Stock Code: 3025

Loop Telecommunication International, Inc.

Parent Company Only Financial Statements for the Years Ended December 31, 2025 and 2024 and Independent Auditors’ Report

Address: 7F, No.8, Xin’an Road, Hsinchu Science Park
Tel: (03)5787696

§Table of Contents§

Item		Pages	Notes to the Financial Statements
I.	Cover	1	-
II.	Table of Contents	2	-
III.	Independent Auditors’ Report Translated from Chinese	3~7	-
IV.	Parent Company Only Balance Sheet	8	-
V.	Parent Company Only Statement of Comprehensive Income	9~10	-
VI.	Parent Company Only Statement of Changes in Equity	11	-
VII.	Parent Company Only Statement of Cash Flows	12~13	-
VIII.	Notes to the Parent-Only Financial Statements
	(I) Company History	14	1
	(II) Approval date and procedures of the financial statements	14	2
	(III) New standards, amendments and interpretations adopted:	14~16	3
	(IV) Summary of significant accounting policies	17~29	4
	(V) Significant accounting judgments and key source of uncertainties for estimations and assumptions	29	5
	(VI) Explanation of significant accounting items	29~57	6 to 26
	(VII) Related party transactions	57~59	27
	(VIII) Pledged assets	59	28
	(IX) Significant contingent liabilities and unrecognized contractual commitments	-	-
	(X) Losses due to severe disasters	-	-
	(XI) Significant subsequent events	-	-
	(XII) Assets and liabilities in foreign currencies of material effects	59~60	29
	(XIII) Disclosures notes
	1. Information on significant transactions	61~62	30
	2. Information on investees	61, 63	30
	3. Information on investments in Mainland China	61, 64~65	30
	(XIV) Segment information	-	-
IX.	Breakdown of Major Accounting Items	66~77	-

Independent Auditors' Report Translated from Chinese

Opinion

We have audited the accompanying parent company only balance sheet of Loop Telecommunication International, Inc. (the “Company”) as of December 31, 2025 and 2024, and the parent company only statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the parent company only financial statements (including a summary of significant accounting policies).

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

Basis for opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements of the Company for the

year ended December 31, 2025. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters for the Company’s parent company only financial statements for the year ended December 31, 2025 is stated as follows:

Authenticity of revenue recognition

The consolidated operating revenue of Loop Telecommunication International, Inc. (the "Company") for the year 2025 was NT$676,196 thousand. For accounting policies and information related to revenue recognition, please refer to Notes 4 and 21 to the consolidated financial statements. The Company’s major revenue sources include the production and sales of user remote line disconnectors, high-speed network access equipment, smart network resource management selectors, and other relevant products. As revenue has material effects on the 2025 consolidated financial statements, and there may be risks regarding the authenticity of transactions with specific customers whose revenue has grown significantly, we have identified revenue recognition as a key audit matter.
In response to the abovementioned risks, we have performed the following audit procedures:

(1) Understand and test the relevant internal control systems and procedures related to the cycle of sales transactions to identify and evaluate the effectiveness of the internal control procedures involved in conducting sales transactions.

(2) Sample and test the relevant documents and collection status of sales revenue from specific customers to verify that the transactions have indeed occurred, and check whether there are any irregularities between the sales counterparties and the remitting parties.

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

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

In preparing the parent company only financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management

either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including members of the Audit Committee, are responsible for overseeing the Company's financial reporting process.

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

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

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

Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required
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to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the parent company only financial statements (including the disclosures) and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinions on the parent company only financial statements. We are responsible for the direction, supervision and performance of the company audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements for the year ended December 31, 2025 and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this auditors’ report are Wen, Chih-Yuan and Yeh, Tung-Hui.

Deloitte & Touche
Taiwan, Taiwan
Republic of China

March 30, 2026

Notice to Readers

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

For the convenience of readers, the independent auditors’ review report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ review report and consolidated financial statements shall prevail.

Loop Telecommunication International, Inc.

Parent Company Only Balance Sheet

December 31, 2025 and 2024

(In Thousands of New Taiwan Dollars)

Assets	December 31, 2025		December 31, 2024
	Amount	%	Amount	%
Current assets
Cash and cash equivalents (Notes 4, 6 and 28)	$ 294,739	23	$ 236,413	22
Financial assets at fair value through profit or loss - current (Notes 4 and 7)	21,938	2	17,178	2
Financial assets at amortized cost - current (Notes 4 and 8)	33,599	3	1,560	-
Contract assets - current (Notes 4 and 21)	8,366	1	9,593	1
Net accounts receivable (Notes 4, 9, and 21)	288,441	22	146,602	14
Accounts receivable - related party (Notes 4, 21, and 27)	74	-	1,963	-
Other receivables (Notes 4, 9 and 27)	2,525	-	1,019	-
Inventories (Notes 4, 5, and 10)	362,244	28	356,762	33
Other current assets (Notes 16 and 27)	9,137	1	15,670	1
Total current assets	1,021,063	80	786,760	73
Non-current assets
Financial assets at amortized cost - non-current (Notes 4, 8, and 28)	10,500	1	10,500	1
Investments accounted for using equity method (Notes 4 and 11)	1,156	-	3,465	-
Property, plant and equipment (Notes 4, 12, and 28)	139,016	11	149,859	14
Right-of-use assets (Notes 4 and 13)	31,891	3	34,136	3
Investment property (Notes 4, 14, and 28)	27,351	2	28,538	3
Intangible assets (Notes 4 and 15)	1,046	-	1,855	-
Deferred income tax assets (Notes 4 and 23)	7,350	1	6,870	1
Refundable deposits (Note 28)	18,715	1	43,765	4
Net defined benefit assets (Notes 4 and 19)	18,407	1	10,476	1
Total non-current assets	255,432	20	289,464	27
Total assets	$ 1,276,495	100	$ 1,076,224	100
Financial liabilities and equity
Current liabilities
Short-term borrowings (Notes 17)	$ 135,000	11	$ -	-
Contract liabilities - current (Notes 4 and 21)	11,822	1	4,596	-
Accounts payable	89,646	7	34,614	3
Accounts payable - related party (Note 27)	1,057	-	5,652	1
Other payables (Note 18)	70,391	5	74,921	7
Income tax payable (Notes 4 and 23)	32,247	3	19,779	2
Lease liabilities - current (Notes 4 and 13)	2,065	-	2,002	-
Other current liabilities (Note 18)	5,455	-	8,085	1
Total current liabilities	347,683	27	149,649	14
Non-current liabilities
Deferred income tax liabilities (Notes 4 and 23)	1,160	-	2,726	-
Lease liabilities - non-current (Notes 4 and 13)	38,199	3	40,264	4
Guarantee deposits	1,185	-	1,597	-
Other non-current liabilities (Note 18)	1,924	1	6,772	1
Total non-current liabilities	42,468	4	51,359	5
Total liabilities	390,151	31	201,008	19
Equity (Note 20)
Common stock	567,365	44	567,365	52
Capital surplus	43,953	3	43,953	4
Retained earnings
Legal reserve	68,294	6	46,947	5
Special reserve	2,648	-	2,751	-
Unappropriated earnings	206,937	16	216,848	20
Total retained earnings	277,879	22	266,546	25
Other equity	(2,853)	-	(2,648)	-
Total equity	886,344	69	875,216	81
Total Liabilities and Equity	$ 1,276,495	100	$ 1,076,224	100

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

Loop Telecommunication International, Inc.
Parent Company Only Statement of Comprehensive Income
For the years ended December 31, 2025 and 2024
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	2025		2024
	Amount	%	Amount	%
Net revenue (Notes 4, 21, and 27)	$ 676,196	100	$ 650,733	100
Cost of revenue (Notes 4, 22, and 27)	218,196	32	210,868	33
Gross profit	458,000	68	439,865	67
Realized gross profit	458,000	68	439,865	67
Operating expenses (Note 22)
Sales and marketing expenses	44,203	7	44,771	7
General and administrative expenses	48,054	7	46,252	7
Research and development expenses	167,185	25	158,505	24
Subtotal	259,442	39	249,528	38
Income from operations	198,558	29	190,337	29
Non-revenue and expenses (Note 22)
Interest income	7,113	1	11,897	2
Other income	13,436	2	15,086	2
Other gains and losses	10,249	1	23,547	4
Finance costs	( 2,342)	-	( 1,896)	-
Share of losses of subsidiaries accounted for using equity method (Note 4)	( 2,104)	-	2,797	-
Total non- operating income and expenses	26,352	4	51,431	8

(Cont'd)

	2025		2024
	Amount	%	Amount	%
Income before income tax	$ 224,910	33	$ 241,768	37
Income tax expenses (Notes 4 and 23)	29,305	4	32,711	5
Net income	195,605	29	209,057	32
Other comprehensive income
(Notes 4, 19, and 20)
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit obligation	2,958	-	4,419	1
Items that may be reclassified subsequently to profit or loss
Exchange differences arising on translation of foreign operations	( 205 )	-	103	-
Other comprehensive income, net of income tax	2,753	-	4,522	1
Total comprehensive income	$ 198,358	29	$ 213,579	33
Earnings per share (Note 24)
Basic	$ 3.45		$ 3.68
Diluted	$ 3.42		$ 3.66

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

Loop Telecommunication International, Inc.
Parent Company Only Statement of Changes in Equity
For the years ended December 31, 2025 and 2024

(In Thousands of New Taiwan Dollars; unless specified otherwise)

	Capital stock		Capital surplus	Retained earnings			Other Equity
	Shares (1,000 shares)	Amount		Legal reserve	Special reserve	Unappropriated earnings	Exchange differences arising on translation of foreign operations	Total equity
Balance on January 1, 2024	56,737	$ 567,365	$ 43,953	$ 26,563	$ 2,786	$ 205,278	($ 2,751)	$ 843,194
Earnings distribution and appropriation in 2023
Legal reserve	-	-	-	20,384	-	( 20,384)	-	-
Special reserve	-	-	-	-	( 35)	35	-	-
Cash dividends of shareholders	-	-	-	-	-	( 181,557)	-	( 181,557)
Net income in 2024	-	-	-	-	-	209,057	-	209,057
Other comprehensive income, net of income tax in 2024	-	-	-	-	-	4,419	103	4,522
Total comprehensive income in 2024	-	-	-	-	-	213,476	103	213,579
Balance of December 31, 2024	56,737	567,365	43,953	46,947	2,751	216,848	( 2,648)	875,216
Earnings distribution and appropriation in 2024
Legal reserve	-	-	-	21,347	-	( 21,347)	-	-
Special reserve	-	-	-	-	( 103)	103	-	-
Cash dividends of shareholders	-	-	-	-	-	( 187,230)	-	( 187,230)
Net income in 2025	-	-	-	-	-	195,605	-	195,605
Other comprehensive income, net of income tax in 2025	-	-	-	-	-	2,958	( 205)	2,753
Total comprehensive income in 2025	-	-	-	-	-	198,563	( 205)	198,358
Balance of December 31, 2025	56,737	$ 567,365	$ 43,953	$ 68,294	$ 2,648	$ 206,937	($ 2,853)	$ 886,344

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

Loop Telecommunication International, Inc.
Parent Company Only Statement of Cash Flows
For the years ended December 31, 2025 and 2024
(In Thousands of New Taiwan Dollars)

	2025	2024
Cash flows from operating activities
Income before income tax	$ 224,910	$ 241,768
Item of profit or loss:
Depreciation expense	19,004	18,151
Amortization expense	2,078	3,025
Net losses (gains) on financial assets at fair value through profit or loss	( 7,637)	( 1,884)
Finance costs	2,342	1,896
Interest income	( 7,113)	( 11,897)
Dividend income	( 212)	( 47)
Losses of inventory write-down or obsolescence	2,401	2,152
Share of losses of subsidiaries accounted for using the equity method	2,104	( 2,797)
Net losses (gains) on foreign exchange	7,831	( 8,869)
Changes in operating assets and liabilities
Contract assets	1,227	( 9,360)
Accounts receivable (including those from related parties)	( 139,251)	85,042
Other receivables	( 1,043)	( 63)
Inventories	( 7,883)	13,953
Other current assets	6,533	( 2,940)
Contract liabilities	7,226	35
Accounts payable (including those to related parties)	50,121	413
Other payables	302	( 3,891)
Other current liabilities	( 2,630)	( 1,589)
Net defined benefit liability	( 4,973)	( 4,630)
Other non-current liabilities	( 4,848)	( 7,470)
Cash from operations	150,489	310,998
Interest paid	( 2,315)	( 1,647)
Income tax paid	( 18,883)	( 60,006)
Net cash generated by operating activities	129,291	249,345

(Cont'd)

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(Cont'd)

	2025	2024
Cash flows from investing activities
Acquisition of financial assets at amortized cost	($ 134,135)	($ 751,059)
Disposal of financial assets at amortized cost	101,560	854,224
Acquisition of financial assets at fair value through profit or loss	( 7,726)	( 4,753)
Disposal of financial assets at fair value through profit or loss	10,603	-
Acquisition of property, plant and equipment	( 9,583)	( 8,978)
Refundable deposits (paid) refunded	25,050	( 10,854)
Acquisition of intangible assets	( 1,269)	( 320)
Interest received	6,650	12,776
Dividends received	212	47
Net cash used in investing activities	( 8,638)	91,083
Cash flows from financing activities
Increasing in short-term debt	135,000	-
Decreasing in short-term debt	-	( 192,000)
Guarantee deposits received (refunded)	( 412)	104
Repayment for the principal of lease liabilities	( 2,002)	( 2,256)
Cash dividends paid	( 187,230)	( 181,557)
Net cash used in financing activities	( 54,644)	( 375,709)
Effect of exchange rate changes on cash and cash equivalents	( 7,683)	7,288
Net increase (decrease) in cash and cash equivalents during the year	58,326	( 27,993)
Cash and cash equivalents, beginning of year	236,413	264,406
Cash and cash equivalents, end of year	$ 294,739	$ 236,413

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

Loop Telecommunication International, Inc.
Notes to the Parent-Only Financial Statements
For the years ended December 31, 2025 and 2024
((In Thousands of New Taiwan Dollars; unless specified otherwise))

I. Company History

Loop Telecommunication International, Inc. (the "Company") was established in Hsinchu Science Park in December 1991 and commenced its operation in December of the same year. The Company primarily engages in the R&D, development, production, manufacturing, and sales of user remote line disconnectors, protectors and their components, line reactors and their components, subtitle phones and their components, and smart network resource management multiplexers.

Shares of the Company were listed on Taipei Stock Exchange for trading in February 2001 and transferred to Taiwan Stock Exchange for listing and trading in August 2002.

The parent company's only financial statements are presented in New Taiwan Dollars (NTD), which is the Company's functional currency.

II. Approval date and procedures of the financial statements

The parent company only financial statements were approved by the Board on March 11, 2026.

III. New standards, amendments and interpretations adopted:

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

IAS 21 "Lack of Exchangeability"

Amendments to IAS 21 "Lack of Exchangeability" did not cause significant change to the Company's accounting policies.

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(II) IFRSs endorsed by the FSC that are applicable in 2026

New, revised or amended standards and interpretations	Effective date issued by IASB
Amendments to IFRS 9 and IFRS 7 “Amendments to the Classification and Measurement of Financial Instruments” – the amendments to the application guidance of classification of financial assets	January 1, 2026
Amendments to IFRS 9 and IFRS 7 “Amendments to the Classification and Measurement of Financial Instruments”	January 1, 2026
“Annual Improvements to IFRS Accounting Standards – Volume 11”	January 1, 2026
IFRS 17 “Insurance Contracts” (including the 2020 and 2021 amendments)	January 1, 2023

Amendments to IFRS 9 and IFRS 7 “Amendments to the Classification and Measurement of Financial Instruments”

(1) Amendments to the application guidance on the derecognition of financial liabilities

The amendments clarify that a financial liability is generally derecognized on the settlement date. However, when an entity uses an electronic payment system to settle a financial liability in cash, it may elect to derecognize the financial liability before the settlement date if the following conditions are met:

The entity does not have the practical ability to withdraw, stop, or cancel the payment instruction;
The entity does not have the practical ability to access the cash to be used for settlement as a result of the payment instruction; and
The settlement risk associated with the electronic payment system is not significant.

The Company shall apply these amendments retrospectively without restating comparative periods, with the cumulative effect of initial application recognized on the date of initial application. However, an entity may elect to restate comparative periods if it can do so without the use of hindsight.

Except for the aforementioned impact, as of the date the consolidated financial statements were authorized for issue, the Company has assessed that the amendments to other standards will not have a material impact on its financial position and financial performance.

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(III) The IFRSs in issue but not yet endorsed and issued into effect by the FSC

New, revised or amended standards and interpretations	Effective date issued by IASB (Note 1)
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture”	To be determined by IASB
IFRS 18 “Presentation and Disclosures in Financial Statements”	January 1, 2027 (Note 2)
IFRS 19“Subsidiaries without Public Accountability: Disclosures”	January 1, 2027
Amendments to IAS 21 “Translation to a Hyperinflationary Presentation Currency	January 1, 2027

Note 1: Unless otherwise specified, the above newly issued, amended or revised standards or interpretations are effective for annual reporting periods beginning on or after their respective effective dates.

Note 2: On September 25, 2025, the FSC announced that IFRS 18 will take effect starting from January 1, 2028. Domestic entities could elect to apply IFRS 18 for an earlier period after the endorsement of IFRS 18 by the FSC.

IFRS 18 “Presentation and Disclosure in Financial Statements”

IFRS 18 will supersede IAS 1“ Presentation of Financial Statements”. The main changes comprise:

The Company shall assess whether its primary operating activities include investing in specific types of assets and providing financing to customers, and accordingly, items of income and expenses in the statement of profit or loss shall be classified into the operating, investing, financing, income taxes and discontinued operations categories.
Items of income and expenses included in the statement of profit or loss shall be classified into the operating, investing, financing, income taxes and discontinued operations categories.
The statement of profit or loss shall present totals and subtotals for operating profit or loss, profit or loss before financing and income taxes and profit or loss.
Provides guidance to enhance the requirements of aggregation and disaggregation: The Company shall identify the assets, liabilities, equity,
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income, expenses and cash flows that arise from individual transactions or other events and shall classify and aggregate them into groups based on shared characteristics, so as to result in the presentation in the primary financial statements of line items that have at least one similar characteristic. The Company shall disaggregate items with dissimilar characteristics in the primary financial statements and in the notes. The Company labels items as "other" only if it cannot find a more informative label.

In addition, the following consequential amendments have been made to IAS 7 "Statement of Cash Flows":

The Company shall use operating profit or loss as the starting point when presenting cash flows from operating activities under the indirect method.
Interest and dividends received by the Company shall be classified as investing activities, while interest and dividends paid shall be classified as financing activities. However, if, after assessment, the Company has a specific main operating activity, it shall determine how to classify dividends received, interest received and interest paid in the statement of cash flows by referring to how it classifies dividend income, interest income and interest expense in the statement of profit or loss. The total of each of these cash flows shall be classified in a single category in the statement of cash flows.

Except for the above impact, as of the date the accompanying consolidated financial statements were issued, the Company continues in evaluating other impacts of the above amended standards and on its financial position and financial performance from the initial adoption of the aforementioned standards or interpretations and related applicable period. The related impact will be disclosed when the Company completes its evaluation.

IV. Summary of significant accounting policies

(I) Statement of compliance

The parent company only financial statements were prepared according to the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(II) Basis of preparation

Except for financial instruments at fair value and net defined benefit liabilities recognized based on the present value of defined benefit obligations less the fair

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value of plan assets, the parent company only financial statements are prepared based on historical costs.

The measurement of fair value is divided into levels 1 to 3 based on the observable level and significance of relevant inputs:

Level 1 input: Refer to quotations (unadjusted) of equivalent assets or liabilities available in the active market on the measurement date.
Level 2 input: Refer to direct (i.e., prices) or indirect (i.e., inferred from prices) observable inputs of assets or liabilities other than level 1 quotations
Level 3 input: Refer to unobservable inputs of assets or liabilities.

When preparing the parent company only financial statements, the Company adopts the equity method for the treatment of the subsidiaries it invested investment. To allow the profit or loss of the year, other comprehensive income, and equity in the parent company only financial statements to be equivalent to profit or loss of the year, other comprehensive income, and equity attributable to owners of the Company in the Company's consolidated financial statements, "investments accounted for using the equity method," "share of profit or loss of subsidiaries certain accounting differences accounted for using the equity method," and relevant equity items are adjusted under the parent company only basis and consolidation basis.

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

Current assets include:

Assets held primarily for the purpose of trading;
Assets expected to be realized within 12 months after the balance sheet date; and
Cash and cash equivalents (excluding those restricted for being used for exchange or settling liabilities over 12 months after the balance sheet date).

Current liabilities include:

Liabilities held primarily for the purpose of trading;
Liabilities expected to be settled within 12 months after the reporting period (they shall be current liabilities even if a long-term refinancing or re-arranged payment agreement is entered into after the balance sheet date and before the approval of the publication of the financial statements); and
Liabilities with a settlement deadline that cannot be unconditionally deferred to at least 12 months after the reporting period. However, terms of a liability that
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could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.

Liabilities that are not current assets or current liabilities described above are non-current assets and non-current liabilities.

(IV) Foreign currency

When preparing the parent company only financial statements, transactions in currencies other than the functional currency of the Company (foreign currencies) are translated into functional currencies at the exchange rate on the transaction date for records.

Monetary items in foreign currencies are translated at the closing exchange rate on each balance sheet date. Exchange differences arising from the delivery of monetary items or the translation of monetary items are recognized in profit or loss in the year of occurrence.

Non-monetary items in foreign currencies at fair value are translated at the exchange rate on the date determining the fair value, and the exchange difference arising thereof is presented as profit or loss of the period; however, for changes in fair value recognized in other comprehensive income, exchange difference arising thereof shall be recognized in other comprehensive income.

Non-monetary items in foreign currencies at historical costs shall be translated at the exchange rate on the transaction date without re-translation.

When preparing the parent company only financial statements, assets and liabilities of the Company’s foreign operations (including subsidiaries in different countries or using currencies different from the Company) are translated into NTD at the exchange rate on each balance sheet date. Items of income and expenses are translated at the average exchange rate of the period, and the exchange difference arising thereof is recognized in other comprehensive income.

(V) Inventory

Inventory includes raw materials, work-in-progress, and finished goods. Inventories are stated at the lower of cost or net realizable value. Except for inventories of the same category, the comparison of the lower of cost and net realizable value is made on an item-by-item basis. The net realizable value represents the estimated selling price in the ordinary course of business, less all estimated costs of completion and necessary selling expenses. The weighted average method is adopted for the calculation of the costs of inventory.

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(VI) Investments in subsidiaries

The Company adopts the equity method for treating investments in subsidiaries.

Subsidiaries are entities the Company has control over.

Under the equity method, investments are initially recognized at costs, and the carrying amount after the acquisition increases/decreases in the share of profit or loss of subsidiaries and other comprehensive income and profit allocation entitled to the Company. In addition, changes in other equity of subsidiaries entitled to the Company are recognized based on the shareholding ratio.

Changes in the Company's ownership interest in a subsidiary that do not result in loss of control are treated as equity transactions. The carrying amount of investments and the differences between the fair value of considerations paid or received are directly recognized as equity.

If the share of loss of subsidiaries of the Company equals or exceeds the interests in such subsidiaries (including the carrying amount of subsidiaries under the equity method and other long-term equity of net investment components in such subsidiaries that is substantially attributable to the Company), it continues to recognize losses based on the shareholding ratio.

When assessing impairment, the Company considers cash-generating units and compares their recoverable amount and carrying amount for the financial statements as a whole. Subsequently, if the recoverable amount of assets increases, the reversal of impairment losses is recognized as gains; however, the carrying amount of assets after the reversal of impairment losses shall not exceed the carrying amount of such assets less amortization that should be provided when no impairment loss is recognized. The impairment losses attributable to goodwill may not be reversed subsequently.

Unrealized profit or loss of downstream transactions between the Company and subsidiaries are eliminated in the parent company only financial statements. Profit or loss arising from upstream and side stream transactions between the Company and subsidiaries are recognized in the parent company only financial statements within the scope that are not related to the interest of the Company in subsidiaries.

(VII) Property, plant and equipment

Property, plant and equipment are recognized at costs, and subsequently measured at the amount of costs less cumulative depreciation and cumulative impairment losses.

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The Company separately provides depreciation for each material component of property, plant and equipment within the useful life on a straight-line basis. The Company shall examine the estimated useful life, residual value, and depreciation method at least at the end of each year and postpone the effects of changes in applicable accounting estimation.

For the derecognition of property, plant and equipment, the difference between the net disposal considerations and the carrying amount of such assets is recognized in profit or loss.

(VIII) Investment properties

Investment properties refer to properties held for earning rental or capital appreciation or both (including right-of-use assets that fulfill the definition of investment properties).

Self-owned investment properties are initially measured at costs (including transaction costs), and subsequently measured at the amount of costs less cumulative depreciation and cumulative impairment losses.

Investment properties obtained via leases are initially measured at costs (including the initial measurement of lease liabilities), and subsequently measured at the amount of costs less cumulative depreciation and cumulative impairment losses, with adjustments made to the remeasurement of lease liabilities.

Depreciation is provided for all investment properties on a straight-line basis.

For properties under property, plant and equipment, their carrying amounts are transferred to investment properties upon the end of the self-use period.

For the derecognition of investment properties, the difference between the net disposal considerations and the carrying amount of such assets is recognized in profit or loss.

(IX) Intangible assets

Individually acquired

Intangible assets with definite useful life that are individually acquired are initially measured at costs, and subsequently measured at the amount of costs less cumulative amortization and cumulative impairment losses. Intangible assets are amortized on a straight-line basis within their useful life. The Company shall examine the estimated useful life, residual value, and amortization method at least at the end of each year and postpone the effects of

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changes in applicable accounting estimation. Intangible assets with indefinite useful life are presented at costs less cumulative impairment losses.

2. Derecognition

For the derecognition of intangible assets, the difference between the net disposal considerations and the carrying amount of such assets is recognized in profit or loss of the period.

(X) Impairment of property, plant and equipment, right-of-use assets, and intangible assets

The Company evaluates whether there is any indication of impairment of property, plant and equipment, right-of-use assets, and intangible assets on each balance sheet date. If any such indication of impairment exists, then the asset's recoverable amount is estimated. If the recoverable amount of the individual asset cannot be estimated, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The recoverable amount is the higher of fair value less disposal costs and its value in use. If the recoverable amount of individual assets or cash-generating units is lower than their carrying amounts, the carrying amount of such assets or cash-generating units shall be reduced to the recoverable amount, and the impairment losses shall be recognized in profit or loss.

If impairment losses are subsequently reversed, the carrying amount of such assets or cash-generating units shall be increased to the recoverable amount after amendments; however, the increased carrying amount shall not exceed the carrying amount determined of the carrying amount of such assets or cash-generating units if there were no impairment losses recognized in prior years (less amortization or depreciation). The reversal of impairment losses is recognized in profit or loss.

(XI) Financial instruments

Financial assets and financial liabilities are recognized in the parent company only balance sheet when the Company becomes a party to the contract terms of such instruments.

For the initial recognition of financial assets and financial liabilities, if financial assets or financial liabilities are not measured at fair value through profit or loss, they shall be measured at the carrying amount plus the transaction costs directly attributable to the acquisition or issuance of financial assets or financial liabilities. Transaction costs directly attributable to the acquisition or issuance of financial

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assets or financial liabilities at fair value through profit or loss are immediately recognized as profit or loss.

Financial assets

Regular transactions of financial assets are recognized and derecognized by adopting trade date accounting.

(1) Measurement category

On initial recognition, financial assets are classified as financial assets at amortized cost and financial assets at fair value through profit or loss.

A. Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets designated as measuring at value through profit or loss.

Financial assets at fair value through profit or loss are measured at fair value, and their d4idends and remeasurement gains or losses are recognized in other income and other gains and losses, respectively. For the determination method of fair value, please refer to Note 26.

B. Financial assets measured at amortized cost

If the financial assets of the Company concurrently fulfill both of the following conditions, they are recognized as financial assets at amortized costs:

a. Held under a certain operating model, and the purpose of the model if to hold financial assets to collect contract cash flows; and
b. Contract terms generate cash flows on particulate dates, and such cash flows are fully used to pay the principal and interests of the outstanding principal.

Financial assets at amortized costs (including cash and cash equivalents, accounts receivable and other receivables at amortized costs) are measured at a total carrying amount determined by using the effective interest method less amortized costs of any impairment losses after the initial recognition; any gains or losses on exchange gains are recognized in profit or loss.

Cash equivalents include short-term and high-liquidity time deposits within 3 months that can be converted to a fixed amount of

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cash at any time with minor risk of changes in value, and are used to satisfy short-term cash commitments instead of investments or other purposes.

Demand deposits subject to restrictions on use due to contracts with third parties are also classified as cash, unless such restrictions change the nature of the deposits so that they no longer meet the definition of cash. If the restrictions on the use of demand deposits extend beyond 12 months after the balance sheet date, the relevant amounts are classified as non-current assets.

(2) Impairment of financial assets and contract assets

The Company evaluates the impairment losses of financial assets at amortized costs (including accounts receivable) and contract assets based on ECL on each balance sheet date.

Loss allowance of accounts receivables and contract assets are recognized based on the lifetime ECL. For other financial assets, the Company evaluates whether credit risks have significantly increased after the initial recognition. If there is no significant increase, the Company recognizes loss allowance based on the 12-month ECL; if there is a significant increase, the Company recognizes loss allowance based on the lifetime ECL.

ECL is average credit loss using default risks as its weight. 12-month ECL refers to ECL that may arise from possible defaults of financial instruments within 12 months after the reporting date; lifetime ECL refers to ECL that may arise from all defaults of financial instruments during the lifetime.

The Company reduces the carrying amount via the allowance account for the impairment losses of all financial assets.

(3) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset become invalid, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred.

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For the derecognition of financial assets at amortized cost, the difference between the carrying amount and the considerations received is recognized in profit or loss.

Equity instruments

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

Equity instruments issued by the Company are recognized at the amount after deducting direct issuance costs from the obtained proceeds.

The retrieval of the Company’s own equity instruments is recognized and deducted under equity. Acquisition, disposals, issuance, or cancellation of the Company’s own equity instruments is not recognized in profit or loss.

Financial liabilities

(1) Subsequent measurement

All financial liabilities are measured at amortized costs by adopting the effective interest method.

(2) Derecognition of financial liabilities

For the derecognition of financial liabilities, the difference between the carrying amount and the considerations paid (including any non-cash assets transferred or liabilities assumed) is recognized as profit or loss.

(XII) Revenue recognition

After the Company has identified the performance obligations in a contract with a customer, it allocates the transaction price to each performance obligation and recognizes income when fulfilling each performance obligation.

Sales revenue of products

Sales revenue of products is primarily from the sales of optical transport network access equipment, U interface and MDSL interface multiplexer, network management systems, Internet access equipment, time-slot interchange, and other products. From the shipping of products sold, customers are entitled to pricing and use, hold the primary responsibilities for reselling, and assume the risks of product obsolescence. The Company recognizes income and contract assets at the point of time and transfers them to accounts receivable after the performance of the remaining obligations.

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Prepayments for the sales of products are recognized as contract liabilities before the products arrive.

Service revenue

Service revenue arises from educational training services and software/hardware installation services.

With educational training services and software/hardware installation services provided by the Company, customers also obtain and consume performance benefits. The Company recognizes relevant income based on the service provided by technicians over time during the contract period. It is agreed in contracts that customers shall make payments after the installation and acceptance; therefore, the Company recognizes contract assets when providing services and transfers them to accounts receivable upon the completion of installation and acceptance.

(XIII) Lease

The Company evaluates whether a contract is (or includes) a lease on the establishment date of the contract.

The Company as the lessor

All leases are classified as operating leases.

Under operating leases, lease payments are recognized as gains during the relevant leasing period on a straight-line basis.

Variable rentals not subject to the index or rate used in the lease agreement are recognized as gains during the period.

When a lease contains elements of land and building, the Company evaluates the classification of elements into financing lease or operating lease depending on whether the majority of all risks and compensation of the ownership of each element is transferred to the lessee. Lease payments are allocated to land and buildings based on the corresponding ratio of the fair value of leasing rights of land and buildings on the establishment date of the contract. If lease payments may be reliably allocated to such two elements, each element is treated based on the applicable lease classification. If lease payments may not be reliably allocated to such two elements, the overall lease is classified as a financing lease; however, if such two elements are evidently in line with the standards of operating leases, the overall lease is classified as an operating lease.

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The Company as the lessee

Except for lease payments of low-value target asset leases and short-term leases with recognition exemption applicable recognizing as expenses within the leasing period on a straight-line basis, right-of-use assets and lease liabilities are recognized for other leases on the commencement date of leases.

Right-of-use assets obtained via leases are initially measured at costs (including the initial measurement of lease liabilities), and subsequently measured at the amount of costs less cumulative depreciation and cumulative impairment losses, with adjustments made to the remeasurement of lease liabilities. Apart from those complying with the definition of investment properties, right-of-use assets are separately presented in the parent company only balance sheet. For the recognition and measurement of right-of-use assets fulfilling the definition of investment properties, please refer to the accounting policies of investment properties in (VIII).

Depreciation is provided for investment properties one a straight-line basis from the commencement date of the lease to the earlier of the expiry of the useful life or the expiry of the leasing period.

Lease liabilities are initially measured at the current value of lease payments (including fixed payments). If the implied interest rate of leases may be easily confirmed, lease payments are discounted by using the interest rate. If the interest rate may not be easily confirmed, the incremental borrowing interest rate of lessees is used.

Subsequently, lease liabilities are measured at amortized costs, and the interest expenses are allocated during the leasing period. If there is any change in lease payment in the future resulting from the index or rate used to determine the lease payment during the leasing period, the Company remeasures lease liabilities and makes adjustments to right-of-use assets accordingly; however, if the carrying amount of the right-of-use assets is reduced to nil, the remaining remeasurement amount shall be recognized in profit or loss. Lease liabilities are separately presented in the parent company only balance sheet.

(XIV) Borrowing costs

All borrowing costs are recognized as profit or loss during the period of occurrence.

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(XV) Employees benefits

Short-term employee benefits

Liabilities related to short-term employee benefits are measured at the non-discounted amount expected to be paid in exchange for employees’ services.

Post-employment benefits

Pension of the defined contribution plan is recognized as expenses based on the amount of pension to be contributed during the period in which employees provide their services.

The projected unit credit method is adopted for the actuarial valuation of defined benefit costs of the defined benefit plan (including service costs, net profit, and remeasurement). Current period service costs and net interest of net defined liabilities (assets) are recognized as employee benefit expenses upon occurrence. Remeasurements (including actuarial gains or losses and plan asset compensation after interest) are recognized in other comprehensive income and presented as other equity upon the occurrence and will not be reclassified to profit or loss subsequently.

Net defined benefit liabilities (assets) are the appropriation deficit (surplus) of the defined benefit plan. Net defined benefit assets shall not exceed the current value of the amount of appropriation refunded from the plan or the amount of appropriation that may be reduced in the future.

Severance benefits

The Company recognizes severance benefit liabilities when it can no longer cancel the offer of severance benefits or recognize relevant reorganization costs (the earlier).

(XVI) Income tax

Income tax expenses are the sum of income tax of the period and deferred income tax.

Income tax of the period

The additional income tax on undistributed earnings calculated based on the Income Tax Act of the Republic of China is recognized during the year of the shareholders’ resolution.

Adjustments to income taxes payable in prior years are recognized as income tax of the period.

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Deferred income tax

Deferred income tax is calculated based on the temporary difference between the carrying amount of assets and liabilities accounted for and the taxation basis for calculating income tax.

Deferred income tax liabilities shall be recognized for all taxable temporary differences, and deferred income tax assets are recognized when it is likely to offset the deductible temporary differences and income tax credits arising from R&D and other expenses.

Temporary taxable differences related to subsidiaries it invested are recognized as deferred income tax liabilities, except when the Company is able to control the point of time to reverse the temporary differences, and such temporary differences are not likely to be reversed in the foreseeable future. Deductible temporary differences related to such investments are only recognized as deferred income tax assets when it is likely that there will be sufficient taxable income to realize the temporary differences and when it is expected to be within the reversal scope in the foreseeable future.

The carrying amount of deferred income tax assets is re-examined on each balance sheet date, and the carrying amount is adjusted for those having no possible, sufficient taxable income to recover the entire or partial assets. For those not recognized as deferred income tax assets initially, the Company also re-examines them on each balance sheet date and increases their carrying amounts when it is likely to have taxable income to recover the entire or partial assets in the future.

Deferred income tax assets and liabilities are measured at the tax rate of the period in which the liabilities or assets are expected to be settled or realized, respectively, and the tax rate is based on the tax rate and tax laws enacted or substantially enacted on the balance sheet date. The measurement of deferred income tax reflects the tax consequences of the method for recovering or settling the carrying amount of its assets and liabilities by the Company after the balance sheet date.

Deferred income tax of the period

Deferred income tax of the period is recognized in profit or loss; however, deferred income tax related to items recognized in other comprehensive income

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or directly included in equity is recognized in other comprehensive income or directly included in equity, respectively.

V. Significant accounting judgments and key source of uncertainties for estimations and assumptions

When adopting accounting policies, the management shall make relevant judgments, estimations, and assumptions based on its historical experience and other relevant factors when it is difficult to obtain relevant information from other sources. Actual results may differ from these estimates.

Uncertainties for estimations and assumptions

(I) Inventory impairment

The net realizable value of inventories is estimated based on the balance of estimated selling price during the course of normal operations less the estimated costs required to be invested in until the completion and the costs required until the completion of sales; such estimates are evaluated based on the current market condition and the historical sales experience of similar products; any change in the market condition may materially affect the results of such estimates.

VI. Cash and cash equivalents

	December 31, 2025	December 31, 2024
Cash in hand and working capital	$ 244	$ 269
Bank checks and demand deposits	89,012	133,327
Cash equivalents (investments with an initial expiry within 3 months)
Time deposits with banks	205,483	102,817
	$294,739	$236,413

For information on the pledge of bank time deposits, please refer to Note 28.

The market interest range of deposits and time deposits with banks on the balance sheet date is as follows:

	December 31, 2025	December 31, 2024
Bank deposits	0.01%~0.705%	0.001%~0.95%
Time deposits	3.75%~4.06%	1.255%~4.57%

VII. Financial instruments at fair value through profit or loss

	December 31, 2025	December 31, 2024
Financial assets - current
Measured at fair value through profit or loss
- Domestic listed stocks	$ 21,938	$ 6,703
- Beneficiary certificates	-	10,475
	$ 21,938	$ 17,178

VIII. Financial assets at amortized costs

	December 31, 2025	December 31, 2024
Current
Time deposits with an initial expiry exceeding 3 months	$ 33,599	$ 1,560
Non-current
Time deposits pledged	$ 10,500	$ 10,500

(I) The interest rate range of time deposits with an initial expiry exceeding 3 months and time deposits pledged is as follows:

	December 31, 2025	December 31, 2024
Time deposits with an initial expiry exceeding 3 months	1.255%~3.75%	1.255%
Time deposits pledged	0.675%~1.690%	0.675%~1.690%

(II) For information on financial assets at amortized costs, please refer to Note 28.

IX. Accounts receivable and other receivables

	December 31, 2025	December 31, 2024
Accounts receivables
Financial assets measured at amortized cost
Total carrying amount	$289,006	$147,167
Less: loss allowance	(565)	(565)
	$288,441	$146,602
Other receivables
Others	$ 2,525	$ 1,019

The average credit period of product sales is settled by month or within 30 to 90 days from the issuance of the invoice; no interest is accrued for accounts receivable. The Company adopts the policy to engage in transactions with counterparties with equivalent ratings. For the credit rating information, the Company rated major

customers based on publicly available financial information and historical transaction records and allocated the total transaction amount to different customers with qualified credit ratings. In addition, it regularly reviews and approves the credit limits of counterparties to manage its credit exposure.

The Company recognizes loss allowance of accounts receivable based on lifetime expected credit loss. Lifetime expected credit loss is calculated by using the provision matrix, which considers the past default records and current financial positions of customers, industrial and economic status, and considers GDP and the unemployment rate. Based on the Company's past experience of credit losses, there is no material difference between the loss patterns of different customer bases; therefore, customer bases are not further distinguished for the provision matrix, and the expected credit loss rate is determined based on the number of overdue days of accounts receivable.

Loss allowance of accounts receivable measured based on the provision matrix is as follows:

December 31, 2025

	Not overdue	Overdue for 1 to 60 days	Overdue for 61 to 120 days	Overdue for 121 to 364 days	Overdue for 365 days or above	Total
Total carrying amount	$ 205,876	$ 301	$ 82,426	$ 263	$ 140	$ 289,006
Loss allowance (lifetime ECL)	-	-	( 162)	( 263)	( 140)	( 565)
Amortized costs	$ 205,876	$ 301	$ 82,264	$ -	$ -	$ 288,441

December 31, 2024

	Current	Overdue for 1 to 60 days	Overdue for 61 to 120 days	Overdue for 121 to 364 days	Overdue for 365 days or above	Total
Total carrying amount	$ 69,692	$ 3,088	$ 74,061	$ 88	$ 238	$ 147,167
Loss allowance (lifetime ECL)	-	-	( 239)	( 88)	( 238)	( 565)
Amortized costs	$ 69,692	$ 3,088	$ 73,822	$ -	$ -	$ 146,602

Changes in loss allowance of accounts receivable are as follows:

	2025	2024
Balance at the beginning and the end of the year	$ 565	$ 565

X. Inventories

	December 31, 2025	December 31, 2024
Finished goods	$224,759	$247,049
Work in progress	58,778	35,266
Raw material	78,707	74,447
	$362,244	$356,762

The nature of costs of sales is as follows:

	2025	2024
Costs of goods sold	$199,949	$202,480
Losses for market price decline and obsolete and slow-moving inventories	2,401	2,152
	$202,350	$204,632

XI. Investments accounted for using the equity method

	December 31, 2025	December 31, 2024
Investments in subsidiaries
Tech-Plan (BVI) Ltd.	$ 999	$ 3,302
Loop Telecom NA, Inc.	157	163
	$ 1,156	$ 3,465
	Ownership interest and voting right percentage
	December 31, 2025	December 31, 2024
Name of subsidiaries
Tech-Plan (BVI) Ltd.	100%	100%
Loop Telecom NA, Inc.	100%	100%

For details of subsidiaries indirectly held by the Company, please refer to Note 30.

In 2025 and 2024, the share of profit or loss and other comprehensive income of subsidiaries accounted for using the equity method is recognized based on the financial statements of the same period of subsidiaries audited by Accountants.

XII. Property, plant and equipment

	Buildings	Machinery and equipment	R&D equipment	Transportation equipment	Office equipment	Other equipment	Total
Costs
Balance on January 1, 2025	$213,195	$ 12,619	$ 17,957	$ 1,362	$ 3,223	$ 4,738	$253,094
Addition	-	467	2,549	-	1,193	520	4,729
Disposal	-	(328)	(680)	-	(52)	-	(1,060)
Balance on December 31, 2025	$213,195	$ 12,758	$ 19,826	$ 1,362	$ 4,364	$ 5,258	$256,763
Cumulative depreciation
Balance on January 1, 2025	$ 89,745	$ 3,640	$ 6,212	$ 676	$ 1,936	$ 1,026	$103,235
Depreciation	5,301	3,254	4,803	186	762	1,266	15,572
Disposal	-	(328)	(680)	-	(52)	-	(1,060)
Balance on December 31, 2025	$ 95,046	$ 6,566	$ 10,335	$ 862	$ 2,646	$ 2,292	$117,747
Net amount on December 31, 2025	$118,149	$ 6,192	$ 9,491	$ 500	$ 1,718	$ 2,966	$139,016
Costs
Balance on January 1, 2024	$213,195	$ 8,664	$ 18,784	$ 1,362	$ 4,031	$ 1,823	$247,859
Addition	-	5,045	5,471	-	322	3,699	14,537
Disposal	-	(1,090)	(6,298)	-	(1,130)	(784)	(9,302)
Balance on December 31, 2024	$213,195	$ 12,619	$ 17,957	$ 1,362	$ 3,223	$ 4,738	$253,094

Cumulative depreciation
Balance on January 1, 2024	$ 84,536	$ 2,508	$ 7,470	$ 448	$ 2,139	$ 875	$ 97,976
Depreciation	5,209	2,222	5,040	228	927	935	14,561
Disposal	-	( 1,090 )	( 6,298 )	-	( 1,130 )	( 784 )	( 9,302 )
Balance on December 31, 2024	$ 89,745	$ 3,640	$ 6,212	$ 676	$ 1,936	$ 1,026	$103,235
Net amount on December 31, 2024	$123,450	$ 8,979	$ 11,745	$ 686	$ 1,287	$ 3,712	$149,859

As there was no indication of impairment in 2025 and 2024, the Company did not perform any impairment assessment.

Depreciation expenses are provided for based on the following useful lives on a straight-line basis:

Buildings
11 to 51 years
Machinery and equipment
4 years
R&D equipment
2 to 4 years
Transportation equipment
6 years
Office equipment
4 years
Other equipment
4 years

The material components of the Company’s building are primarily plant and interior fitting, and the depreciation is provided based on their useful life of 35 to 51 years and 11 years, respectively.

For the amount of property, plant and equipment pledged for borrowings, please refer to Note 28.

XIII. Lease agreement

(I) Right-of-use assets

	December 31, 2025	December 31, 2024
Carrying amount of right-of-use assets
Land	$ 29,684	$ 30,826
Buildings	2,207	3,310
	$ 31,891	$ 34,136
	2025	2024
Depreciation expenses of right-of-use assets
Land	$ 1,142	$ 1,348
Buildings	1,103	1,103
	$ 2,245	$ 2,451
Gains on the sublease of right-of-use assets (accounted for as other income)	($ 623)	($ 598)

Except for the additional and recognition of depreciation fees, right-of-use assets of the Company have no material sub-lease or impairment in 2025 and 2024.

(II) Lease liabilities

	December 31, 2025	December 31, 2024
Carrying amount of lease liabilities
Current	$ 2,065	$ 2,002
Non-current	$ 38,199	$ 40,264

The range of discount rate of lease liabilities is as follows:

	December 31, 2025	December 31, 2024
Land	3.36%	3.36%
Buildings	2.93%	2.93%

(III) Material leasing activities and terms

The Company also rents certain land and buildings for use as plant, office, and dormitory, with a leasing period of 5 to 51 years. Lease payments may be adjusted for the land lease in Hsinchu Science Park based on the announced land price and other reasons at all times. Upon the end of the leasing period, the Company has no preemptive right for the acquisition of land and buildings it rented, and it is agreed that the Company may not sublease or transfer the entire or partial lease target without the consent of the lessor.

In 2019, the Company subleased partial right-of-use assets to Company A; relevant right-of-use assets are presented as investment properties; please refer to Note 14.

(IV) Other leases

	2025	2024
Total cash (outflow) of leases	($ 3,379)	($ 3,467)

The Company chose the application of recognition exemption for employee dormitory and office leases that fulfill the conditions of short-term leases and do not recognize relevant right-of-use assets and lease liabilities for such leases.

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XIV. Investment properties

	Completed investment properties	Right-of-use assets	Total
Costs
Balance on January 1, 2025 and December 31, 2025	$ 39,159	$ 6,927	$ 46,086
Cumulative depreciation
Balance on January 1, 2025	$ 16,057	$ 1,491	$ 17,548
Depreciation	986	201	1,187
Balance on December 31, 2025	$ 17,043	$ 1,692	$ 18,735
Net amount on December 31, 2025	$ 22,116	$ 5,235	$ 27,351
Costs
Balance on January 1, 2024	$ 39,159	$ 7,969	$ 47,128
Decrease	-	( 1,042 )	( 1,042 )
Balance on December 31, 2024	$ 39,159	$ 6,927	$ 46,086
Cumulative depreciation
Balance on January 1, 2024	$ 15,158	$ 1,251	$ 16,409
Depreciation	899	240	1,139
Balance on December 31, 2024	$ 16,057	$ 1,491	$ 17,548
Net amount on December 31, 2024	$ 23,102	$ 5,436	$ 28,538

During the leasing period, rental commitments commence after the balance sheet date are as follows:

	December 31, 2025	December 31, 2024
Rental commitment of investment properties	$ 21,300	$ 6,748

The depreciation of investment properties is provided for based on the following useful lives on a straight-line basis:

Completed investment properties 35 to 51 years
Right-of-use assets 20 years

The fair value of investment properties is measured at the level 3 input by the independent appraiser Integration Appraiser Firm which is not a related party. The

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appraisal is performed by adopting the weighted average of the cost approach and the market comparison approach, and unobservable material inputs adopted include the discount rate; the fair value derived from the assessment is as follows:

Fair value measurement	December 31, 2025	December 31, 2024
	$ 60,813	$ 68,782

For the amount of investment properties pledged for borrowings, please refer to Note 28.

XV. Intangible assets

	Software
Costs
Balance on January 1, 2025	$ 7,548
Individually acquired	1,269
Disposal	( 1,300 )
Balance on December 31, 2025	$ 7,517
Cumulative amortization
Balance on January 1, 2025	$ 5,693
Amortization expense	2,078
Disposal	( 1,300 )
Balance on December 31, 2025	$ 6,471
Net amount on December 31, 2025	$ 1,046
Costs
Balance on January 1, 2024	$ 13,069
Individually acquired	320
Disposal	( 5,841 )
Balance on December 31, 2024	$ 7,548
Cumulative amortization
Balance on January 1, 2024	$ 8,509
Amortization expense	3,025
Disposal	( 5,841 )
Balance on December 31, 2024	$ 5,693
Net amount on December 31, 2024	$ 1,855

The Company provides for the amortization fees of intangible assets based on a straight-line basis over 3 years.

37 -

38 -

XVI. Other assets

	December 31, 2025	December 31, 2024
Current
Temporary payments	$ 4,874	$ 7,634
Overpaid sales tax	2,103	5,133
Prepayments for goods	1,100	1,807
Other prepayments	978	1,012
Prepaid insurance premium	82	84
	$ 9,137	$ 15,670

XVII. Borrowings

Short-term borrowings	December 31, 2025	December 31, 2024
Secure borrowings (Note 28)
Bank borrowings	$135,000	$ -

The range of interest rates for bank loans were from 1.88% to 1.98% on December 31, 2024.

XVIII. Other liabilities

	December 31, 2025	December 31, 2024
Current
Other payables
Remunerations of employees and Directors payable	$ 30,670	$ 32,968
Bonuses payable	11,714	10,473
Salaries payable	9,870	9,258
Equipment payments payables	887	5,741
Service fees payable	3,002	2,988
Insurance premium payable	2,571	2,540
Others	11,677	10,953
	$ 70,391	$ 74,921
Other liabilities
Advance (Note)	$ 4,848	$ 7,469
Collections on behalf of others	607	584
Others	-	32
	$ 5,455	$ 8,085
Other non-current liabilities
Advance (Note)	$ 1,924	$ 6,772

Note: The Company has entered into a trademark licensing contract of NT$82,860 thousand (US$3,000 thousand), and the amount was fully collected in cash in January 2022. The Company allocates and recognizes trademark licensing income on a straight-line basis; it recognized trademark licensing income of NT$7,469 thousand and NT$9,063 thousand in 2025 and 2024, respectively (accounted for as other income).

XIX. Retirement benefit plan

(I) Defined contribution plans

The pension system under the “Labor Pension Act” applicable to the Company is a defined contribution plan managed by the government, and the Company appropriates 6% of the monthly salaries of employees to the personal accounts with the Bureau of Labor Insurance.

(II) Defined benefit plans

The pension system, organized in accordance with the “Labor Standards Act” of R.O.C, is a defined benefit plan managed by the government. The payment of an employee’s retirement pension is calculated based on the service seniority and average wages during the six months before the approved retirement date. The Company appropriates 6% of the total monthly salaries of employees as the pension for the Supervisory Committee of Labor Retirement Reserve to deposit in the account with the Bank of Taiwan in the name of the Committee. At the end of the year, if it is estimated that the balance of the account is not sufficient to make the payments for laborers who are estimated to fulfill the retirement conditions in the following year, the Company will appropriate the difference in a lump sum by the end of March in the following year. The Bureau of Labor Funds, Ministry of Labor, is entrusted with the management of the account, and the Company has no right to affect the investment and management strategies.

The amount of the defined benefit plan included in the parent company only balance sheet is set out as follows:

	December 31, 2025	December 31, 2024
Defined benefit obligation	$ 42,765	$ 41,898
Fair value of plan assets	( 61,172)	( 52,374)
Net defined benefit assets	($ 18,407)	($ 10,476)

Changes in net defined benefit liabilities (assets) are as follows:

	Defined benefit obligation	Fair value of plan assets	Net defined benefit liabilities (assets)
January 1, 2024	$ 46,420	($ 47,847)	($ 1,427)
Service costs
Interest expenses (income)	580	( 686)	( 106)
Recognized in profit or loss	580	( 686)	( 106)
Remeasurement
Compensation of plan assets (except for amounts included in net interest)	$ -	($ 3,918)	($ 3,918)
Actuarial losses – experience adjustments	( 501)	-	( 501)
Recognized in other comprehensive income	( 501)	( 3,918)	( 4,419)
Appropriated by the employer	-	( 4,524)	( 4,524)
Benefit payment	( 4,601)	4,601	-
December 31, 2024	41,898	( 52,374)	( 10,476)
Service costs
Interest expenses (income)	598	( 790)	( 192)
Recognized in profit or loss	598	( 790)	( 192)
Remeasurement
Compensation of plan assets (except for amounts included in net interest)	-	( 3,227)	( 3,227)
Actuarial gains – experience adjustments	269	-	269
Recognized in other comprehensive income	269	( 3,227)	( 2,958)
Appropriated by the employer	-	( 4,781)	( 4,781)
December 31, 2025	$ 42,765	($ 61,172)	($ 18,407)

The amount of the defined benefit plan recognized in profit or loss is summarized by function as follows:

	2025		2024
Operating cost	($	4)	($	10)
Sales and marketing expenses	(	28)	(	15)
General and administrative expenses	(	31)	(	14)
Research and development expenses	(	129)	(	67)
	($	192)	($	106)

The Company is exposed to the following risks due to the pension system under the "Labor Standards Act":

Investment risks: The Bureau of Labor Funds, Ministry of Labor, invests labor pension funds in domestic (foreign) equity securities, debt securities, bank deposits, and other targets by way of self-utilization or entrusted management; however, the amount available for allocation of the Company's plan assets shall not be lower than the gains calculated at the interest rate for two-year time deposits with local banks.
Interest rate risks: A decrease in the government bonds interest rate will lead to an increase in the current value of the defined benefit obligations; however, debt investment returns of plan assets will also increase; both items have partial offsetting effects on net defined benefit liabilities.
Salary risks: The calculation of the current value of defined benefit obligations refers to the future salaries of the plan's participants. Therefore, an increase in the salaries of the plan's participants will result in an increase in the current value of defined benefit obligations.

The actuarial valuation for the current value of defined benefit obligations of the Company is performed by a qualified actuary; the material assumption adopted on the measurement date is as follows:

	December 31, 2025	December 31, 2024
Discount rate	1.25%	1.50%
Expected increase rate of salaries	3.00%	3.00%

If there are reasonable and possible changes in a material actuarial assumption and when all other assumptions remain unchanged, the increase (decrease) in the current value of defined benefit obligations is as follows:

As actuarial assumptions may be correlated, the possibility of having changes in a single assumption is low; therefore, the abovementioned sensitivity analysis may not be able to reflect the actual changes in the current value of defined benefit obligations.

	December 31, 2025	December 31, 2024
Amount expected to be appropriated in one year	$ 4,402	$ 4,524
Average maturity of defined benefit obligations	7.7	8.9

XX. Equity

(I) Common stock

	December 31, 2025	December 31, 2024
Authorized shares (in thousands)	128,000	128,000
Authorized capital	$ 1,280,000	$ 1,280,000
Number of issued and paid-in shares (in thousands)	56,737	56,737
Issued share capital	$ 567,365	$ 567,365

The par value of issued ordinary shares is NT$10 per share, and each share is entitled to one vote and the right to receive dividends.

(II) Capital surplus

	December 31, 2025	December 31, 2024
Available for loss compensation, cash distribution, or appropriation to share capital (Note)
Premium of share issuance	$ 2,658	$ 2,658
Premium of corporate bond conversion	31,731	31,731
Treasury share transactions	9,357	9,357
Only available for loss compensation

Uncollected dividends of shareholders' past due
207
$ 43,953
207
$ 43,953

Note: Such capital reserve may be used in loss compensation, and may be used in cash distribution or appropriation to share capital when the Company has no loss; however, appropriation to share capital is limited to a certain ratio of the paid-in ratio.

(III) Retained earnings and dividend policy

According to the requirements of earning distribution policy in the Articles of Incorporation, if the Company records earnings from the final account of the year, after paying taxes and compensating cumulative losses according to the law, the Company shall appropriate 10% as the statutory surplus reserve. For the remaining earnings, the Company shall appropriate or reverse special surplus reserve according to the requirements of laws and regulations. Shall there be remaining balances, the Company shall combine such balances with the cumulated undistributed earnings, and the Board shall prepare the proposal for earning distribution and submit it to the shareholders' meeting for the resolution of distributing dividends and bonuses to shareholders. For the distribution policy of remuneration of employees and Directors stipulated in the Articles of Incorporation, please refer to Note 22 (7).

In addition, according to the requirements of the Articles of Incorporation, the Company responds to the current and future development plans and takes investment environments, capital requirements, and domestic and foreign competition status into account, with equal consideration given to shareholders' benefits. The Board shall prepare the proposal for earning distribution, and the shareholders' meeting shall make the resolution. Distribution of shareholders' dividends/bonuses may be made in shares or cash; however, in principle, the ratio of cash dividends to the total distribution amount shall not be less than 10%.

The appropriation of the legal reserve shall be until its balance reaches the total paid-in capital of the Company. Legal reserve may be used in loss compensation. When the Company has no loss, the part of the legal reserve that exceeds the total paid-in capital for 25% may be distributed in cash.

43 -

The Company held its annual shareholders' meetings on June 26, 2025 and June 25, 2024 and the proposals for earning distribution for 2024 and 2023 approved as resolutions are as follows:

	2024	2023
Legal reserve	$ 21,347	$ 20,384
Special reserve	($ 103)	($ 35)
Cash dividends	$187,230	$181,557
Cash dividends per share (NT$)	$ 3.30	$ 3.20

On March 11, 2026, the proposal for the earning distribution of 2025 discussed by the Board is as follows:

	2025
Legal reserve	$ 19,856
Special reserve	$ 205
Cash dividends	$181,557
Cash dividends per share (NT$)	$ 3.20

The proposal for the earning distribution and the proposal for the cash distribution from the capital reserve of 2025 are expected to be resolved at the annual shareholders' meeting to be convened on June 26, 2026.

(IV) Special reserve

	2025	2024
Beginning balance	$ 2,751	$ 2,786
Appropriation of special reserve	( 103)	( 35)
Ending balance	$ 2,648	$ 2,751

(V) Other Components of Equity

Exchange differences on translation of foreign operations

	2025	2024
Beginning balance	($ 2,648)	($ 2,751)
Generated during the year
Translation difference of foreign operations	( 205)	103
Ending balance	($ 2,853)	($ 2,648)

XXI. Net revenue

	2025	2024
Revenue from contracts with customers
Revenue from product sales	$610,030	$583,939
Service revenue	66,166	66,794
	$676,196	$650,733

(I) Description of contracts with customers

Sales revenue of products

Refer to the sales of optical transport network access equipment, U interface and MDSL interface multiplexer, network management systems, Internet access equipment, time-slot interchanger, and other products.

Service revenue

Partial contracts entered into with customers include educational training services and software/hardware installation services.

(II) Contract balance

	December 31, 2025	December 31, 2024	January 1, 2024
Accounts receivable
(Note 9)	$ 288,441	$ 146,602	$ 230,989
Accounts receivable - related party	$ 74	$ 1,963	$ -
Contract assets - current Sales of products	$ 8,366	$ 9,593	$ 233
Contract liabilities - current Sales of products	$ 11,822	$ 4,596	$ 4,561

Changes in contract assets and liabilities are primarily due to the difference in the point of time fulfilling the performance obligations and the point of time that customers make payments.

The amount of contract liabilities at the beginning of the year recognized as revenue of the current period is as follows:

	2025	2024
Contract liabilities from the beginning of the year
Sales of products	$ 2,636	$ 3,129

(III) Breakdown of revenue from contracts with customers

	2025	2024
Primary geographical markets
Europe	$224,409	$177,650
America	181,252	234,419
Taiwan	150,061	161,237
Asia (other than Taiwan)	94,668	61,516
Others	25,806	15,911
	$676,196	$650,733

46 -

Major products
Optical transport network access equipment	$391,144	$352,068
U interface and MDSL interface multiplexer	145,670	146,257
Network management system	32,968	23,131
Internet access equipment	13,185	9,930
Time-slot interchanger	4,848	8,337
Others	88,381	111,010
	$676,196	$650,733
XXII. Net income
(I) Interest income
	2025	2024
Bank deposits	$ 7,113	$ 11,897
(II) Other income
	2025	2024
Trademark licensing income (Note 18)	$ 7,469	$ 9,063
Income and expenses of investment properties
Rental income	6,146	6,441
Depreciation of investment properties	( 1,187)	( 1,139)
Dividend income	212	47
Others	796	674
	$ 13,436	$ 15,086
(III) Other gains and losses
	2025	2024
Net gains on currency exchange	$ 2,625	$ 22,895
Net (losses) gains on financial assets at fair value through profit or loss	7,637	1,884
Others	( 13)	( 1,232)
	$ 10,249	$ 23,547
(IV) Finance costs
	2025	2024
Interest of lease liabilities	$ 1,377	$ 1,211
Interest of bank borrowings	905	685
Others	60	-
	$ 2,342	$ 1,896

47 -

(V) Depreciation and amortization

	2025	2024
Summary of depreciation expenses by function
Operating cost	$ 6,953	$ 7,310
Operating expenses	10,864	9,702
Other expenses	1,187	1,139
	$ 19,004	$ 18,151
Summary of amortization expenses by function
Operating cost	$ 471	$ 542
Operating expenses	1,607	2,483
	$ 2,078	$ 3,025

(VI) Employee benefits expense

	2025	2024
Short-term employee benefits	$199,225	$191,379
Post-employment benefits (Note 19)
Defined contribution plans	7,111	6,902
Defined benefit plans	( 192)	( 106)
	6,919	6,796
Other employee benefits	11,843	12,193
Total employee benefits expenses	$217,987	$210,368
Summary by function
Operating cost	$ 39,771	$ 39,880
Operating expenses	178,216	170,488
	$217,987	$210,368

(VII) Remunerations of employees and Directors

According to the requirements of the Articles of Incorporation, if there is any balance after retaining the amount for compensating cumulative losses, the Company shall distribute no less than 10% and no more than 5% of the net income before tax and before deduction remuneration of employees and Directors of the year as remuneration of employees and remuneration of Directors, respectively. Pursuant to the amendments to the Securities and Exchange Act in August 2024, the Company's shareholders' meeting resolved on June 26, 2025 to amend the Articles of Incorporation to stipulate that no less than 5% of the aforementioned remuneration of employees shall be distributed to entry-level employees. In 2025 and 2024,

remuneration of employees (including NT$1,278 thousand for entry-level employees in 2025) and remuneration of Directors were resolved by the Board on March 11, 2026 and March 13, 2025, respectively, as follows:

Estimated ratio

	2025	2024
Remuneration of employees	10%	10%
Remuneration of Directors	2%	2%

Amount

	2025		2024
		Cash	Shares	Cash	Shares
Remuneration employees	of	$ 25,558	$ -	$ 27,473	$ -
Directors' remuneration		5,112	-	5,495	-

If there is any change in the amount after the approval date for the publication of the parent company only financial statements, it shall be treated as a change in accounting estimate, and adjusted and accounted for in the following year.

In 2024 and 2023, the actual distribution amount of remuneration of employees and remuneration of Directors has no difference from the amount recognized in the 2024 and 2023 consolidated financial statements.

For information on the remuneration of employees and remuneration of Directors resolved by the Board of the Company, please visit “MOPS” of the Taiwan Stock Exchange for inquiries.

(VIII) Foreign currency exchange gains and losses

	2025	2024
Total gains on currency exchange	$ 2,625	$ 22,895

XXIII. Income tax

(I) Income tax recognized in profit or losses

The major components of income tax expenses are as follows:

49 -

	2025	2024
Income tax of the period
Generated during the year	$ 41,894	$ 42,233
Adjustments from prior years	( 10,543)	( 10,872)
	31,351	31,361
Deferred income tax
Generated during the year	( 2,046)	1,350
Income tax expenses recognized in profit or losses	$ 29,305	$ 32,711

The reconciliation of accounting income and income tax expenses is as follows:

	2025	2024
Net income before tax	$224,910	$241,768
Income tax expense calculated at the statutory tax rate based on net profit before tax	$ 44,982	$ 48,353
Unrecognized deductible temporary differences	( 2,384)	( 1,867)
Investment tax credits offset during the period	( 2,750)	( 2,903)
Adjustments from prior years	( 10,543)	( 10,872)
Income tax expenses recognized in profit or losses	$ 29,305	$ 32,711

(II) Tax liability

	December 31, 2025	December 31, 2024
Tax liability
Income tax payable	$ 32,247	$ 19,779

(III) Deferred income tax assets and liabilities

Changes in deferred income tax assets and liabilities are as follows:

2025

Deferred income tax assets	Beginning balance	Changes during the year	Ending balance
Temporary difference
Unrealized allowance for inventory valuation and obsolescence losses	$ 6,870	$ 480	$ 7,350
Deferred income tax liabilities	Beginning balance	Changes during the year	Ending balance
Temporary difference
Unrealized exchange gains	$ 2,726	($ 1,566)	$ 1,160

2024

Deferred income tax assets	Beginning balance	Changes during the year	Ending balance
Temporary difference
Unrealized allowance for inventory valuation and obsolescence losses	$ 6,439	$ 431	$ 6,870
Deferred income tax liabilities	Beginning balance	Changes during the year	Ending balance
Temporary difference
Unrealized exchange gains	$ 945	$ 1,781	$ 2,726

(IV) Deductible temporary differences of deferred income tax assets not recognized in the parent company only balance sheet

	December 31, 2025	December 31, 2024
Deductible temporary differences	$ 35,468	$ 47,388

(V) Assessment of tax

The profit-seeking business income tax declarations of the Company as of 2023 have been approved by the taxation authority.

XXIV. Earnings per share

	(In New Taiwan Dollars per share)
	2025	2024
Basic earnings per share	$ 3.45	$ 3.68
Diluted earnings per share	$ 3.42	$ 3.66

Net income and the weighted average number of ordinary shares used to calculate earnings per share are as follows:

Net income for the year	2025	2024
Net income used to calculate basic and diluted earnings per share	$195,605	$209,057

Shares
Unit: thousand shares

	2025	2024
Weighted average number of ordinary shares used to calculate basic earnings per share	56,737	56,737
Impacts of potential ordinary shares with diluted effects:
Remuneration of employees	405	378
Weighted average number of ordinary shares used to calculate diluted earnings per share	57,142	57,115

If the Company may choose to distribute remuneration of employees in stock or in cash, when calculating the diluted earnings per share, it assumes that remuneration of employees will be distributed in stock and calculates the diluted earnings per share by including the weighted average number of outstanding shares when potential ordinary shares have diluted effects. When calculating diluted earnings per share before resolving the number of shares for the distribution of remuneration of employees in the following year, the Company continues to consider the diluted effects of such potential ordinary shares.

XXV. Capital risk management

The Company engages in capital management to ensure all enterprises within the Company can optimize the balance of liabilities and equity with a precondition of continuing operations so as to maximize shareholders' return. The overall strategy of the Company has no significant change.

The capital structure of the Company is composed of equity (i.e., share capital, capital reserve, retained earnings, and other equity items).

The Company is not required to comply with other external capital requirements.

XXVI. Financial instruments

(I) Information on fair value - financial instruments not measured at fair value

The management of the Company considers that the carrying amounts of financial assets and financial liabilities not measured at fair value are equivalent to their fair value.

(II) Information on fair value - financial instruments at fair value on a repeatability basis

Fair value hierarchy
51 -

December 31, 2025

	Level 1	Level 2	Level 3	Total
Financial asset measured at fair value through profit or loss
Domestic listed stocks	$ 21,938	$ -	$ -	$ 21,938
December 31, 2024
	Level 1	Level 2	Level 3	Total
Financial asset measured at fair value through profit or loss
Domestic listed stocks	$ 6,703	$ -	$ -	$ 6,703
Beneficiary certificates	10,475	-	-	10,475
	$ 17,178	$ -	$ -	$ 17,178

In 2025 and 2024, there was no measurement transfer between level 1 and level 2 fair value.

(III) Categories of financial instruments

	December 31, 2025	December 31, 2024
Financial assets
Measured at fair value through profit or loss	$ 21,938	$ 17,178
Financial assets at amortized costs (Note 1)	629,878	398,057
Financial liabilities
Measured at amortized costs (Note 2)	$296,094	$115,187

Note 1: The balance includes cash and cash equivalents, financial assets at amortized costs (current and non-current), accounts receivable (including those from related parties), other receivables (including those from related parties), and other financial assets at amortized costs.

Note 2: The balance includes accounts payable (including those to related parties), other payables, long-term borrowings (including those due within one year), and other financial liabilities at amortized costs.

(IV) Financial risk management purpose and policy

The Company's main financial instruments include investments in equity instruments, cash and cash equivalents, accounts receivable, bank borrowings, accounts payable, and lease liabilities. The financial management department of the Company provides services for all business departments, coordinates the entrance to

domestic and international financial markets for operations, analyzes the internal risk of exposure based on the level and width of risks, and monitors and manages financial risks related to the operations of the Company. Such risks include market risks (including exchange rate risks, interest rate risks, and other price risks), credit risks, and liquidity risks.

Market risks

The major financial risks assumed by the Company due to its operating activities are the risk of changes in exchange rates (please refer to (1) below for details) and the risk of changes in interest rates (please refer to (2) below for details).

There is no change in the exposure to financial instrument market risks of the Company and its management and measurement methods of such exposures.

(1) Exchange rate risks

The Company engages in sales and purchases denominated in foreign currencies, resulting in the exposure of the Company to changes in exchange rates. The management of exchange rate exposure of the Company is to utilize natural hedging methods for risk management within the scope permitted under its policies.

For the carrying amount of monetary assets and monetary liabilities denominated in non-functional currencies of the Company on the balance sheet date, please refer to Note 29.

Sensitivity analysis

The Company is primarily affected by the fluctuation of the USD exchange rate.

The following table describes the sensitivity analysis of the Company when the exchange rate of the functional currency appreciates and depreciates by 1% for each of the relevant foreign currencies. The sensitivity ratio used to report to the major management within the Company for exchange rate risks is 1%, which also represents the scope of reasonable and possible changes in exchange rates assessed by the management. The sensitivity analysis only includes outstanding monetary items in foreign currencies, and adjustments are made to their translation at the end of the period based on a change of 1%. The

53 -

positive figures in the following table refer to the increase in net income before tax when NTD depreciates by 1% against relevant currencies; when NTD appreciates by 1% against relevant currencies, the effects on net income before tax will be the same amount in negative.

	Effects of USD
	2025	2024
Profit or loss	$ 4,219(i)	$ 2,125(i)

(i) Primarily originated from cash and cash equivalents, accounts receivable, other receivables, and accounts payable denominated in USD that is outstanding on the balance sheet date with no cash flow hedging performed.

(2) Interest rate risks

Interest rate exposure arising from the borrowing of capital at fixed and floating rates by entities within the Company. The Company manages the interest rates risk by maintaining an adequate portfolio of fixed and variable interest rates.

The carrying amount of financial assets and financial liabilities under interest rate exposure on the balance sheet date is as follows:

	December 31, 2025	December 31, 2024
With fair value interest rate risks
- Financial assets	$243,982	$103,477
- Financial liabilities	175,264	42,266
With cash flow interest rate risks
- Financial assets	94,212	144,585

Sensitivity analysis

The following sensitivity analysis is based on the risk exposure to the interest rates risk of non-derivative instruments on the balance sheet date. Regarding liabilities with variable interest rates, the analysis is based on the assumption that the amount of liabilities outstanding on the balance sheet date was outstanding throughout the reporting period. The rate of change is expressed as the interest rate increases or decreases by 0.1% when reporting to the key management internally, which also

54 -

represents the management's assessment of the reasonable and possible scope of change in interest rates.

With other variables remaining unchanged, if the interest rate increases/decreases by 0.1%, the net income before tax of the Company in 2025 and 2024 will increase/decrease by NT$94 thousand and NT$145 thousand in 2025 and 2024, respectively, primarily due to the interest rate exposure of net assets at variable interest rates.

(3) Other price risks

The Company has equity price exposure arising from its investments in equity securities. Such equity investments are not held for trading purposes but strategic investments; the Company is not actively trading such investments. In addition, the Company has appointed a particular team to monitor price risks and evaluate the timing to increase the hedging positions of the risks hedged.

Sensitivity analysis

The following sensitivity analysis is based on the equity price on the balance sheet date.

If the equity price increases/decreases by 5%, net income before tax in 2025 and 2024 will increase/decrease by NT$1,097 thousand and NT$859 thousand, respectively, due to the increase/decrease in the fair value of financial assets at fair value through profit or loss.

Credit risks

Credit risks refer to risks of financial losses of the Company resulting from the delay in performing contract obligations of counterparties. As of the balance sheet date, the maximum credit risk exposure of financial losses that may incur to the Company due to non-performance of obligations by counterparties and the provision of financial guarantees is the carrying amount of financial assets recognized in the consolidated balance sheet.

To mitigate credit risks, the management of the Company has appointed a dedicated team to be responsible for the decision of loan limits, loan approval, and other monitoring procedures to ensure that appropriate actions are adopted for the recovery of overdue amounts receivable. In addition, the Company reviews the recoverable amount of amounts receivables on a case-by-case basis on the balance sheet date to ensure impairment losses are provided for amounts

55 -

receivable not recoverable. Accordingly, the management of the Company considers that the credit risks of the Company have reduced significantly.

3. Liquidity risks

The Company supports its operations and mitigates the effects of cash flow fluctuation by managing and maintaining abundant positions of cash and cash equivalents. The management of the Company monitors the use status of financing limits with banks and ensures compliance with the terms of borrowing contracts.

Bank borrowings represent a material source of liquidity to the Company. As of December 31, 2025 and 2024, the Company has not utilized any financing limit; please refer to the description of the financing limit in (3) below.

(1) Table of liquidity and interest rate risks of non-derivate financial liabilities

The maturity analysis of remaining contracts for non-derivative liabilities is prepared in accordance with the earliest date on which the Company may be requested to make repayment based on the undiscounted cash flow of financial liabilities (including principals and estimated interest). Therefore, bank borrowings that the Company may be requested to repay immediately are set out in the earliest period in the following table, without considering the probability of banks exercising their rights immediately; the maturity analysis of other non-derivative financial liabilities is prepared based on the repayment dates agreed upon.

December 31, 2025

	Request of instant payment or less than 1 month	1 to 3 months	3 months to 1 year	Over 1 year	Total
Non-derivative financial liabilities
Accounts payable	$ 18,337	$ 72,366	$ -	$ -	$ 90,703
Other payables	65,748	4,643	-	-	70,391
Lease liabilities	282	563	2,534	55,972	59,351
Instruments at floating interest rate	135,027	-	-	-	135,027
	$ 219,394	$ 77,572	$ 2,534	$ 55,972	$ 355,472

Further information on the maturity analysis of the abovementioned financial liabilities is as follows:

	Less than 1 year	1 to 5 years	5 to 10 years	10 to 15 years	15 to 20 years	Over 20 years
Lease liabilities	$ 3,379	$ 9,953	$ 10,957	$ 10,957	$ 10,957	$ 13,148
Instruments at floating interest rate	135,027	-	-	-	-	-
	$ 138,406	$ 9,953	$ 10,957	$ 10,957	$ 10,957	$ 13,148

December 31, 2024

	Request of instant payment or less than 1 month	1 to 3 months	3 months to 1 year	Over 1 year	Total
Non-derivative financial liabilities
Accounts payable	$ 17,309	$ 22,957	$ -	$ -	$ 40,266
Other payables	71,399	3,522	-	-	74,921
Lease liabilities	281	563	2,534	59,351	62,729
Instruments at floating interest rates	$ 88,989	$ 27,042	$ 2,534	$ 59,351	$ 177,917

Further information on the maturity analysis of the abovementioned financial liabilities is as follows:

	Less than 1 year	1 to 5 years	5 to 10 years	10 to 15 years	15 to 20 years	Over 20 years
Lease liabilities	$ 3,378	$ 11,140	$ 10,957	$ 10,957	$ 10,957	$ 15,340

(2) Financing limit

	December 31, 2025	December 31, 2024
Secured bank borrowing limits (may be extended with the consent of both parties)
- Amount utilized	$135,000	$ -
- Amount not utilized	160,715	329,703
	$295,715	$329,703

XXVII. Related party transactions

Transactions between the Company and its related parties are as follows:

(I) Names and relationships with related parties

Name of the related parties	Relationship with the Company
Tianjin Loop Technology Co., Ltd	Subsidiary
Tianjin Loop Electron Technology Co., Ltd.	Subsidiary
Chongqing Loop Technology Co., Ltd.	Subsidiary
Loop Telecom NA, Inc	Subsidiary

(II) Operating revenue

Accounting item	Type of related parties	2025	2024
Operating revenue	Subsidiary	$ 85	$ 2,109

(III) Purchases

Type of related parties	2025	2024
Subsidiary	$ 14,891	$ 17,466

The Company purchases from and sales to related parties without purchasing from other suppliers and sales to other customers as there is no market price available for comparison; the transacting price is determined by both parties with reference to the market status.

(IV) Amounts receivable from related parties

Accounting item	Type of related parties	December 31, 2025	December 31, 2024
Accounts receivable (including those from related parties)	Tianjin Loop Technology Co., Ltd	$ 74	$ 1,963
Other receivables (including those from related parties)	Tianjin Loop Technology Co., Ltd	$ 1,959	$ 752

No guarantee is received for amounts due from related parties that are outstanding. In 2025 and 2024, no loss provision was made for amounts due from related parties.

(V) Prepayments for goods (accounted for as other current assets)

Accounting item	Type of related parties	December 31, 2025	December 31, 2024
Prepayments for goods	Tianjin Loop Technology Co., Ltd	$ 966	$ 966

(VI) Prepayments (accounted for as other current assets)

Accounting item	Type of related parties	December 31, 2025	December 31, 2024
Temporary payments	Loop Telecom NA, Inc	$ 31	$ 31

(VII) Amounts payable to related parties

59 -

Accounting item	Type of related parties	December 31, 2025	December 31, 2024
Accounts payable - related parties	Chongqing Loop	$ 1,057	$ 5,608
	Technology Co., Ltd.
	Tianjin Loop	-	44
	Technology Co., Ltd	$ 1,057	$ 5,652

No guarantee is provided for the balance of amounts payable to related parties that are outstanding.

(VIII) Salary of the major management

	2025	2024
Short-term employee benefits	$ 25,090	$ 18,866
Post-employment benefits	1,050	582
Other employee benefits	247	179
	$ 26,387	$ 19,627

The salary of Directors and other major management is determined by the Remuneration Committee based on individual performance and market trends.

XXVIII. Pledged assets

The following assets were provided as collateral for bank borrowings, performance guarantees, and lease deposits:

	December 31, 2025	December 31, 2024
Time deposits pledged	$ 81,499	$ -
Time deposits pledged (accounted for financial assets at amortized costs - non-current)	10,500	10,500
Property, plant and equipment and investment properties	119,453	123,899
Refundable deposits	18,715	43,765
	$230,167	$178,164

XXIX. Assets and liabilities in foreign currencies of material effects

The following information is presented as a summary of foreign currencies other than the functional currency of the Company, and the exchange rates disclosed are the exchange rates used to translate such foreign currencies into functional currency. Assets and liabilities in foreign currencies of material effects are as follows:

Unit Foreign currencies/NT$ thousand

December 31, 2025

Assets in foreign currencies	Foreign currency	Exchange rate	Carrying amount
Monetary items
USD	$ 14,915	31.430	$ 468,778
JPY	51,753	0.201	10,392
GBP	107	42.330	4,529
RMB	1,238	4.496	5,566
			$ 489,265
Liabilities in foreign currencies
Monetary items
USD	1,491	31.430	$ 46,862

December 31, 2024

Assets in foreign currencies	Foreign currency	Exchange rate	Carrying amount
Monetary items
USD	$ 6,953	32.785	$ 227,954
JPY	51,748	0.210	10,867
GBP	106	41.190	4,366
RMB	1,415	4.478	6,336
			$ 249,523
Liabilities in foreign currencies
Monetary items
USD	472	32.785	$ 15,475
RMB	1,262	4.478	5,651
			$ 21,126

(Losses) gains (unrealized) on currency exchange of material effects are as follows:

Foreign currency	2025		2024
	Exchange rate	Net exchange gains or losses	Exchange rate	Net exchange gains or losses
USD	31.430	$ 6,028	32.785	$ 13,513

XXX. Disclosures notes

(I) Information on significant transactions:
1. Financings provided to others: None.
2. Endorsements and guarantees provided to others: None
3. Marketable securities held at the end of the period (excluding investments in the equity of subsidiaries). (Table 1)
4. Total purchases from or sales to related parties of at least NT$100 million or 20% of the paid-in capital: None
5. Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: None

(II) Information on investees (Table 2)

(III) Information on investments in Mainland China:
1. Name of investees in Mainland China, major scope of business, paid-in capital, investment methods, outward/inward remittance of capital, shareholding ratio, carrying amount of investments at the end of the period, gains or losses on investments remitted back, and investment limits in Mainland China. (Table 3)
2. Material transactions that occurred directly or indirectly via a third-party region with investees in Mainland China, their prices, payment conditions, and unrealized gains or losses: (Table 4)
(1) Purchase amount and ratio and ending balance and ratio of relevant amounts payable.
(2) Sales amount and ratio and ending balance and ratio of relevant amounts receivable.
(3) Amount of property transaction and gains or losses arising thereof.
(4) Ending balance of note endorsements/guarantees of provision of collateral and its purpose.
(5) Maximum balance of fund accommodation, closing balance, interest rate range, and total interest of the period.
(6) Other transactions have material effects on the profit or loss of the period or financial position (i.e., provision or receipt of services).

61 -

Loop Telecommunication International, Inc.

Marketable securities held

December 31, 2025

Table 1
(In Thousands of New Taiwan Dollars; unless specified otherwise)

Names of companies held	Category of marketable securities	Name of marketable securities	Relationship with the securities issuer	Accounting item	At the end of the period				Remarks
					Shares (In Thousands)	Carrying amount	Shareholding ratio (%)	Market price
The Company	Common shares	Taiwan Semiconductor Manufacturing Co., Ltd.	—	Financial assets at fair value through profit or loss - Current	14	$ 21,700	-	$ 21,700	Note 1
	Common shares	TPK Holding Co., Ltd.	—	Financial assets at fair value through profit or loss - Current	3	121	-	121	Note 1
	Common shares	G-TECH Optoelectronics Corporation	—	Financial assets at fair value through profit or loss - Current	2	76	-	76	Note 1
	Common shares	Sunspring Metal Corporation	—	Financial assets at fair value through profit or loss - Current	2	41	-	41	Note 1
	Preferred shares	Formerica Optoelectronics Inc.	—	Financial assets at fair value through profit or loss - Current	8	-	-	-	—

Note 1: Calculated based on the net assets of funds and closing price of shares on December 31, 2025.
Note 2: As of December 31, 2025 the abovementioned securities were not provided for guarantee, pledge, or being restricted from use due to other agreements.

62 -

Loop Telecommunication International, Inc.
Information on investees, location, and other relevant information
For the year ended December 31, 2025

Table 2
(In Thousands of New Taiwan Dollars; unless specified otherwise)

Name of the investors	Name of the investees	Location	Main business line	Original / investment amount		Held at the end of the period			Net loss of the investee for the period (Note)	Investment losses recognized during the period (Note)	Remarks
				Ending balance of the period	End of the preceding period	Shares (In Thousands)	Ratio (%)	Carrying amount (Note)
The Company	Tech-Plan (BVI) Ltd.	BVI	Investment business	USD4,016 thousand	USD4,016 thousand	4,016	100	$ 999	($ 2,104)	($ 2,104)	Subsidiary of the Company
	Loop Telecom NA, Inc.	The U.S.	Development and trading of digital communication equipment and software	USD 5 thousand	USD 5 thousand	5	100	157	-	-	Subsidiary of the Company
Tech-Plan (BVI) Ltd.	Maxi View Holdings Ltd.	Hong Kong	Investment business	USD1,616 thousand	USD1,616 thousand	1,616	100	( 626)	( 577)	( 577)	Sub-subsidiary of the Company
	Loop Telecommunication International Ltd.	Cayman	Investment business	USD2,400 thousand	USD2,400 thousand	2,400	100	1,625	( 1,527)	( 1,527)	Sub-subsidiary of the Company

Note: Calculated based on the financial statements of the same period audited by Accountants.

Loop Telecommunication International, Inc.

Information on investments in Mainland China

For the year ended December 31, 2025

Table 3
(In Thousands of New Taiwan Dollars; unless specified otherwise)

Investee in Mainland China	Main business line	Paid-in capital	Method of investment	Accumulated investment amount of remittance from Taiwan at the beginning of the period	Investment flows		Accumulated investment amount of remittance from Taiwan at the end of the period	Shareholding ratio of the Company's direct or indirect investments (%)	Investment gains or losses recognized during the period (Note 2)	Carrying amount of investments at the end of the period	Accumulated inward remittance of earnings as of the end of the period
					Outflow	Inflow
Tianjin Loop Electron Technology Co., Ltd.	Development and trading of digital communication equipment and software	USD850 thousand	Note 1	USD296 thousand and RMB500 thousand ($ 11,551) Note 3	$ -	$ -	USD296 thousand and RMB500 thousand ($ 11,551) Note 3	100	$ 28	($ 438)	$ -
Tianjin Loop Technology Co.,Ltd	Development and trading of digital communication equipment and software	USD600 thousand	Note 1	USD300 thousand ($ 9,429) Note 6	-	-	USD 300 thousand ($ 9,429) Note 6	100	( 605)	( 2,751)	-
Chongqing Loop Technology Co., Ltd.	R&D, design, production, processing, and trading of digital communication equipment	USD2,400 thousand	Note 1	USD2,400 thousand ($ 75,432)	-	-	USD2,400 thousand ($ 75,432)	100	( 1,527)	1,616	-
Accumulated Investment in Mainland China at the end of the period (Note 5)	Investment amounts authorized by Investment Commission, MOEA	Ceiling on investments in Mainland China imposed by the Investment Commission of the Ministry of Economic Affairs is 60% of the net worth
---	---	---
USD 3,882 thousand and RMB 500 thousand ($ 124,259)	USD 5,536 thousand ($ 173,996)	$531,806

Note 1: Investment in the company in Mainland China through investing in establishing a company in a third-party region.
Note 2: Calculated based on the financial statements of the same period audited by Accountants.
Note 3: Maxi View Holdings Ltd. was established through the investments from earnings distributed by Tianjin Loop Communication Equipment Co., Ltd. Maxi View Holdings Ltd. acquired the residual equity of Tianjin Loop Electron Technology Co., Ltd. at RMB500 thousand in August 2019, and its shareholding ratio increased from 75% to 100%.
Note 4: For those involving foreign currencies, they are translated into NTD at the exchange rates on December 31, 2025 using the following rate: US$1=NT$31.430 and RMB$1=NT$4.496.
Note 5: Include the cumulative outward remittance amount of US$886 thousand to Hangzhou Loop Electronics Co., Ltd. and Hangzhou Loop Smart Instrument Co., Ltd.
Note 6: Exclude the investment amount of US$300 thousand from the earnings of Maxi View Holdings Ltd..

Loop Telecommunication International, Inc.

Material transactions that occurred directly or indirectly via a third-party region with investees in Mainland China, their prices, payment conditions, unrealized gains or losses, and other relevant information

For the year ended December 31, 2025

Table 4
(In Thousands of New Taiwan Dollars)

Investee in Mainland China	Transaction category	Purchases and sales		Transaction conditions (Note)	Notes and accounts receivable (payable)		Unrealized gains or losses	Remarks
		Amount	Ratio		Amount	Ratio
Tianjin Loop Technology Co.,Ltd	Sales	$ 85	0.01%	—	$ 74	0.03%	$ -	—
	Purchases	3,559	1.63%	—	-	-	-	—
Chongqing Loop Technology Co., Ltd.	Purchases	11,332	5.19%	—	( 1,057)	( 1.17%)	-	—

Note: For transactions between related parties, the transacting price is determined by both parties with reference to the market status; however, the collection of payments for goods shall be subject to the capital status of the related parties.

66 -

§List of Major Accounting Items§

Item	No./index
Breakdown of assets, liabilities, and equity items
Breakdown of cash and cash equivalents	Breakdown 1
Breakdown of financial assets at fair value through profit or loss - current	Note 7
Breakdown of accounts receivable	Breakdown 2
Breakdown of inventories	Breakdown 3
Breakdown of other assets	Note 16
Breakdown of changes in investments accounted for using the equity method	Breakdown 4
Breakdown of changes in property, plant and equipment	Note 12
Breakdown of changes in right-of-use assets	Breakdown 5
Breakdown of changes in investment properties	Note 14
Breakdown of changes in intangible assets	Note 15
Breakdown of deferred income tax assets	Note 23 (3)
Breakdown of accounts payable	Breakdown 6
Breakdown of other liabilities	Note 18
Breakdown of lease liabilities	Breakdown 7
Breakdown of profit or loss items
Breakdown of operating revenue	Breakdown 8
Breakdown of operating costs	Breakdown 9
Breakdown of operating expenses	Breakdown 10
Breakdown of financial costs	Note 22 (4)
Summary of employee benefits and depreciation and amortization expenses that occurred during the period by function	Breakdown 11

Loop Telecommunication International, Inc.
Breakdown of cash and cash equivalents
December 31, 2025

Breakdown 1

(In Thousands of New Taiwan Dollars)

Item	Summary	Amount
Bank deposits	Time deposits (Note 1 and 4)	$249,582
	Deposits in foreign currency (Note 2)	46,080
	Demand deposit	42,532
	Checking account deposits	400
		338,594
Cash in hand and working capital		244
Subtotal		338,838
Transferred to financial assets at amortized cost - current (Note 3)		( 33,599)
Transferred to financial assets at amortized cost - non-current (Note 4)		( 10,500)
Total		$294,739

Note 1: Expired by July 2025 successively with an interest rate per annum ranging from $0.675\% \sim 4.060\%$.

Note 2: Refer to approximately US$868 thousand (the exchange rate was US$1 = NT$31.43), RMB $35 thousand (the exchange rate was RMB $1 = NT$4.496), GBP$107 thousand (the exchange rate was GBP$1 = NT$42.33), EUR$5 thousand (the exchange rate was EUR$1 = NT$36.9), JPY$51,661 thousand (the exchange rate was JPY $1 = NT$0.02008) and other petty foreign currencies, including AUD.

Note 3: Time deposits with an initial expiry exceeding 3 months.

Note 4: Time deposits pledge with a bank as the collateral for the performance guarantee of the Company.

67 -

Loop Telecommunication International, Inc.
Breakdown of accounts receivable
December 31, 2025

Breakdown 2
(In Thousands of New Taiwan Dollars)

Client Name	Amount
Related party	$ 74
Non-related party
Customer A	101,410
Customer B	84,495
Customer C	70,967
Others (Note)	32,134
	289,006
Less: loss allowance	( 565)
Net amount	$288,515

Note: The balance of each customer has not exceeded 5% of the balance of the item.

68 -

Loop Telecommunication International, Inc.
Breakdown of inventories
December 31, 2025

Breakdown 3
(In Thousands of New Taiwan Dollars)

Item	Amount
	Costs	Net realizable value
(Note 2)
Finished goods	$ 78,707	$215,842
Work in progress	58,778	139,813
Raw material	224,759	229,627
	$362,244	$585,282

Note 1: The combined insurance amount of inventory and property, plant and equipment were NT$563,445 thousand.

Note 2: Inventories are stated at the lower of cost or net realizable value. Except for inventories of the same category, the comparison of the lower of cost and net realizable value is made on an item-by-item basis.

69 -

Loop Telecommunication International, Inc.
Breakdown of changes in investments accounted for using the equity method
For the year ended December 31, 2025

Breakdown 4

(In Thousands of New Taiwan Dollars; unless specified otherwise)

Name of the investees	Beginning balance		Investment losses recognized by using the equity method (Note 1)	Amount of translation adjustments	Ending balance			Net value of equity (Note 2)
	Shares (In Thousands)	Amount			Number of shares (1,000 shares)	Shareholding (%)	Amount
Tech-Plan (BVI) Ltd.	4,016	$ 3,302	($ 2,104)	($ 199)	4,016	100	$ 999	$ 999
Loop Telecom NA, Inc.	5	163	-	( 6)	5	100	157	157
		$ 3,465	($ 2,104)	($ 205)			$ 1,156	$ 1,156

Note 1: Calculated based on the financial statements audited by Accountants.

70 -

Loop Telecommunication International, Inc.
Breakdown of changes in right-of-use assets
For the year ended December 31, 2025

Breakdown 5
(In Thousands of New Taiwan Dollars)

	Land	Buildings	Total
Costs
Balance on January 1, 2025 and December 31, 2025	$ 39,246	$ 10,366	$ 49,612
Cumulative depreciation
Balance on January 1, 2025	8,420	7,056	15,476
Depreciation	1,142	1,103	2,245
Balance on December 31, 2025	9,562	8,159	17,721
Net amount on December 31, 2025	$ 29,684	$ 2,207	$ 31,891

71 -

Loop Telecommunication International, Inc.
Breakdown of accounts payable
December 31, 2025

Breakdown 6
(In Thousands of New Taiwan Dollars)

Supplier	Amount
Accounts payable - related parties	$ 1,057
Accounts payable - non-related parties:
WT Microelectronics	36,712
Kintech Electronics	8,021
Qinyi Enterprise	5,520
Yuan Tsu Enterprise	5,029
Others (Note)	34,364
	89,646
Total	$ 90,703

Note: The balance of each supplier has not exceeded 5% of the balance of the item.

72 -

Loop Telecommunication International, Inc.
Breakdown of lease liabilities
December 31, 2025

Breakdown 7
(In Thousands of New Taiwan Dollars; unless specified otherwise)

Name	Leasing period	Discount rate	Ending balance
Land	1996.06~2026.12 and 2019.08~2038.12	3.36%	$ 37,961
Building	2023.01~2027.02	2.93%	2,303
Less: Lease liabilities - current			( 2,065)
Lease liabilities - non-current			$ 38,199

73 -

Loop Telecommunication International, Inc.
Breakdown of operating revenue
For the year ended December 31, 2025

Breakdown 8
(In Thousands of New Taiwan Dollars; unless specified otherwise)

Item	Quantity (thousand machines)	Amount
Optical transport network access equipment	11	$391,144
U interface multiplexer and MDSL interface multiplexer	12	145,670
Network management system	2	32,968
Internet access equipment	-	13,185
Time-slot interchanger	-	4,848
Others	33	88,381
Total		$676,196

74 -

Loop Telecommunication International, Inc.
Breakdown of operating costs
For the year ended December 31, 2025

Breakdown 9
(In Thousands of New Taiwan Dollars)

Item	Amount
Raw material
Raw materials at the beginning of the year	$247,049
Purchase of materials during the year	154,099
Other outward transfers	( 7,760)
Raw materials at the end of the year	( 224,759)
Raw material used	168,629
Direct labor costs	7,391
Manufacturing expenses	61,253
Manufacturing costs	237,273
Work-in-progress at the beginning of the year	35,266
Purchase of materials during the year	875
Other inward transfers	( 521)
Work-in-progress at the end of the year	( 58,778)
Cost of finished good	214,115
Finished good at the beginning of the year	74,447
Inward transfers or transfers to others of fees	( 7,505)
Finished good at the end of the year	( 78,707)
Total costs of sales	202,350
Service costs	15,846
Total operating cost	$218,196

75 -

Loop Telecommunication International, Inc.
Breakdown of operating expenses
For the year ended December 31, 2025

Breakdown 10
(In Thousands of New Taiwan Dollars)

Item	Sales and marketing expenses	General and administrative expenses	Research and development expenses
Salary expenses	$ 19,886	$ 25,383	$ 106,119
Service fees	9,082	5,397	1,572
Directors’ remuneration	-	5,112	-
Travel expenses	2,414	98	82
Insurance premium	1,356	1,739	8,368
Depreciation	875	877	9,112
Indirect materials	14	-	16,413
Others (Note)	10,576	9,448	25,519
Total	$ 44,203	$ 48,054	$ 167,185

Note: The amount of each entry item has not exceeded 5% of the amount of the item.

76 -

Loop Telecommunication International, Inc.
Summary of employee benefits and depreciation and amortization expenses that occurred during the period by function
For the years ended December 31, 2025 and 2024

Breakdown 11
(In Thousands of New Taiwan Dollars)

	2025			2024
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefits expense
Salary expenses	$ 33,148	$ 151,388	$ 184,536	$ 33,094	$ 144,016	$ 177,110
Labor and health insurance	3,226	11,463	14,689	3,318	10,951	14,269
Pension costs	1,426	5,493	6,919	1,434	5,362	6,796
Directors’ remuneration	-	5,112	5,112	-	5,495	5,495
Other employee benefits expense	1,971	4,760	6,731	2,034	4,664	6,698
Total	$ 39,771	$ 178,216	$ 217,987	$ 39,880	$ 170,488	$ 210,368
Depreciation	$ 6,953	$ 10,864	$ 17,817	$ 7,310	$ 9,702	$ 17,012
Amortization expense	$ 471	$ 1,607	$ 2,078	$ 542	$ 2,483	$ 3,025

Note 1: The number of employees of the year and the preceding year was 152 persons and 159 persons, respectively, and the number of Directors who are not concurrently employees was 7 persons and 7 persons, respectively.
Note 2: Companies whose shares are listed on TWSE or TPEx for trading shall additionally disclose the following information:

(1) The average employee benefits expenses of the year were NT$1,468 thousand (“total employee benefits expenses of the year - total Directors’ Remuneration”/“number of employees of the year - number of Directors who are not concurrently employees”).
The average employee benefits expenses of the preceding year were NT$1,348 thousand (“total employee benefits expenses of the preceding year - total Directors’ Remuneration”/“number of employees of the preceding year - number of Directors who are not concurrently employees”).

(2) The average salary expenses of employees of the year were NT$1,273 thousand (total salary expenses of the year/“number of employees of the year - number of Directors who are not concurrently employees”).
The average salary expenses of employees of the preceding year were NT$1,165 thousand (total salary expenses of the preceding year/“number of employees of the preceding year - number of Directors who are not concurrently employees”).

(3) The average adjustments and changes in salary expenses reached 9.27% (“average salary expenses of employees of the year - average salary expenses of employees of the preceding year”/average salary expenses of employees of the preceding year).

(4) Remuneration policy

A. Based on the percentage or scope of remuneration of employees and Directors stipulated in the Company’s Articles of Incorporation:

Based on the distribution policy of remuneration of employees and Directors stipulated in the Articles of Incorporation. If the Company records any earnings from its final account of the year, apart from paying all taxes according to the law, it shall first compensate cumulative losses from prior years. It may appropriate special reserve based on the Company’s requirements. Then, the remaining balance shall be combined with the cumulative undistributed earnings from prior years; after retaining partial earnings based on the operating status and for a balanced dividend policy, the Company may make distribution after a resolution is made by the shareholders’ meeting based on the following principles:

a. Remuneration of employees shall be no less than 10%: Remuneration of employees may be made in shares or cash, and the distribution targets may include employees, who fulfill certain conditions, of subordinated companies; such conditions shall be resolved by the Board. No less than 5% of the aforementioned remuneration of employees shall be distributed to entry-level.
b. Remuneration of Directors shall be no more than 5%.
c. The remaining shall be shareholders’ bonuses.

AI assistant

LOOP Audit Report / Information 2025

52258_rns_2026-04-14_706c2fa7-5a09-4251-a069-49c549855797.pdf

Loop Telecommunication International, Inc.

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

Notice to Readers

(IV) Foreign currency

(V) Inventory

2. Derecognition

XIII. Lease agreement

(I) Right-of-use assets

XV. Intangible assets

XIX. Retirement benefit plan

(I) Defined contribution plans

(II) Defined benefit plans

XX. Equity

Estimated ratio

Amount

(VIII) Foreign currency exchange gains and losses

XXIII. Income tax

XXV. Capital risk management

XXVI. Financial instruments

(2) Interest rate risks

Sensitivity analysis

3. Liquidity risks

(VIII) Salary of the major management

XXVIII. Pledged assets

XXIX. Assets and liabilities in foreign currencies of material effects

§List of Major Accounting Items§

AI assistant

LOOP — Audit Report / Information 2025

52258_rns_2026-04-14_706c2fa7-5a09-4251-a069-49c549855797.pdf

Loop Telecommunication International, Inc.

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

Notice to Readers

(IV) Foreign currency

(V) Inventory

2. Derecognition

XIII. Lease agreement

(I) Right-of-use assets

XV. Intangible assets

XIX. Retirement benefit plan

(I) Defined contribution plans

(II) Defined benefit plans

XX. Equity

Estimated ratio

Amount

(VIII) Foreign currency exchange gains and losses

XXIII. Income tax

XXV. Capital risk management

XXVI. Financial instruments

(2) Interest rate risks

Sensitivity analysis

3. Liquidity risks

(VIII) Salary of the major management

XXVIII. Pledged assets

XXIX. Assets and liabilities in foreign currencies of material effects

§List of Major Accounting Items§

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LOOP Audit Report / Information 2025