share	For the Year Ended	For the Year Ended	For the Year Ended	December 31
		2024 212,057 1,171 54 2,788 1,058 217,128		2023
				207,742 3,732 59 2,248 732 214,513

This is the translation of the financial statements. CPAs do not audit or review on this translation.

27. SHARE-BASED PAYMENT ARRANGEMENTS

a. Employee stock option plan

The Company did not have new share option plan issued for employees for the years ended December 31, 2024 and 2023.

Information about vested options as of December 31, 2024 and 2023 are as following:

Employee Stock Option Plan 2015	December31,2024 Range of exercise price (NT$) Weighted-average remaining contractual life (years) $12.80 0.67	December31,2023	December31,2023
	Range of exercise price (NT$) $12.80	Range of exercise price (NT$) $12.80	Weighted-average remaining contractual life (years)
			1.67

Information about outstanding options for the years ended December 31, 2024 and 2023 are as following:

2024

Employee stock Option Plan 2015	BeginningBalance Quantity of Options Weighted-average Exercise Price (NT$) 63,000 $ 12.80	Options exercised Quantity of Options Weighted-average Exercise Price (NT$) - $ -	Options expired Quantity of Options Weighted-average Exercise Price (NT$) - $ -	EndingBalance	EndingBalance
	Quantity of Options 63,000	Quantity of Options -	Quantity of Options -	Quantity of Options 63,000	Weighted-average Exercise Price (NT$)
					$ 12.80

2023

Employee stock Option Plan 2006 2015	BeginningBalance Quantity of Options Weighted-average Exercise Price (NT$) 22,399 $ 29.68 87,000 12.80	Options exercised Quantity of Options Weighted-average Exercise Price (NT$) ( 22,399) $ 29.68 ( 24,000) 12.80	Options expired Quantity of Options Weighted-average Exercise Price (NT$) - $ - - -	EndingBalance	EndingBalance
	Quantity of Options 22,399 87,000	Quantity of Options ( 22,399) ( 24,000)	Quantity of Options - -	Quantity of Options - 63,000	Weighted-average Exercise Price (NT$)
					$ - 12.80

As of December 31, 2024, the valid and outstanding employee stock option plans are as following:

Plan 2015 employee stock option plan	Number of Options 2,800,000	Valid Period 10 years	VestingTerms
			A certain percentage of the options defined in the plan are vested and exercisable after the second anniversary.

For the subsequent changes in the Company’s ordinary share capital, such as issuance of shares in cash, from earnings and capital surplus, consolidation, spin-off, share split, and issuance of global depositary receipts, and decrease in ordinary shares which is not resulted from treasury share retired, the exercise price and the conversion ratio would be considered to adjust accordingly based on the plans.

• b. Treasury shares transferred to employees

Information about treasury stock transferred to employee are as follows:

This is the translation of the financial statements. CPAs do not audit or review on this translation.

Items	The date of board of directors approved	Buyback shares (In thousand share)	Transferred shares (In thousand share)	Transferred price (in dollar)
The 6th treasury stock transferred to employee program	2022/2/23	4,000	2,715	126.91

Information about treasury stock transferred to employee as of December 31, 2024 are as follows:

The 6th treasury stock transferred to employee program

Employee subscription base date 2022/06/21 2022/11/11 2023/02/23 Total	Shares transferred (In Thousands) 2,315 140 260 2,715	The fair value of the right to subscribe (NT$)
		$ - - -

The limitations and rights on the unvested shares were as follows:

• 1) The employees cannot sell, pledge, transfer, donate, or dispose these shares.

• 2) The Company and the employees should enter into a trust agreement with a trust and custodian institution and authorize the institution to exercise the shareholders’ rights including but not limited to attendance, proposing, speaking and voting in the shareholder meetings.

• c. Restricted stock for employees

The Company’s shareholders’ meeting resolved to issue restricted stocks for employees up to 6,000 thousand shares on May 30, 2023, and the issued price is NT$10 per share. The restricted stocks plan was approved by Financial Supervisory Commission on July 25, 2023.

The information of the issued restricted stock for employees as of December 31, 2024 are as follows:

Items Grant date 2020 restricted stocks for employees plan 2021/04/07 2020 restricted stocks for employees plan 2021/07/29 2023 restricted stocks for employees plan 2023/09/26 2023 restricted stocks for employees plan 2024/02/23 2023 restricted stocks for employees plan 2024/08/09	Fair value per share (in dollar) $ 205.00 265.00 67.40 94.00 67.30	Actual shares of issued (in thousand)
		5,749 236 2,033 1,597 183

2020 restricted stocks for employees plan

From the date when employees are granted restricted stock units, they have to fulfill the service metrics, and should not violate the company's labor contract, work rules or the company's employee management measures, etc. The vesting condition are as follows:

• a. Upon service for two years: the shares vested in 50% to employees.

• b. Upon service for three years: the shares vested in 25% to employees.

• c. Upon service for four years: the shares vested in 25% to employees.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

2023 restricted stocks for employees plan

From the date when employees are granted restricted stock units, they have to fulfill the service metrics, and should not violate the company's labor contract, work rules or the company's employee management measures, etc. One third of granted shares can be vested after every one year of employment, total for three years.

The constraints of restricted stock are as follows:

• a. Employees are restricted to dispose, pledged, transferred, and give to others the granted shares until they are vested.

• b. The rights of restricted stock are the same as ordinary share including attendance, propose, speak, voting right and so on.

• c. Stock dividends and cash dividends yielding from restricted stock will be distributed to employees in the current year and will not be restricted.

• d. National employee should transfer the granted shares to trustee appointed by the Company immediately. Before they are vested, the restricted should be kept in trustee. Non-national employee’ granted share should be kept by bank appointed by the Company.

The Company will buy back the restricted shares at issued price and write off the shares if employees do not fulfill the vesting condition.

For the restricted share plan for employees with a purchase price, which was granted before October 10, 2024, the Group did not retrospectively apply the Q&A “Accounting Treatment for Restricted Share Plan for Employees” issued by the Accounting Research and Development Foundation (ARDF) on October 11, 2024 in accordance with the Q&A issued by the FSC. Therefore, the Group continuously measured the liabilities of the expected repayments to the employees leaving during the vesting period based on its estimated turnover rate.

d. Compensation cost of aforementioned share-based payments for the years ended December 31, 2024 and 2023 was as follows:

Shares buyback programs Restricted stock for employees Adjustment account: Capital surplus - employee stock options Other equity - unearned employee compensation	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2024 $ 3,377 163,051 $ 166,428 $ 3,377 163,051 $ 166,428		2023
				$ 8,633 110,775 $ 119,408 $ 8,633 110,775 $ 119,408

This is the translation of the financial statements. CPAs do not audit or review on this translation.

28. LEASE ARRANGEMENTS

The Company as a lessee

The Company has lease contracts for office, plant and some office equipment, which would be expired before December 2025. Above mentioned lease contracts are short-term lease agreement, and the Company applies practical expedients so the Company does not recognize right-of-use assets and lease liabilities.

The lease payments recognized in profit or loss for the current period was as follows:

Lease payment	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2024 $ 804		2023
				$ 789

29. CAPITAL MANAGEMENT

The capital structure of the Company consists of debt and equity. The Company manages its capital to ensure that entities in the Company will be able to continue as going concerns while maximizing the return to stockholders through the optimization of the debt and equity balance.

To define the strategy of the Company’s capital structure, the Company first sets its target market share according to the industry scale, the growth of the industry and the product roadmap. Based on the projected market position, the Company plans the research and development investment and capital expenditure. Furthermore, the Company calculates working capitals and cash demands based on the long-term development plan considering the industry characteristics to build up the overall operating model. Finally, the Company evaluates not only the possible contribution margin, operating profit ratio and cash flows according to the product competitiveness but also risk factors such as the fluctuation of the business circle and the life circle of the product to decide the suitable capital structure. The management reviews capital structures periodically and considers the possible costs and risks of different capital structures. Generally, the Company adopted prudent capital management strategy.

The Company was not restricted to other external capital requirements.

30. FINANCIAL INSTRUMENTS

• a. Fair value of financial instruments that are not measured at fair value

The management believes the carrying amounts of financial assets and financial liabilities not measured of fair value approximate their fair values or cannot be reliably measured.

• b. Fair value of financial instruments that are measured at fair value on a recurring basis

• 1.) Fair value hierarchy

December 31, 2024

Financial asset at FVTPL Listed preferred shares Private funds Total		Level 1 $ 10,285 - $ 10,285		Level 2 $ - - $-		Level 3 $ - 250,711 $ 250,711		Total
								$ 10,285 250,711 $ 260,996

This is the translation of the financial statements. CPAs do not audit or review on this translation.

Financial asset at FVTPL Financial assets at FVTOCI Investments in debt instruments Fixed income bonds December 31, 2023 Financial asset at FVTPL Listed preferred shares Private funds Total		Level 1 $- Level 1 $ 10,183 - $ 10,183		Level 2 $ 9,767 Level 2 $ - - $-		Level 3 $- Level 3 $ - 207,487 $ 207,487

There were no transfers between Level 1 and Level 2 for the years ended December 31, 2024 and 2023.

• 2.) Reconciliation of Level 3 fair value measurements of financial instruments

	**For the Year Ended in December 31 **	**For the Year Ended in December 31 **	**For the Year Ended in December 31 **	**For the Year Ended in December 31 **
		2024		2023
Financial assets at FVTPL
Balance, beginning		$ 207,487		$ 178,069
Purchases		58,155		17,500
Disposals	(	17,600 )	(	3,345 )
Recognized in profit or loss(other income or loss)		2,669		15,263
Balance, ending		$ 250,711		$ 207,487

• 3.) Valuation techniques and inputs applied for the purpose of measuring Level 2 fair value measurement

The fair values of domestic fixed income bonds are determined by quoted market prices provided by the independent third party.

• 4.) Valuation techniques and inputs applied for the purpose of measuring Level 3 fair value measurement

The fair values of non-publicly traded equity investments are mainly determined by using the market approach, with reference to the recent net assets of investees or the market transaction prices of the similar instruments. The Company evaluated and selected the suitable valuation method with discretion, but the use of different valuation models or fair values may result in different valuation results.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

c. Categories of financial instruments

Financial assets Fair value through profit or loss (FVTPL) Mandatorily at FVTPL Amortized cost (Note 1) Financial assets at FVTOCI Investments in debt instruments Financial liabilities Amortized cost (Note 2)	**December 31 **	**December 31 **
	2024 $ 260,996 6,139,465 9,767 5,005,159	2023
		$ 217,670 7,691,111 - 6,199,450

• 1) The balances included financial assets measured at amortized cost, which comprise cash and cash equivalents, accounts receivables, other financial assets and refundable deposits.

• 2) The balances included financial liabilities measured at amortized cost, which comprise accounts payables, other payables, current position of long-term loans, long-term loans, and guaranteed deposits received.

d. Financial risk management objectives and policies

The Company’s major financial instruments include cash and cash equivalents, accounts receivable, other financial assets, financial assets at FVTPL, financial assets at FVTOCI, accounts payables and other payables. The Company’s Corporate Treasury function provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including foreign currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The board of directors is solely responsible for established and monitored the framework of risk management of the Company. The chairman is authorized by the board of directors to develop and monitor the risk management policy of the Company with the operation center of the Company, and regularly reported the situation to the board of directors.

The Company’s financial risk management policies are established for identifying and analyzing the financial risks to the Company, evaluating the impacts of the financial risks, and executing the financialrisk aversion policies. The financial risk management policies are periodically reviewed to reflect changes to the market and the operations. The Company devotes to build a disciplined and constructive control environment through proper internal controls, such as training and establishing managerial principles and operation procedures in order to have all employees aware of their own roles and responsibilities.

The Company’s management oversees the company operation in compliance with financial risk management policies and reviews the appropriateness of risk management structure under supervision of the board of directors. Internal auditors, in assistance to the board of directors, perform periodical and exceptional reviews on the controls and procedures of financial risk management and report the results of review to the board of directors.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

1) Market risk

The major financial risks from the Company’s operations were foreign currency exchange risk referred to a) and interest rate risk referred to b).

• a) Foreign currency risk

The carrying amounts of the Company’s monetary assets and monetary liabilities denominated in foreign currency at the end of the reporting period are shown in Note 34.

Sensitivity analysis

The Company was mainly exposed to the U.S. dollar. The following table details the Company’s sensitivity to a 5% appreciate and depreciate in New Taiwan dollars (the functional currency) against the relevant foreign currencies. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis included only outstanding foreign currency denominated monetary items and adjusts their translation value at the end of the reporting period for a 5% change in foreign currency rates. A positive number in below table indicates an increase in pre-tax profit or equity associated with a 5% depreciation of the New Taiwan Dollar against the U.S. dollar.

Profit or loss/ equity		USD Impact **For the Year Ended December 31 **	USD Impact **For the Year Ended December 31 **	USD Impact **For the Year Ended December 31 **
		2024 $ 6,030(i)		2023
				$ 19,504(i)

• i. This was mainly attributable to the outstanding balances of USD time deposits, accounts receivables, accounts payables, other payables, refundable deposits, other current liability and guarantee deposits received.

• b) Interest rate risk

The Company was exposed to interest risk primarily related to time deposits with fixed-rate interest, short-term loans, demand deposits with floating-rate interest, current position of longterm loans and long-term loans. The time deposits were at fixed interest rates. Therefore, changes in interest rates would not affect the future cash flows.

The carrying amount of the Company’s financial assets and financial liabilities exposed to interest rates at the end of the reporting period were as follows:

Fair value interest rate risk Financial assets Cash flow interest rate risk Financial assets Financial liabilities		**December 31 **	**December 31 **	**December 31 **
		2024 $ 3,353,072 $ 1,484,579 $ -		2023
				$ 3,665,825 $ 800,233 $ 786,840

This is the translation of the financial statements. CPAs do not audit or review on this translation.

Sensitivity analysis

The below sensitivity analysis was determined based on the Company’s exposure to interest rates for non-derivative instruments at the end of the reporting period. An increase or a decrease of 25 basis points was used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 25 basis points higher/lower and all other variables were held constant, the Company’s pre-tax profit for the years ended December 31, 2024 and 2023 would decrease/increase by $3,711 thousand and $33 thousand, respectively.

2) Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. As at the end of the reporting period, the Company’s maximum exposure to credit risk which will cause a financial loss to the Company due to failure of counterparties to discharge an obligation from the carrying amounts of the financial assets as recognized in the balance sheets.

The Company’s major credit risk of accounts receivables mainly came from its top 5 customers. Ongoing credit evaluation of the financial condition of the customers is performed.

As of December 31, 2024, accounts receivables from top 5 customers represented 65% of total accounts receivables. The credit concentration risk of other accounts receivables was insignificant.

Credit risk management for investments in debt instruments

The Company’s investments in debt instruments are financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. The Company’s policy allows it only to invest in those with credit ratings equal to or higher than the investment grade and with low credit risk after the impairment assessment. Credit rating information is provided by independent rating institute. The Company continuously tracks external rating information to monitor changes in credit risk of the invested debt instruments, and also examines other information such as the bond yield curve and material information concerning the debtors to assess whether the credit risk of the debt instrument investment has increased significantly after the original recognition.

The Company assesses the 12-month expected credit loss based on the probability of default and loss given default provided by external credit rating agencies. The current credit risk assessment policies and carrying amount of investments in debt instruments for each credit rating are as follows:

Category Performing	Description Basis for Recognizing Expected Credit Loss The debtor with low credit risk and fully capable of paying off contractual cash flows 12 months expected credit loss	Expected Credit Loss Ratio 0%	Carrying Amount as of December 31, 2024	Carrying Amount as of December 31, 2024
				$ 9,767

This is the translation of the financial statements. CPAs do not audit or review on this translation.

Category Performing	Description Basis for Recognizing Expected Credit Loss The debtor with low credit risk and fully capable of paying off contractual cash flows 12 months expected credit loss	Expected Credit Loss Ratio 0%	Carrying Amount as of December 31, 2023	Carrying Amount as of December 31, 2023
				$ -

• 3) Liquidity risk

The Company manages liquidity risk by monitoring and maintaining adequate cash and cash equivalents to fund its operations and mitigate the impacts of fluctuations in cash flows. The Company relies on bank loans as a significant source of liquidity.

Liquidity and interest risk rate tables for non-derivative financial liabilities

The table below summarizes the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments, including principal and interest.

December 31, 2024

Non-interest bearing Fixed interest rate liabilities December 31, 2023	On Demand or Less than 1 Year $ 2,540,119 90 $ 2,540,209		1-5 Years $ 2,464,950 - $ 2,464,950		More than 5 Years
					$ - - $ -

Non-interest bearing Fixed interest rate liabilities Floating interest rate liabilities	On Demand or Less than 1 Year $ 1,729,694 382 26,386 $ 1,756,462		1-5 Years $ 3,682,534 - 258,893 $ 3,941,427		More than 5 Years
					$ - - 501,561 $ 501,561

31. TRANSACTIONS WITH RELATED PARTIES

Except for information disclosed elsewhere in the other notes, details of transactions between the Company and other related parties are disclosed below.

• a. Related party name and category

Related Party Name FocalTech Electronics, Ltd. FocalTech Electronics (Shenzhen) Co., Ltd.	Related Party Category
	Subsidiary Subsidiary

This is the translation of the financial statements. CPAs do not audit or review on this translation.

b. Purchases of goods

Line Item Purchase	Related Party Category/Name Subsidiaries	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
			2024 $ 52,673		2023
					$ 32,902

Purchases were made by the Company at market prices and conditions similar with the non-related parties.

• c. Payables to related parties

Line Item Accountspayables	Related Party Category/Name Subsidiaries FocalTech Electronics, Ltd. Others		December 31	December 31	December 31
			2024 $ 487,086 11,373 $ 498,459		2023
					$ 456,237 21,558 $ 477,795

The outstanding accounts payables to related parties are unpledged.

• d. Compensation of key management personnel

Long-term employee benefits Short-term employee benefits Post-employment benefits Share-based payments	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2024		2023
		$ - 37,553 612 33,085 $ 71,250		$ 19,705 40,721 540 41,321 $ 102,287

32. PLEDGED ASSETS

The following assets were provided as collateral for bank loans:

Properties, plants and equipment – Net of buildings Properties, plants and equipment – Land	**For the Year Ended **	**For the Year Ended **	**For the Year Ended **	**December 31 **
		2024		2023
		$ 475,174 557,110 $ 1,032,284		$ 485,178 557,110 $ 1,042,288

33. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACTUAL COMMITMENTS

ELAN MICROELECTRONICS CORPORATION. (“ELAN”) filed patent infringement actions with Intellectual Property and Commercial Court on March 20, 2024. The lawsuit alleges that the Company infringed on an invention patent and demands the destruction or other necessary disposal of the specific infringing product already manufactured, as well as the raw materials and tools used in the infringing activities. They are also asking compensation for damages. Currently, the case is undergoing a document review by the Intellectual Property and Commercial Court and has not yet been assigned to a specific division for processing. It does not have material impact on the Company’s operation and finance.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

34. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The following information was aggregated by the foreign currencies other than functional currencies of the Company and the exchange rates between foreign currencies and respective functional currencies were disclosed. The significant assets and liabilities denominated in foreign currencies were as follows:

December 31, 2024

Financial assets Monetary items USD Non-Monetary items USD Financial liabilities Monetary items USD December 31, 2023 Financial assets Monetary items USD Non-Monetary items USD Financial liabilities Monetary items USD	Foreign Currencies (thousand) $ 147,075 132,010 143,397 Foreign Currencies (thousand) $ 181,561 115,868 168,856	Exchange Rate 32.785 (USD:NTD) 32.785 (USD:NTD) 32.785(USD:NTD) Exchange Rate 30.705 (USD:NTD) 30.705 (USD:NTD) 30.705(USD:NTD)	NT$ (thousand)
			$ 4,821,853 4,327,951 4,701,262 NT$ (thousand)
			$ 5,574,824 3,557,725 5,184,737

This is the translation of the financial statements. CPAs do not audit or review on this translation.

35. SEPARATELY DISCLOSED ITEMS

• a. Information about significant transactions and investees:

• 1) Financing provided to others: See Table 1 attached;

• 2) Endorsements/guarantees provided: See Table 2 attached;

• 3) Marketable securities held (excluding investments in subsidiaries, associates and joint ventures): See Table 3 attached;

• 4) Marketable securities acquired and disposed of with accumulated amount exceeding the lower NT$300 million or 20% of the paid-in capital: None;

• 5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital: None;

• 6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: None;

• 7) Total purchases from or sales to related parties of at least NT$100 million or 20% of the paid-in capital: None;

• 8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: None;

• 9) Information about the derivative financial instrument transaction: None;

• b. Names, locations, and related information of investees over which the Company exercises significant influence (excluding information on investment in mainland China): See Table 4 attached.

• c. Information on investments in mainland China

• 1) The name of the investee in mainland China, the main businesses and products, its issued capital, method of investment, information on inflow or outflow of capital, percentage of ownership, income (losses) of the investee, share of profits/losses of investee, ending balance, amount received as dividends from the investee, and the limitation on investee: See Table 5 attached.

• 2) Significant direct or indirect transactions with the investee, its prices and terms of payment, unrealized gain or loss, and other related information which is helpful to understand the impact of investment in Mainland China on financial reports: None.

• d. Information of major shareholder

List of all shareholders with ownership of 5 percent or greater showing the names and the number of shares and percentage of ownership held by each shareholder: None.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

TABLE 1

FocalTech Systems Co., Ltd.

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2024

(Amounts in Thousands; Currency denomination in NTD or in foreign currencies)

No (Note 1)	Financing Company	Counterparty	Financial Statement Account	Related Party	Maximum Balance for the Period (Note 4)	Ending Balance (Note 4)	Amount Actually Drawn (Note 4)	Interest Rate	Nature for Financing	Transaction Amounts	Reason for Financing	Allowance for Bad Debt	Collateral	Collateral	Financing Limits for Each Borrowing Company (Note 2)	Financing Company’s Total Financing Amount Limits (Note 2)	Note
													Item	Value
1	FocalTech Systems, Ltd.	FocalTech Systems Co., Ltd.	Other receivables from relatedparties	Yes	$ 983,550 (USD 30,000)	$ 983,550 (USD 30,000)	$ -	-	The need for short- term financing	$ -	Operating capital	$ -	-	$ -	$ 2,402,688	$ 2,402,688	Note 3

Note 1: The parent company and its subsidiaries are coded as follows:

• 1) The parent company is coded "0".

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

• Note 2: The lending limits:

• 1) The total amount available for lending purpose shall not exceed 20% of the net worth of the Company.

• 2) The lending limits for any borrowers are set forth as below:

• A. The total amount for lending to a company having a business relationship with the company shall not exceed the total transaction amount between the parties during the period of twelve months prior to the time of lending (the transaction amount shall mean the sales or purchasing amount between the parties, whichever is higher), and shall not exceed 20% of the net worth of the financing company or 30% of the net worth of the counterparty, whichever is lower.

• B. The total amount for lending to a company in need of funds for a short-term period shall not exceed 20% of the net worth of the financing company. The lending limits for any borrower shall not exceed 10% of the net worth of the creditor or 30% of the net worth of the borrower, whichever is lower.

• 3) For financing needs between offshore subsidiaries whose voting shares are 100% owned, directly or indirectly, by the Company, or financing needs to the Company by offshore subsidiaries whose voting shares are 100% owned, directly or indirectly, by the Company, the total amount for such fund-lending shall not be subject to the limit of 100% of the net worth of the creditor

4) Where the Company’s financial reports are prepared in accordance with the International Financial Reporting Standards, “net worth” in the Procedures means the equity attributable to shareholders of the parent in the balance sheet. Note 3: The balances have been eliminated on consolidation.

Note 4: Using the exchange rate of 1 USD: 32.785 NTD as of December 31, 2024.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

TABLE 2

FocalTech Systems Co., Ltd.

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2024

(Amount in thousand; Currency denomination in NTD or in foreign currencies)

No. (Note1)	Endorsement/ Guarantee Provider	Guaranteed Party	Guaranteed Party	Limits on Endorsement/ Guarantee Amount Provided to Each Guaranteed Party (Note 2)	Maximum Balance for the Period (Note 5)	Ending Balance	Amount Actually Drawn	Amount of Endorsement / Guarantee Collateralize d by Properties	Ratio of Accumulated Endorsement/ Guarantee to Net Equity per Latest Financial Statements(%)	Maximum Endorsement/ Guarantee Amount Allowable (Note 2)	Guarantee Provided by Parent Company	Guarantee Provided by A Subsidiary	Guarantee Provided to Subsidiaries in Mainland China	Note
		Name	Nature of Relationship
0 0 0	FocalTech Systems Co., Ltd. FocalTech Systems Co., Ltd. FocalTech Systems Co., Ltd.	Hefei PineTech Electronics Co., Ltd. FocalTech Electronics (Shenzhen) Co., Ltd. Chengdu FocalTech Systems Co., Ltd.	The endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/ guaranteed company. The endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/ guaranteed company. The endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/ guaranteed company.	$ 5,060,564 5,060,564 5,060,564	$ 885,195 ( USD 27,000 ) 1,278,615 ( USD 39,000 ) 327,850 ( USD 10,000 )	$ 885,195 ( USD 27,000 ) 1,278,615 ( USD 39,000 ) 327,850 ( USD 10,000 )	$ 5,171 97,845 -	$ - - -	8.75% 12.63% 3.24%	$ 5,060,564 5,060,564 5,060,564	Y Y Y	N N N	Y Y Y	(Note 3 and 4) (Note 3 and 4) (Note 4)

• Note 1: Number should be input in the remark column for intercompany transactions. Here illustrate how to assign numbers to transaction

• 1) 0 for parent company.

• 2) Subsidiaries are given a number in sequence starting with No. 1.

• Note 2: Limits on Endorsement/ Guarantee Amount

• 1) The ceilings on the amount of endorsements/guarantees due to business transaction are as below:

• 2) The total amount of endorsements/guarantees and the amount of endorsements/guarantees for any single entity shall not exceed 50% of the net worth of the Company.

• 3) The total amount of endorsements/guarantees between the Company owns directly or indirectly 100% voting shares shall not exceed 100% of the net worth of the guarantee company.

• 4) The total amount of endorsement/guarantee provided by the Company or by the Company and its subsidiaries shall not exceed 50% of the net worth of the Company. The total amount of the endorsement/guarantee provided by the Company and the subsidiaries to any individual entity shall not exceed 50% of the net worth of the Company.

• 5) The net worth referred to above are based on the latest reviewed financial statements. Where the Company’s financial reports are prepared in accordance with the International Financial Reporting Standards, “net worth” in the Procedures means the equity attributable to shareholders of the parent in the balance sheet.

• Note 3: FocalTech Systems Co., Ltd. provided USD 15,000 thousand of endorsements/guarantees for Hefei PineTech Electronics Co., Ltd. and FocalTech Electronics (Shenzhen) Co., Ltd. for the purchases, the amount actually drawn during the period is NT$ 0 and 20,749 thousand.

• Note 4: Using the exchange rate of 1 USD: 32.785 NTD as of December 31, 2024.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

TABLE 3

FocalTech Systems Co., Ltd.

MARKETABLE SECURITIES HELD DECEMBER 31, 2024 (Amount in thousand; Currency denomination in NTD)

Held Company Name		Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account		December 31,2023	December 31,2023		Note
					Shares/Units	Carrying Value	Percentage of Ownership (%)	Fair Value
FocalTech Systems Co., Ltd.		Stock Series B Preferred Stock of Fubon Financial Holding Co., Ltd. Privately Offered Fund CDIB Capital Healthcare Ventures II Limited Partnership CDIB Capital Growth Partners L.P. CDIB-Innolux Limited Partnership CDIB-Innolux Fund II Limited Partnership Cathay Private Equity Smart Tech Limited Partnership Fixed income bonds First Commercial Bank, Ltd. MaturityDate：December 08,2026	- - - - - -	Financial assets at fair value through profit or loss - non current Financial assets at fair value through profit or loss - non current 〃 〃 〃 〃 Financial assets at fair value through other comprehensive income - non current	170,000 - - - - -	NT$ 10,285 NT$ 30,617 NT$ 26,150 NT$ 63,549 NT$ 24,064 NT$ 106,331 NT$ 9,767	0.03 0.96 0.66 4.37 1.57 22.16	NT$ 10,285 NT$ 30,617 NT$ 26,150 NT$ 63,549 NT$ 24,064 NT$ 106,331 NT$ 9,767	- - - - - -

Note 1: The percentage of ownership is calculated by preferred shares the Company owned divided by outstanding preferred shares.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

TABLE 4

FocalTech Systems Co., Ltd.

NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES OVER WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE (EXCLUDING INFORMATION ON INVESTMENT IN MAINLAND CHINA) (Note 1) FOR THE YEAR ENDED DECEMBER 31, 2024

(Amount in thousand; Currency denomination in NTD or in foreign currencies)

Investor Company	Investee Company	Location	Main Businesses and Products	Original InvestmentAmount	Original InvestmentAmount	Balance as of December31,2024	Balance as of December31,2024	Balance as of December31,2024	Net Income (Losses) of the Investee (Note 4)	Share of Profits/Losses of Investee (Note 4)	Note
				December 31,2024 (Note 2)	December 31,2023 (Note 3)	Shares	Percentage of Ownership	Carrying Value (Note 2)
FocalTech Systems Co., Ltd. FocalTech Systems Co., Ltd. FocalTech Systems Co., Ltd. FocalTech Electronics Co., Ltd. FocalTech Smart Sensors, Ltd. FocalTech Corporation, Ltd. FocalTech Systems, Inc. FocalTech Systems, Ltd.	FocalTech Corporation, Ltd. FocalTech Electronics, Ltd. FocalTech Smart Sensors, Ltd. FocalTech Smart Sensors, Ltd. FocalTech Smart Sensors Co., Ltd. FocalTech Systems, Inc. FocalTech Systems, Ltd. FocalTech Electronics Co., Ltd.	Cayman Islands Cayman Islands Cayman Islands Cayman Islands Taiwan U.S.A Cayman Islands Taiwan	Investment activity Investment activity Investment activity Investment activity Research, development, manufacturing and sale of integrated circuits Investment activity Investment activity Import and export of integrated circuits	NT$ 7,059,264 NT$ 3,279 (USD 100 ) NT$ 85,350 NT$ 238,821 NT$ 11,990 NT$ 3,353,671 (USD 102,293 ) NT$ 765,532 (USD 23,350 ) NT$ 20,000	NT$ 7,059,264 NT$ 3,071 (USD 100 ) NT$ 85,350 NT$ 238,821 NT$ 11,990 NT$ 3,140,902 (USD 102,293 ) NT$ 716,964 (USD 23,350 ) NT$ 20,000	5,491,200 2 3,000,000 18,813,050 17,417,000 100 2 2,000,000	100% 100% 9.14% 57.31% 100% 100% 100% 100%	NT$ 2,537,078 (USD 77,385 ) NT$ 1,790,750 (USD 54,621 ) NT$ 123 (USD 4 ) NT$ 774 (USD 24 ) NT$ 163 NT$ 2,336,507 (USD 71,268 ) NT$ 2,402,688 (USD 73,286 ) NT$ 89,525 (USD 2,731 )	NT$ 31,153 (USD 970) NT$ 464,270 (USD 14,458) (NT$ 16,710 ) (USD 520 ) (NT$ 16,710 ) (USD 520 ) (NT$ 16,187 ) NT$ 31,842 (USD 992 ) NT$ 31,746 (USD 989 ) (NT$ 3,828 ) (USD 119 )	NT$ 31,153 (USD 970) NT$ 464,270 (USD 14,458) (NT$ 1,527 ) (USD 48 ) (NT$ 9,577 ) (USD 298 ) (NT$ 16,187 ) NT$ 31,842 (USD 992 ) NT$ 31,746 (USD 989 ) (NT$ 3,828 ) (USD 119 )	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary

Note 1: Please refer to the table 6 for the information on investment in Mainland China. Note 2: Using the exchange rate of 1 USD: 32.785 NTD as of December 31, 2024. Note 3: Using the exchange rate of 1 USD: 30.705 NTD as of December 31, 2023. Note 4: Using the average exchange rate of 1 USD: 32.112 NTD for the year ended December 31, 2024.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

TABLE 5

FocalTech Systems Co., Ltd.

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2024

(Amount in thousand; Currency denomination in NTD or in foreign currencies)

Investee company	Main businesses and products	Total amount of paid-in capital (Note 1)	Method of investment	Accumulated outflow of investment from Taiwan as of January 1, 2023 (Note 1)	Investment flows	Investment flows	Accumulated outflow of investment from Taiwan as of December 31, 2024 (Note 1)	Net income (loss) of investee company (Note 2)	Percentage of ownership	Investment income (loss) recognized (Note 2)	Carrying amount as of December 31, 2024 (Note 1)	Accumulated inward remittance of earnings as of December 31, 2024	Note
					Outflow	Inflow
FocalTech Electronics (Shanghai) Co., Ltd. FocalTech Electronics (Shenzhen) Co., Ltd. FocalTech Systems (Shenzhen) Co., Ltd. Hefei PineTech Electronics Co., Ltd. Chengdu FocalTech Systems Co., Ltd.	Sales support and post-sales service for IC products Research, development, manufacturing and sale of integrated circuits Design and research of integrated circuits Research, development and sale of integrated circuits Research, development and sale of integrated circuits	NT$ 95,077 (USD 2,900) NT$ 304,901 (USD 9,300) NT$ 1,213,050 (USD 37,000) NT$ 136,824 (RMB 30,000) NT$ 27,365 (RMB 6,000)	(Notes 3 and 4) (Note 3) (Note 4) (Note 4) (Note 4)	NT$ 32,785 (USD 1,000) NT$ 32,785 (USD 1,000) - - -	$ - - - - -	$ - - - - -	NT$ 32,785 (USD 1,000) NT$ 32,785 (USD 1,000) - - -	(NT$ 3,504) (USD 109) NT$ 501,138 (USD 15,606) (NT$ 8,925) (USD 278) NT$ 12,255 (USD 382) (NT$ 7,785) (USD 242)	100% 100% 100% 100% 100%	(NT$ 3,504) (USD 109) NT$ 501,138 (USD 15,606) (NT$ 8,925) (USD 278) NT$ 12,255 (USD 382) (NT$ 7,785) (USD 242)	NT$ 65,281 (USD 1,991) NT$ 729,090 (USD 22,239) NT$ 664,066 (USD 20,255) NT$ 249,824 (USD 7,620) NT$ 19,492 (USD 595)	$ - - - - -	- - - - -

Accumulated Investment in Mainland China as of December31,2024	Investment Amounts Authorized by Investment Commission,MOEA	Upper Limit on Investment
$65,570 (USD2,000)	$2,011,921 (USD61,367)	$6,072,676

Note 1: Using the exchange rate of 1 USD: 32.785 NTD and 1 RMB :4.5608 NTD as of December 31, 2024. Note 2: Using the average exchange rate of 1 USD: 32.112 NTD and 1 RMB :4. 5099 NTD for the year ended December 31, 2024. Note 3: Indirect investment in Mainland China through a holding company established in other countries. Note 4: The investment is through the foreign subsidiaries, has not been remitted from Taiwan.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

FocalTech Systems Co., Ltd.

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

Item Major Accounting Items in Assets, Liabilities and Equity Major accounting items in assets, liabilities and equity Statement of cash and cash equivalents Statement of other financial assets Statement of Financial assets at fair value through profit or loss Statement ofaccountsreceivables, net Statement of inventories Statement of changes in investments accounted for using equity method Statement of changes in property, plant and equipment Statement of changes in accumulated depreciation of property, plant and equipment Statement of changes in intangible assets Statement of deferred tax assets Statement ofaccountspayables Statement of other payables Statement of deferred tax liabilities Major accounting items in profit or loss Statement of revenues Statement of operating costs Statement of operating expenses Statement of finance costs Statement of employee benefit, depreciation and amortization by function

Statements Index

1 2 Table 3 3 4 5 Note 13 Note 13 Note 15 Note 25 6 Note 19 Note 25 7 8 9 Note 24 10

This is the translation of the financial statements. CPAs do not audit or review on this translation.

STATEMENT 1

FocalTech Systems Co., Ltd.

STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2024 (In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Item Petty cash and cash on hand Cash in banks Checking accounts and current accounts Foreign currency current accounts Cash equivalents Time Deposits	Description Including EUR 3 thousand, HKD 23 thousand, RMB 22 thousand, JPY 530 thousand, USD 3 thousand and NTD 40 thousand Including USD 34,185 thousand, JPY 7,950 thousand, RMB 34 thousand and EUR 1 thousand Which would be expired before March 30, 2025, interest rates at 1.28%-4.95%, including USD 65,000 thousand		Amount
			$ 545 365,283 1,122,623 1,487,906 2,531,025 $ 4,019,476

Note : Using the exchange rate of 1 USD: 32.785 NTD, 1 EUR :34.14 NTD, 1 HKD : 4.222 NTD ,1 RMB :4.5608 NTD and 1 JPY :0.2099 as of December 31, 2024.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

STATEMENT 2

FocalTech Systems Co., Ltd.

STATEMENT OF OTHER FINANCIAL ASSETS DECEMBER 31, 2024 (In Thousands of New Taiwan Dollars)

Item Description Time deposits with original maturities more than three months Including USD 8,000 thousand； Expiration date 2025.01.22~2025.05.04 Note 1: Using the exchange rate of 1 USD: 32.785 NTD as of December 31, 2024.	Rate 1.65%-5.44%		Amount
			$ 812,280

This is the translation of the financial statements. CPAs do not audit or review on this translation.

STATEMENT 3

FocalTech Systems Co., Ltd.

STATEMENT OF ACCOUNTS RECEIVABLES, NET DECEMBER 31, 2024 (In Thousands of New Taiwan Dollars)

Item Client A Client B Client C Client D Client E Client F Client G Others (Note) Less: Allowance for doubtful accounts		Amount
		$ 253,281 96,519 77,071 65,339 65,310 64,161 44,668 187,236 853,585 - $ 853,585

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

This is the translation of the financial statements. CPAs do not audit or review on this translation.

STATEMENT 4

FocalTech Systems Co., Ltd.

STATEMENT OF INVENTORIES DECEMBER 31, 2024 (In Thousands of New Taiwan Dollars)

Amount

Item Finished goods Work in process Raw materials	Book value $ 605,909 756,356 450,411 $1,812,676	Net Realizable Value	Net Realizable Value
			$ 733,144 852,650 525,072 $2,110,866

This is the translation of the financial statements. CPAs do not audit or review on this translation.

STATEMENT 5

FocalTech Systems Co., Ltd.

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2024 (In Thousands of New Taiwan Dollars)

FocalTech Corporation, Ltd. FocalTech Electronics, Ltd. FocalTech Smart Sensors, Ltd.	Balance, January 1, 2024	Balance, January 1, 2024	Balance, January 1, 2024	Amount Shares (In thousand) $ 2,350,762 - 1,205,321 - 1,642 - $ 3,557,725	Amount $ - - - $ -		Share of Profit (Loss) of the Investee $ 31,153 464,270 ( 1,527 ) $ 493,896	Other Comprehensi ve Income $ 155,163 83,262 8 $ 238,433	Other Adjustment $ - 37,897 - $ 37,897	Balance, December 31, 2024 Shares (In thousand) Percentage of Ownership(%) Amount 5,491 100 $ 2,537,078 2 shares 100 1,790,750 3,000 9.14 123 $ 4,327,951	Balance, December 31, 2024 Shares (In thousand) Percentage of Ownership(%) Amount 5,491 100 $ 2,537,078 2 shares 100 1,790,750 3,000 9.14 123 $ 4,327,951	Balance, December 31, 2024 Shares (In thousand) Percentage of Ownership(%) Amount 5,491 100 $ 2,537,078 2 shares 100 1,790,750 3,000 9.14 123 $ 4,327,951	Collateral Nil Nil Nil
	Shares (In thousand) 5,491 2 shares 3,000	Percentage of Ownership(%) 100 100 9.14								Shares (In thousand) 5,491 2 shares 3,000	Percentage of Ownership(%) 100 100 9.14
							(

Note 1: Other adjustment is compensation cost of employee share options, NT$37,897 thousand.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

STATEMENT 6

FocalTech Systems Co., Ltd.

STATEMENT OF ACCOUNTS PAYABLES DECEMBER 31, 2024 (In Thousands of New Taiwan Dollars)

Item Accountspayables-related party FocalTech Electronics, Ltd. Others(Note) Accountspayables-others Vendor A Vendor B Vendor C Vendor D Others (Note)		Amount
		$ 487,086 11,373 498,459 $ 496,900 392,807 240,136 199,733 387,463 1,717,039 $2,215,498

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

This is the translation of the financial statements. CPAs do not audit or review on this translation.

STATEMENT 7

FocalTech Systems Co., Ltd.

STATEMENT OF REVENUES FOR THE YEAR ENDED DECEMBER 31, 2024 (In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Item Net sales IC for Human-Machine Interface Solutions Less: Sales discounts Sales returns	Quantity (in thousand units) 224,162		Amount
			$ 9,016,986 (42,597) (1,944) $ 8,972,445

This is the translation of the financial statements. CPAs do not audit or review on this translation.

STATEMENT 8

FocalTech Systems Co., Ltd.

STATEMENT OF OPERATING COSTS FOR THE YEAR ENDED DECEMBER 31, 2024 (In Thousands of New Taiwan Dollars)

Item Raw materials, beginning of year Raw materials purchased Transferred to expenses Raw materials balance, end of year Raw materials used Manufacturing expenses Manufacturing cost Work in process, beginning of year Transferred to expenses and others Work in process, end of year Cost of finished goods Finished goods, beginning of year Finished goods purchased Transferred to expenses and others Finished goods, end of year Operating costs		Amount
		$ 240,556 5,815,821 ( 10,419) ( 450,411) 5,595,547 1,894,912 7,490,459 681,924 ( 13,613) ( 756,356) 7,402,414 633,068 53,664 22,325 ( 605,909) $ 7,505,562

This is the translation of the financial statements. CPAs do not audit or review on this translation.

STATEMENT 9

FocalTech Systems Co., Ltd.

STATEMENT OF OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2024 (In Thousands of New Taiwan Dollars)

Item Payroll Freight Insurance fees Depreciation expense Amortization expense Test board expense Professional service fees Miscellaneous fees Others (Note)	Selling Expenses $ 122,329 11,885 4,819 182 - - 2,015 36 13,130 $ 154,396	General and Administrative Expenses $ 94,273 319 24,683 32,430 2,926 - 11,008 21,527 55,016 $ 242,182	Research and Development Expenses	Research and Development Expenses
				$ 760,212 9 21,600 15,001 108,328 88,475 24,194 836 223,391 $1,242,046

Note: Expected credit loss is included and the amount of each item in others does not exceed 5% of the account balance.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

STATEMENT 10

FocalTech Systems Co., Ltd.

STATEMENT OF EMPLOYEE BENEFIT, DEPRECIATION AND AMORTIZATION BY FUNCTION FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

(In Thousands of New Taiwan Dollars)

Employee benefits Salary and bonus Labor and health insurance Pension Board compensation Others Depreciation Amortization		2024		Total $ 1,132,579 57,285 33,600 8,365 24,377 $ 1,256,206 $ 74,917 $ 112,893		2023
	Classified as Operating Costs $ 164,130 7,200 5,160 - 2,864 $ 179,354 $ 27,304 $ 1,639	Classified as Operating Expenses $ 968,449 50,085 28,440 8,365 21,513 $ 1,076,852 $ 47,613 $ 111,254			Classified as Operating Costs $ 106,656 7,200 5,160 - 2,212 $ 121,228 $ 23,924 $ 1,357	Classified as Operating Expenses $ 594,142 47,319 26,611 7,093 19,829 $ 694,994 $ 38,949 $ 90,005		**Total **
								$ 700,798 54,519 31,771 7,093 22,041 $ 816,222 $ 62,873 $ 91,362

Note 1: The Company’s average employees totaled to 457 and 423 as of December 31, 2024 and 2023, respectively, including 6 and 6 non-employee directors, respectively.

• Note 2: Listed Company at Taiwan Stock Exchange and over-the-counter company at Taipei Exchange should disclose additional information below:

• a. The average amount of employee benefits for the years ended December 31, 2024 and 2023 was NT$2,767 thousand and NT$1,940 thousand, respectively. (“Total employee benefit - Total board compensation”/ “Total employee headcount - Total non-employee director headcount”)

• b. The average amount of salary and bonus for the years ended December 31, 2024 and 2023 was NT$2,511 thousand and NT$1,681 thousand, respectively. (Total salary and bonus/ “Total employee headcount - Total non-employee director headcount”)

• c. The average salary and bonus increased by 49% year over year.

  • (“Average salary and bonus in current year - Average salary and bonus in previous year”/Average salary and bonus in previous year)

• d. The Company did not have supervisors for the years ended December 31, 2024 and 2023. Therefore, there was no compensation to the supervisors.

• e. The compensation paid to board of directors and the executive officers is based on their contribution and market trends. It is reviewed by the Compensation Committee. The compensation paid to the employees is based on their contribution and market trends.

This is the translation of the financial statements. CPAs do not audit or review on this translation.