FocalTech - Interim / Quarterly Report 2024

FocalTech Systems Co., Ltd. and Subsidiaries

Consolidated Financial Statements for the Nine Months Ended September 30, 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’ REVIEW REPORT

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

Introduction

We have reviewed the accompanying consolidated balance sheets of FocalTech Systems Co., Ltd. and its subsidiaries (collectively, the “Company”) as of September 30, 2024 and 2023, the related consolidated statements of comprehensive income for the three months ended September 30, 2024 and 2023 and for the nine months ended September 30, 2024 and 2023, the consolidated statements of changes in equity and of cash flows for the nine months then ended, and the related notes to the consolidated financial statements, including a summary of significant accounting policies(collectively referred to as the “consolidated financial statements”). Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

Except as explained in the following paragraph, we conducted our reviews in accordance with the Standards on Review Engagements of the Republic of China “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

As disclosed in Note 12 to the consolidated financial statements, the financial statements of non-significant subsidiaries included in the consolidated financial statements referred to in the first paragraph were not reviewed. As of September 30, 2024 and 2023, combined total assets of these non-significant subsidiaries were NT$3,282,360 thousand and NT$2,246,306 thousand, respectively, representing 17% and 12%, respectively, of the consolidated total assets, and combined total liabilities of these subsidiaries were NT$1,080,910 thousand and NT$973,382 thousand, respectively, representing 11% and 10%, respectively, of the consolidated total liabilities; for the three months ended and nine months ended September 30, 2024 and 2023, the amounts of combined comprehensive income (loss) of these subsidiaries were NT$(105,903) thousand, NT$(7,652) thousand respectively, NT$(7,173) thousand and NT$(3,631) thousand ,representing (129)%, (3)%, (1)%,(1)% .

Qualified Conclusion

Based on our reviews, except for the adjustments, if any, as might have been determined to be necessary had the financial statements of the non-significant subsidiaries and as described in the preceding paragraph been reviewed, nothing has come to our attention that caused us to believe that the accompanying consolidated financial statements do not give a true and fair view of the consolidated financial position of the Group as of September 30, 2024 and 2023, its consolidated financial performance and its consolidated cash flows for the three months ended September 30, 2024 and 2023 and for the nine months ended September 30, 2024 and 2023 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 "Interim Financial Reporting" endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

The engagement partners on the reviews resulting in this independent auditors' review report are Yu-Hong Kuo and Chih-Ming Shao.

Deloitte & Touche Taipei, Taiwan Republic of China November 13, 2024

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

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FOCALTECH SYSTEMS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 6) Financial assets at fair value through profit or loss (Note 7) Financial assets at fair value through other comprehensive income (Note 8) Accounts receivables, net (Note 10) Inventories (Note 11) Other financial assets (Note 9) Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss (Note 7) Financial assets at fair value through other comprehensive income (Note 8) Property, plant and equipment (Note 13) Goodwill (Notes 14) Other intangible assets (Note 15) Deferred tax assets Refundable deposits (Note 16) Other non-current assets (Note 31) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 17) Accounts payables (Note 18) Other payables (Note 19) Current tax liabilities (Notes 4) Current position of long-term borrowings (Note 17) Other current liabilities (Notes 23) Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Note 17) Deferred tax liabilities Net defined benefit liabilities - non-current (Note 4) Guarantee deposits received (Notes 21) Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT (Notes 22 and 27) Share capital Ordinary shares Capital surplus Retained earnings Legal reserve Undistributed earnings Total retained earnings Other equity Treasury shares Equity attributable to owners of the parent NON-CONTROLLING INTERESTS (Note 22) Total equity TOTAL		September 30, 2024 (Reviewed) Amount % $ 8,615,453 45 268,428 1 134,432 1 1,240,960 7 2,563,616 13 887,783 5 263,787 1 13,974,459 73 397,064 2 62,096 - 2,463,285 13 1,237,268 6 95,759 1 175,846 1 766,654 4 13,179 - 5,211,151 27 $ 19,185,610 100 $ 1,283,453 7 1,972,777 10 1,599,850 8 246,371 1 108,986 1 230,771 1 5,442,208 28 734,495 4 217,623 1 13,586 - 3,010,421 16 3,976,125 21 9,418,333 49 2,192,709 11 6,154,752 32 747,512 4 896,600 5 1,644,112 9 (61,993) - (163,060) (1) 9,766,520 51 757 - 9,767,277 51 $ 19,185,610 100		December 31, 2023 (Audited) Amount % $ 4,444,804 24 250,205 1 129,746 1 1,649,039 9 2,675,092 15 2,806,629 15 227,685 1 12,183,200 66 365,725 2 50,364 - 2,439,730 13 1,237,268 7 114,519 1 179,725 1 1,857,769 10 26,997 - 6,272,097 34 $ 18,455,297 100 $ 860,242 5 1,478,429 8 1,456,384 8 387,792 2 198,493 1 78,002 - 4,459,342 24 760,454 4 219,167 2 13,955 - 3,688,279 20 4,681,855 26 9,141,197 50 2,178,900 12 6,031,904 32 712,562 4 757,830 4 1,470,392 8 (210,063) (1) (163,060) (1) 9,308,073 50 6,027 - 9,314,100 50 $ 18,455,297 100		September 30, 2023 (Reviewed)	September 30, 2023 (Reviewed)
		Amount $ 8,615,453 268,428 134,432 1,240,960 2,563,616 887,783 263,787 13,974,459 397,064 62,096 2,463,285 1,237,268 95,759 175,846 766,654 13,179 5,211,151 $ 19,185,610 $ 1,283,453 1,972,777 1,599,850 246,371 108,986 230,771 5,442,208 734,495 217,623 13,586 3,010,421 3,976,125 9,418,333 2,192,709 6,154,752 747,512 896,600 1,644,112 (61,993) (163,060) 9,766,520 757 9,767,277 $ 19,185,610		Amount $ 4,444,804 250,205 129,746 1,649,039 2,675,092 2,806,629 227,685 12,183,200 365,725 50,364 2,439,730 1,237,268 114,519 179,725 1,857,769 26,997 6,272,097 $ 18,455,297 $ 860,242 1,478,429 1,456,384 387,792 198,493 78,002 4,459,342 760,454 219,167 13,955 3,688,279 4,681,855 9,141,197 2,178,900 6,031,904 712,562 757,830 1,470,392 (210,063) (163,060) 9,308,073 6,027 9,314,100 $ 18,455,297		Amount $ 4,226,026 259,161 - 1,599,687 3,297,716 2,634,009 205,177 12,221,776 469,899 187,530 2,480,822 1,237,268 60,147 191,662 2,112,216 17,707 6,757,251 $ 18,979,027 $ 875,631 1,797,850 1,355,644 415,556 144,594 188,681 4,777,956 820,682 217,065 13,213 3,814,421 4,865,381 9,643,337 2,158,720 5,891,222 712,562 692,008 1,404,570 35,582 (163,060) 9,327,034 8,656 9,335,690 $ 18,979,027	%
							22 1 - 9 17 14 1 64 3 1 13 7 - 1 11 - 36 100 5 9 7 2 1 1 25 5 1 - 20 26 51 11 31 4 4 8 - (1) 49 - 49 100

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

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

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FOCALTECH SYSTEMS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

REVENUE (Note 23) COSTS OF SALES (Note 11 and 24) GROSS PROFIT OPERATING EXPENSES (Note 24, 28 and 30) Selling and marketing expenses General and administrative expenses Research and development expenses Total operating expenses OPERATING INCOME NON-OPERATING INCOME AND EXPENSES Finance costs (Note 24) Interest income Gain (loss) on financial assets and liabilities at fair value through profit or loss Other gains and losses - net Gain (loss) on foreign exchange Total non-operating income and expenses INCOME BEFORE INCOME TAX INCOME TAX EXPENSE (Note 25) NET INCOME (LOSS) OTHER COMPREHENSIVE INCOME Items that may be reclassified subsequently to profit or loss: Exchange differences from translating the financial statements of foreign operations		For the Three Months Ended September 30	For the Three Months Ended September 30	For the Three Months Ended September 30		For the Nine Months	For the Nine Months	Ended September 30	Ended September 30	Ended September 30
		2024		2023		2024			2023
		Amount % $ 3,813,063 100 (2,964,003) (78) 849,060 22 (123,547) (3 ) (120,171 ) (3 ) (516,991) (14) (760,709) (20) 88,351 2 (15,651) - 97,223 2 1,230 - 16,047 - (16,458) - 82,391 2 170,742 4 (3,045) - 167,697 4 (87,800) (2 )		Amount % $ 3,598,407 100 (2,892,033) (80) 706,374 20 (102,016) (3 ) (105,181 ) (3 ) (485,837) (14) (693,034) (20) 13,340 - (10,636) - 69,413 2 4,171 - 15,908 - 58,689 2 137,545 4 150,885 4 (26,480) (1) 124,405 3 133,518 4		Amount $ 10,350,922 (7,987,771) 2,363,151 (379,063) (333,651) (1,553,100) (2,265,814) 97,337 (43,850) 273,090 6,616 55,981 (920) 290,917 388,254 (2,669) 385,585 107,226	% 100 (77) 23 (4 ) (3 ) (15) (22) 1 - 3 - - - 3 4 - 4 1		Amount % $ 9,936,037 100 (7,984,301) (80) 1,951,736 20 (260,872) (3 ) (320,075) (3 ) (1,284,519) (13) (1,865,466) (19) 86,270 1 (43,045) - 180,671 2 35,643 - 33,277 - 57,125 1 263,671 3 349,941 4 (72,824) (1) 277,117 3 128,146 1 (Continued)

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

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For the Three Months Ended September 30	For the Three Months Ended September 30	For the Nine Months	Ended September 30
2024	2023	2024	2023
Amount % 2,307 - (85,493) (2) (85,493) (2) $ 82,204 2 $ 168,067 4 (370) - $ 167,697 4 $ 82,587 2 (383) - $ 82,204 2 $ 0.79 $ 0.78	Amount % 1,570 - 135,088 4 135,088 4 $ 259,493 7 $ 126,963 3 (2,558) - $ 124,405 3 $ 261,766 7 (2,273) - $ 259,493 7 $ 0.61 $ 0.60	Amount % 5,508 - 112,734 1 112,734 1 $ 498,319 5 $ 390,871 4 (5,286) - $ 385,585 4 $ 503,589 5 (5,270) - $ 498,319 5 $ 1.85 $ 1.81	Amount % 3,467 - 131,613 1 131,613 1 $ 408,730 4 $ 283,682 3 (6,565) - $ 277,117 3 $ 414,903 4 (6,173) - $ 408,730 4 $ 1.37 $ 1.33


$	$	$	$
$	$	$	$
$	$	$	$
$	$	$	$
$	$	$	$

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

(Concluded)

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

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FOCALTECH SYSTEMS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars)

			Equity Attributable	Equity Attributable	to Owners of the Parent	to Owners of the Parent			Total Equity
Share Capital Ordinary Shares $ 2,161,107 - - - - - - - 463 - (2,850) - $ 2,158,720 $ 2,178,900 - - - - - - - 17.800 - (3,991) $ 2,192,709	Capital Surplus $ 6,041,988 - - - - (108,000) (2,079) 19,750 508 - (60,945) - $ 5,891,222 $ 6,031,904 - - - - - (2,571) 6,153 163,276 - (44,010) $ 6,154,752		Retained Earnings	Undistributed Earnings $ 196,847 211,479 283,682 - 283,682 - - - - - - - $ 692,008 $ 757,830 (34,950) (217,151) 390,871 - 390,871 - - - - - $ 896,600		Other Equity	Unearned employee compensation $ (335,829) - - - - - - - - 139,911 60,945 - $ (134,973) $ (214,722) - - - - - - - (163,276) 154,618 44,010 $ (179,370)	Treasury Shares $ (196,057) - - - - - - - - - - 32,997 $ (163,060) $ (163,060) - - - - - - - - - - $ (163,060)
		Legal Reserve $ 712,562 - - - - - - - - - - - $ 712,562 $ 712,562 34,950 - - - - - - - - - $ 747,512	Special Reserve $ 211,479 (211,479) - - - - - - - - - - $ - $ - - - - - - - - - - - $ -		Exchange Differences from Translating the Financial Statement of Foreign Operations $ 52,472 - - 127,754 127,754 - - - - - - - $ 180,226 $ 11,178 - - - 107,210 107,210 - - - - - $ 118,388	Unrealized Gain (Loss) on Financial Assets at Fair Value through Other Comprehensive Income $ (13,138) - - 3,467 3,467 - - - - - - - $ (9,671) $ (6,519) - - - 5,508 5,508 - - - - - $ (1,011)
									$ 8,846,260 - 277,117 131,613 408,730 (108,000) (2,079) 19,750 971 139,911 (2,850) 32,997 $ 9,335,690 $ 9,314,100 - (217,151) 385,585 112,734 498,319 (2,571) 6,153 17,800 154,618 (3,991) $ 9,767,277

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

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

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FOCALTECH SYSTEMS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Net gain on financial assets at fair value through profit or loss Finance costs Interest income Compensation cost of employee share options Loss on disposal of property plant and equipment Loss (gain) on disposal of investments Reversal gain on write-down of inventories Unrealized (gain) loss on foreign exchange Compensation cost of restricted stock to employees Changes in operating assets and liabilities Financial assets mandatorily measured at fair value through profit or loss Accounts receivables Inventories Other current assets Accounts payables Other payables Other current liabilities Net defined benefit liabilities Cash generated from operations Interest paid Income tax paid Net cash inflow 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 Decrease in refundable deposits Acquisition of intangible assets Decrease (Increase) in other financial assets Decrease in other non-current assets Interest received Net cash inflow (outflow) from investing activities		For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2024 $ 388,254 93,575 74,559 (6,616) 43,850 (273,090) 6,153 176 (3,350) (386,903) 8,265 154,618 (27,447) 419,924 544,928 (46,138) 475,061 102,485 150,145 (369) 1,718,080 (44,019) (165,853) 1,508,208 (9,750) (68,295) 1,091,318 (55,714) 1,959,011 14,747 306,537 3,237,854		2023
				$ 349,941 85,087 70,625 (35,643) 43,045 (180,671) 19,750 170 1,803 (934,930) 36,919 139,911 (209,873) (446,601) 3,415,398 64,175 861,210 (346,716) 107,195 (347) 3,040,448 (44,040) (189,038) 2,807,370 - (28,764) 542,373 (70,180) (2,086,336) 7,905 179,723 (1,455,279)

(Continued)

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

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FOCALTECH SYSTEMS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) increase in short-term borrowings Decrease in long-term borrowings Decrease in guarantee deposits Dividends paid to owners of the Company Exercise of employee share options Treasury shares transferred to employees Issuance of restricted stock employees Retirement of restricted stock employees Other Net cash outflow financing activities EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD CASH AND CASH EQUIVALENTS, END OF PERIOD		For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2024 $ 386,344 (122,364) (678,175) (217,151) - - 17,800 (3,991) (2,571) (620,108) 44,695 4,170,649 4,444,804 $ 8,615,453		2023
				$ (2,212,504) (23,993) (555,130) (108,000) 971 32,997 - (2,850) (2,079) (2,870,588) 70,053 (1,448,444) 5,674,470 $ 4,226,026

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

(Concluded)

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

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FOCALTECH SYSTEMS CO., LTD. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

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

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Company’s board of directors on November 13, 2024.

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 Group’s accounting policies.

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

Effective Date New, Revised or Amended Standards and Interpretations Announced by IASB (Note 1) Amendments to IAS 21 “Lack of Exchangeability” January 1, 2025 (Note 2)

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

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

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

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

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 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
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.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

The present Consolidated Financial Report has been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs as endorsed and issued into effect by Financial Supervisory Commission.

b. Basis of Preparation

The consolidated 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.
c. Basis of consolidation

The detail information, holding percentages, and main business of the subsidiaries could be found in Note 12, TABLE 5 and TABLE 6.

d. Other significant accounting policies

Except for the following, the accounting policies applied in these consolidated financial statements are

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

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consistent with those applied in the consolidated financial statements for the year ended December 31, 2023.

1) Retirement benefits

Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial year, and adjusted for significant market fluctuations since that time and for significant plan amendments, settlements, or other significant one-off events.

2) Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax. Interim period income taxes are assessed on an annual basis and calculated by applying to an interim period’s pre-tax income and the tax rate that would be applicable to expected total annual earnings.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Critical accounting judgments, estimations and assumptions applied in these consolidated financial statements are consistent with those in the consolidated financial statements for the year ended December 31, 2023.

6. CASH AND CASH EQUIVALENTS

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
		2024		2023		2023
Cash on hand	$	4,608	$	5,406	$	8,115
Checking accounts and demand deposits		4,193,741		1,286,961		1,776,132
Cash equivalent (time deposits with original
maturities within three months)		4,417,104		3,152,437		2,441,779
	$	8,615,453	$	4,444,804	$	4,226,026

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Current Mandatorily measured at fair value through profit or loss (FVTPL) Government bonds Beneficiary Certificate Non–Current Mandatorily measured at fair value through profit or loss (FVTPL) Listed preferred shares Private Funds Structured Investments	September 30, 2024 $ 262,936 5,492 $ 268,428 $ 10,200 261,342 125,522 $ 397,064	December 31, 2023 $ 246,194 4,011 $ 250,205 $ 10,183 238,544 116,998 $ 365,725	September 30, 2023 $ 255,008 4,153 $ 259,161 $ 93,868 255,724 120,307 $ 469,899

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

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8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

9. 10.	September 30, 2024 Investments in debt instruments Current Foreign investments Fixed income bonds $ 134,432 Non–Current Foreign investments Fixed income bonds $ 62,096 OTHER FINANCIAL ASSETS September 30, 2024 Time deposits with original maturities more than three months $ 887,783 ACCOUNTS RECEIVABLES, NET September 30, 2024 Accounts receivables $ 1,240,960	December 31, 2023 $ 129,746 $ 50,364 December 31, 2023 $ 2,806,629 December 31, 2023 $ 1,649,039	September 30, 2023 $ - $ 187,530 September 30, 2023 $ 2,634,009 September 30, 2023 $ 1,599,687

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

The Group applies the simplified approach prescribed by IFRS 9, which permits the use of allowances of expected credit losses over the lifetime for all accounts receivables. The expected credit losses on accounts receivables are estimated by using an allowance matrix with references to past 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 in the loss patterns of different customer groups. Therefore, the allowance matrix does not further distinguish the customer base, 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 Group’s allowance matrix.

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

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September 30, 2024

Expected credit loss rate Gross carrying amount and Amortized cost December 31, 2023 Expected credit loss rate Gross carrying amount and Amortized cost September 30, 2023 Expected credit loss rate Gross carrying amount and Amortized cost	Non Past Due 0% $ 1,240,960 Non Past Due 0% $ 1,649,039 Non Past Due 0% $ 1,599,687		Overdue 1-60 Days 0% $ - Overdue 1-60 Days 0% $ - Overdue 1-60 Days 0% $ -	Overdue 61-180 Days 0% $ - Overdue 61-180 Days 0% $ - Overdue 61-180 Days 0% $ -	Overdue Over 180 Days 0% $ - Overdue Over 180 Days 0% $ - Overdue Over 180 Days 0% $ -		Total
							0% $ 1,240,960 Total
							0% $ 1,649,039 Total
							0% $ 1,599,687

11. INVENTORIES

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
		2024		2023		2023
Finished goods	$	708,653	$	842,838	$	832,129
Work in process		1,066,077		980,224		1,441,468
Raw materials and supplies		788,886		852,030		1,024,119
	$	2,563,616	$	2,675,092	$	3,297,716

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 Three Months Ended September 30 2024 2023 $ 83,662 $ 318,321		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2024 $ 83,662		2024 $ 386,903	2023 $ 934,930

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

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12. SUBSIDIARIES

Details of the Company’s subsidiaries included in the consolidated financial statements were as follows:

Investor	Investee	Main Businesses	Percentage of Ownership	Percentage of Ownership	Percentage of Ownership	Note
			September 30, 2024	December 31, 2023	September 30, 2023
FocalTech Systems Co., Ltd. FocalTech Systems Co.,Ltd.	FocalTech Corporation, Ltd. FocalTech Electronics, Ltd.	Investment activity Investment activity	100% 100%	100% 100%	100% 100%	- Note1
FocalTech Systems Co., Ltd. And FocalTech Electronics Co., Ltd.	FocalTech Smart Sensors, Ltd.	Investment activity	66.45%	66.45%	66.45%	Note1
FocalTech Smart Sensors, Ltd.	FocalTech Smart Sensors Co., Ltd.	Research, development, manufacturing and sale of integrated circuits	100%	100%	100%	Note1
FocalTech Corporation,Ltd.	FocalTech Systems, Inc.	Investment activity	100%	100%	100%	-
FocalTech Systems, Inc.	FocalTech Systems, Ltd.	Investment activity	100%	100%	100%	Note1
FocalTech Systems, Ltd. FocalTech Systems, Ltd.	FocalTech Systems (Shenzhen) Co., Ltd. FocalTech Electronics Co.,Ltd.	Design and research of integrated circuits Import and export of integrated circuits	- 100%	- 100%	100% 100%	Note2 Note1
FocalTech Electronics, Ltd. FocalTech Electronics, Ltd. FocalTech Electronics, Ltd. FocalTech Electronics (Shanghai) Co., Ltd. FocalTech Electronics (Shenzhen) Co., Ltd. FocalTech Electronics (Shenzhen) Co., Ltd.	FocalTech Electronics (Shanghai) Co., Ltd. FocalTech Electronics (Shenzhen) Co., Ltd. Hefei PineTech Electronics Co., Ltd. Chengdu FocalTech Systems Co., Ltd. FocalTech Systems (Shenzhen) Co., Ltd. Hefei PineTech Electronics Co., Ltd.	Sales support and post-sales service for affiliates’ IC products Research, development, manufacturing and sale of integrated circuits Research, development and sale of integrated circuits Design and research of integrated circuits Design and research of integrated circuits Research, development and sale of integrated circuits	100% 100% - 100% 100% 100%	100% 100% - - 100% 100%	100% 100% 100% - - -	Note1 - Note1&2 Note1&3 Note2 Note1&2

Note 1 : Immaterial subsidiaries of the Company, whose financial statements had not been reviewed by auditors. Note 2 : The Group adjusted organizational structure under common control in October, 2023. All shares of FocalTech Systems (Shenzhen) Co., Ltd. and Hefei PineTech Electronics Co., Ltd., which owned by FocalTech Systems, Ltd. and FocalTech Electronics, Ltd. separately, were transferred to FocalTech Electronics (Shenzhen) Co., Ltd..

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

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Note 3 : Chengdu FocalTech Systems Co., Ltd. was established in August 2024.

13. PROPERTY, PLANT AND EQUIPMENT

Cost Balance, January 1, 2023 Additions Disposals Reclassification Effect of foreign currency exchange differences Balance, September 30, 2023 Accumulated depreciation Balance, January 1, 2023 Depreciation Disposals Effect of foreign currency exchange differences Balance, September 30, 2023 Carrying amounts as of September 30, 2023 Cost Balance, January 1, 2024 Additions Disposals Effect of foreign currency exchange differences Balance, September 30, 2024 Accumulated depreciation Balance, January 1, 2024 Depreciation Disposals Effect of foreign currency exchange differences Balance, September 30, 2023 Carrying amounts as of December 31, 2023 and January 1, 2024 Carrying amounts as of September 30, 2024		Land		Buildings	Development Equipment	Office Equipment	Information Equipment	Leasehold Improvements	Leasehold Improvements	Construction Inprogress	Total
		$ 557,110 - - - - $ 557,110 $ - - - - $ - $ 557,110 $ 557,110 - - - $ 557,110 $ - - - - $ - $ 557,110 $ 557,110		$ 1,856,612 - - - 25,483 $ 1,882,095 $ 199,720 27,634 - 3,986 $ 231,340 $ 1,650,755 $ 1,834,420 - - 54,258 $ 1,888,678 $ 232,937 27,978 - 8,838 $ 269,753 $ 1,601,483 $ 1,618,925	$ 476,829 11,616 ( 5,466 ) - 10,121 $ 493,100 $ 292,528 45,109 ( 5,424 ) 8,728 $ 340,941 $ 152,159 $ 491,480 61,982 ( 132 ) 10,861 $ 564,191 $ 341,371 51,143 ( 130 ) 7,736 $ 400,120 $ 150,109 $ 164,071	$ 60,977 17,120 ( 182 ) 56,640 176 $ 134,731 $ 12,980 10,502 ( 177 ) 139 $ 23,444 $ 111,287 $ 149,461 5,451 ( 200 ) 400 $ 155,112 $ 27,010 12,720 ( 179 ) 293 $ 39,844 $ 122,451 $ 115,268	$ 43,345 28 ( 1,225 ) - 726 $ 42,874 $ 32,077 1,842 ( 1,102 ) 546 $ 33,363 $ 9,511 $ 41,406 862 ( 1,465 ) 1,540 $ 42,343 $ 32,829 1,734 ( 1,312 ) 1,181 $ 34,432 $ 8,577 $ 7,911		$ 21,869 - - - 273 $ 22,142 $ 21,869 - - 273 $ 22,142 $ - $ 21,632 - - 580 $ 22,212 $ 21,632 - - 580 $ 22,212 $ - $ -	$ 56,640 - - ( 56,640 ) - $ - $ - - - - $ - $ - $ - - - - $ - $ - - - - $ - $ - $ -	$ 3,073,382 28,764 ( 6,873 ) - 36,779 $ 3,132,052 $ 559,174 85,087 ( 6,703 ) 13,672 $ 651,230 $ 2,480,822 $ 3,095,509 68,295 ( 1,797 ) 67,639 $ 3,229,646 $ 655,779 93,575 ( 1,621 ) 18,628 $ 766,361 $ 2,439,730 $ 2,463,285

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

Buildings 45-50 years Development equipment 2-5 years Office equipment 3-5 years Information equipment 3-5 years Leasehold improvements 1-5 years

Property, plant and equipment were pledged as collateral. Refer to Note 31.

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

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14. GOODWILL

	September 30,	December 31,	September 30,
	2024	2023	2023
Ending balance	$ 1,237,268	$ 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, accounted for goodwill according to business combination. The Group estimated cash flows from sales of IDC (Integrated Driver Controller) based on smartphone market growth rate and market share. Refer to Note 14 in consolidated financial statements in 2023 for related information.

15. OTHER INTANGIBLE ASSETS

Cost Balance, January 1, 2023 Additions Disposal Effect of foreign currency exchange differences Balance, September 30, 2023 Accumulated amortization Balance, January 1, 2023 Amortization expenses Disposal Effect of foreign currency exchange differences Balance, September 30, 2023 Carrying amounts as of September 30, 2023 Cost Balance, January 1, 2024 Additions Disposal Effect of foreign currency exchange differences Balance, September 30, 2024		Licenses and Franchises $ 144,432 - (18,656) 6,163 $ 131,939 $ 142,207 2,225 (18,656) 6,163 $ 131,939 $ - $ 125,757 - - 3,733 $ 129,490		Software $ 229,600 70,180 (60,784) 6,875 $ 245,871 $ 200,676 57,375 (60,784) 6,832 $ 204,099 $ 41,772 $ 314,510 55,714 (24,084) 4,346 $ 350,486		Patents $ 76,710 - - 5 $ 76,715 $ 62,110 5,475 - 5 $ 67,590 $ 9,125 $ 76,706 - - 10 $ 76,716	Trademark $ 74,000 - - - $ 74,000 $ 59,200 5,550 - - $ 64,750 $ 9,250 $ 74,000 - - - $ 74,000		Total
									$ 524,742 70,180 (79,440) 13,043 $ 528,525 $ 464,193 70,625 (79,440) 13,000 $ 468,378 $ 60,147 $ 590,973 55,714 (24,084) 8,089 $ 630,692

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

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Accumulated amortization
Balance, January 1, 2024	$ 125,757		$	214,691	$	69,406	$	66,600	$	476,454
Amortization expenses		-		63,534		5,475		5,550		74,559
Disposal		-		(24,084)		-		-		(24,084)
Effect of foreign currency
exchange differences		3,733		4,261		10		-		8,004
Balance, September 30, 2024	$ 129,490		$	258,402	$	74,891	$	72,150	$	534,933
Carrying amounts as of
December 31, 2023 and
January 1, 2024	$	-	$	99,819	$	7,300	$	7,400	$	114,519
Carrying amounts as of
September 30, 2024	$	-	$	92,084	$	1,825	$	1,850	$	95,759
Other intangible assets were amortized		on a straight-line basis over the estimated useful lives as follows:
Licenses and franchises										1-5 years
Software										1-5 years
Patents										7-10 years
Trademark										10 years
REFUNDABLE DEPOSITS
				September	30,	December		31,	September 30,
				2024			2023		2023
Capacity guarantee deposits and	others			$ 766,654		$	1,857,769		$ 2,112,216

16. REFUNDABLE DEPOSITS

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

17. BORROWINGS

a. Short-term borrowings

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
		2024		2023		2023
Unsecured bank loans	$1,283,453		$	860,242	$	875,631
Annual interest rate
Unsecured bank loans	2.10-3.35%		3.10`～`3.60%		2.80-3.80%
b. Long-term borrowings
	September 30,		December 31,		September 30,
		2024		2023		2023
Secured bank loans (1)	$	776,635	$	786,840	$	786,840
Unsecured bank loans (2)		66,846		172,107		178,436
		843,481		958,947		965,276

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

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Less: reclassification to Current position of

long-term borrowings Annual interest rate Secured bank loans Unsecured bank loans	(108,986) $ 734,495 1.875~2.00% 3.00~3.10%	(198,493) $ 760,454 1.75~1.875% 3.30~3.65%	(144,594) $ 820,682 1.75-1.875% 3.30%-3.65%

(1) 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 31.
(2) For unsecured bank loans, the principals will be paid according to the contract. The period of borrowings is from August, 2023 to September, 2025.

18. ACCOUNTS PAYABLES

	September 30,	December 31,	September 30,
	2024	2023	2023
Accounts payables	$ 1,972,777	$ 1,478,429	$ 1,797,850

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

19. OTHER PAYABLES

		September 30,	December 31,	September 30,
		2024	2023	2023
Payable	for rebates	$ 938,563	$ 849,398	$ 798,353
Payable	for salaries and bonus	416,622	380,430	319,819
Payable	for labor, health and social insurance	14,966	15,320	15,269
Reserve	for litigations	53,652	53,473	54,315
Payable	for professional services and others	176,047	157,763	167,888
		$1,599,850	$1,456,384	$1,355,644

20. RETIREMENT BENEFIT

Pension expenses under the defined benefit plans, calculated using the actuarially determined pension cost rate as of December 31, 2023 and 2022, were NT$43 thousand, NT$42 thousand, NT$132 thousand and NT$124 thousand for the three months ended and the nine months ended September 30, 2024 and 2023, respectively.

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

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21. GUARANTEE DEPOSITS RECEIVED

			September 30,	December 31,	September 30,
			2024	2023	2023
Capacity	guarantee	deposits and others	$ 3,010,421	$3,688,279	$ 3,814,421

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

22. EQUITY

a. Share capital

Ordinary shares (par value at NT$10 per share)

	September 30,	December 31,	September 30,
	2024	2023	2023
Numbers of shares authorized (in thousands)	500,000	500,000	500,000
Shares authorized	$ 5,000,000	$ 5,000,000	$ 5,000,000
Number of shares issued and fully paid (in
thousands)	219,271	217,890	215,872
Shares issued	$ 2,192,709	$ 2,178,900	$ 2,158,720
Capital surplus
The categories of uses and the sources of capital	surplus based on	regulations were as	follows:
	September 30,	December 31,	September 30,
	2024	2023	2023
May be used to offset a deficit, distributed as
cash dividends, or transferred to share
capital(1)
Additional paid-in capital	$5,441,090	$5,159,995	$5,159,415
Treasury stock	210,887	167,900	167,549
Employee share options-expired	34,448	34,448	34,448
Maybe used to offset a deficit only
Other – unclaimed dividend	14	6	6
Maynot be used for any purpose
Restricted stock for employees	461,256	625,664	490,752
Employee share options	7,057	43,891	39,052
	$6,154,752	$ 6,031,904	$5,891,222

b. Capital surplus

(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 transferred to share capital (at a

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

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certain percentage of the Company’s capital surplus annually).

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.

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		2023 $ 34,950 $- $ 217,151 $ 1.00		2022
				$- $ 211,479 $- $-

d. Special reserve

Balance, beginning Special reserve (reversed) Balance, ending		For the Nine Months Ended September 30	For the Nine Months Ended September 30
			2023
			$ 211,479 ( 211,479) $ -

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

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e. Treasury stock

Number of shares on January 1, 2023 Decrease during the period Number of shares on September 30, 2023 Number of shares on January 1, 2024 and September 30, 2024	Shares (In Thousands)	Shares (In Thousands)
		1,545 (260) 1,285 1,285

The detailed information for other treasure 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 Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2024 $ 214,722 ) 163,276 ) 44,010 154,618 $ 179,370)		2023
	( ( (		( (	$ 335,829 ) - 60,945 139,911 $ 134,973)

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

g. Non-controlling interests

Balance, beginning Net loss Other comprehensive income (loss) Exchange differences from translating the financial statements of foreign operations Balance, ending	For the Nine Months Ended September 30	For the Nine Months Ended September 30
	2024 $ 6,027 ( 5,286) 16 $ 757	2023
		$ 14,829 ( 6,565) 392 $ 8,656

23. REVENUE

IC for human and machine interface devices		For the Three Months Ended September 30 2024 2023 $ 3,813,063 $ 3,598,407		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2024 $ 3,813,063		2024 $ 10,350,922	2023 $ 9,936,037

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

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Contract balances

Contract liabilities (classified as current liabilities) Sales of goods	September 30, 2024 $ 164,991		December 31, 2023 $ 24,732	September 30, 2023	September 30, 2023
					$ 152,436

24. NET INCOME (LOSS)

a. Finance costs

For the Three Months Ended September 30 2024 2023 Interest on bank loans $ 15,651 $ 10,636 Interest on deposits - - $ 15,651 $ 10,636 b. Depreciation and amortization For the Three Months Ended September 30 2024 2023 Property, plant and equipment $ 34,503 $ 27,842 Intangible assets 25,729 32,732 $ 60,232 $ 60,574 An analysis of deprecation by function Operating costs $ 6,628 $ 6,332 Operating expenses 53,604 54,242 $ 60,232 $ 60,574 c. Employee benefits expense For the Three Months Ended September 30 2024 2023 Post-employment benefits Defined contribution plans $ 8,594 $ 7,968 Defined benefit plans (Note 20) 43 42		For the Nine Months Ended September 30
		2024 2023 $ 43,850 $ 42,978 - 67 $ 43,850 $ 43,045 For the Nine Months Ended September 30
		2024 2023 $ 93,575 $ 85,087 74,559 70,625 $ 168,134 $ 155,712 $ 19,474 $ 18,927 148,660 136,785 $ 168,134 $ 155,712 For the Nine Months Ended September 30
	2024 2023 $ 25,282 $ 24,365 132 124

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

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Share-based payments (Note 27) Cash-settled Equity-settled Other employee benefits Total employee benefits expense An analysis of employee benefits expense by function Operating costs Operating expenses	792 40,655 515,672 $ 565,756 $ 42,798 522,958 $ 565,756	- 34,177 426,170 $ 468,357 $ 29,880 438,477 $ 468,357	1,579 160,771 1,466,483 $ 1,654,247 $ 131,386 1,522,861 $ 1,654,247	- 159,661 1,071,878 $ 1,256,028 $ 92,016 1,164,012 $ 1,256,028

d. The remuneration of 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 three months and nine months ended September 30, 2024 and 2023 are as follows:

Amount

	For	the	Three Months	Three Months		Ended	For	the Nine Months	the Nine Months		Ended
			September	30				September 30
	2024				2023		2024			2023
Employees’	$	1,615		$		1,662	$	3,800	$		3,649
compensation
Remuneration of	$		85	$		88	$	200	$		183
directors

If there is any change in the proposed amounts after the annual consolidated 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 consolidated 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.

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

-22-

25. INCOME TAXES

a. Major components of tax (benefits) expense recognized in profit or loss:

Current income tax expense In respect of the current year Other income tax adjustments Deferred income tax expense In respect of the current year Income tax expense recognized in profit or loss		For the Three Months Ended September 30 2024 2023 $ 57 $ - - ( 5,109) 57 ( 5,109) 2,988 31,589 $ 3,045 $ 26,480		For the Nine Months Ended September 30
		2024 $ 57 - 57 2,988 $ 3,045		2024 2023 $ 334 $ 239 - ( 4,846) 334 ( 4,607) 2,335 77,431 $ 2,669 $ 72,824

b. Income tax assessments

The Company, FocalTech Smart Sensors Co., Ltd., and FocalTech Electronics Co., Ltd.’s tax returns through 2022 have been examined by the tax authorities.

26. EARNINGS (LOSS) PER SHARE

Unit: NT$ Per Share

Basic earnings per share Diluted earnings per share		For the Three Months Ended September 30 2024 2023 $ 0.79 $ 0.61 $ 0.78 $ 0.60		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2024 $ 0.79 $ 0.78		2024 $ 1.85 $ 1.81	2023 $ 1.37 $ 1.33

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 Three Months Ended September 30 2024 2023 $ 168,067 $ 126,963		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2024 $ 168,067		2024 $ 390,871	2023 $ 283,682

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

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

Weighted average number of ordinary shares in computation of basic earnings per share Effect of potentially dilutive ordinary shares: Treasure share issued to employee Employees stock options (share) Restricted stock for employees (share) The compensation to employees Weighted average number of ordinary shares used in the computation of diluted earnings per share		For the Three Months Ended September 30 2024 2023 213,022 209,240 386 2,942 54 85 1,856 491 12 22 215,330 212,780		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2024 213,022 386 54 1,856 12 215,330		2024 211,499 1,468 54 2,547 198 215,766	2023 207,198 4,026 60 1,419 46 212,749

27. SHARE-BASED PAYMENT ARRANGEMENTS

The Group did not have new share option plan issued for employees for the nine months ended September 30, 2024 and 2023. The detailed information could be found in Note 27 of the consolidated financial statements of the year ended December 31, 2023.

a. Employee share option plan

Information on outstanding options for the nine months ended September 30, 2024 and 2023 were as follows:

September 30, 2024

Employee Stock Option Plan	BeginningBalance	BeginningBalance	Options exercised	Options exercised	Options	expired	EndingBalance	EndingBalance
	Units of Option 63,000	Weighted- Average Exercise Price (NT$)	Units of Option	Weighted- Average Exercise Price (NT$) -	Units of Option	Weighted- Average Exercise Price (NT$)	Units of Option 63,000	Weighted- Average Exercise Price (NT$)
2015		12.80	-		-	-		12.80

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

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September 30, 2023

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

b. Treasure stock transferred to employees

Information about treasure stock transferred to employee are as follows:

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

Information about treasure stock transferred to employee as of September 30, 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$)
		$ - - -

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 September 30, 2024 are as follows:

Items	Grant date 2021/04/07 2021/07/29 2023/09/26 2024/02/23 2024/08/09	Fair value per share (indollar) $ 205.00 265.00 67.40 94.00 67.30	Actual shares of issued (inthousand)
2020 restricted stocks for employees plan 2020 restricted stocks for employees plan 2023 restricted stocks for employees plan 2023 restricted stocks for employees plan 2023 restricted stocks for employees plan			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 code, 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:

1) Upon service for two years. the shares vested in 50% to employees.
2) Upon service for three years. the shares vested in 25% to employees.
3) 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.

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2023 restricted stocks for employees plan

The constraints of restricted stock are as follows:

1) Employees are restricted to sell, pledge, transfer, and give to another, create any encumbrance on, or otherwise dispose of, any shares before vested.
2) The rights of restricted stock are same as ordinary share including attendance, propose, speak, voting right and so on at the Company’s shareholders’ meeting. The exercise of such rights shall be performed in accordance with the trust agreement or the securities custodies by the Company’s prescribed.
3) Stock dividends and cash dividends yielding from restricted stock will be distributed to employees in the current year, and will not be restricted.
4) 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 nine months ended September 30, 2024 and 2023 are as follows:

Shares buyback programs Restricted stock for employees Adjustment account: Capital surplus - employee stock options Other equity - unearned employee compensation		For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2024 $ 6,153 154,618 $ 160,771 $ 6,153 154,618 $ 160,771		2023
				$ 19,750 139,911 $ 159,661 $ 19,750 139,911 $ 159,661

e. Cash-settled share-base payment agreements of subsidiaries

Focaltech Electronics (Shenzhen) Co., Ltd. granted its specific employees and employees in its subsidiaries 1,500,000 units cash-settled stock appreciation rights. The expected option life of the stock appreciation rights is 8 years. The employees could exercise the stock appreciation rights they were granted in 12 months, 24 months, 36 months and 48 months separately, and the subsidiaries will pay cash when its employees exercise the stock appreciation rights according to the agreement.

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

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The fair value of cash-settled share-base payment use the Black-Scholes Option Pricing Model, and assumption used in calculating the fair value are disclosed as follows:

Stock price at measurement date (in dollars) Exercise Price per share Expected price volatility Expected option life Expected dividend yield Risk-free interest rate	September 30, 2024
	RMB 2.50 - 36.48~37.34% 8 years - 2.31~2.38%

The compensation cost of the cash-settled share-base payment was NT$792 thousand and NT$1,579 thousand for the three months ended and the nine months ended September 30, 2024.

28. OPERATING LEASE ARRANGEMENTS

The Group as Lessee

The Company and its subsidiaries have lease contracts in relation to office, plant and part of office equipment, and they would expire by September, 2025. Those agreements are short-term leases and qualified for the recognition exemption to leases so the Company does not recognize right-of-use assets and lease liabilities for these leases. The committed payments for the short-term leases were $3,352 thousand and $2,782 thousand as of September 30, 2024 and 2023.

The lease payments recognized in profit or loss were as follows:

Lease payment		For the Three Months Ended September 30 2024 2023 $ 2,605 $ 2,233		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2024 $ 2,605		2024 $ 7,299	2023 $ 7,421

29. FINANCIAL INSTRUMENTS

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

The Group’s management believes the carrying amounts of financial assets and financial liabilities not measured at fair value approximate their fair values.

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

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

September 30, 2024

Financial assets at FVTPL Listed preferred shares Private funds Beneficiary certificate Government bonds Structured Investments Total Financial assets at FVTOCI Investments in debt instruments Fixed income bonds December 31, 2023 Financial assets at FVTPL Listed preferred shares Private funds Beneficiary certificate Government bonds Structured Investments Total Financial assets at FVTOCI Investments in debt instruments Fixed income bonds September 30, 2023 Financial assets at FVTPL Listed preferred shares Private funds Beneficiary certificate Government bonds Structured Investments Total Financial assets at FVTOCI Investments in debt instruments Fixed income bonds		Level 1 $ 10,200 - 5,492 - - $ 15,692 $ - Level 1 $ 10,183 - 4,011 - - $ 14,194 $ - Level 1 $ 93,868 - 4,153 - - $ 98,021 $ -		Level 2 $ - - - 262,936 125,522 $ 388,458 $ 196,528 Level 2 $ - - - 246,194 116,998 $ 363,192 $ 180,110 Level 2 $ - - - 255,008 120,307 $ 375,315 $ 187,530		Level 3 $ - 261,342 - - - $ 261,342 $ - Level 3 $ - 238,544 - - - $ 238,544 $ - Level 3 $ - 255,724 - - - $ 255,724 $ -		Total
								$ 10,200 261,342 5,492 262,936 125,522 $ 665,492 $ 196,528 Total
								$ 10,183 238,544 4,011 246,194 116,998 $ 615,930 $ 180,110 Total
								$ 93,868 255,724 4,153 255,008 120,307 $ 729,060 $ 187,530

There were no transfers between Level 1 and Level 2 for the nine months ended September 30, 2024 and 2023.

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

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

Financial assets at FVTPL Balance, beginning Purchases Disposals Recognized in profit or loss (other income or loss) Effect of foreign currency exchange differences Balance, ending		For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2024 $ 238,544 28,155 (11,366) 4,975 1,034 $ 261,342		2023
				$ 207,977 17,500 (9,313) 37,929 1,631 $ 255,724

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

The fair values of foreign fixed income bonds and government bonds are determined by quoted market prices provided by the independent third party. The fair values of structured investments are determined by quoted prices provided by the seller.

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 financing activities of investees or the market transaction prices and status of the similar instruments. The Group 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.

c. Categories of financial instruments

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
		2024		2023		2023
Financial assets
Fair value through profit or loss (FVTPL)
Mandatorily at FVTPL	$	665,492	$	615,930	$	729,060
Amortized cost (Note 1)		11,510,850	10,758,241			10,571,938
Financial assets at FVTOCI
Investments in debt instruments		196,528		180,110		187,530
Financial liabilities
Amortized cost (Note 2)		8,709,982		8,442,281	$	8,808,822

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 short-term borrowings, accounts payables, other payables, current position of long-term borrowings, long-term borrowings and guarantee deposits received.
d. Financial risk management objectives and policies

The Group’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 Group’s Corporate Treasury function provides services to the business, coordinates

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

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access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group 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 establishing and monitoring the framework of risk management of the Group. The chairman is authorized by the board of directors to develop and monitor the risk management policy of the Group with the operation center of the Group, and regularly reported the situation to the board of directors.

The Group’s financial risk management policies are established for identifying and analyzing the financial risks to the Group, evaluating the impacts of the financial risks, and conducting the financial-risk aversion policies. The financial risk management policies are periodically reviewed to reflect changes in the market and the operations. The Group 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 Group’s management oversees the Group operates 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.

1) Market risk

The major financial risks from the Group’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 Group’s monetary assets and monetary liabilities denominated in foreign currency at the end of the reporting period are shown in Note 33.

Sensitivity analysis

The Group was mainly exposed to the U.S. dollar. The following table details the Group’s sensitivity to a 5% increase and decrease 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 by 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 Nine Months Ended September 30	USD Impact For the Nine Months Ended September 30	USD Impact For the Nine Months Ended September 30
		2024 $ 12,865(i)		2023
				$ 77,267(i)

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

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

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b) Interest rate risk

The Group was exposed to interest rate risk primarily related to its investments in time deposits with fixed-rate interest, bonds investment, short-term borrowings, demand deposits with floating-rate interest, structured investments, current position of long-term borrowings and long-term borrowings. The time deposits were at fixed interest rates, and bonds investment were at fixed rates or with guaranteed minimal interest rates and carried. Therefore, changes in interest rates would not affect the future cash flows.

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

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
		2024		2023		2023
Fair value interest rate risk
Financial assets	$	5,764,351	$	6,385,370	$	5,518,326
Financial liabilities	$	1,283,453	$	860,242	$	875,631
Cash flow interest rate risk
Financial assets	$	4,315,830	$	1,400,499	$	1,892,979
Financial liabilities	$	843,481	$	958,947	$	965,276

Sensitivity analysis

The below sensitivity analysis was determined based on the Company’s exposure to interest rates for non-derivative instruments as of 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 nine months ended September 30, 2024 and 2023 would increase/ decrease by NT$6,511 thousand and NT$1,739 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 Group. As at the end of the reporting period, the Group’s maximum exposure to credit risk which will cause a financial loss to the Group due to failure of counterparties to discharge an obligation could arise from the carrying amounts of the financial assets as recognized in the balance sheets.

The Group’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 September 30, 2024, accounts receivables from top 5 customers represented 56% 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

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

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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 Category Performing 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 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 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% Expected Credit Loss Ratio 0% Expected Credit Loss Ratio 0%	Carrying Amount as of September 30, 2024	Carrying Amount as of September 30, 2024
			$ 459,464 Carrying Amount as of December 31, 2023	$ 459,464
			$ 426,304 Carrying Amount as of September 30, 2023	$ 426,304
				$ 442,538

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

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3) Liquidity risk

The Group 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 Group relies on bank borrowings as a significant source of liquidity.

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

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

September 30, 2024

Non-interest bearing Fixed interest rate liabilities Floating interest rate liabilities December 31, 2023 Non-interest bearing Fixed interest rate liabilities Floating interest rate liabilities September 30, 2023 Non-interest bearing Fixed interest rate liabilities Floating interest rate liabilities	On Demand or Less than 1 Year $ 3,571,380 1,284,700 108,986 $ 4,965,066 On Demand or Less than 1 Year $ 2,933,439 861,616 198,493 $ 3,993,548 On Demand or Less than 1 Year $ 3,153,139 875,986 144,594 $ 4,173,719		1-5 Years $ 3,010,421 - 281,477 $ 3,291,898 1-5 Years $ 3,688,279 - 258,893 $ 3,947,172 1-5 Years $ 3,814,421 - 302,940 $ 4,117,361		More than 5 Years
					$ - - 453,018 $ 453,018 More than 5 Years
					$ - - 501,561 $ 501,561 More than 5 Years
					$ - - 517,742 $ 517,742

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

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30. TRANSACTIONS WITH RELATED PARTIES

a. Balances, transactions, revenue and expenses between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note.
b. Compensation of key management personnel

Long-term employee benefits Short-term employee benefits Post-employment benefits Share-based payments		For the Three Months Ended September 30 2024 2023 $ - $ - 9,814 12,202 153 135 8,908 9,576 $ 18,875 $ 21,913		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2024 $ - 9,814 153 8,908 $ 18,875		2024 $ - 31,441 477 24,109 $ 56,027	2023 $ 19,705 41,591 405 28,728 $ 90,429

31. PLEDGED ASSETS

The following assets were provided as collateral for banks loans and import customs duties:

	September 30,	September 30,	December 31,	September 30,	September 30,
		2024	2023		2023
Property, plant and equipment – Net of buildings	$	477,675	$ 485,178	$	487,678
Properties, plants and equipment – Land		557,110	557,110		557,110
Pledge deposits (categorized in other non-current
assets)		4,000	12,670		4,000
	$	1,038,785	1,054,958	$	1,048,788

32. 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.

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33. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

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

September 30, 2024

Financial assets Monetary items USD USD Financial liabilities Monetary items USD USD December 31, 2023 Financial assets Monetary items USD USD Financial liabilities Monetary items USD USD September 30, 2023 Financial assets Monetary items USD USD Financial liabilities Monetary items USD USD	Foreign Currencies (thousand) $ 164,466 41,200 155,697 41,840 Foreign Currencies (thousand) $ 184,442 19,801 168,856 47,177 Foreign Currencies (thousand) $ 228,457 22,843 180,944 22,468	Exchange Rate 31.65 (USD:NTD) 7.0074 (USD:RMB) 31.65 (USD:NTD) 7.0074 (USD:RMB) Exchange Rate 30.705 (USD:NTD) 7.0827 (USD:RMB) 30.705 (USD:NTD) 7.0827 (USD:RMB) Exchange Rate 32.27 (USD:NTD) 7.1798 (USD:RMB) 32.27 (USD:NTD) 7.1798 (USD:RMB)	NT$(thousand)
			$ 5,205,354 1,303,990 4,927,810 1,324,237 NT$(thousand)
			$ 5,663,308 607,980 5,184,737 1,448,583 NT$(thousand)
			$ 7,372,310 737,130 5,839,061 725,030

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

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34. ADDITIONAL DISCLOSURES

a. Information about significant transactions and investees:

1) Financings provided to others: See Table 1 attached;
2) Endorsement/guarantee provided: See Table 2 attached;
3) Marketable securities held (excluding investments in subsidiaries and associates): See Table 3 attached;
4) Marketable securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the paid-in capital: None;
5) Acquisition of individual real estate property at costs of at least NT$300 million or 20% of the paid-in capital: None;
6) Disposal of individual real estate property 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;
10) Others: The business relationship between the parent and the subsidiaries and significant transactions between them: See Table 4 attached;
b. Names, locations, and related information of investees over which the Company exercises significant influence (excluding information on investment in mainland China): See Table 5 attached;
c. Information on investment 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 6 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: See Table 4 attached.
d. Information of major shareholders
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.

35. SEGMENT INFORMATION

Segment information is provided to business decision makers to allocate resources and assesse segment performance. The Company operates the business of the sales and development of Human -Machine Interface solutions related IC under a single operation unit. Thus, the information of separate operating segments is not applicable.

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

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TABLE 1

FocalTech Systems Co., Ltd. and Subsidiaries FINANCINGS PROVIDED TO OTHERS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024

(Amount in thousand; 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	$ 949,500 (USD 30,000)	$ 949,500 (USD 30,000)	$ -	-	The need for short-term financing	$ -	Operating capital	$ -	-	-	$ 2,350,418	$ 2,350,418	Note 3
1	FocalTech Systems, Ltd.	FocalTech Electronics (Shenzhen) Co.,Ltd.	Other receivables from related parties	Yes	316,500 (USD 10,000)	316,500 (USD 10,000)	-	-	The need for short-term financing	-	Operating capital	-	-	-	2,350,418	2,350,418	Note 3
2	FocalTech Electronics, Ltd.	FocalTech Electronics (Shenzhen) Co.,Ltd.	Other receivables from related parties	Yes	791,250 (USD 25,000)	791,250 (USD 25,000)	-	-	The need for short-term financing	-	Operating capital	-	-	-	1,598,517	1,598,517	Note 3
3	FocalTech Electronics (Shenzhen) Co.,Ltd.	Chengdu FocalTech Systems Co., Ltd.	Other receivables from related parties	Yes	158,250 (USD 5,000)	158,250 (USD 5,000)	-	-	The need for short-term financing	-	Operating capital	-	-	-	535,143	535,143	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: 31.65 NTD as of September 30, 2024.

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

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TABLE 2

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024

FocalTech Systems Co., Ltd. and Subsidiaries

(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	Ending Balance	Amount Actually Drawn	Amount of Endorsement/ Guarantee Collateralized by Property	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.	$ 4,833,260 4,833,260 4,833,260	$ 854,550 ( USD 27,000 ) 1,234,350 ( USD 39,000 ) 316,500 ( USD 10,000 )	$ 854,550 ( USD 27,000 ) 1,234,350 ( USD 39,000 ) 316,500 ( USD 10,000 )	$ 73,324 14,704	$	8.75% 12.64% 3.24%	$ 4,833,260 4,833,260 4,833,260	Yes Yes Yes	No No No	Yes Yes Yes	(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 14,704 thousand. Note 4: Using the exchange rate of 1 USD: 31.65 NTD as of September 30, 2024.

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

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TABLE 3

FocalTech Systems Co., Ltd. and Subsidiaries MARKETABLE SECURITIES HELD SEPTEMBER 30, 2024

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

Held Company Name			Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account		September 30,2024	September 30,2024		Note
						Shares/Units	Carrying Value	Percentage of Ownership (%)	Fair Value
FocalTech Systems Co., Ltd. FocalTech Systems, Ltd. FocalTech Electronics, Ltd.		Stock Class 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 Fund Limited Partnership CDIB-Innolux Fund II Limited Partnership Cathay Private Equity Smart Tech Limited Partnership Fixed income bonds First Commercial Bank, Ltd. Maturity Date`：`December 08, 2026 Structured product CLN Link HSBC SUB CLN Link Barclays SUB Beneficiary certificate UBS Monetary Fund Government bonds United States Department of The Treasury Maturity Date`：`October 03,2024 ~ September 04, 2025 Fixed income bonds Bank of China Limited Maturity Date`：`November 13, 2024 Industrial and Commercial Bank of China Limited Maturity Date`：`September 21, 2025 Privately Offered Fund TIEF Fund, L.P.		- - - - - - - - - - - - - -	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 Financial assets at fair value through profit or loss - non current `〃` Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - non current Financial assets at fair value through profit or loss - non current	170,000 - - - - - - - - - -	NT$ 10,200 NT$ 32,044 NT$ 27,628 NT$ 64,820 NT$ 20,699 NT$ 90,562 NT$ 9,740 NT$ 62,561 ( USD 1,977 ) NT$ 62,961 ( USD 1,989 ) NT$ 5,492 ( USD 173 ) NT$ 262,936 ( USD 8,308 ) NT$ 134,432 ( USD 4,247 ) NT$ 53,356 ( USD 1,654 ) NT$ 25,589 ( USD 808 )	0.03 0.96 0.66 4.37 1.93 22.16 4.83	NT$ 10,200 NT$ 32,044 NT$ 27,628 NT$ 64,820 NT$ 20,699 NT$ 90,562 NT$ 9,740 NT$ 62,561 ( USD 1,977 ) NT$ 62,961 ( USD 1,989 ) NT$ 5,492 ( USD 173 ) NT$ 262,936 ( USD 8,308 ) NT$ 134,432 ( USD 4,247 ) NT$ 53,356 ( USD 1,654 ) NT$ 25,589 ( USD 808 )	- - - - - - - - - - - - - -

Note 1 ： The percentage of ownership for preferred stock is the held shares divided by the number of outstanding shares. Note 2 ： Using the exchange rate of 1 USD: 31.65 NTD as of September 30, 2024.

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

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TABLE 4

FocalTech Systems Co., Ltd. and Subsidiaries

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024

(Amount in Thousands of New Taiwan Dollars)

No. (Note 1)	Company Name	Counterparty	Nature of Relationship (Note 3)		Intercompany Transactions	Intercompany Transactions
				Financial Statements Item	Amount (Note 4)	Terms	Percentage of Consolidated Net Revenue or Total Assets
0 0 1 2 3 3 3	FocalTech Systems Co., Ltd. FocalTech Systems Co., Ltd. FocalTech Electronics, Ltd. FocalTech Systems, Ltd FocalTech Electronics (Shenzhen) Co., Ltd. FocalTech Electronics (Shenzhen) Co., Ltd. FocalTech Electronics (Shenzhen) Co., Ltd.	FocalTech Electronics, Ltd. FocalTech Electronics (Shenzhen) Co., Ltd. FocalTech Electronics (Shenzhen) Co., Ltd. FocalTech Electronics (Shenzhen) Co., Ltd. Hefei PineTech Electronics Co., Ltd. FocalTech Systems (Shenzhen) Co., Ltd. FocalTech Electronics (Shanghai) Co., Ltd.	1 1 2 2 2 2 2 2 2 2	Accounts Payables Cost of revenue Other Receivables Other Receivables Accounts Payables Research and development expenses Other Prepayment Research and development expenses Other Payables Selling and marketing expenses	$ 470,248 36,016 162,611 569,985 312,747 72,739 450,947 405,579 27,042 80,159	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2	2.45% 0.35% 0.85% 2.97% 1.63% 0.70% 2.35% 3.92% 0.14% 0.77%

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: The services of production management, sales, research and development are provided between the Company and its subsidiaries. For other intercompany transactions, prices and terms are determined in accordance with mutual agreements. Note 3: The transaction relationships with the counterparties are as follows:

1) The Company to the consolidated subsidiary.

2) The consolidated subsidiary to another consolidated subsidiary.

Note 4: Balances, transactions, revenue and expenses between the Company and its subsidiaries have been eliminated on consolidation.

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

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TABLE 5

FocalTech Systems Co., Ltd. and Subsidiaries

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 NINE MONTHS ENDED SEPTEMBER 30, 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 ofSeptember30,2024	Balance as ofSeptember30,2024	Balance as ofSeptember30,2024	Net Income (Losses) of the Investee (Note 4)	Share of Profits/Losses of Investee (Note 4)	Note
				September 30,2024 (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$ 3,165 (USD 100 ) NT$ 85,350 NT$ 238,821 NT$ 11,990 NT$ 3,237,569 (USD 102,293 ) NT$ 739,029 (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$ 2,469,462 (USD 78,024 ) NT$ 1,598,517 (USD 50,506 ) NT$ 206 (USD 7 ) NT$ 1,293 (USD 41 ) NT$ 845 NT$ 2,272,801 (USD 71,810 ) NT$ 2,350,418 (USD 74,263 ) NT$ 88,257 (USD 2,789)	NT$ 46,610 (USD 1,455) NT$ 322,060 (USD 10,054) (NT$ 15,759 ) (USD 492 ) (NT$ 15,759 ) (USD 492 ) (NT$ 15,505 ) NT$ 46,790 (USD 1,461 ) NT$ 60,588 (USD 1,891 ) (NT$ 5,070 ) (USD 158 )	NT$ 46,610 (USD 1,455) NT$ 322,060 (USD 10,054) (NT$ 1,440 ) (USD 45 ) (NT$ 9,031 ) (USD 282 ) (NT$ 15,505 ) NT$ 46,790 (USD 1,461 ) NT$ 60,588 (USD 1,891 ) (NT$ 5,070 ) (USD 158 )	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: 31.65 NTD as of September 30, 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: 32.034 NTD for the nine months ended September 30, 2024.

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

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TABLE 6

FocalTech Systems Co., Ltd. and Subsidiaries INFORMATION ON INVESTMENT IN MAINLAND CHINA FOR THE NINE MONTHS ENDED SEPTEMBER 30, 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 September 30, 2024 (Note 1)	Net income (loss) of investee company (Note 2)	Percentage of ownership	Investment income (loss) recognized (Note 2)	Carrying amount as of September 30, 2024 (Note 1)	Accumulated inward remittance of earnings as of September 30, 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 affiliates’ 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$ 91,785 (USD 2,900) NT$ 294,345 (USD 9,300) NT$ 1,171,055 (USD 37,000) NT$ 135,498 (RMB 30,000) NT$ 2,258 (RMB 500)	(Note 3 and 4) (Note 3) (Note 4) (Note 4) (Note 4)	NT$ 31,650 (USD 1,000) NT$ 31,650 (USD 1,000) - - -	$ - - - - -	$ - - - - -	NT$ 31,650 (USD 1,000) NT$ 31,650 (USD 1,000) - - -	NT$ 3,124 (USD 98) NT$ 321,655 (USD 10,041) (NT$ 36,980) (USD 1,154) NT$ 20,991 (USD 655) (NT$ 8) (USD -)	100% 100% 100% 100% 100%	NT$ 3,124 (USD 98) NT$ 321,655 (USD 10,041) (NT$ 36,980) (USD 1,154) NT$ 20,991 (USD 655) (NT$ 8) (USD -)	NT$ 71,289 (USD 2,252) NT$ 535,143 (USD 16,908) NT$ 621,566 (USD 19,639) NT$ 256,137 (USD 8,093) NT$ 2,250 (USD 71)	$ - - - - -	- - - - -

Accumulated Investment in Mainland China as of September30,2024	Investment Amounts Authorized by Investment Commission,MOEA	Upper Limit on Investment
$63,300 (USD2,000)	$1,962,269 (USD61,367)	$5,859,912

Note 1: Using the exchange rate of 1 USD: 31.65 NTD and 1 RMB :4.5166 NTD as of September 30, 2024. Note 2: Using the average exchange rate of 1 USD: 32.034 NTD and 1 RMB :4.5064 NTD for nine months ended September 30, 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.

-- 42 --

AI assistant

FocalTech — Interim / Quarterly Report 2024

52342_rns_2024-11-14_4beaeb9f-fa65-4b6b-ac14-ec5905af799c.pdf

FocalTech Systems Co., Ltd. and Subsidiaries

Consolidated Financial Statements for the Nine Months Ended September 30, 2024 and 2023

Notice to Readers

INDEPENDENT AUDITORS’ REVIEW REPORT

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

FOCALTECH SYSTEMS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

FOCALTECH SYSTEMS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOCALTECH SYSTEMS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

FOCALTECH SYSTEMS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

FOCALTECH SYSTEMS CO., LTD. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1) Retirement benefits

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

September 30, 2024

11. INVENTORIES

12. SUBSIDIARIES

13. PROPERTY, PLANT AND EQUIPMENT

14. GOODWILL

15. OTHER INTANGIBLE ASSETS

16. REFUNDABLE DEPOSITS

17. BORROWINGS

18. ACCOUNTS PAYABLES

19. OTHER PAYABLES

20. RETIREMENT BENEFIT

21. GUARANTEE DEPOSITS RECEIVED

22. EQUITY

b. Capital surplus

e. Treasury stock

g. Non-controlling interests

23. REVENUE

Contract balances

24. NET INCOME (LOSS)

Amount

25. INCOME TAXES

26. EARNINGS (LOSS) PER SHARE

Net Profit for the Period

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

27. SHARE-BASED PAYMENT ARRANGEMENTS

September 30, 2024

September 30, 2023

The 6th treasury stock transferred to employee program

2023 restricted stocks for employees plan

e. Cash-settled share-base payment agreements of subsidiaries

28. OPERATING LEASE ARRANGEMENTS

The Group as Lessee

29. FINANCIAL INSTRUMENTS

September 30, 2024

1) Market risk

Sensitivity analysis

b) Interest rate risk

Sensitivity analysis

2) Credit risk

Credit risk management for investments in debt instruments

3) Liquidity risk

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

September 30, 2024

30. TRANSACTIONS WITH RELATED PARTIES

31. PLEDGED ASSETS

32. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACTUAL COMMITMENTS

33. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

FocalTech Interim / Quarterly Report 2024