M3 Technology Inc.

Financial Statements for the Years Ended December 31, 2025 and 2024 and Independent Auditors' Report

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders
M3 Technology Inc.

Opinion

We have audited the accompanying parent company only financial statements of M3 Technology Inc. (the “Company”), which comprise the parent company only balance sheets 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 material accounting policy information (collectively referred to as the “parent company only financial statements”).

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the 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 Financial Statement Audit and Attestation Engagements of 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 are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matter

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 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 matter of the Company’s financial statements for the year ended December 31, 2025 is stated as follows:

Recognition of revenue from the specific customer

The revenue from specific customer amounted to NT$367,230 thousand in 2025; such amount which accounted for 38% of sales revenue is a significant amount of the Company’s financial statements. Therefore, recognition of revenue from the specific customer was deemed to be a key audit matter.

For the accounting policy on recognition of revenue from the specific customer, refer to Note 4 (12).

The audit procedures for the abovementioned key audit matter were as follows:

We understood the design and tested the effectiveness of the internal controls with respect to recognition of revenue from specific customer.
We sent out confirmation request to specific customer; we requested confirmation of the total amount of revenue for the year.
We selected samples of sales to specific customer and validated the details against the supporting documents, including sales orders, delivery documents and cash received from customer to verify the occurrence of sales transactions.
We validated selected samples of sales returns and collection of trade receivables after the year-end against the data as of December 31, 2025.

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

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of 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 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 these 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 management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the 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 entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

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

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

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

The engagement partners on the audits resulting in this independent auditors’ report are Chih-Feng Yu and Pi-Yu Chuang.

Deloitte & Touche
Taipei, Taiwan
Republic of China

February 25, 2026

Notice to Readers

The accompanying parent company only financial statements are intended only to present the 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 audit such parent company only financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying parent company only 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’ report and parent company only financial statements shall prevail.

M3 TECHNOLOGY INC.

BALANCE SHEETS

DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars)

	2025		2024
ASSETS	Amount	%	Amount	%
CURRENT ASSETS
Cash and cash equivalents (Notes 4 and 6)	$ 293,847	16	$ 306,001	18
Financial assets at amortized cost - current (Notes 4, 7 and 27)	1,102,285	59	848,037	49
Notes receivable (Notes 4, 8 and 18)	6,916	-	6,391	-
Trade receivables (Notes 4, 8, 18 and 26)	171,371	9	158,082	9
Other receivables (Notes 4 and 26)	1,102	-	20,777	1
Inventories (Notes 4, 5 and 9)	111,483	6	139,749	8
Prepayments	1,510	-	1,686	-
Other current assets (Note 20)	-	-	64,522	4
Total current assets	1,688,514	90	1,545,245	89
NON-CURRENT ASSETS
Investments accounted for using the equity method (Notes 4 and 10)	1,836	-	11,730	1
Property, plant and equipment (Notes 4 and 11)	161,417	8	159,323	9
Right-of-use assets (Notes 4 and 12)	4,709	-	1,934	-
Intangible assets (Notes 4 and 13)	10,786	1	9,127	-
Deferred tax assets (Notes 4 and 20)	16,386	1	12,763	1
Prepayments for equipment	36	-	1,764	-
Refundable deposits	287	-	952	-
Total non-current assets	195,457	10	197,593	11
TOTAL	$ 1,883,971	100	$ 1,742,838	100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term borrowings (Notes 4 and 14)	$ 30,000	2	$ -	-
Contract liabilities - current (Notes 4 and 18)	149	-	7	-
Notes payable	17	-	3	-
Accounts payable	56,579	3	46,562	3
Other payables (Notes 15 and 26)	95,982	5	97,634	6
Current tax liabilities (Notes 4 and 20)	27,418	1	10,796	1
Provisions - current (Note 4)	9,354	1	9,649	-
Lease liabilities - current (Notes 4 and 12)	2,675	-	2,009	-
Other current liabilities	1,187	-	1,060	-
Total current liabilities	223,361	12	167,720	10
NON-CURRENT LIABILITIES
Deferred tax liabilities (Notes 4 and 20)	-	-	4,747	-
Lease liabilities - non-current (Notes 4 and 12)	2,049	-	-	-
Credit balance on the carrying value of investments accounted for using the equity method (Notes 4 and 10)	4,783	-	14,867	1
Total non-current liabilities	6,832	-	19,614	1
Total liabilities	230,193	12	187,334	11
EQUITY (Notes 4, 17 and 22)
Share capital
Ordinary share	437,056	23	428,321	25
Share capital awaiting retirement	( 40)	-	-	-
Total share capital	437,016	23	428,321	25
Capital surplus	590,054	31	591,465	34
Retained earnings
Legal reserve	96,510	5	84,354	5
Unappropriated earnings	564,943	30	504,805	29
Total retained earnings	661,453	35	589,159	34
Other equity
Exchange differences on translation of foreign financial statements	149	-	877	-
Unearned compensation	( 6,469)	-	( 25,893)	( 2)
Total other equity	( 6,320)	-	( 25,016)	( 2)
Treasury shares	( 28,425)	( 1)	( 28,425)	( 2)
Total equity	1,653,778	88	1,555,504	89
TOTAL	$ 1,883,971	100	$ 1,742,838	100

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

M3 TECHNOLOGY INC.

STATEMENTS 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	%
OPERATING REVENUE (Notes 4, 18 and 26)
Sales revenue	$ 972,228	101	$ 910,129	100
Sales returns	( 1,351)	-	( 1,299)	-
Sales discounts	( 7,249)	( 1)	( 1,652)	-
Total operating revenue, net	963,628	100	907,178	100
OPERATING COSTS (Notes 4, 5, 9 and 19)	497,385	52	476,292	52
GROSS PROFIT	466,243	48	430,886	48
OPERATING EXPENSES (Notes 4, 19 and 26)
Selling and marketing expenses	38,380	4	37,064	4
General and administrative expenses	64,433	7	61,217	7
Research and development expenses	144,224	15	163,069	18
Total operating expenses	247,037	26	261,350	29
PROFIT FROM OPERATIONS	219,206	22	169,536	19
NON-OPERATING INCOME AND EXPENSES
Interest income (Notes 4 and 26)	28,497	3	25,738	3
Other income	74	-	138	-
Other gains and losses	295	-	1,339	-
Financial costs	( 148)	-	( 1,942)	-
Share of loss of subsidiaries (Notes 4 and 10)	( 10,557)	( 1)	( 49,850)	( 6)
Foreign exchange gains, net (Notes 4 and 19)	-	-	27,360	3
Foreign exchange loss, net (Notes 4 and 19)	( 38,295)	( 4)	-	-
Total non-operating income and expenses	( 20,134)	( 2)	2,783	-
PROFIT BEFORE INCOME TAX	199,072	20	172,319	19
INCOME TAX EXPENSE (Notes 4 and 20)	( 41,830)	( 4)	( 50,761)	( 6)
NET PROFIT FOR THE YEAR	157,242	16	121,558	13
OTHER COMPREHENSIVE (LOSS) INCOME
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of the financial statements of foreign operations	( 728)	-	413	-

(Continued)

M3 TECHNOLOGY INC.

STATEMENTS 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	%
Other comprehensive (loss) income for the year	($ 728)	-	$ 413	-
TOTAL COMPREHENSIVE INCOME FOR THE YEAR	$ 156,514	16	$ 121,971	13
EARNINGS PER SHARE (Note 21)
Basic	$ 3.70		$ 2.94
Diluted	$ 3.63		$ 2.84

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

(Concluded)

M3 TECHNOLOGY INC.

STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars)

	Ordinary Shares (Notes 4,17 and 22)				Capital Surplus (Notes 6,17 and 22)	Retained Earnings (Note 17)			Other Equity (Notes 4,17 and 22)				Treasury Shares (Notes 4,17 and 22)
	Number of Shares (In Thousands)	Amount	Share capital awaiting retirement	Total		Legal Reserve	Unappropriated Earnings	Total	Exchange Differences on Translation of the Financial Statements of Foreign Operations	Unearned Compensation	Total
BALANCE AT JANUARY 1, 2024	42,542	$ 425,421	($ 540)	$ 424,881	$ 565,381	$ 62,506	$ 530,661	$ 593,167	$ 464	($ 65,945)	($ 65,481)	($ 134,835)	$ 1,383,113
Appropriation of the 2023 earnings
Legal reserve	-	-	-	-	-	21,848	( 21,848)	-	-	-	-	-	-
Cash dividends distributed by the Company	-	-	-	-	-	-	( 125,697)	( 125,697)	-	-	-	-	( 125,697)
Employee compensation cost for employee share options	-	-	-	-	37	-	-	-	-	-	-	-	37
Cash dividend redemption for share-based payment	-	-	-	-	-	-	131	131	-	-	-	-	131
Employee compensation cost for restricted employee shares	-	-	-	-	-	-	-	-	-	38,186	38,186	-	38,186
Net profit for the year ended December 31, 2024	-	-	-	-	-	-	121,558	121,558	-	-	-	-	121,558
Other comprehensive income for the year ended December 31, 2024	-	-	-	-	-	-	-	-	413	-	413	-	413
Total comprehensive income for the year ended December 31, 2024	-	-	-	-	-	-	121,558	121,558	413	-	413	-	121,971
Gain on disgorgement	-	-	-	-	380	-	-	-	-	-	-	-	380
Issuance of ordinary shares under employee share options	362	3,620	-	3,620	2,081	-	-	-	-	-	-	-	5,701
Issuance of employee restricted shares	32	320	-	320	3,664	-	-	-	-	( 3,984)	( 3,984)	-	-
Cancellation of employee restricted shares	( 104 )	( 1,040)	540	( 500)	( 5,350)	-	-	-	-	5,850	5,850	-	-
Treasury shares transferred to employees for share-based payment	-	-	-	-	25,272	-	-	-	-	-	-	106,410	131,682
BALANCE AT DECEMBER 31, 2024	42,832	428,321	-	428,321	591,465	84,354	504,805	589,159	877	( 25,893)	( 25,016)	( 28,425)	1,555,504
Appropriation of the 2023 earnings
Legal reserve	-	-	-	-	-	12,156	( 12,156)	-	-	-	-	-	-
Cash dividends distributed by the Company	-	-	-	-	-	-	( 85,126)	( 85,126)	-	-	-	-	( 85,126)
Employee compensation cost for restricted employee shares	-	-	-	-	-	-	-	-	-	14,096	14,096	-	14,096
Cash dividend redemption for share-based payment	-	-	-	-	-	-	178	178	-	-	-	-	178
Net profit for the year ended December 31, 2025	-	-	-	-	-	-	157,242	157,242	-	-	-	-	157,242
Other comprehensive income for the year ended December 31, 2025	-	-	-	-	-	-	-	-	( 728)	-	( 728)	-	( 728)
Total comprehensive income for the year ended December 31, 2025	-	-	-	-	-	-	157,242	157,242	( 728)	-	( 728)	-	156,514
Issuance of ordinary shares under employee share options	915	9,150	-	9,150	3,462	-	-	-	-	-	-	-	12,612
Cancellation of employee restricted shares	( 41 )	( 415 )	( 40 )	( 455 )	( 4,873 )	-	-	-	-	5,328	5,328	-	-
BALANCE AT DECEMBER 31, 2025	43,706	$ 437,056	($ 40 )	$ 437,016	$ 590,054	$ 96,510	$ 564,943	$ 661,453	$ 149	($ 6,469)	($ 6,320)	($ 28,425)	$ 1,653,778

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

M3 TECHNOLOGY INC.

STATEMENTS 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	$ 199,072	$ 172,319
Adjustments for
Depreciation expense	39,500	32,584
Amortization expense	6,789	10,638
Financial costs	148	1,942
Interest income	(28,497)	(25,738)
Compensation cost of treasury shares	-	6,849
Compensation cost of employee share options	-	21
Compensation cost of employee restricted shares	12,438	25,448
Loss on disposal of property, plant and equipment	-	8
Share of loss of subsidiaries	10,557	49,850
(Reversal) write-down of inventories	(4,061)	11,939
Unrealized loss (gain) on foreign currency exchange	27,192	(19,957)
Reversal of provisions	(295)	(1,347)
Changes in operating assets and liabilities
Notes receivable	(525)	(5,396)
Trade receivables	(13,653)	12,728
Other receivables	19,552	(19,522)
Inventories	32,327	29,300
Prepayments	176	1,133
Other current assets	-	(64,522)
Contract liabilities	142	(645)
Notes payable	14	(2)
Accounts payable	10,252	(11,399)
Other payables	3,922	(20,610)
Other current liabilities	127	306
Net cash generated from operations	315,177	185,927
Interest received	28,301	25,415
Interest paid	(143)	(1,942)
Income tax returned (paid)	30,944	(56,136)
Net cash generated from operating activities	374,279	153,264
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at amortized cost	(2,068,065)	(1,787,538)
Proceeds from sale of financial assets at amortized cost	1,787,130	1,781,680
Net cash outflow on acquisition of subsidiary	(9,817)	-
Payments for property, plant and equipment	(46,462)	(31,492)
Increase in refundable deposits	-	(672)
Decrease in refundable deposits	665	-
Payments for intangible assets	(4,845)	(4,518)
Increase in prepayments for equipment	(36)	(1,764)
Net cash used in investing activities	(341,430)	(44,304)

(Continued)

M3 TECHNOLOGY INC.

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars)

	2025	2024
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings	$ 30,000	$ -
Repayment of the principal portion of lease liabilities	( 2,667)	( 2,623)
Cash dividend paid	( 85,126)	( 125,697)
Exercise of employee share options	12,612	5,701
Treasury shares sold to employees	-	106,100
Cash dividend redemption for share-based payment	178	131
Imposition of disgorgement	-	380
Net cash used in financing activities	( 45,003)	( 16,008)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	( 12,154)	92,952
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR	306,001	213,049
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	$ 293,847	$ 306,001
The accompanying notes are an integral part of the financial statements.		(Concluded)

11 -

M3 TECHNOLOGY INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. GENERAL INFORMATION

M3 Technology Inc. (hereinafter referred to as the "Company") was incorporated in September 2010, upon approval of the Ministry of Economic Affairs. The Company mainly engages in the design, development and sale of power management ICs and provides related application services.

Upon approval of Taipei Exchange (TPEx) in November 2020, the Company started trading on Emerging Stock Board of The Company's shares have been listed on the Taiwan Stock Exchange (TWSE) since May 12, 2022.

The financial statements are presented in the Company's functional currency, the New Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved by the board of directors on February 25, 2026.

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

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

Amendments to IAS 21 "Lack of Exchangeability"

The initial application of the Amendments to IAS 21 "Lack of Exchangeability" did not have a material impact on the Company's accounting policies.

b. The IFRS Accounting Standards endorsed by the FSC for application starting from 2026

New, Amended and Revised Standards and Interpretations	Effective Date Announced by IASB
Amendments to IFRS 9 and IFRS 7 “Amendments to the Classification and Measurement of Financial Instruments”	January 1, 2026
Amendments to IFRS 9 and IFRS 7 “Contracts Referencing Nature-dependent Electricity”	January 1, 2026
Annual Improvements to IFRS Accounting Standards - Volume 11	January 1, 2026
IFRS 17 “Insurance Contracts” (including the 2020 and 2021 amendments to IFRS 17)	January 1, 2023

As of the date the parent company only financial statements were authorized for issue, the Company has assessed that the application of other standards and interpretations will not have a material impact on the Company's financial position and financial performance.

c. The IFRS Accounting Standards in issue but not yet endorsed and issued into effect by the FSC

New, Amended and Revised Standards and Interpretations	Effective Date Announced 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 Disclosure in Financial Statements”	January 1, 2027 (Note 2)
IFRS 19 “Subsidiaries without Public Accountability: Disclosures” (including the 2025 amendments to IFRS 19)	January 1, 2027
Amendments to IAS 21 “Translation to a Hyperinflationary Presentation Currency”	January 1, 2027

Note 1: Unless stated otherwise, the above IFRS Accounting Standards 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” and consequential amendments

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

To classify items of income and expenses presented in the statement of profit or loss into the operating, investing, financing, income taxes and discontinued operations categories, the Company shall assess whether it has specified main business activities of investing in particular types of assets and providing financing to customers.
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, 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.
Disclosures on Management-defined Performance Measures (MPMs): When in public communications outside financial statements and communicating to users of financial statements management’s view of an aspect of the financial performance of the Company as a whole, the Company shall disclose related information about its MPMs in a single note to the financial statements, including the description of such measures, calculations, reconciliations to the subtotal or total specified by IFRS Accounting Standards and the income tax and non-controlling interests effects of related reconciliation items.

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 parent company only financial statements were authorized for issue, the Company is continuously assessing the other impacts of the above amended standards and interpretations on the Company's financial position and financial performance and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION

a. Statement of compliance

The parent company only financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

b. Basis of preparation

The parent company only financial statements have been prepared on the historical cost basis.

When preparing these parent company only financial statements, the Company used the equity method to account for its investments in subsidiaries. In order for the amounts of the net profit for the year, other comprehensive income for the year and total equity in the parent company only financial statements to be the same with the amounts attributable to the owners of the Company in its consolidated financial statements, adjustments arising from the differences in accounting treatments between the parent company only basis and the consolidated basis were made to investments accounted for using the equity method, the share of profit or loss of subsidiaries and the share of other comprehensive income of subsidiaries, as appropriate, in these parent company only financial statements.

c. Classification of current and non-current assets and liabilities

Current assets include:

1) Assets held primarily for the purpose of trading;
2) Assets expected to be realized within 12 months after the reporting period; and
3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

1) Liabilities held primarily for the purpose of trading;
2) Liabilities due to be settled within 12 months after the reporting period, and
3) Liabilities for which the Company does not have the substantial right at the end of the reporting period to defer settlement for at least 12 months after the reporting period.

Assets and liabilities that are not classified as current are classified as non-current.

14 -

d. Foreign currencies

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

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

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

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

e. Inventories

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

f. Investments in subsidiaries

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

A subsidiary is an entity that is controlled by the Company.

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

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

g. Property, plant and equipment

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

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

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

15 -

h. Intangible assets

1) Intangible assets acquired separately

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

2) Derecognition of intangible assets

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

i. Impairment of property, plant and equipment, right-of-use assets and intangible assets

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant and equipment, right-of-use assets and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the smallest group of cash-generating units on a reasonable and consistent basis of allocation.

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

When an impairment loss is subsequently reversed, the carrying amount of the corresponding asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount (after deducting amortization and depreciation) that would have been determined had no impairment loss been recognized on the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

j. Financial instruments

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

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

1) Financial assets

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

a) Measurement category

Financial assets are classified into financial assets at amortized cost.

16 -

Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

i) The financial assets are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

ii) The contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, time deposits financial assets at amortized cost, notes receivable, trade receivables, other receivables and refundable deposits, are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset, except for:

i) Originated credit-impaired financial asset, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of such financial asset; and

ii) Financial asset that is not credit impaired on purchase or origination but has subsequently become credit impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods.

A financial asset is credit impaired when one or more of the following events have occurred:

i) Significant financial difficulty of the issuer or the borrower;

ii) Breach of contract, such as a default;

iii) It is becoming probable that the borrower will enter bankruptcy or undergo a financial reorganization; or

iv) The disappearance of an active market for that financial asset because of financial difficulties.

Cash equivalents include time deposits with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

b) Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including trade receivables).

The Company always recognizes lifetime expected credit losses (ECLs) for trade receivables. For all other financial instruments, the Company recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

17 -

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

For internal credit risk management purposes, the Company considers internal or external information which shows that the debtor is unlikely to pay its creditors as indication that a financial asset is in default (without taking into account any collateral held by the Company).

The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amounts through a loss allowance account.

c) Derecognition of financial assets

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

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss.

2) Equity instruments

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

The repurchase of the Company’s own equity instruments is recognized in and deducted directly from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of the Company’s own equity instruments.

3) Financial liabilities

a) Subsequent measurement

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

b) Derecognition of financial liabilities

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

k. Provisions

Provisions are measured at the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Provisions are estimated liabilities to settle the present obligation, which are estimated as probably compensation according to the judgement of the Company's management and other known facts and recognized as non-operating income and expense during the period of sale of the relevant products.

l. Revenue recognition

The Company identifies contracts with customers, allocates the transaction price to the performance

18 -

obligations and recognizes revenue when performance obligations are satisfied.

Revenue from the sale of goods

Revenue from the sale of goods comes from sales of power management integrated circuit products. Sales of products are recognized as revenue at the time the goods are delivered to the customer's specific location because it is the time when the customer has full discretion over the manner of distribution and price to sell the goods, has the primary responsibility for sales to future customers and bears the risks of obsolescence. Trade receivables are recognized concurrently. Advance receipts from the sale of the goods are recognized as contract liabilities until the goods have been delivered to the customer.

The Company does not recognize revenue on materials delivered to subcontractors because this delivery does not involve a transfer of control.

m. Leases

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

The Company as lessee

The Company recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for low-value asset leases accounted for applying a recognition exemption and short-term leases where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the parent company only balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments, which comprises fixed payments and in-substance fixed payments. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the lessee's incremental borrowing rate will be used.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the parent company only balance sheet.

n. Borrowing costs

All borrowing costs are recognized in profit or loss in the period in which they are incurred.

o. Employee benefits

1) Short-term employee benefits

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

19 -

2) Retirement benefits

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

p. Share-based payment arrangements

1) Equity-settled share-based payment arrangements granted to employees

The fair value at the grant date of the employee share options or restricted shares for employees are expensed on a straight-line basis over the vesting period, based on the Company's best estimates of the number of shares that are expected to ultimately vest, with a corresponding increase in capital surplus - employee share options or other equity - unearned compensation. The expense is recognized in full at the grant date if the grants are vested immediately. The grant date of treasury shares transferred to employees is the date on which the number of shares that the employees purchase is confirmed.

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

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

2) Equity-settled share-based payment arrangements granted to the employees of a subsidiary

The grant by the Company of its equity instruments to the employees of a subsidiary under employee share options or restricted shares for employees are treated as a capital contribution. The fair value of employee services received under the arrangement is measured by reference to the grant-date fair value and is recognized over the vesting period as an addition to the investment in the subsidiary, with a corresponding credit to capital surplus - employee share options or capital surplus - restricted shares for employees. The grant date of treasury shares transferred to the employees of a subsidiary is the date on which the number of shares that the employees of a subsidiary purchase is confirmed.

q. Taxation

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

1) Current tax

Income tax payable (recoverable) is based on taxable profit (loss) for the year determined according to the tax laws in the ROC.

According to the Income Tax Act in the ROC, an additional tax on unappropriated earnings is provided for in the year the shareholders approve to retain earnings.

Adjustments of prior years' tax liabilities are added to or deducted from the current year's tax provision.

2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and

20 -

liabilities and the corresponding tax bases used in the computation of taxable profit.

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

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

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

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

3) Current and deferred taxes

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

MATERIAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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

When developing material accounting estimates, the Company considers the possible impact on the cash flow projection, growth rates, discount rates, profitabilities and other relevant material estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.

Key Sources of Estimation and Uncertainty

Write-down of Inventory

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

21 -

22 -

6. CASH AND CASH EQUIVALENTS

	December 31
	2025	2024
Cash on hand	$ 70	$ 119
Checking accounts and demand deposits	293,777	240,312
Cash equivalents
Time deposits	-	65,570
	$ 293,847	$ 306,001

Interest rate ranges for demand deposits and time deposits on the balance sheet date were as follows:

	December 31
	2025	2024
Demand deposits	0.005%-0.675%	0.005%-0.80%
Time deposits	-	4.60%

7. FINANCIAL ASSETS AT AMORTIZED COST - CURRENT

	December 31
	2025	2024
Time deposits with original maturities of more than 3 months	$1,097,585	$ 843,242
Restricted time deposit	4,700	4,795
	$1,102,285	$ 848,037

The ranges of interest rates for time deposits were approximately 1.52%-4.25% and 1.42%-5.30% per annum as of December 31, 2025 and 2024, respectively.

Please refer to Note 27 for information relating to pledged assets.

8. NOTES RECEIVABLE AND TRADE RECEIVABLES

	December 31
	2025	2024
Notes receivable
At amortized cost
Gross carrying amount	$ 6,916	$ 6,391
Trade receivables
At amortized cost
Gross carrying amount	$ 171,371	$ 158,082

The average credit period of sales of goods was 30-60 days, and no interest was charged on trade receivables.

In order to minimize credit risk, the management of the Company has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Company reviews the recoverable amount of each

individual trade debt at the end of the reporting period to ensure that an adequate allowance is made for possible irrecoverable amounts. In this regard, the management believes the Company's credit risk is significantly reduced.

The Company measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated using a provision matrix by reference to past default experience of the customer, the customer's current financial position, economic conditions of the industry in which the customer operates and industry outlook. As the Company's historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Company's different customer base.

The following table details the loss allowance of trade receivables based on the Company's provision matrix.

December 31, 2025

	Not Past Due	1-90 Days Past Due	91-180 Days Past Due	181-365 Days Past Due	More than 365 Days Past Due	Total
Gross carrying amount	$171,371	$ -	$ -	$ -	$ -	$171,371
Allowance for impairment loss (lifetime ECLs)	-	-	-	-	-	-
Amortized cost	$171,371	$ -	$ -	$ -	$ -	$171,371

December 31, 2024

	Not Past Due	1-90 Days Past Due	91-180 Days Past Due	181-365 Days Past Due	More than 365 Days Past Due	Total
Gross carrying amount	$156,350	$ 1,732	$ -	$ -	$ -	$158,082
Allowance for impairment loss (lifetime ECLs)	-	-	-	-	-	-
Amortized cost	$156,350	$ 1,732	$ -	$ -	$ -	$158,082

The Company did not recognize allowance for impairment loss because the Company estimated that the recoverable amount was equal to the original account amount.

INVENTORIES

	December 31
	2025	2024
Raw materials	$ 18,874	$ 24,790
Work-in-progress	48,421	45,791
Finished goods	44,188	69,168
	$ 111,483	$ 139,749

The nature of the cost of goods sold is as follows:

	For the Year Ended December 31
	2025	2024
Cost of inventories sold	$ 501,446	$ 464,353
Inventory (reversed) write-downs	( 4,061 )	11,939
	$ 497,385	$ 476,292

10. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in subsidiaries

	December 31
	2025	2024
M3 Technology (Dallas), Inc. (hereinafter referred to as “M3 Dallas”)	$ 1,836	$ 11,730

Credit balance on the carrying value of investments accounted for using the equity method

	December 31
	2025	2024
Blink Electronic Co., Ltd. (hereinafter referred to as “Blink”)	$ 4,783	$ 14,867
	Proportion of Ownership and Voting Rights
	December 31
Name of Subsidiary	2025	2024
M3 Dallas	100%	100%
Blink	100%	100%

Refer to Tables 2 and 3 for the details of the subsidiaries directly and indirectly held by the Company.

The investments in subsidiaries accounted for using the equity method and the share of profit or loss and other comprehensive income of those investments for the years ended December 31, 2025 and 2024 was based on the subsidiaries' financial statements which have been audited for the same years.

11. PROPERTY, PLANT AND EQUIPMENT

	Land	Buildings	Machinery and Equipment	Office Equipment	Leasehold Improvement	Test Equipment	Other Equipment	Total
Cost
Balance at January 1, 2024	$ 96,231	$ 22,077	$ 25,948	$ 6,827	$ 3,250	$ 144,708	$ 1,361	$ 300,402
Additions	-	324	3,147	2,663	622	26,062	794	33,612
Disposals	-	-	( 529 )	( 49 )	-	( 32 )	-	( 610 )
Reclassification	-	619	-	-	-	-	-	619
Balance at December 31, 2024	$ 96,231	$ 23,020	$ 28,566	$ 9,441	$ 3,872	$ 170,738	$ 2,155	$ 334,023
Accumulated depreciation
Balance at January 1, 2024	$ -	$ 339	$ 16,727	$ 940	$ 2,697	$ 123,234	$ 1,361	$ 145,298
Depreciation expense	-	1,132	3,947	2,580	272	21,789	284	30,004
Disposals	-	-	( 529 )	( 49 )	-	( 24 )	-	( 602 )
Balance at December 31, 2024	$ -	$ 1,471	$ 20,145	$ 3,471	$ 2,969	$ 144,999	$ 1,645	$ 174,700

(Continued)

25 -

	Land	Buildings	Machinery and Equipment	Office Equipment	Leasehold Improvement	Test Equipment	Other Equipment	Total
Carrying amount at December 31, 2024	$ 96,231	$ 21,549	$ 8,421	$ 5,970	$ 903	$ 25,739	$ 510	$ 159,323
Cost
Balance at January 1, 2025	$ 96,231	$ 23,020	$ 28,566	$ 9,441	$ 3,872	$ 170,738	$ 2,155	$ 334,023
Additions	-	-	8,219	1,015	33	27,847	109	37,223
Reclassification	-	-	1,764	-	-	-	-	1,764
Balance at December 31, 2025	$ 96,231	$ 23,020	$ 38,549	$ 10,456	$ 3,905	$ 198,585	$ 2,264	$ 373,010
Accumulated depreciation
Balance at January 1, 2025	$ -	$ 1,471	$ 20,145	$ 3,471	$ 2,969	$ 144,999	$ 1,645	$ 174,700
Depreciation expense	-	1,142	4,998	3,047	392	26,908	406	36,893
Balance at December 31, 2025	$ -	$ 2,613	$ 25,143	$ 6,518	$ 3,361	$ 171,907	$ 2,051	$ 211,593
Carrying amount at December 31, 2025	$ 96,231	$ 20,407	$ 13,406	$ 3,938	$ 544	$ 26,678	$ 213	$ 161,417

(Concluded)

No impairment loss was recognized for the year ended December 31, 2025 and 2024 after assessment performed.

The above items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives as follows:

Buildings 8 to 34 years
Machinery and equipment 2 to 5 years
Office equipment 3 to 5 years
Leasehold improvement 3 to 5 years
Test equipment 2 years
Other equipment 2 years

12. LEASE AGREEMENTS

a. Right-of-use assets

	December 31
	2024	2024
Carrying amount
Buildings	$ 4,709	$ 1,934
	For the Year Ended December 31
	2024	2024
Additions to the right-of-use assets	$ 5,382	$ -
Depreciation charge for right-of-use assets
Buildings	$ 2,607	$ 2,580

Except for the aforementioned addition and recognized depreciation, the Company did not have significant sublease or impairment of right-of-use assets during the year ended December 31, 2025 and 2024.

b. Lease liabilities

	December 31
	2024	2024
Carrying amount
Current	$ 2,675	$ 2,009
Non-current	$ 2,049	$ -
Discount rate for lease liabilities was as follows:
	December 31
	2024	2024
Buildings	2.38%	2.40%

c. Other lease information

	For the Year Ended December 31
	2024	2024
Expense relating to short-term leases and low-value asset leases	$ 1,443	$ 667
Total cash outflow for leases	$ 4,156	$ 3,367

The Company's leases of certain buildings qualify as short-term leases and leases of certain office equipment qualify as low-value asset leases. The Company has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

INTANGIBLE ASSETS

	Computer Software	Specific Technology	Patents	Total
Cost
Balance at January 1, 2024	$ 31,669	$ 1,000	$ 8,300	$ 40,969
Additions	9,795	-	793	10,588
Balance at December 31, 2024	$ 41,464	$ 1,000	$ 9,093	$ 51,557
Accumulated amortization
Balance at January 1, 2024	$ 24,880	$ 1,000	$ 5,912	$ 31,792
Amortization expense	9,352	-	1,286	10,638
Balance at December 31, 2024	$ 34,232	$ 1,000	$ 7,198	$ 42,430
Carrying amount at December 31, 2024	$ 7,232	$ -	$ 1,895	$ 9,127
				(Continued)

27 -

Cost	Computer Software	Specific Technology	Patents	Total
Balance at January 1, 2025	$ 41,464	$ 1,000	$ 9,093	$ 51,557
Additions	8,154	-	294	8,448
Balance at December 31, 2025	$ 49,618	$ 1,000	$ 9,387	$ 60,005
Accumulated amortization
Balance at January 1, 2025	$ 34,232	$ 1,000	$ 7,198	$ 42,430
Amortization expense	5,785	-	1,004	6,789
Balance at December 31, 2025	$ 40,017	$ 1,000	$ 8,202	$ 49,219
Carrying amount at December 31, 2025	$ 9,601	$ -	$ 1,185	$ 10,786

(Concluded)

The above items of intangible assets are amortized on a straight-line basis over their estimated useful lives as follows:

Computer software	3 years
Specific technology	2 years
Patents	5 years

An analysis of Amortization by function:

For the Year Ended December 31	2025	2024
General and administrative expenses	$ 1,219	$ 333
Research and development expenses	5,570	10,305
	$ 6,789	$ 10,638

14. BORROWINGS (DECEMBER 31, 2024: NONE)

December 31	2025
Unsecured borrowings
Line of credit loans	$ 30,000

The range of interest rates on revolving bank loans was 1.88% per annum at December 31, 2025.

28 -

15. OTHER LIABILITIES

	December 31
	2025	2024
Current
Other payables
Payable for compensation of employees	$ 49,015	$ 58,015
Payable for salaries	21,231	9,601
Payable for purchases of equipment	12,890	18,467
Payable for professional expenses	2,628	3,259
Payable for remuneration of directors	2,031	1,853
Payable for labor and national health insurances and pension	1,680	1,654
Payable for business tax	837	-
Others	5,670	4,785
	$ 95,982	$ 97,634

16. RETIREMENT BENEFIT PLANS

Defined Contribution Plans

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

17. EQUITY

a. Share capital

Ordinary shares

	December 31
	2025	2024
Number of shares authorized (in thousands)	60,000	60,000
Shares authorized	$ 600,000	$ 600,000
Number of shares issued and fully paid (in thousands)	43,706	42,832
Shares issued	$ 437,056	$ 428,321

Fully paid ordinary shares, which have a par value of NT$10, carry one vote per share and a right to dividends.

In 2025 and 2024, the Company issued 915 thousand and 362 thousand new shares respectively due to the employee share options exercised. As of the date the parent company only financial statements were authorized for issue, the registration of the issuance of new shares for the three months ended December 31, 2025 has not been completed.

The Company's board of directors resolved to issue 32 thousand and 682 thousand employee restricted shares within the quota approved by the FSC on July 30, 2024 and September 14, 2023. The Company recalled and canceled 46 thousand and 50 thousand employee restricted shares due to employee resignations before the vesting date for the years ended December 31, 2025 and 2024, respectively. As of the date the parent company only financial statements were authorized for issue, the registration of 4 thousand shares for the year ended December 31, 2025 has not been processed, the share capital

awaiting retirement was $40 thousand.

Please refer to Note 22 for information relating to employee share options and employee restricted shares.

b. Capital surplus

	December 31
	2025	2024
May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (1)
Issuance of ordinary shares	$ 527,502	$ 508,067
Exercised employee share options	17,017	11,826
Issuance of ordinary shares for cash capital increase reserved for employee share options	260	260
Treasury share transactions	24,692	24,692
May only be used to offset a deficit
Gain on disgorgement	380	380
May not be used for any purpose
Employee restricted shares	20,179	44,482
Employee share options	24	1,758
	$ 590,054	$ 591,465

1) Such capital surplus may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company's capital surplus and to once a year).

c. Retained earnings and dividend policy

Under the Company's Articles of Incorporation (the "Articles"), the proposal for profit distribution or offsetting of losses may be made at the end of each quarter, where the Company made a profit in a quarter, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, until the accumulated legal reserve equals the Company's paid-in capital, where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, until the accumulated legal reserve equals the Company's paid-in capital. Setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company's board of directors as the basis for proposing a distribution plan. The board of directors is authorized to adopt a special resolution (more than two-thirds of the directors of the board are present, and more than half of the directors present agree) to distribute dividends and bonuses in cash and a report of such distribution should be submitted in the shareholders' meeting, distribution of earnings by the issuance of shares should be approved by the shareholders in their meetings. For the policies on the distribution of compensation of employees and remuneration of directors, refer to compensation of employees and remuneration of directors in Note 19-c.

An appropriation of earnings to a legal reserve shall be made until the legal reserve equals the Company's paid-in capital. The legal reserve may be used to offset deficits. If the Company has no

deficit and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.

The appropriations of earnings for 2024 and 2023 were as follows:

	For the Year Ended December 31
	2024	2023
Legal reserve	$ 12,156	$ 21,848
Cash dividends	$ 85,126	$125,697
Cash dividends per share (NT$)	$ 2.00	$ 3.05

The above appropriations for cash dividends were resolved by the Company’s board of directors on February 26, 2025 and February 29, 2024, respectively; the other proposed appropriations were resolved by the shareholders in their meetings on May 22, 2025 and May 24, 2024, respectively.

The dividends per share in 2023 were adjusted to NT$2.96944509 due to the employee share options exercised and the treasury shares transferred to employees.

The dividends per share in 2024 were adjusted to NT$1.98790252 due to the employee share options exercised and the employee restricted shares recalled.

The appropriations of earnings for 2025, which were proposed by the Company’s board of directors on February 25, 2026, were as follows:

	For the Year Ended December 31
	2025
Legal reserve	$ 15,724
Cash dividends	$108,508
Cash dividends per share (NT$)	$ 2.50

If the dividends per share changes due to the employee share options exercised and the employee restricted shares recalled, the dividends per share shall be adjusted proportionally.

The above appropriation for cash dividends has been resolved by the Company’s board of directors; the other proposed appropriations will be resolved by the shareholders in their meeting to be held on May 25, 2026.

d. Treasury shares

Purpose of Buy-back	Shares Transferred to Employees (In Thousands)
Number of shares at January 1 and December 31, 2025	269
Number of shares at January 1, 2024	1,276
Decrease during the period	( 1,007)
Number of shares at December 31, 2024	269

For the purpose of transferring shares to employees, the Company’s board of directors approved a share buyback program on October 11, 2022, the Company bought back 1,276 thousand shares by $134,835 thousand between October 12, 2022 to December 9, 2022.

The Company’s board of directors resolved to transfer 971 thousand shares to employees on May 2, 2024. The grant date was May 9, 2024, and the stock subscription date was May 13, 2024. The actual number of shares transferred was 897 thousand, and the transfer price was $94,795 thousand.

The Company’s board of directors resolved to transfer 272 thousand shares to employees on September 11, 2024. The grant date was September 12, 2024, and the stock subscription date was September 11, 2024. The actual number of shares transferred was 110 thousand, and the transfer price was $11,625 thousand.

Please refer to Note 22 for information relating to treasury shares.

Under the Securities and Exchange Act, the Company shall neither pledge treasury shares nor exercise shareholders’ rights on these shares before transferring.

18. REVENUE

	For the Year Ended December 31
	2025	2024
Revenue from contracts with customers
Revenue from the sale of goods	$ 963,628	$ 907,178
Contract balance
	December 31, 2025	December 31, 2024
Notes and trade receivables (Note 8)	$ 178,287	$ 164,473
Contract liabilities
Sale of goods	$ 149	$ 7

The changes in the balance of contract liabilities primarily result from the timing difference between the Company’s satisfaction of performance obligations and the respective customer’s payment.

Revenue in the current year that was recognized from the contract liability balance at the beginning of the year and from the performance obligations satisfied in the previous periods was summarized as follows:

	For the Year Ended December 31
	2025	2024
From the contract liabilities at the beginning of the year
Sale of goods	$ 7	$ 652

32 -

19. NET PROFIT

a. Depreciation and amortization

	For the Year Ended December 31
	2025	2024
Property, plant and equipment	$ 36,893	$ 30,004
Right-of-use assets	2,607	2,580
Intangible assets	6,789	10,638
	$ 46,289	$ 43,222
An analysis of depreciation by function
Operating costs	$ 4,193	$ 6,320
Operating expenses	35,307	26,264
	$ 39,500	$ 32,584
An analysis of amortization by function
Operating expenses	$ 6,789	$ 10,638

Refer to Note 13 for information relating to the line items in which any amortization of intangible assets is included.

b. Employee benefit expense

	For the Year Ended December 31
	2025	2024
Post-employment benefits (Note 16)
Defined contribution plans	$ 3,174	$ 2,663
Share-based payments
Equity settled	12,438	32,318
Salary and bonus expense	95,236	78,865
	$ 110,848	$ 113,846
An analysis of employee benefits expense by function
Operating costs	$ 22,574	$ 28,345
Operating expenses	88,274	85,501
	$ 110,848	$ 113,846

c. Compensation of employees and remuneration of directors

The shareholders held their regular meeting on May 22, 2025 and resolved the amendments to the Company's Articles of Incorporation (the "Articles"). According to the Articles, the Company accrues compensation of employees and remuneration of directors at the rates of no less than 1% and no higher than 2%, respectively, of net profit before income tax, compensation of employees, and remuneration of directors. When the Company has accumulated losses, the losses should be offset first. In accordance with the amendments to the Securities and Exchange Act in August 2024, the shareholders of the Company resolved the amendments to the Company's Articles at their 2025 regular meeting. The amendments explicitly stipulate the allocation of no less than 1% of net profit before income tax,

compensation of employees, and remuneration of directors. Furthermore, no less than 1% of the total compensation of employees shall be distributed to non-executive employees.

According to the Articles before the amendments, the Company accrues compensation of employees and remuneration of directors at the rates of no less than 6% and no higher than 2%, respectively, of net profit before income tax, compensation of employees, and remuneration of directors. When the Company has accumulated losses, the losses should be offset first.

The accrued compensation of employees (including non-executive employees) and the remuneration of directors for the year ended December 31, 2025, and the accrued (reversed) compensation of employees and the remuneration of directors for the year ended December 31, 2024, which were approved by the Company's board of directors on February 25, 2026 and February 26, 2025, respectively, are as follows:

Accrual rate

	For the Year Ended December 31
	2025	2024
Compensation of employees	1%	6%
Remuneration of directors	1%	1%
Amount
	For the Year Ended December 31
	2025	2024
Compensation of employees	$ 2,031	$ 11,117
Remuneration of directors	2,031	1,853

If there is a change in the amounts after the annual parent company only financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate.

There is no difference between the actual amounts of compensation of employees and remuneration of directors paid and the amounts recognized in the parent company only financial statements for the years ended December 31, 2024 and 2023.

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

d. Gains or losses on foreign currency exchange

	For the Year Ended December 31
	2025	2024
Foreign exchange gains	$ 48,156	$ 48,929
Foreign exchange losses	( 86,451)	( 21,569)
Net (losses) gains	($ 38,295)	$ 27,360

34 -

20. INCOME TAXES

a. Income tax recognized in profit or loss

Major components of income tax expense are as follows:

	For the Year Ended December 31
	2025	2024
Current tax
In respect of the current year	$ 50,296	$ 40,699
Income tax on unappropriated earnings	-	1,758
Adjustments for prior year	( 96)	4,481
	50,200	46,938
Deferred tax
In respect of the current year	( 8,370)	3,823
Income tax expense recognized in profit or loss	$ 41,830	$ 50,761

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

	For the Year Ended December 31
	2025	2024
Profit before tax	$ 199,072	$ 172,319
Income tax expense calculated at the statutory rate	$ 39,814	$ 34,464
Income tax on unappropriated earnings	-	1,758
Nondeductible expenses in determining taxable income	-	88
Unrecognized deductible temporary differences	2,112	9,970
Adjustments for prior years’ tax	( 96)	4,481
Income tax expense recognized in profit or loss	$ 41,830	$ 50,761

b. Current tax assets and liabilities

	December 31
	2025	2024
Current tax liabilities
Income tax payable	$ 27,418	$ 10,796

c. Deferred tax assets and liabilities

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

For the year ended December 31, 2025

	Opening Balance	Recognized in Profit or Loss	Closing Balance
Deferred tax assets
Temporary differences
Write-downs of inventory	$ 10,684	($ 1,541)	$ 9,143
Payables for annual leave	149	(32)	117
Unrealized exchange loss	-	5,255	5,255
Provisions	1,930	(59)	1,871
	$ 12,763	$ 3,623	$ 16,386
Deferred tax liabilities
Unrealized exchange gain	$ 4,747	($ 4,747)	$ -
For the year ended December 31, 2024
	Opening Balance	Recognized in Profit or Loss	Closing Balance
Deferred tax assets
Temporary differences
Write-downs of inventory	$ 8,492	$ 2,192	$ 10,684
Payables for annual leave	81	68	149
Unrealized exchange loss	1,067	(1,067)	-
Provisions	2,199	(269)	1,930
	$ 11,839	$ 924	$ 12,763
Deferred tax liabilities
Unrealized exchange gain	$ -	$ 4,747	$ 4,747

d. Deductible temporary differences for which no deferred tax assets have been recognized in the parent company only balance sheets

	December 31
	2025	2024
Deductible temporary differences	$ 70,813	$ 60,256

e. Income tax assessment

The income tax returns of the Company through 2023 have been assessed by the tax authorities. In 2024, according to the Income Tax Act, the Company fulfilled its withholding obligations for the contracted research expenses paid to subsidiaries and applied for tax refunds at the applicable preferential tax rates as stipulated by relevant directives of the Income Tax Act. The temporary

payments (classified as other current assets) was $64,522 thousand.

As of December 31, 2025, the withholding tax rate for the contracted research expenses paid to subsidiaries has been approved by the tax authorities, and the tax refund has been received.

21. EARNINGS PER SHARE

Unit: NT$ Per Share

	For the Year Ended December 31
	2025	2024
Basic earnings per share	$ 3.70	$ 2.94
Diluted earnings per share	$ 3.63	$ 2.84

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

Net Profit for the Year

	For the Year Ended December 31
	2025	2024
Earnings used in the computation of basic and diluted earnings per share	$ 157,242	$ 121,558

Number of Ordinary Shares

Unit: In Thousands of Shares

	For the Year Ended December 31
	2025	2024
Weighted average number of ordinary shares used in the computation of basic earnings per share	42,531	41,393
Effects of potentially dilutive ordinary shares:
Employee share options	500	1,007
Employee restricted shares	223	223
Compensation of employees	39	131
Weighted average number of ordinary shares used in the computation of diluted earnings per share	43,293	42,754

The Company may settle the compensation of employees in cash or shares; therefore, the Company assumes that the entire amount of the compensation will be settled in shares, and the resulting potential shares are included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

22. SHARE-BASED PAYMENT AGREEMENTS

a. Employee share option plan

In order to retain and reward employees and improve employees' morale. The Company's board of directors resolved to issue 1,000 units of the first type of option and 2,000 units of the second type of

36 -

option according to the different nature of rewards and remunerations on February 20, 2020. Each option entitles the holder with the right to subscribe for one thousand ordinary shares of the Company. Employees of the Company or its subsidiaries who meet certain conditions would be included. The options granted are valid for 6 and 10 years, respectively, and exercisable at certain percentages after the second anniversary from the grant date. The options were granted at an exercise price of $10 and $18, respectively. For any subsequent changes in the Company's capital, the exercise price is adjusted according to subscription rules. The Company has granted 2,798 units of first type and second type of option in March 2020.

Information relating to issued employee share options was as follows:

	2025		2024
Employee Share Options	Units of Options (Each Equal to Thousand Shares)	Weighted-average Exercise Price Per Share (NT$)	Units of Options (Each Equal to Thousand Shares)	Weighted-average Exercise Price Per Share (NT$)
Balance, beginning of year	928	$ 13.96	1,290	$ 14.68
Options forfeited	(3)	16.30	-	-
Options exercised	(915)	13.78	(362)	15.75
Balance, end of year	10	15.90	928	13.96
Options exercisable, end of year	10	15.90	928	13.96

The weighted-average share prices on the exercise date of the share options for the years ended December 31, 2025 and 2024 were $90.23 and $143.53.

Information on outstanding options was as follows:

	December 31
	2025		2024
Issue Date	Exercise Price Per Share (NT$)	Weighted Average Remaining Contractual Life (Years)	Exercise Price Per Share (NT$)	Weighted Average Remaining Contractual Life (Years)
March 19, 2020 (Type First)	$ 10	0.17	$ 10	1.17
March 19, 2020 (Type Second)	$ 15.9	4.17	$ 16.3	5.17

Compensation cost recognized were $21 thousand for the year ended December 31, 2024. (For the year ended December 31, 2025: None).

b. Employee restricted share

In the shareholders' meeting on May 26, 2022, the shareholders approved a restricted share plan for issuing no more than 800 thousand shares to employees without charge. The plan has been approved by the FSC on August 8, 2022. The shares may be issued at once or in installments within two years from the effective date depending on actual needs. The Company's board of directors resolved to issue 682 thousand employee restricted shares on September 14, 2023. The capital increase base date was November 1, 2023. The Company's board of directors resolved to issue 32 thousand employee restricted shares on July 30, 2024. The capital increase base date was July 31, 2024.

The restrictions on the rights of the employees who acquire the restricted shares but have not met the vesting conditions are as follows:

1) The employees cannot sell, pledge, transfer, donate or, in any other way, dispose of these shares.
2) The attendance, proposal, speech, voting rights of shareholders' meeting and other relevant shareholder equity matters of the Company shall be exercised by the commissioned trust/custody institution.
3) When the Company executes cash capital reduction, capital reduction to offset the accumulated deficit, which is not required by law, the restricted employee shares shall also be nullified in proportion to the capital reduction.

If an employee fails to meet the vesting conditions, the Company will recall and cancel the employee's restricted shares.

Information of the employee restricted shares were as follow:

	2025	2024
Employee restricted shares	Number of Shares (In Thousands)	Number of Shares (In Thousands)
Balance, beginning of year	413	628
Shares issued	-	32
Shares cancelled	( 46)	( 50)
Shares vested	( 180)	( 197)
Balance, end of year	187	413

Information of the employee restricted shares granted by the Company as follows:

Grant Date	Fair Value Per Share - Grant Date (NT$)	Shares Granted (In Thousands of Shares)	Vesting Period
November 1, 2023	$ 117	682	1 year-3 years
July 31, 2024	$ 124.5	32	1 year-3 years

The vesting conditions of employee restricted shares are that after an employee is granted employee restricted shares, and remains employed after one, two, and three years from the base date of the capital increase and their performance meets the requirements of the parent Company. The maximum percentage of shares that may vest each year shall be 34%, 33%, and 33% respectively.

Compensation cost recognized was $12,438 thousand and $25,448 thousand for the years ended December 31, 2025 and 2024, respectively.

c. Treasury shares transferred to employees

The Company's board of directors resolved to transfer 971 thousand and 272 thousand treasury shares to employees in May and September, 2024, and the actual number of shares the employees exercised was 897 thousand and 110 thousand.

Compensation cost recognized was $6,849 thousand for the years ended December 31, 2024.

The treasury shares transferred to employees in May, 2024 were priced using Black-Scholes pricing model, and the inputs to the model were as follows:

	May, 2024	May, 2024
	Options without transfer restrictions	Options with transfer restrictions
Grant date stock price per share	NT$141	NT$141
Grant date adjust stock price per share	NT$141	NT$125.5464
Exercise price per share	NT$105.68	NT$105.68
Expected volatility	32.38%	32.38%
Life	9 days	9 days
Expected dividend yield	0%	0%
Risk-free interest rate	0.825%	0.825%
Grant date fair value of options	NT$35.34	NT$19.89
Grant date weighted average fair value of options	NT$27.615	NT$27.615

The treasury shares transferred to employees in September, 2024 were priced using Black-Scholes pricing model, and the inputs to the model were as follows:

	September, 2024	September, 2024
	Options without transfer restrictions	Options with transfer restrictions
Grant date stock price per share	NT$103.5	NT$103.5
Grant date adjust stock price per share	NT$103.5	NT$92.16
Exercise price per share	NT$105.68	NT$105.68
Expected volatility	61.03%	61.03%
Life	13 days	13 days
Expected dividend yield	0%	0%
Risk-free interest rate	1.41%	1.41%
Grant date fair value of options	NT$3.63	NT$0.57
Grant date weighted average fair value of options	NT$2.1	NT$2.1

23. CASH FLOW INFORMATION

a. Non-cash transactions

The Company paid for the acquisition of property, plant and equipment and intangible assets for the years ended December 31, 2025 and 2024 are as follows:

	For the Years Ended December 31
	2025	2024
Additions of property, plant and equipment	$ 37,223	$ 33,612
Additions of intangible assets	8,448	10,588
Changes in other payable	5,636	( 8,190)
Cash paid	$ 51,307	$ 36,010

b. Changes in liabilities arising from financing activities

For the years ended December 31, 2025

	Non-cash Changes
	January 1, 2025	Cash Flows	New Leases	Amortization of Interest Expense	Disposal	Change in Exchange Rate
Lease liabilities	$ 2,009	($ 2,713)	$ 5,382	$ 46	$ -	$ 4,724

For the years ended December 31, 2024

	Non-cash Changes
	January 1, 2024	Cash Flows	New Leases	Amortization of Interest Expense	Disposal	Change in Exchange Rate
Lease liabilities	$ 4,632	($ 2,700)	$ -	$ 77	$ -	$ 2,009

24. CAPITAL RISK MANAGEMENT

The Company manages its capital to ensure that it will be able to continue as a going concern while maximizing the return to stakeholders through the optimization of the debt and equity balance.

The capital structure of the Company consists of equity (comprising issued share capital, capital surplus, retained earnings and other equity) and loans.

The Company is not subject to any externally imposed capital requirements.

Management regularly reviews the Company’s capital structure and considers the costs and risks of different capital structures. In general, the Company has a prudent risk management strategy.

25. FINANCIAL INSTRUMENTS

a. Categories of financial instruments

	December 31
	2025	2024
Financial assets
Financial assets at amortized cost (Note 1)	$ 1,575,808	$ 1,340,125
Financial liabilities
Financial liabilities at amortized cost (Note 2)	107,784	73,076

Note 1: The balances include financial assets measured at amortized cost, which comprise cash and cash equivalents, time deposits financial assets at amortized cost, notes receivable, trade receivables, other receivables (excluding tax receivable) and refundable deposits.

Note 2: The balances include financial liabilities measured at amortized cost, which comprise short-term borrowings, notes payable, trade payables and other payables.

b. Financial risk management objectives and policies

The Company’s major financial instruments include time deposits financial assets at amortized cost, notes receivable, trade receivables, other receivables, refundable deposits, loans, notes payable, trade payables, other payables, and lease liabilities. The Company’s financial risk management objectives are to manage the market risk, credit risk and liquidity risk with respect to the Company’s operations. To lower the financial risks, the Company seeks to identify, evaluate, and avoid market uncertainty, to minimize the potential unfavorable impact on the Company due to market volatility.

1) Market risks

The Company’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below), and interest rates (see (b) below).

There has been no change to the Company’s exposure to market risks or the manner in which these risks are managed and measured.

a) Foreign currency risk

The Company had foreign currency denominated sales and purchases, which exposed the Company to foreign currency risk.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the end of the period are set out in Note 28.

Sensitivity analysis

The Company is mainly exposed to the U.S. dollar.

The following table details the Company’s sensitivity to a 1% increase and decrease in the New Taiwan dollar (the functional currency) against the relevant foreign currencies. The sensitivity analysis included only outstanding foreign currency denominated monetary items and adjusts its translation at the end of the year for a 1% change in foreign currency rates. A positive number below indicates a decrease in pre-tax profit associated with the New Taiwan dollar strengthening 1% against the relevant currency. For a 1% weakening of the New Taiwan dollar against the relevant currency, there would be an equal and opposite impact on pre-tax profit and the balances below would be negative.

Impact of USD
For the Year Ended December 31
	2025	2024
Profit or loss*	$ 4,182	$ 5,539

This was mainly attributable to the exposure on outstanding U.S. dollar-denominated deposits, financial assets at amortized cost, trade receivables, other receivables, trade payables and other payables, which were not hedged at the end of the reporting period.

b) Interest rate risk

The Company is exposed to interest rate risk because the Company borrow funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix of fixed and floating rate.

The carrying amounts of the Company’s financial assets and financial liabilities with exposure to interest rates at the end of the year were as follows:

41 -

	December 31
	2025	2024
Fair value interest rate risk
Financial assets	$1,102,285	$913,607
Financial liabilities	$4,724	$2,009
Cash flow interest rate risk
Financial assets	$293,775	$240,303
Financial liabilities	$30,000	$-

Sensitivity analysis

The sensitivity analysis below was determined based on the Company's exposure to interest rates for non-derivative instruments at the end of the year. For floating rate assets and liabilities, the analysis was prepared assuming the amount of each asset and liability outstanding at the end of the year was outstanding for the whole year. A fluctuation of 0.25% was used when reporting interest rate risk internally to key management personnel and represents management's assessment of the reasonably possible change in interest rates. If interest rates had been 0.25% higher/lower and all other variables were held constant, the Company's pre-tax profit for the years ended December 31, 2025 and 2024 would have increased/decreased by $659 thousand and $601 thousand, respectively.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Company. At the end of the year, the Company's maximum exposure to credit risk, which would cause a financial loss to the Company due to the failure of the counterparty to discharge an obligation, comes from the carrying amounts of the respective recognized financial assets as stated in the parent company only balance sheets.

The Company's credit risk is mainly concentrated in the Company's biggest customer. As of December 31, 2025 and 2024, the percentage of total trade receivables from the aforementioned customer were 45% and 58%, respectively.

3) Liquidity risk

The Company manages liquidity risk by monitoring and maintaining a level of cash deemed adequate to finance the Company's operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

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

The following table details the Company's remaining contractual maturities for its non-derivative financial liabilities with agreed upon repayment periods. The table has been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Company can be required to pay. The table includes both interest and principal cash flows. Specifically, bank loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed upon repayment dates.

December 31, 2025

	On Demand or Less Than 3 Months	3 Months to 1 Year	1 to 2 Years	2 to 3 Years
Non-derivative financial liabilities
Non-interest bearing liabilities	$ 151,867	$ 711	$ -	$ -
Lease liabilities	688	2,065	2,065	-
Bank loans	30,022	-	-	-
	$ 182,577	$ 2,776	$ 2,065	$ -

December 31, 2024

	On Demand or Less Than 3 Months	3 Months to 1 Year	1 to 2 Years	2 to 3 Years
Non-derivative financial liabilities
Non-interest bearing liabilities	$ 130,391	$ 13,808	$ -	$ -
Lease liabilities	675	1,350	-	-
	$ 131,066	$ 15,158	$ -	$ -

b) Financing facilities

The Company's usage of bank financing facilities on the balance sheet date were as follows:

	December 31
	2025	2024
Bank financing facilities
Amount used	$ 30,000	$ -
Amount unused	130,000	150,000
	$ 160,000	$ 150,000

RELATED-PARTY TRANSACTIONS

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

a. Related party name and category

Related Party Name	Related Party Category
M3 Technology (Dallas), Inc. (M3 Dallas)	Subsidiary
Xi An M3 Semiconductor Corporation (Xi An M3)	Sub-subsidiary
Shenzhen M3 Technology Inc. (Shenzhen M3)	Sub-subsidiary
ITE Tech. Inc. (ITE)	The Company’s director

b. Operating revenue

Line Item	Related Party Category/Name	For the Year Ended December 31
		2025	2024
Sales revenue	The Company’s director	$ 4	$ 53
	Sub-subsidiary Shenzhen M3	17,718	-
		$ 17,722	$ 53

There is no material difference between the transaction conditions of related parties above and ordinary transactions.

c. Receivables from related parties

Line Item	Related Party Category/Name	December 31
		2025	2024
Trade receivables	The Company’s director	$ -	$ 16
	Subsidiary M3 Dallas	12,534	-
		$ 12,534	$ 16

d. Other payables to related parties (December 31, 2024: None)

| Line Item | Related Party Category/Name | December 31
2025 |
| --- | --- | --- |
| Other payables | Subsidiary
M3 Dallas | $ 927 |

e. Loans to related parties

	Related Party Category/Name	December 31
		2025	2024
Sub-subsidiary
Xi An M3		$ -	$ 19,756
Interest revenue
	Related Party Category/Name	For the Year Ended December 31
		2025	2024
Sub-subsidiary
Xi An M3		$ 978	$ 84

The Company provided Xi An M3 with unsecured short-term loans at rates comparable to market interest rates. These loans were recovered on August 25, 2025. As of December 31, 2025, the Company had no other loans to related parties.

f. Other transactions with related parties

Line Item	Related Party Category/Name	For the Year Ended December 31
		2025	2024
Contracted research expense	Sub-subsidiary Xi An M3	$ 79,562	$ 57,811
	Subsidiary M3 Dallas	9,128	28,908
		$ 88,690	$ 86,719

g. Remuneration of key management personnel

	For the Year Ended December 31
	2025	2024
Short-term employee benefits	$ 35,276	$ 30,315
Post-employment benefits	823	893
Share-based payments	11,017	24,389
	$ 47,116	$ 55,597

27. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as guarantee for executing the purchasing contract with supplier and tariff guarantee for imported raw material:

	December 31
	2025	2024
Pledged deposits (classified as financial assets at amortized cost)	$ 4,700	$ 4,795

28. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The Company's significant financial assets and liabilities denominated in foreign currencies aggregated by the foreign currencies other than functional currencies of the Company and the related exchange rates between the foreign currencies and the functional currencies were as follows:

In Thousands of New Taiwan Dollar and Foreign Currency

December 31, 2025
	Foreign Currency	Exchange Rate	Carrying Amount
Financial assets
Monetary items USD	$ 15,234	31.430 (USD:NTD)	$ 478,793
			(Continued)

	Foreign Currency	Exchange Rate	Carrying Amount
Non-monetary items
Investments accounted for using the equity method
USD	$ 58	31.430 (USD:NTD)	$ 1,836
Financial liabilities
Monetary items
USD	1,926	31.430 (USD:NTD)	60,544
Non-monetary items
Credit balance on the carrying value of investments accounted for using the equity method
USD	152	31.430 (USD:NTD)	4,783
			(Concluded)
December 31, 2024
	Foreign Currency	Exchange Rate	Carrying Amount
Financial assets
Monetary items
USD	$ 18,385	32.785 (USD:NTD)	$ 602,738
Non-monetary items
Investments accounted for using the equity method
USD	358	32.785 (USD:NTD)	11,730
Financial liabilities
Monetary items
USD	1,490	32.785 (USD:NTD)	48,843
Non-monetary items
Credit balance on the carrying value of investments accounted for using the equity method
USD	453	32.785 (USD:NTD)	14,867

The significant realized and unrealized foreign exchange gains (losses) were as follows:

Foreign Currency	2025		2024
	Exchange Rate	Net Foreign Exchange Gains (Losses)	Exchange Rate	Net Foreign Exchange Gains (Losses)
USD	31.1315 (USD:NTD)	($ 38,295)	32.1251 (USD:NTD)	$ 27,360

29. SEPARATELY DISCLOSED ITEMS

a. Information on significant transactions and b. Information on investees:

1) Financing provided to others (Table 1)
2) Endorsements/guarantees provided (None)
3) Significant marketable securities held (excluding investments in subsidiaries) (None)
4) Total purchases from or sales to related parties amounting to 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)

b. Information on investees (Table 2)

c. Information on investments in mainland China:

1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the year, repatriations of investment income, and limit on the amount of investment in the mainland China area (Table 3)

2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses:

a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period (None)
b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period (Note 26)
c) The amount of property transactions and the amount of the resultant gains or losses (None)
d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes (None)
e) The highest balance, the ending balance, the interest rate range, and total current period interest with respect to the financing of funds (Table 1)
f) Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receipt of services (Note 26)

47 -

TABLE 1

M3 TECHNOLOGY INC.

FINANCING PROVIDED TO OTHERS

FOR THE YEAR ENDED DECEMBER 31, 2025

(Amounts in Thousands of New Taiwan Dollars)

No. (Note 1)	Lender	Borrower	Financial Statement Account	Related Party	Highest Balance for the Period	Ending Balance (Note 3)	Actual Amount Borrowed (Note 3)	Interest Rate (%)	Nature of Financing	Business Transaction Amount	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral		Financing Limit for Each Borrower (Note 2)	Aggregate Financing Limit (Note 2)	Note
													Item	Value
0	M3 Technology Inc.	Si An M3 Semiconductor Corporation	Other receivables - related party	Yes	$ 66,410 (US$ 2,000 thousand)	$ -	$ -	5.28%	Short-term financing	$ -	Operating capital	$ -	--	$ -	$ 165,377	$ 330,755

Note 1: The description of the number column is as follows:

a. The issuer is coded "0".
b. The investee companies are coded consecutively beginning from "1" in the order presented in the table above.

Note 2: According to the Company's regulation governing loaning of funds, loans are provided to companies or firms requiring short-term financing. The total amount of loans granted shall not exceed 20% of the Company's net value, and the amount of any individual loan shall not exceed 10% of the Company's net value. The aforementioned net value is based on the latest financial statements audited by CPA.

Note 3: Translation was based on the exchange rate at December 31, 2025.

TABLE 2

M3 TECHNOLOGY INC.

INFORMATION ON INVESTEES

FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount (Note 1)		As of December 31, 2025			Net (Loss) Income of the Investee (Notes 2 and 3)	Share of (Loss) Profit (Notes 2 and 3)	Note
				December 31, 2025	December 31, 2024	Number of Shares	Percentage of Ownership (%)	Carrying Amount (Note 3)
M3 Technology Inc.	Blink Electronic Co., Ltd.	Samoa	Holding company	$ 53,835 (US$ 1,800 thousand)	$ 44,018 (US$ 1,500 thousand)	1,800,000	100	($ 4,783)	($ 3,480) (US$ (112) thousand)	($ 3,480) (US$ (112) thousand)	Subsidiary
	M3 Technology (Dallas), Inc.	U.S.A.	Product research, design and development	-	-	Note 4	100	1,836	( 7,077) (US$ (227) thousand)	( 7,077) (US$ (227) thousand)	Subsidiary

Note 1: Translation was based on the exchange rate at the time of investment acquisition.
Note 2: Translation was based on the average exchange rate of USD during the investment period.
Note 3: The numbers were calculated based on financial statements audited by the parent company's ROC-based CPA for the same fiscal year.
Note 4: As of December 31, 2025, no capital has been invested therein.
Note 5: Please refer to Table 3 for information on investments in mainland China.

TABLE 3

M3 TECHNOLOGY INC.

INFORMATION ON INVESTMENTS IN MAINLAND CHINA

FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investee Company	Main Businesses and Products	Paid-in Capital (Note 1)	Method of Investment	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2025 (Note 1)	Remittance of Funds		Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2025 (Note 1)	Net Income (Loss) of the Investee (Notes 2 and 4)	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) (Notes 2 and 4)	Carrying Amount as of December 31, 2025	Accumulated Repatriation of Investment Income as of December 31, 2025
					Outward	Inward
Xi An M3 Semiconductor Corporation	Product research, design and development	$ 29,082 (US$ 990 thousand)	Set up new companies in the third region by investing, and then invest in companies in mainland China.	$ 26,484 (US$ 905 thousand)	$ -	$ -	$ 26,484 (US$ 905 thousand)	$ 11,924 (RMB 2,756 thousand)	100	$ 11,924 (RMB 2,756 thousand)	($ 2,536)	$ -
Shenzhen M3 Technology Inc.	Product sales	9,817 (US$ 300 thousand)	Set up new companies in the third region by investing, and then invest in companies in mainland China.	-	9,817 (US$ 300 thousand)	-	9,817 (US$ 300 thousand)	( 11,495) (RMB (2,656) thousand)	100	( 11,495) (RMB (2,656) thousand)	( 2,247)	-
Accumulated Outward Remittance for Investments from Taiwan to Mainland China as of December 31, 2025 (Note 1)	Investment Amounts Authorized by the Investment Commission, MOEA (Note 1)	Upper Limit on the Amount of Investment Stipulated by the Investment Commission, MOEA (Note 3)
---	---	---
$36,301 (US$1,205 thousand)	$36,301 (US$1,205 thousand)	$992,266

Note 1: Translation was based on the exchange rate at the time of investment acquisition.
Note 2: Translation was based on the average exchange rate during the investment period.
Note 3: The calculation was based on 60% of the Company's net value at December 31, 2025.
Note 4: The numbers were calculated based on financial statements audited by the parent company's ROC-based CPA for the same fiscal year.

M3 TECHNOLOGY INC.

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

Item	Statement Index
Major Accounting Items in Assets, Liabilities and Equity
Statement of cash and cash equivalents	1
Statement of financial assets at amortized cost - current	Note 7
Statement of notes receivable and trade receivables	2
Statement of inventories	3
Statement of changes in investments accounted for using equity method	4
Statement of changes in property, plant and Equipment	Note 11
Statement of changes in intangible assets	Note 13
Statement of deferred tax assets	Note 20
Statement of accounts payable	5
Statement of other payables	Note 15
Major Accounting Items in Profit or Loss
Statement of operating revenue	Note 18
Statement of operating cost	6
Statement of manufacturing expenses	7
Statement of selling and marketing expenses	8
Statement of general and administrative expenses	9
Statement of research and development expenses	10
Statement of labor, depreciation and amortization by function	11

51 -

STATEMENT 1

M3 TECHNOLOGY INC.

STATEMENT OF CASH AND CASH EQUIVALENTS

DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Item	Description	Amount
Cash on hand		$ 70
Check account		2
Demand deposits		242,458
Foreign currency deposits	Including US$1,633 thousand (Note)	51,317
Total		$ 293,847

Note: US$1=NT$31.430

52 -

STATEMENT 2

M3 TECHNOLOGY INC.

STATEMENT OF NOTES RECEIVABLE AND TRADE RECEIVABLES
DECEMBER 31, 2025
(In Thousands of New Taiwan Dollars)

Item	Amount
Notes receivable from non-related parties
Client A	$ 6,897
Others (Note)	19
	$ 6,916
Trade receivables from non-related parties
Client B	$ 79,537
Client C	10,932
Client D	10,747
Client E	9,939
Client F	9,803
Client G	8,550
Others (Note)	29,329
	158,837
Trade receivables from related parties
Others (Note)	12,534
Total	$ 171,371

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

53 -

STATEMENT 3

M3 TECHNOLOGY INC.

STATEMENT OF INVENTORIES

DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars)

	Amount
Item	Cost	Market price (Note)
Raw materials	$ 51,335	$ 66,989
Work in progress	51,299	86,415
Finished goods	54,567	90,641
	157,201	$ 244,045
Less: Allowance for inventory write-downs	( 45,718 )
Total	$ 111,483

Note: Market price is measured at replacement cost or net realizable value.

54 -

STATEMENT 4

M3 TECHNOLOGY INC.

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Investees	Balance, January 1, 2025		Increase (Decrease)		Capital Surplus (Note 1)	Share of Profit (Loss) of Subsidiaries	Exchange Differences on Translation of the Financial Statements of Foreign Operation	Balance, December 31, 2025		Ownership (%)	Net Assets Value	Collateral
	Shares	Amount	Shares	Amount				Shares	Amount
Investments accounted for using the equity method
Blink Electronic Co., Ltd.	1,500,000	($ 14,867)	300,000	$ 9,817	$ 3,910	($ 3,480)	($ 163)	1,800,000	($ 4,783)	100%	($ 4,783)	Nil
M3 Technology (Dallas), Inc.	-	11,730	-	-	( 2,252)	( 7,077)	( 565)	-	1,836	100%	1,836	Nil
		($ 3,137)		$ 9,817	$ 1,658	($ 10,557)	($ 728)		($ 2,947)		($ 2,947)

Note: The capital surplus generated by granting stock options, employee restricted shares and treasury shares transferred to employees of subsidiaries.

STATEMENT 5

M3 TECHNOLOGY INC.

STATEMENT OF ACCOUNTS PAYABLE
DECEMBER 31, 2025
(In Thousands of New Taiwan Dollars)

Item	Amount
Accounts payable to non-related parties
Vendor A	$ 18,251
Vendor B	13,169
Vendor C	9,428
Vendor D	4,713
Vendor E	3,701
Vendor F	3,153
Others (Note)	4,164
	$ 56,579

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

56 -

STATEMENT 6

M3 TECHNOLOGY INC.

STATEMENT OF OPERATING COST
FOR THE YEAR ENDED DECEMBER 31, 2025
(In Thousands of New Taiwan Dollars)

Item	Amount
Raw materials used
Balance, beginning of year	$ 65,472
Raw material purchased	224,382
Sample used	( 1,113)
Others	( 245)
Balance, end of year	( 51,335)
	237,161
Manufacturing expenses	45,039
Work in progress, beginning of year	48,063
Subcontracting costs	203,392
Sample used	( 1,065)
Others	( 155)
Work in progress, end of year	( 51,299)
Cost of finished goods	481,136
Finished goods, beginning of year	79,635
Sample used	( 1,150)
Others	( 2,576)
Finished goods, end of year	( 54,567)
Costs of goods sold	502,478
Inventory write-downs reversed	( 4,061)
Others	( 1,032)
Total	$497,385

57 -

STATEMENT 7

M3 TECHNOLOGY INC.

STATEMENT OF MANUFACTURING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2025
(In Thousands of New Taiwan Dollars)

Item	Amount
Payroll expense	$ 19,245
Shipping expense	5,498
Depreciation expense	4,193
Consumables	4,119
Import and export related expense	3,251
Others (Note)	8,733
Total	$ 45,039

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

58 -

STATEMENT 8

M3 TECHNOLOGY INC.

STATEMENT OF SELLING AND MARKETING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2025
(In Thousands of New Taiwan Dollars)

Item	Amount
Payroll expense	$ 26,022
Insurance expense	3,038
Others (Note)	9,320
Total	$ 38,380

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

59 -

STATEMENT 9

M3 TECHNOLOGY INC.

STATEMENT OF GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2025
(In Thousands of New Taiwan Dollars)

Item	Amount
Payroll expense	$ 35,739
Professional service fees	11,127
Depreciation expense	4,132
Others (Note)	13,435
Total	$ 64,433

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

60 -

STATEMENT 10

M3 TECHNOLOGY INC.

STATEMENT OF RESEARCH AND DEVELOPMENT EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2025
(In Thousands of New Taiwan Dollars)

Item	Amount
Contracted research expense	$ 88,690
Depreciation expense	30,032
Payroll expense	12,498
Others (Note)	13,004
Total	$144,224

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

61 -

STATEMENT 11

M3 TECHNOLOGY INC.

STATEMENT OF LABOR, DEPRECIATION AND AMORTIZATION BY FUNCTION

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars)

	2025			2024
	Classified as Operating Cost	Classified as Operating Expenses	Total	Classified as Operating Cost	Classified as Operating Expenses	Total
Labor cost
Salary and bonus	$ 19,245	$ 74,259	$ 93,504	$ 24,881	$ 73,349	$ 98,230
Labor and health insurance	1,340	4,324	5,664	1,423	3,799	5,222
Pension	725	2,449	3,174	745	1,918	2,663
Director's remuneration	-	4,629	4,629	-	4,469	4,469
Others	1,264	2,613	3,877	1,296	1,966	3,262
	$ 22,574	$ 88,274	$ 110,848	$ 28,345	$ 85,501	$ 113,846
Depreciation	$ 4,193	$ 35,307	$ 39,500	$ 6,320	$ 26,264	$ 32,584
Amortization	$ -	$ 6,789	$ 6,789	$ -	$ 10,638	$ 10,638

Note:

For the current year and the previous year, the Company's average number of employee was 58 and 52, respectively. There were 7 non-employee directors for both years.
The Companies which has been listed on the TWSE or TPEx shall disclose the following information:

(1) The average of labor cost of the current year is $2,083 thousand ("Labor cost of the current year - Directors' remuneration" / "Number of employees of the current year - Non-employee directors"). The average of labor cost of the previous year was $2,431 thousand ("Labor cost of the previous year - Directors' remuneration" / "Number of employees of the previous year - Non-employee directors").

(2) The average of employee salary and bonus of the current year is $1,833 thousand (Employee salary and bonus of the current year / "Number of employees of the current year - Non-employee directors") The average of employee salary and bonus of the previous year was $2,183 thousand (Employee salary and bonus of the previous year / "Number of employees of the previous year - Non-employee directors").

(3) Change in average of employee salary and bonus is 16% ("The average of employee salary and bonus of the current year - The average of employee salary and bonus of the previous year" / "The average of employee salary and bonus of the previous year").

(4) The performance assessment and salary / remuneration of board directors, members of the Audit Committee and managers are usually carried out/ distributed based on the industry's standards as well as individual performance, the Company's operating performance and future risks.

AI assistant

M3TEK — Audit Report / Information 2025

52635_rns_2026-03-30_f10b75bd-d522-4a6d-a14c-43cda4b093a4.pdf

INDEPENDENT AUDITORS' REPORT

Opinion

Basis for Opinion

Key Audit Matter

Recognition of revenue from the specific customer

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

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

Notice to Readers

M3 TECHNOLOGY INC.

STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

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

4. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION

Revenue from the sale of goods

m. Leases

The Company as lessee

n. Borrowing costs

o. Employee benefits

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL ASSETS AT AMORTIZED COST - CURRENT

8. NOTES RECEIVABLE AND TRADE RECEIVABLES

10. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

11. PROPERTY, PLANT AND EQUIPMENT

12. LEASE AGREEMENTS

14. BORROWINGS (DECEMBER 31, 2024: NONE)

15. OTHER LIABILITIES

16. RETIREMENT BENEFIT PLANS

Defined Contribution Plans

17. EQUITY

Ordinary shares

18. REVENUE

19. NET PROFIT

Accrual rate

20. INCOME TAXES

21. EARNINGS PER SHARE

Net Profit for the Year

Number of Ordinary Shares

22. SHARE-BASED PAYMENT AGREEMENTS

23. CASH FLOW INFORMATION

24. CAPITAL RISK MANAGEMENT

25. FINANCIAL INSTRUMENTS

Sensitivity analysis

2) Credit risk

3) Liquidity risk

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

27. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

28. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

29. SEPARATELY DISCLOSED ITEMS

M3 TECHNOLOGY INC.

FINANCING PROVIDED TO OTHERS

FOR THE YEAR ENDED DECEMBER 31, 2025

M3 TECHNOLOGY INC.

M3 TECHNOLOGY INC.

M3 TECHNOLOGY INC.

M3 TECHNOLOGY INC.

STATEMENT OF LABOR, DEPRECIATION AND AMORTIZATION BY FUNCTION

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

Note:

More from M3TEK

M3TEK Audit Report / Information 2025