MERRY ELECTRONICS CO., LTD. PARENT COMPANY ONLY FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT DECEMBER 31, 2025 AND 2024

For the convenience of readers and for information purpose only, the auditors' report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors' report and financial statements shall prevail.

INDEPENDENT AUDITORS' REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of Merry Electronics Co., Ltd.

Opinion

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

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

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditor’s 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. Based on our audits and the reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the parent company only financial statements of the current period. 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, we do not provide a separate opinion on these matters.

The key audit matters in relation to the parent company only financial statements for the year ended December 31, 2025 are outlined as follows:

Cut-off on sales revenue from distribution warehouse

Description

Refer to Note 4(29) for accounting policy on revenue recognition.

The Company recognizes revenue upon delivery of goods or pick-up of goods (the transfer of control of ownership) by customers at warehouse. Warehouse sales revenue constitutes 32% of total operating revenue for the year ended December 31, 2025. The Company's revenue recognition is based on inventory movement records of warehouse based on the reports provided by warehouse custodians or bill of lading reports recorded on network platform. As the warehouses are located in various locations and there are numerous custodians, the frequency and contents of statements provided by custodians vary, the process of revenue recognition contains numerous manual procedures, which would potentially result in inaccurate timing of revenue recognition and the discrepancy between physical inventory quantities in the warehouses and quantities per accounting records. Thus, we determine the cut-off on sales revenue from distribution warehouse a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in relation to the above key audit matter:

A. Understood, evaluated and verified the Company's procedures for warehouse sales revenue and internal control, including:

(a) Interviewing the staff of the sales revenue process from distribution warehouse, and confirming the consistency by comparing interview results with the process of warehouse sales revenue recognition obtained.

(b) Verifying the internal control of warehouse distribution (checked the terms of transaction / timing of ownership transfer and dates of supporting documents and verifying transactions recognized in the appropriate period by reconciling the quantities of supporting documents with invoices) to confirm the accuracy of the timing of revenue recognition.

B. Performed cut-off procedures on sales revenue from distribution warehouse recognized during a specific period before and after the period-end, including verifying delivery schedule of distribution warehouse and ensuring the movements of inventories correctly contained in the statements.

C. Performed physical inventory count observation or confirmed the inventory quantities with warehouse custodian and agreed the results to accounting records.

Investments accounted for using equity method - valuation of inventories

Description

Refer to Note 4(12) for accounting policies on inventory valuation, Note 5(1) for significant accounting estimates and assumptions related to inventory valuation, and Note 6(5) for details of allowance for inventory valuation losses. As of December 31, 2025, the balances of inventories and allowance for inventory valuation losses were NT$1,434,498 thousand and NT$91,510 thousand, respectively.

The Company receives orders from customers and the subsidiaries are tasked to manufacture the products. The subsidiaries (shown as investments accounted for using equity method) have a high risk of incurring inventory valuation loss and obsolescence due to fluctuations in market demand and rapidly evolving technology. Further, the measurement of net realizable value of inventories involves judgment resulting in a high degree of estimation uncertainty. Thus, we determine the allowance for inventory valuation loss of the subsidiaries (shown as investments accounted for using equity method) a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in relation to the above key audit matter:

A. Understood and assessed the reasonableness of the subsequent inventory valuation and the provision for loss on obsolete and slow-moving inventory.

B. Assessed the annual plan of the physical inventory count and attended the annual inventory count; evaluated the effectiveness of the procedures used to identify and control obsolete inventories.

C. Obtained inventory aging report and verified dates of movements with supporting documents, and ensured the accuracy of inventory aging classification and its consistency with the policies.

D. Obtained the net realizable value of each kind of inventory and checked whether the applied calculation logic was in agreement with all inventory, tested the supporting documents related to the estimation basis for net realizable value of inventories including verifying the supporting documents of sales and purchase prices, as well as recalculating and assessing the reasonableness of allowance for inventory valuation losses.

Other matter - audits of the other auditors

We did not audit the financial statements of certain consolidated subsidiaries and investments accounted for under the equity method that are included in the consolidated financial statements and disclosures in Note 13. Those financial statements were audited by other auditors, and our opinion expressed herein is based solely on reports of the other auditors. The balance of these investments accounted for under equity method amounted to NT$562,976 thousand and NT$559,364 thousand, constituting 1.48% and 1.56% of total assets as of December 31, 2025 and 2024, respectively, and comprehensive income was NT$62,672 thousand and NT$94,598 thousand, constituting 5.02% and 3.66% of total comprehensive income for the years then ended.

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

A. 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.

B. 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.

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

D. 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 auditor’s 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 auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

E. 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.

F. Obtain sufficient appropriate audit evidence regarding the financial information of the 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 of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Liu, Mei Lan Hsu, Chien-Yeh For and on behalf of PricewaterhouseCoopers, Taiwan February 25, 2026

The accompanying parent company only financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying parent company only financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

(Expressed in thousands of New Taiwan dollars)

MERRY ELECTRONICS CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2025 AND 2024

Assets	Notes	December 31, 2025		December 31, 2024
		AMOUNT	%	AMOUNT	%
Current assets
1100	Cash and cash equivalents	6(1)	$ 6,103,542	16	$ 6,145,347	17
1110	Financial assets at fair value through profit or loss - current	6(2)	807,816	2	634,663	2
1120	Financial assets at fair value through other comprehensive income - current		107,541	-	105,910	-
1170	Accounts receivable, net	6(3)	7,293,497	19	8,008,238	23
1180	Accounts receivable - related parties	7(2)	26,074	-	398	-
1200	Other receivables		15,028	-	40,827	-
1210	Other receivables - related parties	7(2)	5,768,025	15	1,721,820	5
130X	Inventories, net	6(5)	1,342,988	4	1,430,172	4
1479	Other current assets, others		124,566	1	114,618	-
11XX	Total current assets		21,589,077	57	18,201,993	51
Non-current assets
1510	Financial assets at fair value through profit or loss - non-current	6(2)	46,282	-	43,075	-
1517	Financial assets at fair value through other comprehensive income - non-current		99,459	-	110,559	-
1535	Non-current financial assets at amortised cost		110,000	-	50,000	-
1550	Investments accounted for under equity method	6(6)	14,616,559	38	15,755,008	44
1600	Property, plant and equipment, net	6(7)	1,378,242	4	1,366,897	4
1780	Intangible assets	6(8)	186,627	1	184,986	1
1840	Deferred income tax assets	6(26)	51,666	-	80,623	-
1990	Other non-current assets, others		11,815	-	10,638	-
15XX	Total non-current assets		16,500,650	43	17,601,786	49
1XXX	Total assets		$ 38,089,727	100	$ 35,803,779	100

(Continued)

(Expressed in thousands of New Taiwan dollars)

MERRY ELECTRONICS CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2025 AND 2024

	Liabilities and Equity	Notes	December 31, 2025		December 31, 2024
			AMOUNT	%	AMOUNT	%
Current liabilities
2100	Short-term borrowings	6(10)	$ 2,200,100	6	$ -	-
2120	Financial liabilities at fair value through profit or loss - current	6(2)	38,725	-	-	-
2130	Current contract liabilities	6(20)	395,889	1	296,018	1
2170	Accounts payable		2,656,495	7	1,854,867	5
2180	Accounts payable - related parties	7(2)	8,295,997	22	8,264,990	23
2200	Other payables	6(11)	601,585	2	772,476	2
2220	Other payables - related parties	7(2)	120,017	-	104,741	-
2230	Current income tax liabilities		87,100	-	83,903	-
2320	Long-term liabilities, current portion	6(13)	152,691	-	189,914	1
2399	Other current liabilities, others		676,899	2	581,061	2
21XX	Total current liabilities		15,225,498	40	12,147,970	34
Non-current liabilities
2527	Non-current contract liabilities	6(20)	334,382	1	462,049	1
2530	Corporate bonds payable	6(12)	2,912,269	8	2,856,278	8
2540	Non-current portion of non-current borrowings	6(13)	12,500	-	165,191	1
2570	Deferred income tax liabilities	6(26)	2,029,891	5	2,123,372	6
2640	Accrued pension liabilities	6(14)	20,729	-	23,888	-
2670	Other non-current liabilities, others		5,137	-	6,186	-
25XX	Total non-current liabilities		5,314,908	14	5,636,964	16
2XXX	Total liabilities		20,540,406	54	17,784,934	50
Equity
	Share capital	6(16)
3110	Share capital - common stock		2,538,269	7	2,534,914	7
	Capital surplus	6(17)
3200	Capital surplus		8,480,217	22	8,422,431	23
	Retained earnings	6(18)
3310	Legal reserve		2,759,561	7	2,549,941	7
3320	Special reserve		462,936	1	973,012	3
3350	Unappropriated retained earnings		4,088,344	11	4,306,799	12
	Other equity interest	6(19)
3400	Other equity interest		( 780,006)	( 2)	( 768,252)	( 2)
3XXX	Total equity		17,549,321	46	18,018,845	50
	Significant events after the balance sheet date	11
3X2X	Total liabilities and equity		$ 38,089,727	100	$ 35,803,779	100

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

MERRY ELECTRONICS CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2023 AND 2024 (Expressed in thousands of New Taiwan dollars, except earnings per share amount)

Items	Notes	Year ended December 31		2024
		AMOUNT	%	AMOUNT	%
4000	Sales revenue	6(20) and 7	$ 32,427,777	100	$ 33,063,291	100
5000	Operating costs	6(5) and 7	( 30,660,903)	( 95)	( 31,065,212)	( 94)
5900	Net operating margin		1,766,874	5	1,998,079	6
	Operating expenses	6(24)(25)
6100	Selling expenses		( 264,144)	( 1)	( 260,669)	( 1)
6200	General and administrative expenses		( 564,186)	( 1)	( 648,687)	( 2)
6300	Research and development expenses		( 907,398)	( 3)	( 877,280)	( 2)
6450	Expected credit impairment (loss) gain	12(2)	( 15,240)	-	2,355	-
6000	Total operating expenses		( 1,750,968)	( 5)	( 1,784,281)	( 5)
6900	Operating profit		15,906	-	213,798	1
	Non-operating income and expenses
7100	Interest income	6(21)	138,410	-	129,009	-
7010	Other income	6(22)	61,325	-	99,144	-
7020	Other gains and losses	6(23)	( 376,218)	( 1)	174,377	1
7050	Finance costs		( 103,546)	-	( 65,745)	-
7070	Share of profit of associates and joint ventures accounted for using equity method	6(6)
7000	Total non-operating income and expenses		1,653,588	5	2,079,349	6
7900	Profit before income tax		1,373,559	4	2,416,134	7
7950	Income tax expense	6(26)	( 1,389,465	4	2,629,932	8
8200	Profit for the year		$ 1,336,636	4	$ 2,143,258	7
	Other comprehensive income
	Components of other comprehensive income (loss) that will not be reclassified to profit or loss
8311	Gain on remeasurements of defined benefit plans	6(14)	$ 538	-	$ 6,637	-
8316	Unrealized loss from investments in equity instruments measured at fair value through other comprehensive income	6(19)	( 9,471)	-	( 22,889)	-
8330	Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss		5,553	-	9,708	-
8349	Income tax related to components of other comprehensive income that will not be reclassified to profit or loss	6(26)	( 108)	-	( 1,327)	-
8310	Components of other comprehensive loss that will not be reclassified to profit or loss		( 3,488)	-	( 7,871)	-
	Components of other comprehensive income (loss) that will be reclassified to profit or loss
8361	Exchange differences on translation	6(19)	( 118,121)	-	366,104	1
8380	Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss	6(19)
8399	Income tax related to components of other comprehensive income (loss) that will be reclassified to profit or loss	6(19)(26)	13,936	-	191,851	-
8360	Components of other comprehensive (loss) income that will be reclassified to profit or loss		20,638	-	( 111,935)	-
8300	Other comprehensive (loss) income for the year		( 83,547)	-	446,020	1
8500	Total comprehensive income for the year		$ 87,035	-	$ 438,149	1
	Earnings per share	6(27)	$ 1,249,601	4	$ 2,581,407	8
9750	Basic earnings per share		$	5.36	$	9.26
9850	Diluted earnings per share		$	5.02	$	8.37

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

MERRY ELECTRONICS CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2025 AND 2024 (Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

	Notes	Share capital - common stock	Capital surplus, additional paid-in capital	Retained earnings			Financial statements translation differences of foreign operations	Total equity
				Legal reserve	Special reserve	Unappropriated retained earnings
Year 2024
Balance at January 1, 2024		$ 2,193,163	$ 4,872,974	$ 2,412,390	$ 768,186	$ 3,583,885	($ 1,209,351)	$ 12,621,247
Profit for the year		-	-	-	-	2,143,258	-	2,143,258
Other comprehensive income for the year		-	-	-	-	5,418	432,731	438,149
Total comprehensive income		-	-	-	-	2,148,676	432,731	2,581,407
Appropriation and distribution of 2023 retained earnings	6(18)
Legal reserve		-	-	137,551	-	( 137,551 )	-	-
Special reserve		-	-	-	204,826	( 204,826 )	-	-
Cash dividends		-	-	-	-	( 1,030,914 )	-	( 1,030,914 )
Issuance of common stock		50,000	445,241	-	-	-	-	495,241
Proceeds from issuance of convertible bonds	6(12)	-	280,733	-	-	-	-	280,733
Convertible bonds converted into common shares	6(12)	285,593	2,707,409	-	-	-	-	2,993,002
Share-based payments	6(15)	6,158	104,701	-	-	-	( 68,977 )	41,882
Equity instruments at fair value through other comprehensive income reclassified to investments accounted for using equity method	6(6)	-	-	-	-	( 52,471 )	52,471	-
Recognition of change in equity of associates in proportion to the Group's ownership	6(6)	-	13,679	-	-	-	2,816	16,495
Disposal of investments accounted for using equity	6(6)	-	( 1,872 )	-	-	-	22,058	20,186
Changes in ownership of subsidiaries		-	( 434 )	-	-	-	-	( 434 )
Balance at December 31, 2024		$ 2,534,914	$ 8,422,431	$ 2,549,941	$ 973,012	$ 4,306,799	($ 768,252 )	$ 18,018,845
Year 2025
Balance at January 1, 2025		$ 2,534,914	$ 8,422,431	$ 2,549,941	$ 973,012	$ 4,306,799	($ 768,252 )	$ 18,018,845
Profit for the year		-	-	-	-	1,336,636	-	1,336,636
Other comprehensive income(loss) for the year		-	-	-	-	430	( 87,465 )	( 87,035 )
Total comprehensive income(loss)		-	-	-	-	1,337,066	( 87,465 )	1,249,601
Appropriation and distribution of 2024 retained earnings	6(18)
Legal reserve		-	-	209,620	-	( 209,620 )	-	-
Special reserve		-	-	-	( 510,076 )	510,076	-	-
Cash dividends		-	-	-	-	( 1,850,505 )	-	( 1,850,505 )
Share-based payments	6(15)	3,355	36,377	-	-	-	75,711	115,443
Recognition of change in equity of associates in proportion to the Group's ownership	6(6)	-	21,801	-	-	-	-	21,801
Changes in ownership of subsidiaries	6(6)	-	( 392 )	-	-	( 5,472 )	-	( 5,864 )
Balance at December 31, 2025		$ 2,538,269	$ 8,480,217	$ 2,759,561	$ 462,936	$ 4,088,344	($ 780,006 )	$ 17,549,321

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

MERRY ELECTRONICS CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2025 AND 2024

(Expressed in thousands of New Taiwan dollars)

	Year ended December 31
	Notes	2025	2024
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax		$ 1,389,465	$ 2,629,932
Adjustments
Adjustments to reconcile profit (loss)
Depreciation	6(7)(24)	40,191	38,463
Depreciation expense - right-of-use assets	6(24)	3,898	3,854
Amortization	6(8)(24)	24,069	30,193
Expected credit impairment loss (gain)	12(2)	15,240	( 2,355 )
Impairment loss - non-financial assets	6(6)(23)	-	64,973
Finance costs		102,799	64,991
Interest expense - lease liability		747	754
Gain on financial assets at fair value through profit	6(23)	( 50,247 )	( 23,902 )
Share of profit of associates and joint ventures	6(6)
accounted for using equity method		( 1,653,588 )	( 2,079,349 )
Loss on disposal of property, plant and equipment	6(23)	-	258
Loss on disposal of investments	6(23)	-	15,469
Interest income	6(21)	( 138,410 )	( 129,009 )
Dividend income	6(22)	( 4,008 )	( 4,004 )
Share-based payments	6(15)	115,443	62,123
Unrealized foreign exchange gain		( 41,137 )	( 62,071 )
Changes in operating assets and liabilities
Changes in operating assets
Financial assets (liabilities) at fair value through profit or loss		78,197	21,955
Accounts receivable		705,095	( 627,346 )
Accounts receivable - related parties		( 16,521 )	5,260
Other receivables		25,151	100,345
Other receivables - related parties		( 1,643,371 )	153,202
Inventories		87,184	( 193,604 )
Other current assets		( 9,632 )	( 13,974 )
Changes in operating liabilities
Accounts payable		773,290	410,745
Accounts payable - related parties		( 2,857 )	886,579
Contract liabilities		( 27,796 )	( 114,628 )
Other payables		( 202,722 )	41,644
Other payables - related parties		15,276	( 102,695 )
Other current liabilities		94,987	213,961
Accrued pension liabilities		( 2,620 )	( 5,529 )
Cash (outflow) inflow generated from operations		( 321,877 )	1,386,235
Interest paid		( 35,971 )	( 25,239 )
Income taxes paid		( 73,013 )	( 153,694 )
Interest received		138,094	127,665
Dividend income		4,008	4,004
Net cash flows (used in) from operating activities		( 288,759 )	1,338,971

(Continued)

MERRY ELECTRONICS CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2025 AND 2024 (Expressed in thousands of New Taiwan dollars)

	Year ended December 31
	Notes	2025	2024
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in financial assets mandatorily measured at fair value through profit or loss	($)	780,000)	($) 518,485)
Decrease in financial assets mandatorily measured at fair value through profit or loss		614,416	412,874
Increase in financial assets at amortized cost - non - current	(	60,000)	(50,000)
Acquisition of investments accounted for using equity method	6(6)	(65,038)	(25,600)
Proceeds from liquidated amount of investments accounted for using equity method	6(6)	-	439,576
Earnings distribution accounted for using equity method	6(6)	4,199	21,088
Proceeds from capital reduction of investments accounted for using equity method	6(6)	59,169	-
Recognition of dividends received from investments accounted for using equity method	6(6)	401,400	1,074,675
Acquisition of property, plant and equipment	6(28)	(44,676)	(42,890)
Acquisition of intangible assets		(13,040)	(16,207)
Decrease in guarantee deposits paid		-	400
Net cash flows from investing activities		116,430	1,295,431
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings	6(29)	4,516,470	2,790,000
Decrease in short-term borrowings	6(29)	(2,340,970)	(3,580,000)
Decrease in long-term borrowings	6(29)	(189,914)	(759,358)
Proceeds from issuing bonds	6(29)	-	3,114,036
Cash dividends paid	6(29)	(1,850,505)	(1,030,914)
Payments of lease liabilities	6(29)	(4,560)	(4,315)
Redemption of corporate bonds	6(29)	-	4,000)
Decrease in guarantee deposits received		3	-
Proceeds from insurance of shares	6(16)	-	475,000
Net cash flows from financing activities		130,524	1,000,449
Net (decrease) increase in cash and cash equivalents		(41,805)	3,634,851
Cash and cash equivalents at beginning of year		6,145,347	2,510,496
Cash and cash equivalents at end of year		$ 6,103,542	$ 6,145,347

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

MERRY ELECTRONICS CO., LTD.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2025 AND 2024

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY AND ORGANISATION

Merry Electronics Co., Ltd. (the “Company”) was incorporated as a company limited by shares under the provisions of the Company Act of the Republic of China (R.O.C.) on December 24, 1975. The Company is primarily engaged in manufacturing, processing, repair, sales of electric appliances and audiovisual electric products, telecommunication equipment and apparatus, computers and computing peripheral equipments, restrained telecom radio frequency equipments, medical appliances, as well as electronic parts and components; planning, design as well as output of service items’ equipments; production as well as marketing management consultant of service items’ relevant business; and all business items that are not prohibited or restricted by law, except those that are subject to special approval. The Company’s shares were listed on the Taipei Exchange since August 1998 and transferred to the Taiwan Stock Exchange since September 2000 with approval. The Company merged with its subsidiary, Huges Hi-Tech Inc. and Biotest Medical Corporation, on September 1, 2005 and October 29, 2021, respectively. The Company was the surviving company while Huges Hi-Tech Inc. and Biotest Medical Corporation were the dissolved companies.

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE PARENT COMPANY ONLY FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION

These parent company only financial statements were authorized for issuance by the Board of Directors on February 25, 2026.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS®”) Accounting Standards that came into effect as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by the FSC and became effective from 2025 are as follows:

New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IAS 21, ‘Lack of exchangeability’	January 1, 2025

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

(2) Effect of new issuances of or amendments to IFRS Accounting Standards as endorsed by the FSC but not yet adopted by the Company

New standards, interpretations and amendments endorsed by the FSC effective from 2026 are as follows:

New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
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
IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendment to IFRS 17, ‘Initial application of IFRS 17 and IFRS 9 – comparative information’	January 1, 2023
Annual Improvements to IFRS Accounting Standards—Volume 11	January 1, 2026

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

(3) IFRS Accounting Standards issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRS Accounting Standards as endorsed by the FSC are as follows:

New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
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 International Accounting Standards Board January 1, 2027(Note)
IFRS 18, ‘Presentation and disclosure in financial statements’	January 1, 2027
IFRS 19, ‘Subsidiaries without public accountability: disclosures’	January 1, 2027
Amendments to IAS 21, ‘Translation to a Hyperinflationary Presentation Currency’	January 1, 2027

Note: The FSC has announced in a press release on September 25, 2025 that public companies will apply IFRS 18 starting from the fiscal year 2028. Additionally, entities can choose to adopt IFRS 18 earlier based on their requirements after the FSC endorses IFRS 18.

Except for the following, the above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

IFRS 18, ‘Presentation and disclosure in financial statements’ replaces IAS 1. The standard introduces a defined structure of the statement of profit or loss, disclosure requirements related to management-defined performance measures, and enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes. The quantitative impact will be disclosed when the assessment is complete.

4. SUMMARY OF MATERIAL ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these parent company only financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

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

(2) Basis of preparation

A. Except for the following items, the parent company only financial statements have been prepared under the historical cost convention:

(a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

(b) Financial assets at fair value through other comprehensive income.

(c) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.

B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC® Interpretations, and SIC® Interpretations that came into effect as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.

(3) Foreign currency translation

Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The financial statements are presented in New Taiwan dollars, which is the Company’s functional currency.

A. Foreign currency transactions and balances

(a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.

(b) Monetary assets and liabilities denominated in foreign currencies at the period end are re-translated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.

(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive

income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

(d) All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘Other gains and losses’.

B. Translation of foreign operations

(a) The operating results and financial position of all the company entities and associates that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

iii. All resulting exchange differences are recognized in other comprehensive income.

(b) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Company retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

(c) Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing exchange rates at the balance sheet date.

(4) Classification of current and non-current items

A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

(a) Assets that are expected to be realised, or are intended to be sold or consumed in the normal operating cycle;

(b) Assets that are held primarily for the purpose of trading;

(d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities for at least twelve months after the reporting period.

B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

(a) Liabilities that are expected to be settled in the normal operating cycle;

(b) Liabilities that are held primarily for the purpose of trading;

(d) It does not have the right at the end of the reporting period to defer settlement of the liability at least twelve months after the reporting period.

(5) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

(6) Financial assets at fair value through profit or loss

A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortized cost or fair value through other comprehensive income.

B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognized and derecognized using trade date accounting.

C. At initial recognition, the Company measures the financial liabilities at fair value. All related transaction costs are recognized in profit or loss. The Company subsequently measures these financial liabilities at fair value with any gain or loss recognized in profit or loss.

D. The Company recognizes the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

(7) Financial assets at fair value through other comprehensive income

A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Company has made an irrevocable election at initial recognition to recognize changes in fair value in other comprehensive income.

B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognized and derecognized using trade date accounting.

C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. The Company subsequently measures the financial assets at fair value:

The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognized as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

(8) Financial assets at amortised cost

A. Financial assets at amortised cost are those that meet all of the following criteria:

(a) The objective of the Company's business model is achieved by collecting contractual cash flows.

(b) The assets' contractual cash flows represent solely payments of principal and interest.

B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and derecognised using trade date accounting.

C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognised in profit or loss when the asset is derecognised or impaired.

(9) Accounts and notes receivable

A. Accounts and notes receivable entitle the Company a legal right to receive consideration in exchange for transferred goods or rendered services.

B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(10) Impairment of financial assets

For debt instruments measured at fair value through other comprehensive income including accounts receivable, at each reporting date, the Company recognizes the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognizes the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable that do not contain a significant financing component, the Company recognizes the impairment provision for lifetime ECLs.

(11) Derecognition of financial assets

The Company derecognizes a financial asset when one of the following conditions is met:

A. The contractual rights to receive the cash flows from the financial asset expire.

B. The contractual rights to receive cash flows of the financial asset have been transferred and the Company has transferred substantially all risks and rewards of ownership of the financial asset.

C. The contractual rights to receive cash flows of the financial asset have been transferred; however, the Company has not retained control of the financial asset.

(12) Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labor, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realizable value. Net realizable value 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.

(13) Investments accounted for using equity method / subsidiaries and associates

A. Subsidiaries are all entities (including structured entities) controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

B. Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Company are eliminated. The accounting policies of the subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company continues to recognize losses proportionate to its ownership, unless it has incurred statutory/constructive obligations or made payments on behalf of the associate.

D. If changes in the Company’s shares in subsidiaries do not result in loss in control (transactions with non-controlling interest), transactions shall be considered as equity transactions, which are transactions between owners. Difference of adjustment of non-controlling interest and fair value of consideration paid or received is recognized in equity.

E. Associates are all entities over which the Company has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost.

F. The Company’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Company’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

G. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Company’s ownership percentage of the associate, the Company recognizes the Company’s share of change in equity of the associate in ‘capital surplus’ in proportion to its ownership.

H. Unrealized gains on transactions between the Company and its associates are eliminated to the extent of the Company’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

I. Pursuant to the “Regulations Governing the Preparation of Financial Reports by Securities Issuers,” profit (loss) of the current period and other comprehensive income in the parent company only financial statements shall be equal to the amount attributable to owners of the parent in the consolidated financial statements. Owners’ equity in the parent company only financial statements shall be equal to equity attributable to owners of the parent in the consolidated financial statements.

(14) Property, plant and equipment

A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.

B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Buildings and structures	5 ~ 60 years
Machinery and equipment	10 years
Transportation equipment	7 years
Office equipment	5 ~ 7 years
Others	4 ~ 10 years

(15) Leasing arrangements (lessee)—right-of-use assets / lease liabilities

A. Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Company. For short-term leases or leases of low value assets, lease payments are recognized as an expense on a straight-line basis over the lease term.

B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate.

Lease payments are comprised of the fixed payments, less any lease incentives receivable.

The Company subsequently measures the lease liability at amortized cost using the interest method and recognizes interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognized as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

C. At the commencement date, the right-of-use asset is stated at cost comprising the following: (a) The amount of the initial measurement of lease liability; (b) Any lease payments made at or before the commencement date; and (c) Any initial direct costs incurred by the lessee.

D. The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset's useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognized as an adjustment to the right-of-use asset.

(16) Intangible assets A. Computer software Computer software is stated at cost and amortized on a straight-line basis over its estimated useful life of 3 to 5 years. B. Goodwill Goodwill arises in a business combination accounted for by applying the acquisition method. C. Other intangible assets are patents and are amortized using the straight-line method over 3 years.

(17) Impairment of non-financial assets A. The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognized. B. The recoverable amounts of goodwill should be evaluated periodically. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognized in profit or loss shall not be reversed in the following years. C. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that is/are expected to benefit from the synergies of the business combination.

(18) Borrowings Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the borrowings using the effective interest method.

(19) Accounts and notes payable

A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

B. The short-term accounts and notes payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(20) Financial liabilities at fair value through profit or loss

A. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term and financial liabilities at fair value through profit or loss. Financial liabilities that meet one of the following criteria are designated as at fair value through profit or loss at initial recognition:

(a) Hybrid (combined) contracts; or (b) They eliminate or significantly reduce a measurement or recognition inconsistency; or (c) They are managed and their performance is evaluated on a fair value basis, in accordance with a documented risk management policy.

B. At initial recognition, the Company measures the financial liabilities at fair value. All related transaction costs are recognized in profit or loss. The Company subsequently measures these financial liabilities at fair value with any gain or loss recognized in profit or loss.

(21) Convertible bonds payable

Convertible bonds issued by the Company contain conversion options (that is, the bondholders have the right to convert the bonds into the Company's common shares by exchanging a fixed amount of cash for a fixed number of common shares), call options and put options. The Company classifies the bonds payable upon issuance as a financial asset, a financial liability or an equity instrument in accordance with the contract terms. They are accounted for as follows:

A. The embedded call options and put options are recognized initially at net fair value as 'financial assets or financial liabilities at fair value through profit or loss'. They are subsequently remeasured and stated at fair value on each balance sheet date; the gain or loss is recognized as 'Gain or loss on valuation of financial assets or financial liabilities at fair value through profit or loss'.

B. The host contracts of bonds are initially recognized at fair value. Any difference between the initial recognition and the redemption value is accounted for as the premium or discount on bonds payable and subsequently is amortized in profit or loss as an adjustment to 'finance costs' over the period of circulation using the effective interest method.

C. The embedded conversion options which meet the definition of an equity instrument are initially recognized in 'capital surplus—share options' at the residual amount of total issue price less the amount of financial assets or financial liabilities at fair value through profit or loss and bonds payable as stated above. Conversion options are not subsequently remeasured.

D. Any transaction costs directly attributable to the issuance are allocated to each liability or equity component in proportion to the initial carrying amount of each abovementioned item.

E. When bondholders exercise conversion options, the liability component of the bonds (including bonds payable and ‘Financial assets or financial liabilities at fair value through profit or loss’) shall be remeasured on the conversion date. The issuance cost of converted common shares is the total carrying amount of the abovementioned liability component and ‘Capital surplus - share options’.

(22) Derecognition of financial liabilities

A financial liability is derecognized when the obligation specified in the contract is either discharged or cancelled or expires.

(23) Non-hedging and embedded derivatives

Non-hedging derivatives are initially recognized at fair value on the date a derivative contract is entered into and recorded as financial assets or financial liabilities at fair value through profit or loss. They are subsequently remeasured at fair value and the gains or losses are recognized in profit or loss.

(24) Employee benefits

A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expense in that period when the employees render service.

B. Pensions

(a) Defined contribution plans

For defined contribution plans, the contributions are recognised as pension expenses when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

(b) Defined benefit plans

i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Company in current period or prior periods. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the employment benefit obligations.

ii. Remeasurements arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.

C. Employees’ compensation and directors’ remuneration

Employees’ compensation and directors’ remuneration are recognized as expense and liability, provided that such recognition is required under legal or constructive obligation and those

amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is paid by shares, the Company calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

(25) Employee share-based payment

A. For the equity-settled share-based payment arrangements, the employee services received are measured at the fair value of the equity instruments granted at the grant date and are recognized as compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value of the equity instruments granted shall reflect the impact of market vesting conditions and non-market vesting conditions. Compensation cost is subject to adjustment based on the service conditions that are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. Ultimately, the amount of compensation cost recognized is based on the number of equity instruments that eventually vest.

B. Restricted stocks:

(a) Restricted stocks issued to employees are measured at the fair value of the equity instruments granted at the grant date, and are recognized as compensation cost over the vesting period.

(b) For restricted stocks where those stocks do not restrict distribution of dividends to employees and employees are not required to return the dividends received if they resign during the vesting period, the Company recognizes the fair value of the dividends received by the employees who are expected to resign during the vesting period as compensation cost at the date of dividends declared.

(c) For restricted stocks where employees have to pay to acquire those stocks, if employees resign during the vesting period, they must return the stocks to the Company and the Company must refund their payments on the stocks, for new shares with restricted rights issued to employees for a fee after October 11, 2024, the price paid by employees on the date of issuance shall be recognized as a liability; for new shares with restricted rights issued to employees for a fee before October 10, 2024, the Company recognizes the payments from the employees who are expected to resign during the vesting period as liabilities at the grant date, and recognizes the payments from the employees who are expected to be eventually vested with the stocks in 'Capital Surplus - restricted stock'.

(26) Income tax

A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.

B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate

and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

C. Deferred tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the parent company only balance sheet. Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realized or the deferred tax liability is settled.

D. Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred tax assets are reassessed.

E. A deferred tax asset shall be recognized for the carryforward of unused tax credits resulting from acquisitions of equipment or technology, research and development expenditures and equity investments to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilized.

(27) Share capital

A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

B. Where the Company repurchases the Company's equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company's equity holders. Where such shares are subsequently reissued, the difference between their carrying amount and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company's equity holders.

(28) Dividends

Dividends are recorded in the Company's financial statements in the period in which they are resolved by the Company's shareholders. Cash dividends are recorded as liabilities; stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance.

(29) Revenue recognition

Sales of goods

A. The Company manufactures and sells radio apparatus, communication devices, consumer

electronics as well as electronic parts and components. Sales are recognized when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer's acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied.

B. Revenue from these sales of produce is recognized based on the price specified in the contract, net of the estimated sales discounts. Sales discounts and allowances provided to customers are calculated based on different contract terms, and revenue is only recognized to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. A refund liability is recognized for expected sales discounts and allowances payable to customers in relation to sales made until the end of the reporting period. The sales usually are made with a credit term of 30 days to 120 days. As the time interval between the transfer of committed goods or service and the payment of customer does not exceed one year, the Company does not adjust the transaction price to reflect the time value of money.

C. A receivable is recognized when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

(30) Government grants

Government grants are recognized at their fair value only when there is reasonable assurance that the Company will comply with any conditions attached to the grants and the grants will be received. Government grants are recognized in profit or loss on a systematic basis over the periods in which the Company recognizes expenses for the related costs for which the grants are intended to compensate. Government grants related to property, plant and equipment are recognized as non-current liabilities and are amortized to profit or loss over the estimated useful lives of the related assets using the straight-line method.

(31) Business combinations

A. The Group uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities resulting from a contingent consideration arrangement. All acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. For each business combination, the Group measures at the acquisition date components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders to the proportionate share of the entity's net assets in the event of liquidation

at either fair value or the present ownership instruments' proportionate share in the recognised amounts of the acquiree's identifiable net assets. All other non-controlling interests should be measured at the acquisition-date fair value.

B. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of any previous equity interest in the acquiree over the fair value of the identifiable assets acquired and the liabilities assumed is recorded as goodwill at the acquisition date. If the total of consideration transferred, non-controlling interest in the acquiree recognised and the fair value of previously held equity interest in the acquiree is less than the fair value of the identifiable assets acquired and the liabilities assumed, the difference is recognised directly in profit or loss on the acquisition date.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

The preparation of these parent company only financial statements requires management to make critical judgements in applying the Company's accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. The related information is addressed below:

(1) Critical accounting estimates and assumptions

Evaluation of inventories

As inventories are stated at the lower of cost and net realizable value, the Company must determine the net realizable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Company evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date and writes down the cost of inventories to the net realizable value. Evaluation of inventories might be material changes to the evaluation.

As of December 31, 2025, the carrying amounts of inventories was $1,342,988 thousand.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

	December 31, 2025	December 31, 2024
Cash on hand and revolving funds	$ 193	$ 218
Checking accounts and demand deposits	6,103,349	4,745,129
Time deposits	-	1,400,000
	$ 6,103,542	$ 6,145,347

The Company transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

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

Items	December 31, 2025	December 31, 2024
Current items:
Financial assets mandatorily measured at fair value through profit or loss
- Funds	$ 780,000	$ 590,190
- Forward exchange contract	2,139	7,603
- Call options of convertible bonds	-	600
- Stocks	20,480	20,965
Valuation adjustment	5,197	15,305
	$ 807,816	$ 634,663
Non-current items:
- Funds	$ 26,220	$ 26,220
- Stocks	20,000	20,000
Valuation adjustment	62	( 3,145)
	$ 46,282	$ 43,075
Items	December 31, 2025	December 31, 2024
Current items:
Financial liabilities held for trading
- Forward exchange contract	$ 38,725	$ -

A. Amounts recognized in profit or loss in relation to financial assets at fair value through profit or loss are listed below:

	Years ended December 31,
	2025	2024
Net gains on financial assets at fair value through profit or loss	$ 50,247	$ 23,902

B. The Company entered into contracts relating to derivative financial assets which were not accounted for under hedge accounting. The information is listed below:

	December 31, 2025
Derivative instruments	Contract amount (Notional principal)	Contract period	Contract price
Forward foreign exchange contract to sell	USD 116,000 thousand	2025/11/28 ~2026/09/01	NTD 30.730~31.690

December 31, 2024

| Derivative instruments | Contract amount (Notional principal) | Contract period | Contract price | | --- | --- | --- | --- | | Forward foreign exchange contract to buy | USD 6,000 thousand | 2024/03/14 2025/12/30 | NTD 30.25331.712 |

The Company entered into forward foreign exchange contracts to hedge exchange rate risk of import and export proceeds. However, these forward foreign exchange contracts are not accounted for under hedge accounting.

C. The amounts that have been transacted and yet to be paid on December 31, 2025 and 2024 are $62 thousand and $0 thousand, respectively (shown as other receivables). D. The Company has no financial assets at fair value through profit or loss pledged to others as collateral. E. Information relating to credit risk of financial assets at fair value through profit or loss is provided in Note 12 (2).

(3) Accounts receivable

	December 31, 2025	December 31, 2024
Accounts receivable	$ 7,310,162	$ 8,009,663
Less: Allowance for uncollectible accounts	( 16,665)	( 1,425)
	$ 7,293,497	$ 8,008,238

A. The ageing analysis of accounts receivable that were past due but not impaired is as follows:

	December 31, 2025	December 31, 2024
Not past due	$ 7,175,875	$ 7,973,778
Up to 30 days	119,194	35,808
31 to 90 days	1,183	77
91 to 180 days	6,621	-
Over 180 days	7,289	-
	$ 7,310,162	$ 8,009,663

The above ageing analysis was based on past due date.

B. As of December 31, 2025 and 2024, and January 1, 2024, the balances of receivables from contracts with customers amounted to $7,310,162 thousand, $8,009,663 thousand and $6,913,598 thousand, respectively. C. The Company took out a credit insurance on the accounts receivable. The insurance company audits the amount and pays 90% of the amount when the default occurred. As of December 31, 2025 and 2024, the insured accounts receivable amounted to $3,696,212 thousand and $4,593,682 thousand, respectively. D. The Company does not hold any collateral as security. E. The Company entered into a factoring agreement which has no right of recourse with ING BANK N.V., TAIPEI BRANCH on August 19, 2024 and July 19, 2021. As of December 31, 2025, there

were no accounts receivable that were outstanding and expected to be transferred (reclassified as 'financial assets at fair value through other comprehensive income'). Please refer to Note 6(4) for information on transfer of financial assets.

F. Information relating to credit risk of accounts receivable is provided in Note 12 (2).

(4) Transfer of financial assets

Transferred financial assets that are not entirely derecognized.

A. On August 19, 2024 and July 19, 2021, the Company entered into a factoring agreement with ING BANK N.V., TAIPEI BRANCH to sell its accounts receivable. In accordance with the agreement, the Company transferred first 90% of accounts receivable and has obligated to provide partial guarantees for the default risk of the transferred accounts receivable. Therefore, the Company has not derecognized the accounts receivable in their entirety and may not pledge these accounts receivable to a third party.

B. As of December 31, 2025 and 2024, the related information of the transferred accounts receivable sold that the Company continuously recognized to the extent of continuing involvement was as follows:

	December 31, 2025	December 31, 2024
Total carrying amount of the original assets before transferring	$ 945,697	$ 657,263
Carrying amount of the assets continuously recognized	94,570	65,726

(5) Inventories

	December 31, 2025
	Cost	Allowance for slow-moving and valuation losses	Book value
Finished goods	$ 1,281,078	($ 89,992)	$ 1,191,086
Semi-finished goods	32	( 9)	23
Raw materials	153,388	( 1,509)	151,879
	$ 1,434,498	($ 91,510)	$ 1,342,988
	December 31, 2024
	Cost	Allowance for slow-moving and valuation losses	Book value
Finished goods	$ 1,265,765	($ 43,708)	$ 1,222,057
Semi-finished goods	9	( 5)	4
Raw materials	244,290	( 36,179)	208,111
	$ 1,510,064	($ 79,892)	$ 1,430,172

The cost of inventories recognized as expense for the year:

	Years ended December 31,
	2025	2024
Cost of goods sold	$ 30,649,285	$ 31,029,501
Loss on slow-moving inventories and decline in market value	11,618	35,711
	$ 30,660,903	$ 31,065,212

(6) Investments accounted for using equity method

	2025	2024
At January 1	$ 15,755,008	$ 13,690,685
Addition of investments accounted for using equity method	65,038	25,600
Disposal of investments accounted for using equity method	-	(430,463)
The return of capital from investment accounted for using equity method	(59,169)	-
Share of profit or loss of investments accounted for using equity method	1,653,588	2,079,349
Earnings distribution of investments accounted for using equity method	(2,715,211)	(261,967)
Impairment loss	-	(64,973)
Changes in capital surplus	21,409	13,245
Changes in other equity items	(98,632)	567,555
Changes in retained earnings	(5,472)	108
Transferred from financial assets at fair value through other comprehensive income	-	135,869
At December 31	$ 14,616,559	$ 15,755,008

	December 31, 2025	December 31, 2024
Subsidiaries:
MERRY ELECTRONICS (HK) CO., LTD.	$ 5,663,277	$ 5,427,109
DANNY DYNAMICS LIMITED	3,818,290	3,665,620
MERRY ELECTRONICS (SINGAPORE) PTE., LTD.	375,083	2,651,893
MERRY ELECTRONICS (THAILAND) CO., LTD.	1,398,728	1,183,631
MERRY & LUXSHARE (VIETNAM) CO., LTD.	1,566,614	1,154,813
INDIGO ENTERPRISE INC.	210,525	309,136
MERRY HEALTHCARE CO., LTD.	493,180	301,700
ASIAN ELITE INTERNATIONAL LTD.	132,994	148,143
MERRY ELECTRONICS (U.S.A.) CO., LTD.	36,371	37,730
MUtek Electronics Co.,Ltd.	12,552	12,861
Merry Capital Inc.	11,721	10,660
Individually Immaterial Associates:
DONPON PRECISION INC.	453,347	482,410
CDIB-Mac Limited Partnership	208,432	156,199
LEOHAB ENTERPRISE CO., LTD.	109,629	76,954
SYNERGY SCIENTECH CORP	125,816	136,149
	$ 14,616,559	$ 15,755,008

A. Subsidiaries:

(a) Details of the subsidiaries of the Company are provided in Note 4 (3) in the Company's consolidated financial statements as of and for the year ended December 31, 2025. (b) On October 24, 2024, the Company's Board of Directors resolved to participate in the cash capital increase of subsidiary, MERRY HEALTHCARE CO., LTD. in the amount of USD 2,000 thousand (approximately NTD 65,000 thousand). The effective date set on April 23, 2025. (c) On November 25, 2025, the Company acquired a $0.1%$ equity interest from an individual shareholder (non-related party) of the subsidiary, MERRY ELECTRONICS (U.S.A.) CO., LTD. The transfer price was USD 1 thousand (approximately NTD 38 thousand). (d) On May 16, 2025, as resolved by the shareholders, the Group's associate, DONPON PRECISION INC, undertook a capital reduction and returned NTD 59,169 thousand. (e) On August 8, 2025, the Company's subsidiary, DANNY DYNAMICS LIMITED, repatriated earnings in the amount of USD 6,806 thousand (approximately NTD 203,103 thousand) as resolved by the Board of Directors. After deducting a $10%$ enterprise income tax withheld in Mainland China, the actual received amount was approximately NTD 182,497 thousand. (f) On November 28, 2025, the Company's subsidiary, MERRY ELECTRONICS (SINGAPORE)

PTE. LTD., repatriated earnings in the amount of USD 80,536 thousand (approximately NTD 2,507,901 thousand) as resolved by the Board of Directors. As of February 25, 2026, the proceeds have not yet been received.

(g) On March 13, 2025, the Company’s subsidiary, Merry Capital Inc., distributed cash dividends amounting to NTD 2,009 thousand as resolved by the Board of Directors.

(h) For the year ended December 31, 2025, the Group received cash dividends of $2,198 thousand from investments accounted for using equity method, $8 thousand of which was the withholding tax distributed by the Group’s investee company, CDIB-Mac Limited Partnership, on May 5, 2025, which is considered as the earnings appropriation and can be deducted from the tax payable in the income tax returns.

(i) On July 28, 2022, the investment of CDIB-Mac Limited Partnership was resolved by the Board of Directors. The Company increased its capital in CDIB-Mac Limited Partnership in the amount of $25,600 thousand on December 23, 2024.

(j) Guangdong Luxshare & Merry Electronics Co., Ltd. (MEDG), the Company’s investee, established the liquidation committee on April 20, 2022. The liquidation period was between May 1, 2022 and May 29, 2024, with the end of the liquidation period as the dissolution date. The Company wrote off the equity book value amounting to $430,463 thousand, the additional paid-in capital amounting to $1,872 thousand and other equity amounting to ($22,058) thousand based on the liquidation result, and recognized the loss on disposal of investment amounting to $12,653 thousand. The disposal proceeds amounted to RMB $98,581 thousand (equivalent to NT$439,576 thousand) and the liquidation was completed.

(k) On December 30, 2024, the Company’s subsidiary, MERRY ELECTRONICS (HK) CO., LTD., repatriated earnings in the amount of HKD 58,393 thousand (approximately NTD 240,855 thousand) as resolved by the Board of Directors. After deducting a 10% enterprise income tax withheld in Mainland China, the actual received amount was approximately NTD 218,903 thousand.

(l) For the year ended December 31, 2024, the Company received cash dividends of $21,112 thousand from investments accounted for using equity method, $24 thousand of which was the withholding tax distributed by the Company’s investee company, CDIB-Mac Limited Partnership, on May 6, 2024, which is considered as the earnings appropriation and can be deducted from the tax payable in the income tax returns.

(m) On May 30, 2024, the Company acquired 1 seat in the Board of Directors of SYNERGY SCIENTECH CORP. and further had significant influence over the company. The Company had reclassified the investment which was initially shown as financial assets at fair value through other comprehensive income amounting to $135,869 thousand, including realised valuation losses in the amount of $52,471 thousand.

(n) The goodwill arose from acquiring Asian Elite International Ltd. and Indigo Enterprise Inc. amounting to $581,644 thousand due to the benefits from production technology and market

channel such as smart speakers of the companies that are expected to be merged. The goodwill from business combination shall be tested annually at least for impairment in accordance with IAS 36. As of December 31, 2024, the recoverable amount of all cash-generating units calculated using the value-in-use did not exceed their carrying amount, so an impairment loss to investments accounted for using equity method was recognized amounting to $64,973 thousand. The investments accounted for using equity method after the recognition of impairment loss amounted to $309,136 thousand. The key assumptions used for value-in-use calculations are provided in Note 6(8) in the Company's consolidated financial statements.

B. The recognized share of (loss) profit of subsidiaries and associates accounted for using equity is as follows:

	Years ended December 31,
	2025	2024
Subsidiaries:
MERRY ELECTRONICS (HK) CO., LTD.	$ 208,804	$ 683,230
DANNY DYNAMICS LIMITED	330,568	251,049
MERRY ELECTRONICS (SINGAPORE) PTE. LTD.	360,517	640,649
MERRY ELECTRONICS (THAILAND) CO., LTD.	158,469	247,690
MERRY & LUXSHARE (VIETNAM) CO., LTD.	498,434	296,582
INDIGO ENTERPRISE INC.	( 102,747)	( 157,496)
MERRY HEALTHCARE CO., LTD.	104,540	11,814
ASIAN ELITE INTERNATIONAL LTD.	( 15,819)	10,346
MERRY ELECTRONICS (U.S.A.) CO., LTD.	158	125
MUtek Electronics Co.,Ltd.	( 309)	( 3,144)
Merry Capital Inc.	3,071	2,233
Individually Immaterial Associates:
DONPON PRECISION INC.	31,054	39,291
GUANGDONG LUXSHARE & MERRY ELECTRONICS CO., LTD.	-	2,682
CDIB-Mac Limited Partnership	52,241	16,462
LEOHAB ENTERPRISE CO., LTD.	31,867	36,985
SYNERGY SCIENTECH CORP	( 7,260)	851
	$ 1,653,588	$ 2,079,349

(7) Property, plant and equipment

Year ended December 31, 2025

Cost	Opening balance	Additions	Reductions	Transfers	Ending balance
Land	$ 759,583	$ -	$ -	$ -	$ 759,583
Buildings and structures	527,666	16,438	-	446	544,550
Machinery	150,512	16,430	( 450)	-	166,492
Transportation equipment	4,082	-	-	-	4,082
Office equipment	113,252	17,230	( 371)	-	130,111
Others	35,808	-	-	-	35,808
Unfinished construction	446	1,438	-	( 446)	1,438
	1,591,349	51,536	( 821)	-	1,642,064
Accumulated depreciation
Buildings and structures	($ 55,107)	($ 13,140)	$ -	$ -	($ 68,247)
Machinery	( 86,985)	( 10,157)	450	-	( 96,692)
Transportation equipment	( 3,812)	( 214)	-	-	( 4,026)
Office equipment	( 65,040)	( 12,074)	371	-	( 76,743)
Others	( 13,508)	( 4,606)	-	-	( 18,114)
	( 224,452)	( 40,191)	821	-	( 263,822)
	$ 1,366,897				$ 1,378,242

Year ended December 31, 2024

Cost	Opening balance	Additions	Reductions	Transfers	Ending balance
Land	$ 759,583	$ -	$ -	$ -	$ 759,583
Buildings and structures	516,410	10,556	( 829)	1,529	527,666
Machinery	135,655	15,205	( 348)	-	150,512
Transportation equipment	4,082	-	-	-	4,082
Office equipment	114,296	1,673	( 2,717)	-	113,252
Others	17,133	15,619	-	3,056	35,808
Unfinished construction	2,980	446	-	( 2,980)	446
	1,550,139	43,499	( 3,894)	1,605	1,591,349
Accumulated depreciation
Buildings and structures	($ 43,268)	($ 12,410)	$ 571	$ -	($ 55,107)
Machinery	( 77,505)	( 9,828)	348	-	( 86,985)
Transportation equipment	( 3,598)	( 214)	-	-	( 3,812)
Office equipment	( 55,300)	( 12,457)	2,717	-	( 65,040)
Others	( 9,954)	( 3,554)	-	-	( 13,508)
	( 189,625)	( 38,463)	3,636	-	( 224,452)
	$ 1,360,514				$ 1,366,897

A. The Company had no borrowing costs capitalized as part of property, plant and equipment. B. The Company had no property, plant and equipment pledged to others as collateral.

(8) Intangible assets

Year ended December 31, 2025

Cost	Opening balance	Additions	Reductions	Transfers	Ending balance
Goodwill	$ 139,735	$ -	$ -	$ -	$ 139,735
Patents	51,335	4,566	-	-	55,901
Computer software	531,636	21,144	( 604)	-	552,176
	722,706	$ 25,710	($ 604)	$ -	747,812
Accumulated amortization
Patents	($ 43,047)	($ 5,475)	$ -	$ -	($ 48,522)
Computer software	( 494,673)	( 18,594)	604	-	( 512,663)
	( 537,720)	($ 24,069)	$ 604	$ -	( 561,185)
	$ 184,986				$ 186,627

Year ended December 31, 2024

Cost	Opening balance	Additions	Reductions	Transfers	Ending balance
Goodwill	$ 139,735	$ -	$ -	$ -	$ 139,735
Patents	46,033	5,302	-	-	51,335
Computer software	519,970	15,537	( 3,871)	-	531,636
	705,738	$ 20,839	($ 3,871)	$ -	722,706
Accumulated amortization
Patents	($ 37,377)	($ 5,670)	$ -	$ -	($ 43,047)
Computer software	( 474,021)	( 24,523)	3,871	-	( 494,673)
	( 511,398)	($ 30,193)	$ 3,871	$ -	( 537,720)
	$ 194,340				$ 184,986

A. The Company does not hold any intangible asset as security. B. Details of amortization in intangible assets are as follows:

	Years ended December 31,
	2025	2024
Operating costs	$ 2,179	$ 3,627
Selling expenses	990	1,801
Administrative expenses	9,620	12,845
Research and development expenses	11,280	11,920
	$ 24,069	$ 30,193

(9) Impairment of non-financial assets

A. Impairment assessment of goodwill

The recoverable amount of all cash-generating units calculated using the value-in-use exceeded their carrying amount, so goodwill was not impaired. The key assumptions used for value-in-use calculations are as follows:

The cash flow projections are based on financial budgets approved by the management covering a five-year period. Cash flows beyond the five-year period are extrapolated using the estimated growth rates described below.

Management determined budgeted gross margin based on past performance and their expectations of market development. The weighted average growth rates used are consistent with the projection included in industry reports. In addition, value in use adopts pre-tax cash flow projections based on financial budgets approved by the management covering a five-year period. The key assumptions used for value-in-use calculations are as follows:

	Years ended December 31,
	2025	2024
Discount rate	7.48%	9.44%
Growth rate	10%	10%

B. Impairment assessment of investments accounted for using equity method

The Company recognized impairment loss for the years ended December 31, 2025 and 2024. Details of such loss are as follows:

	Years ended December 31,
	2025	2024
	Recognised in profit or loss
Investments accounted for using equity method	$ -	$ 64,973

C. Please refer to Note 6 (6) for the impairment to investments accounted for using equity method.

(10) Short-term borrowings

Type of Borrowings	December 31, 2025	Interest rate range	Collateral
Bank borrowings
Credit loan	$ 2,200,100	4.46%~4.61%	None

As of December 31, 2024: None.

Interest expense recognized in profit or loss amounted to $41,055 thousand and $11,938 thousand for the years ended December 31, 2025 and 2024, respectively.

(11) Other payables

	December 31, 2025	December 31, 2024
Salary and bonus payable	$ 167,217	$ 234,281
Employees’ compensation payable	172,718	306,792
Remuneration due to directors	31,579	59,771
Machinery and equipment payable
(including intangible assets)	25,933	4,939
Others	204,138	166,693
	$ 601,585	$ 772,476

(12) Bonds payable

	December 31, 2025	December 31, 2024
Bonds payable	$ 3,000,000	$ 3,000,000
Less: Discount on bonds payable	( 87,731)	( 143,722)
	2,912,269	2,856,278
Less: Current portion	-	-
	$ 2,912,269	$ 2,856,278

A. The issuance of third domestic unsecured convertible bonds by the Company on August 11, 2021, as approved by the regulatory authority:

(a) The terms are as follows:

i. The bonds were issued at $3,015,000 thousand, 0%. The bonds mature three years from the issue date (August 11, 2021 to August 11, 2024) and will be redeemed in cash at face value at the maturity date. The bonds were listed on the Taipei Exchange on August 11, 2021.

ii. The bondholders have the right to ask for conversion of the bonds into common shares of the Company at any time during the period from the date after three months of the bonds' issued to the maturity date by notifying the Taiwan Depository & Clearing Corporation through the dealer to the Company, except for (i) the stop transfer period as specified in the terms of the bonds or the laws/regulations; (ii) the book closure date of the issuance of bonus shares, and of cash dividends, the period between the date that is 15 business days before the book closure date of a capital increase to the ex-right date; (iii) the period between the record date of a capital reduction and the prior day before the commencement of stock trading after stocks are repurchased; (iv) the period from the commencement date of the cessation of conversion of the share certificate and the prior day before the commencement date of trading of the new share certificate. The rights and obligations of the new shares converted from the bonds are the same as the issued and outstanding common shares.

iii. The conversion price of the bonds is set up based on the pricing model in the terms of the bonds and is subject to adjustments if the condition of the anti-dilution provisions occurs subsequently. The conversion price will be reset based on the pricing model in the terms

of the bonds on each effective date regulated by the terms. The conversion price of convertible bonds was $104.9 per share.

iv. The Company may repurchase all the bonds outstanding in cash at the bonds' face value, based on the Company's redemption rights to the bonds under Article 18 of the terms of issuance and conversion, after the following events occur: (i) the closing price of the Company common shares is above the then conversion price by 30% for 30 consecutive trading days during the period from the date after three months of the bonds issue to 40 days before the maturity date, or (ii) the outstanding balance of the bonds is less than 10% of total initial issue amount during the period from the date after three months of the bonds issue to 40 days before the maturity date.

v. Under the terms of issuance and conversion, all bonds redeemed (including bonds repurchased from the securities trading markets), matured and converted are retired and not to be sold or re-issued; the conversion rights attached to the bonds are also extinguished.

(b) The bonds totaling $2,996,000 thousand (face value) had been converted into 28,559 shares of common stock. The remaining unconverted bonds (face value) was settled at maturity on August 11, 2024, and the forfeited "capital surplus - share options" amounting to $129 thousand was fully transferred to "capital surplus - others".

B. The issuance of fourth domestic unsecured convertible bonds by the Company on July 10, 2024, as approved by the regulatory authority:

(a) The terms are as follows:

i. The bonds were issued at $2,500,000 thousand, 0%. The bonds mature three years from the issue date (July 10, 2024 to July 10, 2027) and will be redeemed in cash at face value at the maturity date. The bonds were listed on the Taipei Exchange on July 10, 2024.

ii. The bondholders have the right to ask for conversion of the bonds into common shares of the Company at any time during the period from the date after three months of the bonds issued to the maturity date by notifying the Taiwan Depository & Clearing Corporation through the dealer to the Company, except for (i) the stop transfer period as specified in the terms of the bonds or the laws/regulations (excluding the stop transfer period of shareholders' annual meeting and shareholders' special meeting); (ii) the book closure date of the issuance of bonus shares, and of cash dividends, the period between the date that is 15 business days before the book closure date of a capital increase to the ex-right date; (iii) the period between the record date of a capital reduction and the prior day before the commencement of stock trading after stocks are repurchased; (iv) the period from the commencement date of the cessation of conversion of the share certificate and the prior day before the commencement date of trading of the new share certificate. The rights and obligations of the new shares converted from the bonds are the same as the issued and outstanding common shares.

iii. The conversion price of the bonds is set up based on the pricing model specified in the terms of the bonds, and is subject to adjustments if the condition of the antidilution provisions occurs subsequently. As of December 31, 2025, the conversion price was $128.9 (in dollars) per share.

iv. The Company may repurchase all the bonds outstanding in cash at the bonds' face value at any time after the following events occur: (i) the closing price of the Company common shares is above the then conversion price by 30% for 30 consecutive trading days during the period from the date after three months of the bonds issue to 40 days before the maturity date, or (ii) the outstanding balance of the bonds is less than 10% of total initial issue amount, the Company has the right to redeem the convertible bonds in accordance with the Article 18 of the terms of issuance and conversion during the period from the date after three months of the bonds issue to 40 days before the maturity date.

v. Under the terms of the bonds, all bonds redeemed (including bonds repurchased from the Taipei Exchange), matured and converted are retired and not to be re-issued; all rights and obligations attached to the bonds are also extinguished.

(b) As of December 31, 2025, there were no bonds (face value) converted into common stock.

C. The issuance of fifth domestic unsecured convertible bonds by the Company on July 22, 2024, as approved by the regulatory authority:

(a) The terms are as follows:

i. The bonds were issued at $500,000 thousand, 0%. The bonds mature three years from the issue date (July 22, 2024 to July 22, 2027) and will be redeemed in cash at face value at the maturity date. The bonds were listed on the Taipei Exchange on July 22, 2024.

iii. The conversion price of the bonds is set up based on the pricing model specified in the terms of the bonds, and is subject to adjustments if the condition of the antidilution

provisions occurs subsequently. As of December 31, 2025, the conversion price was $125.2 (in dollars) per share.

(b) As of December 31, 2025, there were no bonds (face value) converted into common stock.

D. Regarding the issuance of convertible bonds, as of December 31, 2025, the equity conversion options amounting to $280,733 thousand were separated from the liability component and were recognized in ‘capital surplus - share options’ in accordance with IAS 32. The call options embedded in bonds payable were separated from their host contracts and were recognized in ‘financial assets at fair value through profit or loss’ in net amount in accordance with IFRS 9 because the economic characteristics and risks of the embedded derivatives were not closely related to those of the host contracts.

(13) Long-term borrowings

Type of borrowings	Borrowing period
	and repayment term	Interest rate range	Collateral	December 31, 2025
Credit loan	Borrowing period is from 2020/02/20 to 2027/02/19; interest is repayable monthly. Principal is repaid in installments since 2022	1.79%~2.22%	None	$ 165,191
Less: Expiring within one year or one operating cycle				( 152,691)
				$ 12,500

Type of borrowings	Borrowing period and repayment term	Interest rate range	Collateral	December 31, 2024
Credit loan	Borrowing period is from 2020/02/20 to 2025/02/20; interest is repayable monthly. Principal is repaid in installments since 2022 (Notes 1 · 2)	0.93%~1.29%	None	$ 20,556
Credit loan	Borrowing period is from 2020/02/20 to 2027/02/19; interest is repayable monthly. Principal is repaid in installments since 2022	1.23%~1.79%	None	334,549
Less: Expiring within one year or one operating cycle				355,105
				( 189,914)
				$ 165,191

Interest expense recognized in profit or loss amounted to $4,413 thousand and $12,301 thousand for the years ended December 31, 2025 and 2024, respectively.

Note 1: In November 2019, the Company entered into a long-term loan contract with Taipei Fubon Bank. As of December 31, 2025, all available borrowing facilities were used.

Aforementioned contract conditions:

During the credit period, the following financial ratios shall be maintained and the audited/reviewed consolidated financial statements shall be checked semi-annually:

(a) Current ratio shall not be lower than 100%; (b) Debt ratio (total liabilities/total equity) shall not be higher than 200%; (c) Interest coverage ratio shall not be lower than 10. (d) Net tangible assets shall not be less than $8 billion.

Note 2: In February 2020, the Company entered into a long-term loan contract with JIHSUN BANK. As of December 31, 2025, all available borrowing facilities were used.

Aforementioned contract conditions:

During the credit period, the following financial ratios shall be maintained and the audited/reviewed consolidated financial statements shall be checked semi-annually:

(a) Current ratio shall not be lower than 100%; (b) Debt ratio (total liabilities/tangible assets) shall not be higher than 250%; (c) Tangible assets shall be maintained at least $8 billion.

(14) Pensions

A. (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Act, covering all regular employees' service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be

subject to the pension mechanism under the Act. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 5.1% of the employees' monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee, and contributes 8% of the manager's salaries and wages to the retirement fund deposited. Also, the Company would assess the balance in the aforementioned labor pension reserve account by the end of December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions for the deficit by next March.

(b) The amounts recognized in the balance sheet are as follows:

	December 31, 2025		December 31, 2024
Present value of defined benefit obligations	$	80,452	$	77,886
Fair value of plan assets	(	59,723)	(	53,998)
Net defined benefit liability	$	20,729	$	23,888

	Present value of defined benefit obligations	Fair value of plan assets	Net defined benefit liability
Year ended December 31, 2025
Balance at January 1	$ 77,886	($ 53,998)	$ 23,888
Current service cost	299	-	299
Interest expense (income)	1,159	( 783)	376
	79,344	( 54,781)	24,563
Remeasurements:
Return on plan assets
(excluding amounts included in interest income or expense)	-	( 2,927)	( 2,927)
Change in financial assumptions	1,960	-	1,960
Experience adjustments	429	-	429
	2,389	( 2,927)	( 538)
Pension fund contribution	-	( 3,296)	( 3,296)
Paid pension	( 1,281)	1,281	-
Balance at December 31	$ 80,452	($ 59,723)	$ 20,729

	Present value of defined benefit obligations	Fair value of plan assets	Net defined benefit liability
Year ended December 31, 2024
Balance at January 1	$ 86,576	($ 50,522)	$ 36,054
Current service cost	307	-	307
Interest expense (income)	1,003	( 583)	420
	87,886	( 51,105)	36,781
Remeasurements:
Return on plan assets (excluding amounts included in interest income or expense)	-	( 3,255)	( 3,255)
Change in financial assumptions	( 3,120)	-	( 3,120)
Experience adjustments	( 262)	-	( 262)
	( 3,382)	( 3,255)	( 6,637)
Pension fund contribution	-	( 6,256)	( 6,256)
Paid pension	( 6,618)	6,618	-
Balance at December 31	$ 77,886	($ 53,998)	$ 23,888

(d) The Bank of Taiwan was commissioned to manage the Fund of the Company's defined benefit pension plan in accordance with the Fund's annual investment and utilization plan and the "Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund" (Article 6: The scope of utilization for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilization of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings are less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2025 and 2024 is given in the Annual Labor Retirement Fund Utilization Report announced by the government.

(e) The principal actuarial assumptions used were as follows:

	Years ended December 31,
	2025	2024
Discount rate	1.35%	1.65%
Future salary increases	3.00%	3.00%

Future mortality rate was estimated based on the 6th Taiwan Standard Ordinary Experience Mortality Table.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

	Discount rate		Future salary increases
	Increase	Decrease	Increase	Decrease
	0.25%	0.25%	0.25%	0.25%
December 31, 2025
Effect on present value of defined benefit obligation	($ 1,638)	$ 1,694	$ 1,662	($ 1,616)
December 31, 2024
Effect on present value of defined benefit obligation	($ 1,651)	$ 1,709	$ 1,682	($ 1,633)

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

(f) The Company expects to pay contribution for pension plan amounting to $2,090 thousand in 2026.

(g) As of December 31, 2025, the weighted average duration of the retirement plan is 8 years. The analysis of timing of the future pension payment was as follows:

Within 1 year	$	15,186
1-2 year(s)		2,096
2-5 years		12,899
Over 5 years		59,703
	$	89,884

B. (a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the "New Plan") under the Labor Pension Act (the "Act"), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based on $6%$ of the employees' monthly salaries and wages to the employees' individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

(b) The pension costs under the defined contribution pension plan of the Company for the years ended December 31, 2025 and 2024 were $39,740 thousand and $35,293 thousand, respectively.

(15) Share-based payments

A. For the years ended December 31, 2025 and 2024, the fair value of the Company’s stocks granted on the grant date in accordance with the Company’s share-based payment agreement is measured using the closing price. Related information is as follows:

Type of arrangement	Grant date	Quantity granted	Contract period	Stock price	Exercise price	Fair value per unit	Vesting conditions
The first restricted stocks to employees in 2020	2021.05.31	416 units	3 years	107.5	0	107.5	Note 1
The second restricted stocks to employees in 2020	2021.07.30	1,504 units	3 years	111.0	0	111.0	Note 1
The first restricted stocks to employees in 2021	2022.07.29	1,800 units	3 years	80.7	0	80.7	Note 1
The first restricted stocks to employees in 2022	2023.07.28	1,645 units	3 years	91.9	0	91.9	Note 1
The second restricted stocks to employees in 2022	2024.07.26	355 units	3 years	124.0	0	124.0	Note 1
The first restricted stocks to employees in 2023	2024.07.26	1,594 units	5 years	124.0	0	124.0	Note 2
Cash capital increase reserved for employee preemption in 2024	2024.08.28	750 units	Vested immediately	134.0	95.0	39.0	-
The second restricted stocks to employees in 2023	2025.07.25	406 units	5 years	113.0	0	113.0	Note 2

Note 1: Depending on the employees’ tenure in the Company (1 to 3 years), the employees can vest stocks at the ratio of 30%, 30% and 40% in three years based on the number of stocks written on the notification. The conditions for vesting restricted stocks are as follows:

(a) For the employees who are currently working in the Company, whose services have reached 1 year and achieved the performance of the most recent year’s consolidated financial statements and the target personal performance, the ceiling of vested share ratio is 30%.

(b) For the employees who are currently working in the Company, whose services have reached 2 years and achieved the performance of the most recent year’s consolidated financial statements and the target personal performance, the ceiling of accumulated vested share ratio is 60%.

(c) For the employees who are currently working in the Company, whose services have reached 3 years and achieved the performance of the most recent year’s consolidated financial statements and the target personal performance, the ceiling of accumulated vested share ratio is 100%.

(d) The Company will repurchase and retire the stocks that did not meet the conditions of vesting for the employees who resign during the vesting period or not meet the condition of vesting by the issuance price.

Note 2: The expired date of the vesting period is 5 years after the grant date. The Company will calculate the number of vesting stocks by reviewing the personal and company’s

performance and the vesting stocks for the employees will be vested cumulatively at once.

The aforementioned restricted stocks issued by the Company cannot be transferred during the vesting period and the commissioned trust custodians execute the shareholders' rights on behalf of the employees.

B. Details of the share-based payment arrangements are as follows:

	2025		2024
	No. of options	Weighted-average exercise price (in dollars)	No. of options	Weighted-average exercise price (in dollars)
At January 1	4,127	$ -	4,071	$ -
Restricted Stocks granted	406	-	1,949	-
Restricted Stocks vested	( 1,155)	-	( 560)	-
Restricted stocks retired	( 71)	-	( 1,333)	-
At December 31	3,307	-	4,127	-

C. Expenses incurred on share-based payment transactions are shown below:

	Years ended December 31,
	2025	2024
Equity-settled	$ 115,443	$ 62,123

(16) Share capital

As of December 31, 2025, the Company's authorized capital was $4,000,000 thousand, consisting of 400,000 thousand shares of ordinary stock (including 5,000 thousand shares reserved for employee stock options), and the paid-in capital was $2,538,396 thousand with a par value of $10 (in dollars) per share.

Movements in the number of the Company's ordinary shares outstanding are as follows (in thousands):

	Year ended December 31,
	2025	2024
At January 1	253,491	219,316
Employee restricted shares granted	406	1,949
Employee restricted shares retired	(71)	(1,333)
Issuance of common stock for cash	-	5,000
Conversion of convertible bonds	-	28,559
At December 31	253,826	253,491

A. On April 27, 2023, the Board of Directors of the Company resolved to issue employee restricted shares. The issuance was approved by the Competent Authority on October 4, 2023. The effective date set on July 25, 2025. The subscription price is $0 per share. The Company issued 406 thousand common shares. The registration was completed. The employee restricted shares issued are subject to certain transfer restrictions before their vesting conditions are qualified. Other than these restrictions, the rights and obligations of these shares issued are the same as other issued ordinary shares.

B. The retirement of the employees’ restricted stocks which had been resolved by the Company’s Board of Directors was as follows:

The Board of Directors Resolution Date	Employee restricted shares retired	Capital Reduction Reference Date
February 25, 2026	13 thousand shares	February 26, 2026
October 30, 2025	56 thousand shares	November 3, 2025
April 24, 2025	2 thousand shares	April 28, 2025
February 26, 2025	2 thousand shares	March 3, 2025
October 24, 2024	1,122 thousand shares	October 24, 2024
July 25, 2024	182 thousand shares	July 25, 2024
April 25, 2024	27 thousand shares	April 25, 2024

The registration for the abovementioned retirement of the employees’ restricted stocks was completed, excluding the capital reduction which was resolved on February 25, 2026.

C. The Company issued the third unsecured convertible bonds on August 11, 2021. As of December 31, 2024, the face value of the convertible bonds of $2,996,000 thousand had been converted into common shares amounting to 28,559 thousand shares. The remaining unconverted face value of the corporate bonds was matured and settled on August 11, 2024. Among them, 11,316 thousand shares, 16,154 thousand shares and 1,089 thousand shares of which had been set effective on October 25, 2024, July 26, 2024 and April 26, 2024 as resolved by the Board of Directors during their meeting on October 24, 2024, July 25, 2024 and April 25, 2024, respectively. The registration for the abovementioned issuance of the new shares was completed.

D. The Company’s Board of Directors has resolved to increase cash capital by issuing common stock of 5,000 thousand shares with the subscription price of $95 per share on April 25, 2024. The total raised amount of $475,000 thousand has been fully collected, with the record date of this cash capital increase dated on September 24, 2024. The registration process was completed.

E. On April 28, 2022 and April 27, 2023, the Board of Directors of the Company resolved to issue employee restricted shares. The issuance was approved by the Competent Authority on September 21, 2022 and October 4, 2023, respectively. The Company issued 1,949 thousand common shares with the effective date set on July 26, 2024. The subscription price is $0 per share and the registration for the issuance of employee restricted shares was completed. The employee restricted shares issued are subject to certain transfer restrictions before their vesting conditions are qualified. Other than these restrictions, the rights and obligations of these shares issued are the

same as other issued ordinary shares.

(17) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalized mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

	2025
	Share premium	Share option	Employee restricted stocks	Others	Total
At January 1	$ 7,449,826	$ 280,733	$ 390,287	$ 301,585	$ 8,422,431
Issuance of restricted shares to employees	-	-	41,818	-	41,818
Restricted stocks vested	88,692	-	( 88,692)	-	-
Employee restricted stocks retired	-	-	( 5,441)	-	( 5,441)
Recognition of change in equity of associates in proportion to the Company's ownership	-	-	-	21,801	21,801
Change in ownership interests in subsidiaries	-	-	-	( 392)	( 392)
At December 31	$ 7,538,518	$ 280,733	$ 337,972	$ 322,994	$ 8,480,217

	2024
	Share premium	Share option	Employee restricted stocks	Others	Total
At January 1	$4,147,542	$96,854	$338,495	$290,083	$4,872,974
Proceeds from issuing shares	445,241	-	-	-	445,241
Convertible bonds converted into common shares	-	280,733	-	-	280,733
Ordinary shares converted from convertible bonds	2,804,134	(96,725)	-	-	2,707,409
Redeemed of convertible bonds at maturity	-	(129)	-	129	-
Issuance of restricted shares to employees	-	-	222,186	-	222,186
Restricted stocks vested	52,909	-	(52,909)	-	-
Employee restricted stocks retired	-	-	(117,485)	-	(117,485)
Recognition of change in equity of associates in proportion to the
Company’s ownership	-	-	-	13,679	13,679
Change in ownership interests in subsidiaries	-	-	-	(434)	(434)
Disposal of investments accounted for using equity method	-	-	-	(1,872)	(1,872)
At December 31	$7,449,826	$280,733	$390,287	$301,585	$8,422,431
(18) Retained earnings
A. Under the Company’s Articles of Incorporation, the current year’s earnings, after deduction of mandatory income tax, shall first be used to offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve. After the provision or reversal of special reserve, the appropriation of the remaining earnings along with the unappropriated earnings of prior year shall be proposed by the Board of Directors and approved by the shareholders. The Board of Directors may, based on financial, business and operating perspectives, propose a distribution of earnings within an amount at least 30% of the new distributable earnings and not more than 80% of the accumulated distributable earnings for the current period. The dividends shall be preferably distributed in the form of cash, and can be appropriated in the shares. The ratio of cash dividends shall account for at least 30% of the total dividends distributed. All or partial of dividend and bonus that are distributed in the form of cash will be resolved and reported to the shareholders if more than 2/3 of the directors attend the Board of Directors’ meeting and more than 1/2 of the directors present at the meeting have agreed.
B. The Company’s dividend policy is summarized below: as the Company operates in a volatile business environment and is in the stable growth stage, the residual dividend policy is adopted taking into consideration the Company’s financial structure, operating results and future
_	-	-	-	(1,872)	(1,872)

expansion plans.

C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

D. (a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings. As of December 31, 2025, the special reserve set aside based on the above regulation amounted to $193,792 thousand. In Accordance with Ruling No.1010051600 issued by Securities and Futures Bureau of the FSC on November 21, 2012, “unearned employee compensation” under employee restricted stock is not an unrealized item, and therefore is not required to set aside the special reserve.

(b) The amounts previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Jin-Guan-Zheng-Fa-Zi Letter No. 1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently. Such amounts are reversed upon disposal or reclassified if the assets are investment property of land and reversed over the use period if the assets are investment property other than land. As of December 31, 2025, the balance of capital surplus was $269,144 thousand.

(c) As of December 31, 2025 and 2024, the balance of special reserve was $462,936 thousand and $973,012 thousand, respectively.

E. The Company distributed earnings for the years ended December 31, 2024 and 2023 as resolved at the shareholders’ meeting on May 26, 2025 and May 29, 2024, respectively, are as follows:

	Years ended December 31,
	2024		2023
	Amount	Dividends per share	Amount	Dividends per share
Legal reserve	$ 209,620		$ 137,551
Special reserve	( 510,076)		204,826
Cash dividends	1,850,505	$ 7.3	1,030,914	$ 4.7
	$ 1,550,049		$ 1,373,291

The abovementioned distribution of earnings for the years ended December 31, 2024 and 2023 was in agreement with those amounts proposed by the Board of Directors on February 26, 2025 and February 22, 2024, respectively.

F. The Company distributed earnings for the year ended December 31, 2025 as resolved at the Board of Directors on February 25, 2026 is as follows:

	Year ended December 31,
	2025
	Amount	Dividends per share
Legal reserve	$ 133,159
Special reserve	87,465
Cash dividends	1,015,358	$ 4.0
	$ 1,235,982

(19) Other equity items

	2025
	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income	Cost of unearned employee compensation	Total
At January 1	$ 57,735	($ 520,671)	($ 305,316)	($ 768,252)
Issuance of restricted shares to employees	-	-	( 45,878)	( 45,878)
Amortisation of employee restricted stocks	-	-	115,443	115,443
Employee restricted shares retired	-	-	6,146	6,146
Revaluation	-	( 9,471)	-	( 9,471)
Revaluation – subsidiary	-	5,771	-	5,771
Revaluation – associates	-	( 218)	-	( 218)
Currency translation differences:
- Group	( 118,121)	-	-	( 118,121)
- Tax on Group	23,628	-	-	23,628
- Associates	13,936	-	-	13,936
- Tax on associates	( 2,990)	-	-	( 2,990)
At December 31	($ 25,812)	($ 524,589)	($ 229,605)	($ 780,006)

	2024
	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income	Cost of unearned employee compensation	Total
At January 1	($ 413,159)	($ 559,853)	($ 236,339)	($ 1,209,351)
Issuance of restricted shares to employees	-	-	( 241,676)	( 241,676)
Amortisation of employee restricted stocks	-	-	41,882	41,882
Employee restricted shares retired	-	-	130,817	130,817
Revaluation	-	( 22,889)	-	( 22,889)
Revaluation – subsidiary	-	12,305	-	12,305
Revaluation – associates	-	( 2,705)	-	( 2,705)
Revaluation transferred to retained earnings – gross	-	52,471	-	52,471
Currency translation differences:
- Group	366,104	-	-	366,104
- Tax on Group	( 73,332)	-	-	( 73,332)
- Associates	191,851	-	-	191,851
- Tax on associates	( 38,603)	-	-	( 38,603)
- Adjustment on disposal of associates transferred to profit or loss	24,874	-	-	24,874
At December 31	$ 57,735	($ 520,671)	($ 305,316)	($ 768,252)

(20) Operating revenue

	Years ended December 31,
	2025	2024
Revenue from contracts with customers	$ 32,427,777	$ 33,063,291

A. Disaggregation of revenue from contracts with customers

The Company derives revenue from the transfer of goods and services at a point in time in the following geographical regions:

Year ended December 31, 2025

	Electronic devices					Total
	Taiwan	Europe	US	Mainland China	Others
Timing of revenue recognition
At a point in time	$ 1,136,478	$ 14,900,644	$ 14,982,158	$ 166,738	$ 1,241,759	$ 32,427,777

Year ended December 31, 2024

	Electronic devices					Total
	Taiwan	Europe	US	Mainland China	Others
Timing of revenue recognition
At a point in time	$ 513,958	$ 14,150,488	$ 17,734,480	$ 147,898	$ 516,467	$ 33,063,291

B. Contract liabilities:

(a) The Company has recognized the following revenue-related contract liabilities:

	December 31, 2025	December 31, 2024	January 1, 2024
Contract liabilities	$ 730,271	$ 758,067	$ 872,696

(b) Revenue recognized that was included in the contract liability balance at the beginning of the year:

	Years ended December 31,
	2025	2024
Revenue recognized that was included in the contract liability balance at the beginning of the year	$ 224,955	$ 224,581

(21) Interest income

	Years ended December 31,
	2025	2024
Interest income from bank deposits	$ 138,410	$ 128,168
Other interest income	-	841
	$ 138,410	$ 129,009

(22) Other income

	Years ended December 31,
	2025	2024
Sample income	$ 33,994	$ 72,427
Dividend income	4,008	4,004
Grants revenue (Note)	314	140
Rent income	97	46
Other income	22,912	22,527
	$ 61,325	$ 99,144

Note: This refers to the government subsidies for the Work-Life Balance Promotion Program, the Multi-beneficiary Vocational Training Program for Middle-aged and Senior Employees, the Continued Employment Subsidy Program for Senior Workers, and the Breastfeeding (or Combined Breastfeeding) Room Subsidy Program from the Ministry of Labor, applied for by the Company during 2025 and 2024.

(23) Other gains and losses

	Years ended December 31,
	2025	2024
Foreign exchange (losses) gains	($ 426,464)	$ 233,950
Impairment loss recognized in profit or loss
Impairment loss recognized in profit or loss, others	-	( 64,973)
Net gains on financial assets at fair value through profit or loss	50,247	23,902
Losses on disposal of property, plant and equipment	-	( 258)
Losses on disposals of investment	-	( 15,469)
Other losses	( 1)	( 2,775)
	($ 376,218)	$ 174,377

(24) Expenses by nature

	Years ended December 31,
	2025	2024
Employee benefit expense	$ 1,263,147	$ 1,302,929
Depreciation charge - property, plant and equipment	40,191	38,463
Depreciation charge - right-of-use assets	3,898	3,854
Amortization charge	24,069	30,193
	$ 1,331,305	$ 1,375,439

As of December 31, 2025 and 2024, the Company had 918 and 832 employees, respectively. For the years ended December 31, 2025 and 2024, there are 6 non-employee directors.

(25) Employee benefit expense

	Years ended December 31,
	2025	2024
Wages and salaries	$ 933,263	$ 1,017,295
Share-based payments	115,443	62,123
Labor and health insurance fees	82,332	71,159
Pension costs	40,415	36,020
Directors' remuneration	32,869	60,941
Other employee benefit expense	58,825	55,391
	$ 1,263,147	$ 1,302,929

A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees' compensation and directors' remuneration. The ratio shall be at least 5% for employees' compensation, of which at least 1% shall be set aside for rank-and-file employees, and shall not be higher than 2% for directors' remuneration. The Company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by at least two-thirds of the total

number of directors, have the profit distributable as employees' compensation distributed in the form shares or in cash; and in addition thereto a report of such distribution shall be submitted to the shareholders at the shareholders' meeting. Employees' compensation can be distributed in cash or shares and shall be distributed to the employees of subsidiaries of the Company who meet certain specific requirements.

B. The details of employees' compensation and directors' remuneration of the Company are as follows:

	Years ended December 31,
	2025	2024
Employees’ compensation	$ 157,894	$ 298,856
Directors’ remuneration	31,579	59,771
	$ 189,473	$ 358,627

The abovementioned amounts were recognized in wages and salaries, and were accrued at 10% and 10% for employees' compensation and 2% and 2% for directors' remuneration for the years ended December 31, 2025 and 2024, respectively, based on the distributable profit of the year. Employees' compensation and directors' remuneration of 2024 as resolved at the Board of Directors' meeting were in agreement with those amounts recognized in the profit or loss of 2024. Information about employees' compensation and directors' remuneration of the Company as resolved by the Board of Directors will be posted in the "Market Observation Post System" at the website of the Taiwan Stock Exchange.

(26) Income tax

A. Income tax expense

(a) Components of income tax expense:

	Years ended December 31,
	2025	2024
Current tax:
Current tax on profits for the year	$ 118,296	$ 205,531
Tax on undistributed surplus earnings	25,487	-
Prior year income tax (over) underestimation	( 46,960)	6,644
Total current tax	96,823	212,175
Deferred tax:
Origination and reversal of temporary differences	( 43,994)	274,499
Income tax expense	$ 52,829	$ 486,674

(b) The income tax (charge)/credit relating to components of other comprehensive income is as follows:

	Years ended December 31,
	2025	2024
Exchange differences changes on translation of foreign financial statements	($ 23,628)	$ 73,332
Exchange differences changes on translation of foreign financial statements - associates	2,990	38,603
Remeasurement of defined benefit obligations	108	1,327
	($ 20,530)	$ 113,262

B. Reconciliation between income tax expense and accounting profit:

	Years ended December 31,
	2025	2024
Current tax:
Tax calculated based on profit before tax and statutory tax rate	$ 277,893	$ 525,986
Expenses disallowed by tax regulation	11,198	554
Tax exempt income by tax regulation	( 27,977)	( 21,861)
Temporary differences not recognised as deferred tax	( 231,037)	41,212
Effect from investment tax credits	( 59,210)	( 48,546)
Tax on undistributed surplus earnings	25,487	-
Prior year income tax (over) underestimation	( 46,960)	6,644
Others	103,435	( 17,315)
Income tax expense	$ 52,829	$ 486,674

C. Amounts of deferred tax assets or liabilities as a result of temporary differences, tax losses and investment tax credits are as follows:

	2025
	January 1	Recognized in profit or loss	Recognized in other comprehensive income	December 31
Deferred tax assets:
-Temporary differences:
Remeasurement of defined benefit obligations	$ 15,104	$ -	($ 108)	$ 14,996
Allowance for bad debts	3,762	( 471)	-	3,291
Unrealized impairment loss	891	( 75)	-	816
Accumulated unused compensated absences	5,884	644	-	6,528
Allowance for inventory valuation losses and loss on obsolete and slow-moving inventories	15,979	2,324	-	18,303
Amortisation of discounts on corporate bonds	39,003	( 38,588)	-	415
Unrealized loss on valuation of financial instruments	-	7,317	-	7,317
	$ 80,623	($ 28,849)	($ 108)	$ 51,666
-Deferred tax liabilities:
Gain on overseas long-term investment	($ 2,025,873)	$ 74,342	$ -	($ 1,951,531)
Cumulative translation adjustment of long-term equity investments	( 84,488)	-	20,638	( 63,850)
Unrealized exchange gain	( 8,438)	( 4,520)	-	( 12,958)
Unrealized gain on valuation of financial instruments	( 3,773)	3,021	-	( 752)
Others	( 800)	-	-	( 800)
	($ 2,123,372)	$ 72,843	$ 20,638	($ 2,029,891)

	2024
	January 1	Recognized in profit or loss	Recognized in other comprehensive income	December 31
Deferred tax assets:
Temporary differences:
Remeasurement of defined benefit obligations	$ 16,431	$ -	($ 1,327)	$ 15,104
Allowance for bad debts	3,762	-	-	3,762
Unrealized impairment loss	966	(75)	-	891
Accumulated unused compensated absences	5,597	287	-	5,884
Allowance for inventory valuation losses and loss on obsolete and slow-moving inventories	9,192	6,787	-	15,979
Amortisation of discounts on corporate bonds	31,140	7,863	-	39,003
Unrealized exchange loss	12,227	(12,227)	-	-
Cumulative translation adjustment of long-term equity investments	27,447	-	(27,447)	-
	$ 106,762	$ 2,635	($ 28,774)	$ 80,623
-Deferred tax liabilities:
Gain on overseas long-term investment	($ 1,501,203)	($ 524,670)	$ -	($ 2,025,873)
Cumulative translation adjustment of long-term equity investments	-	-	(84,488)	(84,488)
Unrealized exchange gain	-	(8,438)	-	(8,438)
Unrealized gain on valuation of financial instruments	(3,930)	157	-	(3,773)
Others	(800)	-	-	(800)
	($ 1,505,933)	($ 532,951)	($ 84,488)	($ 2,123,372)

D. The amounts of deductible temporary difference that are not recognized as deferred tax assets are as follows:

	December 31, 2025	December 31, 2024
Deductible temporary differences	$ 1,328,145	$ 1,329,939

E. The investment in Merry Electronics (HK) Co., Ltd. and Merry Electronics (U.S.A.) Co., Ltd., of which the undistributed earnings of the investee company were used as permanent investment and were not distributed, and the losses were not compensated before 2000. Therefore, no deferred income tax arising from the difference between the carrying amount of the long-term equity investments and its tax bases had been recognized. However, for the profit from the above-mentioned reinvested companies, based on the overall operation planning, the earnings arising from these companies after 2001 are intended to be distributed and repatriated. Accordingly, deferred income tax liabilities and assets arising from this portion of earnings or losses are recognized since 2001.

F. The Company’s income tax returns through 2023 have been assessed and approved by the Tax Authority.

(27) Earnings per share

	Year ended December 31, 2025
	Amount after tax	Weighted average number of ordinary shares outstanding (shares in thousands)	Earnings per share (in dollars)
Basic earnings per share
Profit attributable to ordinary shareholders of the parent	$ 1,336,636	249,457	$ 5.36
Diluted earnings per share
Profit attributable to ordinary shareholders of the parent	$ 1,336,636	249,457
Assumed conversion of all dilutive potential ordinary shares
Convertible bonds	45,274	22,400
Employees’ compensation	-	2,024
Employee restricted shares	-	1,213
Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	$ 1,381,910	275,094	$ 5.02

Year ended December 31, 2024

	Amount after tax	Weighted average number of ordinary shares outstanding (shares in thousands)	Earnings per share (in dollars)
Basic earnings per share
Profit attributable to ordinary shareholders of the parent	$ 2,143,258	231,541	$ 9.26
Diluted earnings per share
Profit attributable to ordinary shareholders of the parent	$ 2,143,258	231,541
Assumed conversion of all dilutive potential ordinary shares
Convertible bonds	33,319	23,966
Employees’ compensation	-	3,009
Employee restricted shares	-	1,498
Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	$ 2,176,577	260,014	$ 8.37

The number of weighted-average outstanding shares is included for assumed conversion of all dilutive potential ordinary shares at the calculation of diluted earnings per share, based on the assumption that employees’ compensation will be all distributed in the form of shares.

(28) Supplemental cash flow information

A. Investing activities with partial cash payments

	Years ended December 31,
	2025	2024
Purchase of property, plant and equipment	$ 51,536	$ 45,104
Add:
Opening balance of payable on equipment	1,400	244
Ending balance of prepayments for equipment	1,798	546
Less:
Ending balance of payable on equipment	( 9,512)	( 1,400)
Opening balance of prepayments for equipment	( 546)	( 1,604)
Cash paid during the year	$ 44,676	$ 42,890

B. Financing activities with no cash flow effects:

	Years ended December 31,
	2025	2024
Convertible bonds being converted to common stocks	$ -	$ 2,993,002

(29) Changes in liabilities from financing activities

	Short-term borrowings	Lease liability	Convertible bonds (including those matured within one year)	Long-term borrowings (including those matured within one year)	Dividends payable	Total liabilities from financing activities
At January 1, 2025	$ -	$ 9,550	$ 2,856,278	$ 355,105	$ -	$ 3,220,933
Changes in cash flow from financing activities	2,175,500	( 4,560)	-	( 189,914)	( 1,850,505)	130,521
Additions	-	3,611	-	-	1,850,505	1,854,116
Amortisation of discounts on corporate bonds	-	-	55,991	-	-	55,991
Changes in other non-cash items	24,600	747	-	-	-	25,347
At December 31, 2025	$ 2,200,100	$ 9,348	$ 2,912,269	$ 165,191	$ -	$ 5,286,908
	Short-term borrowings	Lease liability	Convertible bonds (including those matured within one year)	Long-term borrowings (including those matured within one year)	Dividends payable	Total liabilities from financing activities
At January 1, 2024	$ 790,000	$ 3,532	$ 2,982,261	$ 1,114,463	$ -	$ 4,890,256
Changes in cash flow from financing activities	( 790,000)	( 4,315)	3,114,036	( 759,358)	( 1,030,914)	529,449
Additions	-	9,579	-	-	1,030,914	1,040,493
Redemption of corporate bond	-	-	( 4,000)	-	-	( 4,000)
Amortisation of discounts on corporate bonds	-	-	40,752	-	-	40,752
Changes in capital surplus	-	-	( 280,733)	-	-	( 280,733)
Changes in other non-cash items	-	754	( 2,996,038)	-	-	( 2,995,284)
At December 31, 2024	$ -	$ 9,550	$ 2,856,278	$ 355,105	$ -	$ 3,220,933

7. RELATED PARTY TRANSACTIONS

(1) Relationship of related parties

Names of related parties	Relationship with the Company
MERRY ELECTRONICS (SHENZHEN) CO., LTD. (“MECL”)	Subsidiary of the Company
MERRY ELECTRONICS (HK) CO., LTD. (“MEST”)	Subsidiary of the Company
Merry Electronics (Thailand) Co., Ltd. (“METC”)	Subsidiary of the Company
MERRY ELECTRONICS (U.S.A) CO., LTD. (“MECA”)	Subsidiary of the Company
MERRY ELECTRONICS (SINGAPORE) PTE. LTD. (“MESG”)	Subsidiary of the Company
FuliCare (Xiamen) Co., Ltd. (“FUXM”)	Subsidiary of the Company
ASIAN ELITE INTERNATIONAL LIMITED (“MSCS”)	Subsidiary of the Company
MERRY & LUXSHARE (VIETNAM) CO., LTD. (“MEVN”)	Subsidiary of the Company
Seas Fabrikker (“SENM”)	Subsidiary of the Company
MUtek Electronics Co., Ltd. (“MUTT”)	Subsidiary of the Company
Merry Electronics (Suzhou) Co., Ltd. (“MECE”)	Affiliated company
MERRY ELECTRONICS (HUIZHOU) CO., LTD. (“MECH”)	Affiliated company
DONPON PRECISION INC.	Affiliated company
SYNergy ScienTech Corp.	Affiliated company
Merry Fuling Co., Ltd. Taiwan Branch	Other related party
LUXSHARE PRECISION SINGAPORE PTE.LT	Other related party (Note 1)
LUXSHARE PRECISION LIMITED	Other related party (Note 1)
LEADER TECH VIET NAM COMPANY LIMITED	Other related party (Note 1)
GUANGZHOU LUXVISIONS INNOVATION TECHNOLOGY LIMITED.	Other related party (Note 1)
Taiwan Reading Culture Foundation	Other related party (Note 2)

Note 1: A corporate director of the Company’s subsidiary, MEVN, and the entity both belong to Luxshare Company. Note 2: The chairman of the Company and of the foundation is the same person.

(2) Significant related party transactions

A. Operating revenue

(a) Sales of goods

	Years ended December 31,
	2025	2024
LUXSHARE PRECISION LIMITED	$ 16,344	$ -
LUXSHARE PRECISION SINGAPORE PTE.LT	14,253	-
Other related party	2,491	-
	$ 33,088	$ -

The prices of goods sold to related parties are based on the different product's profitability and adjusted periodically as there is no comparable transaction for the goods sold to the third parties. The credit terms to related parties are 60 to 120 days end of month and 30 to 120 days end of month to the third parties. For transactions in which the Company sells raw materials to the aforementioned related party and subsequently repurchases finished goods made from the same raw materials from the same party, the initial sale of raw materials is eliminated due to economic substance.

(b) Technical service revenue

	Years ended December 31,
	2025	2024
MESG	$ 10,985	$ 6,898
MUTT	1,498	7,590
	$ 12,483	$ 14,488

The Company collects service revenue from related parties based on the current expenses related to providing services, such as manufacture and technology consultant of electroacoustic products as well as design and development of audio module products. The credit term of aforementioned transactions was 60 to 65 days after the end of the month.

B. Purchases

(a) Purchases of goods

	Years ended December 31,
	2025	2024
MECE	$ 10,133,676	$ 10,225,885
MECL	9,470,262	11,026,896
MEVN	7,674,554	5,089,107
MECH	3,030,754	4,615,142
Subsidiary of the Company	481,025	241,034
	$ 30,790,271	$ 31,198,064

The prices of goods for the aforementioned purchase transactions charged by the companies are based on the different product's profitability and adjusted annually. The credit terms to the

Company was 60 to 65 days after the end of the month and 30 to 120 days after the end of the month to third parties.

C. Operating expenses

	Years ended December 31,
	2025	2024
MECA	$ 76,357	$ 64,281
Subsidiary of the Company	3,792	3,170
	$ 80,149	$ 67,451

Operating expenses pertained to the marketing management services and the licensing of intellectual property provided by the subsidiaries to the Company, which were calculated and collected based on mutual agreement. For the years ended December 31, 2025 and 2024, the marketing management service fees were calculated based on the agreed service fee rates plus an additional 1%, and were reduced by government grants received from the local governments. The credit terms were 60 to 65 days after the end of the month.

D. Receivables from related parties

(a) Accounts receivable

	December 31, 2025	December 31, 2024
LUXSHARE PRECISION SINGAPORE PTE.LT	$ 8,947	$ -
LUXSHARE PRECISION LIMITED	8,940	-
MESG	6,103	320
Other related party	1,860	12
Subsidiary of the Company	224	66
	$ 26,074	$ 398

The receivables arise mainly from sale transactions and services provided for granting licenses of manufacturing, technology and intellectual property of electroacoustic products and revenue charged from technology development and provided design and development of audio module products.

(b) Other receivables

	December 31, 2025	December 31, 2024
METC	$ 3,181,069	$ 1,406,216
MESG	2,531,256	-
MECH	54,745	96,618
Subsidiary of the Company	955	218,986
	$ 5,768,025	$ 1,721,820

Other receivables mainly consisted of the purchases of raw materials on behalf of associates, dividends receivable and the receivables of sale of miscellaneous payments paid on behalf of associates. Details of transactions relating to the purchases of raw materials on behalf of

associates are provided in Table 3.

E. Payables to related parties

(a) Accounts payable

	December 31, 2025	December 31, 2024
MECL	$ 3,864,005	$ 3,711,978
MECE	2,072,198	1,951,430
MEVN	1,876,286	1,947,949
Subsidiary of the Company	42,299	62,119
Affiliated company	441,209	591,514
	$ 8,295,997	$ 8,264,990

(b) Other payables

	December 31, 2025	December 31, 2024
MECL	$ 80,832	$ 15,510
MECE	28,202	43,169
Subsidiary of the Company	2,379	9,046
Affiliated company	8,604	37,016
	$ 120,017	$ 104,741

Other payables arise mainly from sales proceeds collected, payments for mold development, and miscellaneous expenses paid on behalf of the related parties.

F. Endorsements and guarantees provided to related parties

Please refer to table 13(1) B.

G. Key management compensation

	Years ended December 31,
	2025	2024
Salaries and other short-term employee benefits	$ 77,424	$ 137,344
Post-employment benefits	210	204
Share-based payments	43,872	17,746
	$ 121,506	$ 155,294

8. PLEDGED ASSETS

None.

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS

None.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

A. Refer to Note 6(18) F. for details of the appropriation of 2025 retained earnings.

B. The Company aims to enhance its market penetration in Northeast Asia, strengthen vertically integrated manufacturing capabilities, expand operational scale, and improve business performance. On March 17, 2025, as resolved by the Board of Directors, the Group plans to acquire 100% ownership in MWT HOLDINGS CO., LTD. (MWT Holdings) from non-related parties, including J-STAR Co., Ltd., with an investment amount of JPY 9,782 million (approximately NTD 1,950 million) and related transaction costs. The effective date of merger was set on February 2, 2026, and the settlement was completed.

12. OTHERS

(1) Capital management

In view of the industrial characteristics and future development status and considering the external environment changes, the Company’s capital management objective is to ensure it has sufficient financial resource and operating plans to meet operational capital for future needs, capital expenditure, research and development expense, obligation repayment and dividend distribution within the following year.

The Company monitored capital by reassessing debt ratios periodically. The debt ratios at December 31, 2025 and 2024 were as follows:

	December 31, 2025	December 31, 2024
Total debt	$ 20,540,406	$ 17,784,934
Total assets	38,089,727	35,803,779
Debt ratio	54%	50%

(2) Financial instruments

A. Financial instruments by category

	December 31, 2025	December 31, 2024
Financial assets
Financial assets at fair value through profit or loss
Financial assets mandatorily measured at fair value through profit or loss	$ 854,098	$ 677,738
Financial assets at fair value through other comprehensive income
Designation of equity instrument	$ 207,000	$ 216,469

	December 31, 2025	December 31, 2024
Financial assets
Financial assets at amortised cost/Loans and receivables
Cash and cash equivalents	$ 6,103,542	$ 6,145,347
Financial assets at amortized cost	110,000	50,000
Accounts receivable(including due from related parties)	7,319,571	8,008,636
Other receivables (including due from related parties)	5,783,053	1,762,647
Guarantee deposits paid	659	659
	$ 19,316,825	$ 15,967,289
Financial liabilities
Financial liabilities at fair value through profit or loss
Financial liabilities held for trading	$ 38,725	$ -
Short-term borrowings	2,200,100	-
Accounts payable (including accounts payable to related parties)	10,952,492	10,119,857
Other payables (including other payables to related parties)	721,602	877,217
Lease liabilities	9,348	9,550
Corporate bonds payable (including current portion)	2,912,269	2,856,278
Long-term borrowings (including current portion)	165,191	355,105
	$ 16,999,727	$ 14,218,007

B. Financial risk management policies

(a) The Company's activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. (b) The Company's treasury identifies, evaluates and hedges financial risks in close co-operation with the Company's operating units, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity. (c) Information about derivative financial instruments that are used to hedge certain exchange rate risk are provided in Note 6(2).

C. Significant financial risks and degrees of financial risks

(a) Market risk

Foreign exchange risk

i. The Company operates internationally and is exposed to exchange rate risk arising from the transactions of the Company used in various functional currency, primarily with respect to the USD, RMB, HKD, THB and VND. Exchange rate risk arises from future commercial transactions and recognized assets and liabilities.

ii. The Company’s management has a policy specifying that the companies within the Company manage the foreign exchange rate risk of its functional currency. Each company should hedge against its overall foreign exchange rate risk through the Company’s finance department. The foreign exchange rate risk is measured through the expected transaction with highly probable expenditures in US dollars, in which the foreign exchange forward contract is adopted to reduce the impact on the fluctuation of foreign exchange rate over the expected purchase cost of inventories.

iii. The Company hedges foreign exchange rate by using forward exchange contracts. However, the Company does not adopt hedging accounting. Details of financial assets or liabilities at fair value through profit or loss are provided in Note 6(2).

iv. The Company’s businesses involve some non-functional currency operations (the Company’s functional currency: NTD). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

	December 31, 2025			December 31, 2024
	Book value			Book value
	Foreign currency amount	Exchange		Foreign currency amount	Exchange
	(In thousands)	rate	(NTD)	(In thousands)	rate	(NTD)
(Foreign currency: functional currency)
Financial assets
Monetary items
Cash in banks
USD : NTD	$80,567	31.4300	$2,532,210	$82,587	32.7850	$2,707,619
RMB : NTD	69,188	4.4960	311,069	120,235	4.4780	538,412
JPY : NTD	8,025,584	0.2008	1,611,537	37	0.2099	8
Receivables
USD : NTD	$428,986	31.4300	$13,483,041	$300,448	32.7850	$9,850,188
RMB : NTD	-	-	-	44,100	4.4780	197,480
Non-monetary items
Investments accounted for using equity method
USD : NTD	$156,966	31.4300	$4,933,449	$212,478	32.7850	$6,966,079
HKD : NTD	1,402,496	4.0380	5,663,277	1,285,436	4.2220	5,427,109
THB : NTD	1,396,075	1.0019	1,398,728	1,230,002	0.9623	1,183,631
RMB : NTD	29,581	4.4960	132,994	33,082	4.4780	148,143
VND : NTD	1,307,691,152	0.0012	1,566,614	894,510,457	0.0013	1,154,813
Financial liabilities
Monetary items
Bank loan
USD : NTD	$70,000	31.4300	$2,200,100	$-	-	$-
Payable
USD : NTD	$332,519	31.4300	$10,451,072	$287,084	32.7850	$9,412,049
RMB : NTD	205,202	4.4960	922,588	237,938	4.4780	1,065,486

	December 31, 2025			December 31, 2024
	Sensitivity analysis			Sensitivity analysis
	Degree of variation	Effects on profit or loss	Effect on other comprehensive income	Degree of variation	Effects on profit or loss	Effect on other comprehensive income
	(Foreign currency: functional currency)
Financial assets
Monetary items
Cash in banks
USD : NTD	3%	$ 75,966	$ -	3%	$ 81,229	$ -
RMB : NTD	3%	9,332	-	3%	16,452	-
JPY : NTD	3%	48,346	-	3%	-	-
Receivables
USD : NTD	3%	$ 404,491	$ -	3%	$ 295,506	$ -
RMB : NTD	3%	-	-	3%	5,924	-
Non-monetary items
Investments accounted for using equity method
USD : NTD	3%	$ -	$ 148,003	3%	$ -	$ 208,982
HKD : NTD	3%	-	169,898	3%	-	162,813
THB : NTD	3%	-	41,962	3%	-	35,509
RMB : NTD	3%	-	3,990	3%	-	4,444
VND : NTD	3%	-	46,998	3%	-	34,644
Financail liabilities
Monetary items
Bank loan
USD : NTD	3%	$ 66,003	$ -	3%	$ -	$ -
Payable
USD : NTD	3%	$ 313,532	$ -	3%	$ 282,361	$ -
RMB : NTD	3%	27,678	-	3%	31,965	-

Total exchange (loss) gain, including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2025 and 2024 amounted to a loss of $426,464 thousand and a gain of $233,950 thousand, respectively.

Price risk

i. The Company’s borrowings and investment in debt instruments are measured at amortized cost, fair value through profit or loss and fair value through other comprehensive income. The borrowings are periodically contractually repriced and to that extent are also exposed to the risk of future changes in market interest rates.

ii. The Company’s investments in equity securities comprise shares and open-end funds issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 3% with all other variables held constant, post-tax profit for the years ended December 31, 2025 and 2024 would have increased/decreased by $25,559 thousand and $20,086 thousand, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $6,210 thousand and $6,494 thousand, respectively, as a result of other comprehensive income on equity investments classified as at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

i. The Company’s borrowings are measured at amortized cost. The borrowings are periodically contractually repriced and to that extent are also exposed to the risk of future changes in market interest rates.

ii. If the borrowing interest rate had increased/decreased by 0.25% and with all other variables held constant, profit, net of tax for the years ended December 31, 2025 and 2024 would have decreased/increased by $4,731 thousand and $710 thousand, respectively. The main factor is that changes in interest expense result from floating rate borrowings.

(b) Credit risk

i. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows of debt instruments stated at amortized cost, at fair value through profit or loss and at fair value through other comprehensive income.

ii. In accordance with the internal and explicit credit policy, each operating entities within the Company shall conduct management and credit risk analysis for each new customer before setting the terms and conditions for payment and delivery. The internal risk control system assesses the credit quality of the customer by taking into account its financial position, past experience and other factors. The limits of individual risks are set by the Board of Directors according to internal or external ratings, and the use of credit limits is regularly monitored. The main credit risk comes from cash and cash equivalents and deposits with banks and financial institutions. It also comes from customers' credit risks and includes outstanding receivables. For banks and financial institutions, only good credit rating agencies will be accepted as trading counterparts.

iii. For banks and financial institutions, the Company transacts with a variety of banks and financial institutions, mainly domestic and overseas well-known financial institutions, to avoid concentration in any single counterparty and to minimize credit risk. The Company can only enter into the financial services and loan agreement provided by banks and financial institutions after being approved by the Board of Directors or authorized management according to the Company's delegation of authorization policy. To prevent legal risks, all the Company signs with banks and financial institutions after all documents are examined by counsel or legal advisor profession. The Company periodically checks the credit rating, conditions and quality of service as well as transactions. According to the Company's operating condition, the credit limits and utilization of credit limits are monitored on a regular basis and maintained within a reasonable range to ensure it meets the needs of the operation.

iv. The Company adopts the assumption under IFRS 9, that is, the default occurs when the contract payments are past due over 90 days.

v. The Company adopts the following assumption under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition:

(i) If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

(ii) For investments in bonds that are traded over the counter, if any external credit rating agency rates these bonds as investment grade, the credit risk of these financial assets is low.

vi. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:

(i) It becomes probable that the issuer will enter bankruptcy or other financial reorganization due to their financial difficulties;

(ii) The disappearance of an active market for that financial asset because of financial difficulties;

(iii) Default or delinquency in interest or principal repayments;

(iv) Adverse changes in national or regional economic conditions that are expected to cause a default.

vii. The Company classifies customers' accounts receivable and contract assets in accordance with credit rating of customer. The Company applies the simplified approach using provision matrix to estimate expected credit loss under the provision matrix basis.

viii. The Company wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Company will continue executing the recourse procedures to secure their rights.

ix. The Company used the forecastability to adjust historical and timely information to assess the default possibility of accounts receivable, contract assets and lease payments receivable. On December 31, 2025 and 2024, the provision matrix is as follows:

December 31, 2025	Expected loss rate	Total book value	Loss allowance
Not past due	0.02%	$ 7,175,875	$ 1,235
Up to 30 days	1.09%	119,194	1,295
31 to 90 days	19.02%	1,183	225
91 to 180 days	100.00%	6,621	6,621
Over 180 days	100.00%	7,289	7,289
		$ 7,310,162	$ 16,665
December 31, 2024	Expected loss rate	Total book value	Loss allowance
---	---	---	---
Not past due	0.01%	$ 7,973,778	$ 1,015
Up to 30 days	1.12%	35,808	401
31 to 90 days	11.22%	77	9
91 to 180 days	100.00%	-	-
Over 180 days	100.00%	-	-
		$ 8,009,663	$ 1,425

x. Movements in relation to the Company applying the simplified approach to provide loss allowance for accounts receivable are as follows:

	2025		2024
	Accounts receivable		Accounts receivable
At January 1	$	1,425	$	3,780
Allowance (reversal) of impairment loss		15,240	(	2,355)
At December 31	$	16,665	$	1,425

xi. For investments in debt instruments at amortized cost, the credit rating levels are presented below:

	December 31, 2025
		Lifetime
		Significant increase in credit risk	Impairment of credit	Total
Financial assets at amortized cost	$ 110,000	$ -	$ -	$ 110,000
	December 31, 2024
		Lifetime
		Significant increase in credit risk	Impairment of credit	Total
Financial assets at amortized cost	$ 50,000	$ -	$ -	$ 50,000

Based on assessment, the default possibility of the Group's financial assets at amortised cost is remote, and thus no loss allowances were provided as of December 31, 2025 and 2024.

i. Cash flow forecasting is performed in the operating entities of the Company and aggregated by Company treasury. Company treasury monitors rolling forecasts of the Company's liquidity requirements to ensure it has sufficient cash to meet operational needs. ii. Company treasury invests surplus cash in interest bearing current accounts, time deposits, money market deposits and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient head-room as determined by the above-mentioned forecasts. iii. The table below analyses the Company's non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows. iv. As of December 31, 2025 and 2024, the Company has $10,845,350 thousand and $13,373,480 thousand undrawn borrowing facilities, respectively.

Non-derivative financial liabilities:

December 31, 2025	Less than 3 months	Between 3 months and 1 year	Between 1 and 2 years	Between 2 and 5 years	Over 5 years	Total
Short-term borrowings	$ 2,214,216	$ -	$ -	$ -	$ -	$ 2,214,216
Accounts payable	2,083,397	573,098	-	-	-	2,656,495
Accounts payable to related parties	8,295,997	-	-	-	-	8,295,997
Other payables	582,699	18,886	-	-	-	601,585
Other payables to related parties	117,965	2,052	-	-	-	120,017
Lease liabilities	1,193	3,547	3,447	1,909	-	10,096
Long-term borrowings	19,544	135,356	12,535	-	-	167,435
Corporate bonds payable	-	-	3,000,000	-	-	3,000,000
Derivative financial liabilities:
Forward exchange contracts	8,845	29,880	-	-	-	38,725
Non-derivative financial liabilities:
December 31, 2024	Less than 3 months	Between 3 months and 1 year	Between 1 and 2 years	Between 2 and 5 years	Over 5 years	Total
Accounts payable	$ 1,455,474	$ 399,393	$ -	$ -	$ -	$ 1,854,867
Accounts payable to related parties	8,264,990	-	-	-	-	8,264,990
Other payables	755,432	17,044	-	-	-	772,476
Other payables to related parties	104,741	-	-	-	-	104,741
Lease liabilities	981	2,943	3,892	6,184	-	14,000
Long-term borrowings	57,216	136,792	154,398	12,520	-	360,926
Corporate bonds payable	-	-	-	3,000,000	-	3,000,000

(3) Fair value

A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

Level 1: Quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company’s investment in listed stocks and derivative instruments with quoted market prices is included in Level 1.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Company’s investment in certain derivative instruments and equity investment is included in Level 2.

Level 3: Unobservable inputs for the asset or liability. The fair value of the Company’s investment in certain derivative instruments and equity investment without active market and investment property is included in Level 3.

B. Financial instruments not measured at fair value

(a) Financial instruments not measured at fair value include the carrying amounts of cash and cash equivalents, accounts receivable, other receivables, short-term borrowings, accounts payable and other payables.

	December 31, 2025
	Fair value
	Book value	Level 1	Level 2	Level 3
Financial liabilities:
Bonds payable	$ 2,912,269	$ -	$ 2,926,261	$ -
	December 31, 2024
	Fair value
	Book value	Level 1	Level 2	Level 3
Financial liabilities:
Bonds payable	$ 2,856,278	$ -	$ 2,760,265	$ -

(b) Bonds payable: They are measured at present value, which is calculated based on the cash flow expected to be paid and discounted using a market rate prevailing at balance sheet date.

C. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities are as follows:

December 31, 2025	Level 1	Level 2	Level 3	Total
Assets
Recurring fair value measurements
Financial assets at fair value through profit or loss
-Equity securities	$ -	$ -	$ 46,282	$ 46,282
-Forward exchange contracts	-	2,139	-	2,139
-Funds	788,437	-	-	788,437
-Stock	17,240	-	-	17,240
Financial assets at fair value through other comprehensive income			-
-Equity securities	107,541	-	99,459	207,000
	$ 913,218	$ 2,139	$ 145,741	$ 1,061,098
Liabilities
Recurring fair value measurements
Financial liabilities at fair value through profit or loss
-Forward exchange contracts	$ -	$ 38,725	$ -	$ 38,725
December 31, 2024	Level 1	Level 2	Level 3	Total
Assets
Recurring fair value measurements
Financial assets at fair value through profit or loss
-Equity securities	$ -	$ -	$ 43,075	$ 43,075
-Forward exchange contracts	-	7,603	-	7,603
-Funds	609,561	-	-	609,561
-Stock	16,899	-	-	16,899
-Call options of convertible bonds	-	-	600	600
Financial assets at fair value through other comprehensive income
-Equity securities	105,910	-	110,559	216,469
	$ 732,370	$ 7,603	$ 154,234	$ 894,207

D. The methods and assumptions the Company used to measure fair value are as follows:

(a) The instruments the Company used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

	Listed shares	Open-end fund
Market quoted price	Closing price at evaluation date	Net asset value at evaluation date

(b) Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods. (c) Forward exchange contracts are usually valued based on the current forward exchange rate. (d) The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Company's financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs. In accordance with the Company's management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.

E. For the years ended December 31, 2025 and 2024, there was no transfer between Level 1 and Level 2. F. The following chart is the movement of Level 3 for the years ended December 31, 2025 and 2024:

	2025	2024
At January 1	$ 154,234	$ 595,849
Sold in the year	-	( 280,000)
Transferred to investments accounted for using the equity method	-	( 124,604)
Gains (losses) recognised in profit or loss	2,607	( 2,153)
Losses recognised in other comprehensive income	( 11,100)	( 34,858)
At December 31	$ 145,741	$ 154,234

G. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

	Fair value at December 31, 2025	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fair value
Nonderivative equity instrument:
Equity securities	$ 33,258	Market comparable companies	Price to book ratio multiple	1	The higher the multiplier, the higher the fair value
Private equity funds in venture capital	46,282	Net asset value	N/A	N/A	N/A
Private placement shares (listed companies)	66,201	Market price method	Discount for lack of marketability	33.45%	The higher the discount for marketability, the lower the fair value
	Fair value at December 31, 2024	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fair value
Nonderivative equity instrument:
Equity securities	$ 36,358	Market comparable companies	Price to book ratio multiple	1	The higher the multiplier, the higher the fair value
Private equity funds in venture capital	43,075	Net asset value	N/A	N/A	N/A
Private placement shares (listed companies)	74,201	Market price method	Discount for lack of marketability	34.10%	The higher the discount for marketability, the lower the fair value
Call options of convertible bonds	600	Binary tree convertible bond valuation model	Risk-free interest rate	1.4456%~1.4472%	The higher the risk-free interest rate, the lower the fair value
			Stock price	108.0	The higher the stock price, the higher the fair value
			Volatility	32.85%	The higher the stock price volatility, the higher the fair value

H. The Company has carefully assessed the valuation models and assumptions used to measure fair value. However, use of different valuation models or assumptions may result in different measurement. The following is the effect of profit or loss or of other comprehensive income from financial assets and liabilities categorized within Level 3 if the inputs used to valuation models have changed:

			December 31, 2025
			Recognised in profit or loss		Recognised in other comprehensive income
	Input	Change	Favourable change	Unfavourable change	Favourable change	Unfavourable change
Financial assets
Equity securities	Price to book ratio multiple	±10%	$ -	$ -	$ 3,326	($ 3,326)
			December 31, 2024
			Recognised in profit or loss		Recognised in other comprehensive income
	Input	Change	Favourable change	Unfavourable change	Favourable change	Unfavourable change
Financial assets
Equity securities	Price to book ratio multiple	±10%	$ -	$ -	$ 3,636	($ 3,636)

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

A. Loans to others: Please refer to table 1. B. Provision of endorsements and guarantees to others: None. C. Holding of significant marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 2. D. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 3. E. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 4. F. Significant inter-company transactions during the reporting period: Please refer to table 5.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 6.

(3) Information on investments in Mainland China

A. Basic information: Please refer to table 7.

B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 1, table 3, table 4 and table 5.

SEGMENT INFORMATION

Not applicable.

MERRY ELECTRONICS CO., LTD.

Loans to others

Year ended December 31, 2025

Table 1

Expressed in thousands of NTD

(Except as otherwise indicated)

No.	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance for the year ended December 31, 2025	Balance at December 31, 2025	Actual amount drawn down	Interest rate	Nature of loan (Note 2)	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Collateral		Limit on loans granted to a single party (Note 1)	Ceiling on total loans granted (Note 1)
													Item	Value
0	MEHO	MESG	Other receivables	Y	$ 1,571,500	$ 1,571,500	$ -	-	2	$ -	Business operation	$ -	-	$ -	$ 7,019,728	$ 17,549,321
1	MESG	MENA	Other receivables	Y	62,860	62,860	62,860	4.31	2	-	Business operation	-	-	-	375,083	375,083
1	MESG	MENA	Other receivables	Y	125,720	125,720	125,720	3.73–4.83	2	-	Business operation	-	-	-	375,083	375,083
1	MESG	SENM	Other receivables	Y	31,430	31,430	15,715	4.64	2	-	Business operation	-	-	-	375,083	375,083
1	MESG	SENM	Other receivables	Y	31,430	31,430	15,715	3.55	2	-	Business operation	-	-	-	375,083	375,083
1	MESG	MEMP	Other receivables	Y	15,715	15,715	4,715	3.87	2	-	Acquisition for asset	-	-	-	375,083	375,083
1	MESG	SENM	Other receivables	Y	47,145	-	-	-	2	-	Business operation	-	-	-	375,083	375,083
2	MECL	FUXM	Other receivables	Y	58,448	58,448	58,448	2.80	2	-	Business operation	-	-	-	1,591,062	3,977,655
2	MECL	FUXM	Other receivables	Y	49,456	49,456	4,496	2.60	2	-	Business operation	-	-	-	1,591,062	3,977,655
2	MECL	FUXM	Other receivables	Y	58,448	-	-	-	2	-	Business operation	-	-	-	1,591,062	3,977,655
2	MECL	ASCX	Other receivables	Y	35,968	-	-	-	2	-	Business operation	-	-	-	1,591,062	3,977,655
2	MECL	ASCX	Other receivables	Y	35,968	35,968	-	-	2	-	Business operation	-	-	-	1,591,062	3,977,655

Note 1: (1) The ceiling on MESG total loans to others is MESG's net assets; for short-term financing, the limit to a single party is 40% of MESG's net assets. (2) The ceiling on MECL total loans to others is MECL's net assets; for short-term financing, the limit to a single party is 40% of MECL's net assets. (3) For short-term financing between the Company's wholly-owned subsidiaries, limit on loans is not restricted. Limit on total loans granted to a single party is the net value of MESG. (4) For the companies having business relationship with MESG and MECL, financial limit on loans granted to a single party shall not exceed the amount of business transactions occurred between the creditor and borrower. (5) The ceiling on the Company's total loans to others is the Company's net assets; for short-term financing, the limit for MERRY ELECTRONICS (SINGAPORE) PTE. LTD. ('MESG') to a single party is 40% of the Company's net assets. Note 2: (1) For MESG's and MECL's business transactions. (2) For short-term financing.

MERRY ELECTRONICS CO., LTD.

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

December 31, 2025

Expressed in thousands of NTD

(Except as otherwise indicated)

Table 2

Securities held by	Marketable securities (Note 1)	Relationship with the securities issuer	General ledger account	As of December 31, 2025
				Number of shares	Book value (in thousands)	Ownership (%)	Fair value (in thousands)
The Company	Stock - Fextron Vehicle Technologies	-	Financial assets mandatorily measured at fair value through profit or loss - current	400	$ 20,480	-	$ 17,240
The Company	Fund -Taishin Ta-Chong Money Market Fund	-	Financial assets mandatorily measured at fair value through profit or loss - current	16,139	240,000	-	242,825
The Company	Fund - CTBC Hua Win Money Market Fund	-	Financial assets mandatorily measured at fair value through profit or loss - current	22,577	260,000	-	262,996
The Company	Fund - UPAMC James Bond Money Market Fund	-	Financial assets mandatorily measured at fair value through profit or loss - current	16,001	280,000	-	282,616
			Valuation adjustment		800,480		$ 805,677
					5,197
					$ 805,677
The Company	Fund - JAFCO	-	Non-current financial assets mandatorily measured at fair value through profit or loss - non-current	870	$ 26,220	0.71%	$ 25,141
The Company	Stock - WK Technology	-	Non-current financial assets mandatorily measured at fair value through profit or loss - non-current	2,000	20,000	1.78%	21,141
			Valuation adjustment		46,220		$ 46,282
					62
					$ 46,282
The Company	Stock - 2881B.TW	-	Equity instruments measured at fair value through other comprehensive income - current	683	$ 40,980	-	$ 42,141
The Company	Stock - 2882B.TW	-	Equity instruments measured at fair value through other comprehensive income - current	585	35,100	-	35,100
The Company	Stock - 5871A	-	Equity instruments measured at fair value through other comprehensive income - current	300	30,000	-	30,300
			Valuation adjustment		106,080		$ 107,541
					1,461
					$ 107,541
The Company	Stock - 4943.TW	-	Equity instruments measured at fair value through other comprehensive income - non-current	7,712	$ 648,164	6.09%	$ 66,201
The Company	Stock - FUJITER Semiconductor CO.,LTD	-	Equity instruments measured at fair value through other comprehensive income - non-current	2,126	27,811	9.79%	14,795
The Company	Stock - NETVOX TECHNOLOGY CO., LTD	-	Equity instruments measured at fair value through other comprehensive income - non-current	324	2,976	1.32%	-
The Company	Stock - -EVER THAI AGRI-PRODUCT CO.,LTD.	-	Equity instruments measured at fair value through other comprehensive income - non-current	683	6,425	4.64%	2,326
The Company	Stock - -SUNSINO SME Development Co., Ltd.	-	Equity instruments measured at fair value through other comprehensive income - non-current	178	2,123	0.36%	2,209
The Company	Stock - LINSATION Intelligent Technology Limited	-	Equity instruments measured at fair value through other comprehensive income - non-current	75	8,772	6.19%	2,905
The Company	Stock - MERRY FULING CO., LTD., TAIWAN BRANCH (SAMOA)	-	Equity instruments measured at fair value through other comprehensive income - non-current	356	10,437	19.00%	11,023
			Valuation adjustment		706,708		$ 99,459
					( 607,249)
					$ 99,459
The Company	Bond - P13 Fubon Life Insurance 1A	-	Financial assets at amortized cost - non-current	-	$ 50,000	-	$ 50,000
The Company	Bond - P14 Taiwan Life Insurance 1A	-	Financial assets at amortized cost - non-current	-	50,000	-	50,000
The Company	Bond - P14 E. Sun Bank 3	-	Financial assets at amortized cost - non-current	-	10,000	-	10,000
					$ 110,000		$ 110,000

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities within the scope of IFRS 9.

Table 2

MERRY ELECTRONICS CO., LTD.

Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more

Year ended December 31, 2025

Expressed in thousands of NTD

(Except as otherwise indicated)

Table 3

Purchaser/seller	Counterparty	Relationship with the counterparty	Transaction				Differences in transaction terms compared to third party transactions (Note 1)		Notes/accounts receivable (payable)		Note
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unit price	Credit term	Balance (Note 2)	Percentage of total notes/accounts receivable (payable)
The Company	MECL	A subsidiary of the Company	Purchases	$ 9,470,262	20%	60–65 days end of month after offsetting with accounts receivable	(Note 1)	30–120 days end of month for the third parties	($ 3,864,005)	31%	(Note 3)
The Company	MEVN	A subsidiary of the Company	Purchases	7,674,554	16%	60–65 days end of month after offsetting with accounts receivable	(Note 1)	30–120 days end of month for the third parties	( 1,876,286)	15%	(Note 3)
The Company	MECH	Investment accounted for using the equity method	Purchases	3,030,754	7%	60–65 days end of month after offsetting with accounts receivable	(Note 1)	30–120 days end of month for the third parties	( 441,209)	4%
The Company	MECE	Investment accounted for using the equity method	Purchases	10,133,676	22%	60–65 days end of month after offsetting with accounts receivable	(Note 1)	30–120 days end of month for the third parties	( 2,072,198)	16%
The Company	METC	A subsidiary of the Company	Purchases	440,740	1%	60–120 days end of month after offsetting with accounts receivable	(Note 1)	30–120 days end of month for the third parties	-	0%	(Note 3)
METC	The Company	Parent Company	Purchases	5,519,094	12%	60–120 days end of month after offsetting with accounts receivable	(Note 1)	30–120 days end of month for the third parties	( 3,181,069)	27%	(Note 3 - Note 4)
MESG	MECL	Same ultimate parent company	Purchases	684,030	1%	60–65 days end of month after offsetting with accounts receivable	(Note 1)	30–120 days end of month for the third parties	( 299,783)	2%	(Note 3)
MESG	METC	Same ultimate parent company	Purchases	7,003,010	15%	60–120 days end of month after offsetting with accounts receivable	(Note 1)	30–120 days end of month for the third parties	( 2,473,697)	20%	(Note 3)
METC	DONPON	Affiliated company	Purchases	760,909	2%	120 days end of month after offsetting with accounts receivable	(Note 1)	30–120 days end of month for the third parties	278,933	2%
METC	SYNergy	Affiliated company	Purchases	173,794	0%	120 days end of month after offsetting with accounts receivable	(Note 1)	30–120 days end of month for the third parties	( 52,908)	0%
MECL	DONPON	Affiliated company	Purchases	475,995	1%	120 days end of month after offsetting with accounts receivable	(Note 1)	30–120 days end of month for the third parties	( 200,576)	2%
MEVN	LUXSHARE PRECISION SINGAPORE PTE.LT	Affiliated company	(Sales)	2,841,958	2%	60–120 days end of month after offsetting with accounts payable	(Note 1)	30–120 days end of month for the third parties	1,627,080	13%
MEVN	Luxshare Precision Limited	Affiliated company	(Sales)	665,010	1%	60–120 days end of month after offsetting with accounts payable	(Note 1)	30–120 days end of month for the third parties	316,656	3%
MEVN	Luxshare Precision Limited	Affiliated company	Purchases	272,140	1%	60–120 days end of month after offsetting with accounts receivable	(Note 1)	30–120 days end of month for the third parties	( 98,897)	1%
MEVN	The Company	Parent Company	Purchases	689,169	1%	60–65 days end of month after offsetting with accounts receivable	(Note 1)	30–120 days end of month for the third parties	-	2%	(Note 3 - Note 4)

Note 1: For purchase transactions with related parties, the price is based on the profitability of the product and will be adjusted annually. Note 2: The balance is the net amount after offsetting accounts receivable and payable due from/ to related parties. Note 3: Inter-company transactions between companies within the Group are eliminated. Note 4: For transactions in which the Company sells raw materials to the aforementioned related party and subsequently repurchases finished goods made from the same raw materials from the same party, the initial sale of raw materials is eliminated due to economic substance.

MERRY ELECTRONICS CO., LTD. Receivables from related parties reaching $100 million or 20% of paid-in capital or more December 31, 2025

Table 4 Expressed in thousands of NTD (Except as otherwise indicated)

Creditor	Counterparty	Relationship with the counterparty	Balance of accounts receivable due from related party		Turnover rate	Overdue receivables		Amount collected subsequent to the balance sheet date (Note 2)	Allowance for doubtful accounts	Note
			General ledger account	Amount		Amount	Action taken
The Company	METC	A subsidiary of the Company	Other receivable	$ 3,181,069	-	-	-	$ 408,291	-	(Note 1 - Note 3 - Note 4)
MECL	The Company	Parent Company	Accounts receivable	3,864,005	2.49	-	-	1,950,337	-	(Note 1)
MECL	MESG	A subsidiary of the Company	Accounts receivable	299,783	2.66	-	-	118,884	-	(Note 1)
METC	MESG	A subsidiary of the Company	Accounts receivable	2,473,697	3.62	-	-	1,005,174	-	(Note 1)
MEVN	The Company	Parent Company	Accounts receivable	1,876,286	4.01	-	-	459,836	-	(Note 1)
MEVN	LUXSHARE PRECISION SINGAPORE PTE.LT	A other related party of the Group	Accounts receivable	1,627,080	1.37	-	-	762,416	-
MEVN	Luxshare Precision Limited	A other related party of the Group	Accounts receivable	316,656	1.97	-	-	-	-
MESG	MENA	A subsidiary of the Company	Other receivable	188,580	-	-	-	-	-	(Note 1 - Note 3)

Note 1: Inter-company transactions between companies within the Group are eliminated. Note 2: The balance was as at February 25, 2026. Note 3: The amount comprises other receivables and thus, the turnover rate is not calculated. Note 4: Other receivables mainly were the purchases of raw materials on behalf of affiliated companies.

Table 4

MERRY ELECTRONICS CO., LTD.

Significant inter-company transactions during the reporting periods

Year ended December 31, 2025

Table 5 Expressed in thousands of NTD (Except as otherwise indicated)

Number (Note 1)	Company name	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction
						Terms
0	MEHO	MECL	1	Purchases	$ 9,470,262	The price is based on the profitability of the product	20%
0	MEHO	MECL	1	Accounts payable	3,864,005	60–65 days end of month after offsetting with accounts receivable	9%
0	MEHO	MEVN	1	Purchases	7,674,554	The price is based on the profitability of the product	17%
0	MEHO	MEVN	1	Accounts payable	1,876,286	60–65 days end of month after offsetting with accounts receivable	4%
0	MEHO	METC	1	Purchases	440,740	The price is based on the profitability of the product	1%
1	METC	MEHO	2	Purchases	5,519,094	The price is based on the profitability of the product	12%
1	METC	MEHO	2	Accounts payable	3,181,069	60–120 days end of month after offsetting with accounts receivable	7%
2	MEVN	MEHO	2	Purchases	689,169	The price is based on the profitability of the product	1%
3	MESG	MECL	3	Purchases	684,030	The price is based on the profitability of the product	1%
3	MESG	MECL	3	Accounts payable	299,783	60–65 days end of month after offsetting with accounts receivable	1%
3	MESG	METC	3	Purchases	7,003,010	The price is based on the profitability of the product	15%
3	MESG	METC	3	Accounts payable	2,473,697	60–65 days end of month after offsetting with accounts receivable	6%

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

Parent company is '0'.
The subsidiaries are numbered in order starting from '1'.

Note 2: Relationship between transaction company and counter party is classified into the following three categories; fill in the number of category each case belongs to (If transactions between parent company and subsidiaries or between subsidiaries refer to the same transaction, it is not required to disclose twice. For example, if the parent company has already disclosed its transaction with a subsidiary, then the subsidiary is not required to disclose the transaction; for transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction.):

Parent company to subsidiary.
Subsidiary to parent company.
Subsidiary to subsidiary.

Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

Table 5

MERRY ELECTRONICS CO., LTD.

Information on investees

Year ended December 31, 2025

Expressed in thousands of NTD

(Except as otherwise indicated)

Table 6

Investor	Investee	Location	Main business activities	Initial investment amount		Shares held as at December 31, 2025			Net profit (loss) of the investee for the year ended December 31, 2025	Investment income (loss) recognised by the Company for the year ended December 31, 2025	Note
				Balance as at December 31, 2025	Balance as at December 31, 2024	Number of shares (in thousand shares)	Ownership (%)	Book value
The Company	MEST	HONG KONG	Trade service for headphone, microphone, receiver, and speaker	$ 733,733	$ 733,733	19,658	100.00%	$ 5,663,277	$ 192,089	$ 208,804	(Note 1)
The Company	DDBV	British Virgin IS.	General investment business	1,479,925	1,479,925	48,005	100.00%	3,818,290	342,972	330,568	(Note 1)
The Company	LEOHAB ENTERPRISE CO.,LTD.	Taichung City	Plastic injection molding and metal stamping	79,689	79,689	5,529	13.81%	109,629	230,754	31,867
The Company	DONPON PRECISION INC.	Taoyuan City	Various plastic products, mold manufacturing and processing and trading business	386,010	386,010	13,806	15.30%	453,347	221,111	31,054	(Note 1)
The Company	SYNergy ScienTech Corp	Hsinchu City	Research, development, manufacture and sales of secondary lithium batteries	135,869	135,869	7,300	7.78%	125,816	( 95,450)	( 7,260)	(Note 1)
The Company	MECA	U.S.A	Technique, marketing and after service	28,887	28,887	1,000	100.00%	36,371	159	158
The Company	MESG	SINGAPORE	Sales and research of earphones, microphone, audio equipment, receiver and speaker	92,132	92,132	800	100.00%	375,083	360,517	360,517
The Company	METC	THAILAND	Manufacturing of electronic product such as headphone, audio equipment, amplifier, and microphone.	484,358	484,358	5,060	99.99%	1,398,728	163,998	158,469	(Note 1)
The Company	MHKY	CAYMAN	General investment business	922,946	857,946	29,992	100.00%	493,180	104,540	104,540
The Company	INSA	SAMOA	General investment business	1,293,008	1,293,008	302	100.00%	210,525	( 102,747)	( 102,747)
The Company	MEVN	VIETNAM	Manufacture of microphone and speaker	366,710	366,710	-	51.00%	1,566,614	972,412	498,434	(Note 1)
The Company	MUTT	New Taipei City	Manufacturing and application service of electrical appliances and audiovisual electronic products	30,600	30,600	3,060	51.00%	12,552	( 606)	( 309)
The Company	MCTT	Taichung City	General investment business	8,000	8,000	800	100.00%	11,721	3,071	3,071
The Company	MAC FUND	Taipei City	General investment business	149,333	149,333	-	42.67%	208,432	122,429	52,241
MESG	MEMP	Malaysia	Research and development of microphone, receiver and speaker	15,969	15,969	2,400	100.00%	11,854	1,682	-	(Note 2)
MCTT	MAC FUND	Taipei City	General investment business	3,500	3,500	-	1.00%	4,886	122,429	1,224
DDBV	MTHK	HONG KONG	General investment business	1,392,956	1,392,956	45,000	100.00%	3,816,946	342,972	-	(Note 2)
MHKY	FUSA	SAMOA	General investment business	860,943	795,943	28,078	100.00%	484,810	104,821	-	(Note 2)
INSA	MENA	CANADA	Sale and development of speaker and power amplifier	103,557	103,557	56,954	100.00%	( 155,291)	( 76,497)	-	(Note 2)
MENA	SENM	NORWAY	Manufacture and sales of speaker monomer	7,491	7,491	-	100.00%	42,507	( 8,781)	-	(Note 2)
MESG	MEIN	INDIA	Research and development of microphone, receiver and speaker	31,379	-	8,910	99.00%	29,505	( 1,782)	-	(Note 2)
MCTT	MEIN	INDIA	Research and development of microphone, receiver and speaker	317	-	90	1.00%	298	( 1,782)	-	(Note 2)

Note 1: The investment income included unrealised gains or losses and realised gains arising from upstream transactions. Note 2: The investee is second subsidiary and investment income (loss) is not shown. Note 3: Please refer to Note 4(3) of the consolidated statements for details.

MERRY ELECTRONICS CO., LTD.

Information on investees in Mainland China

Year ended December 31, 2025

Table 7 Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in capital	Investment method	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2025	Amount remitted from Taiwan to Mainland China / Amount remitted back to Taiwan for the year ended December 31, 2025		Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2025	Net income of investee for the year ended December 31, 2025	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31, 2025	Book value of investments in Mainland China as of December 31, 2025 (Note 4)	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2025	Note
					Remitted to Mainland China	Remitted back to Taiwan
MSCS	Manufacture of speaker and amplifier	$ 155,438	(Note 1)	$ 110,497	$ -	$ -	$ 110,497	($ 15,819)	100.00%	($ 15,819)	$ 132,993	$ -	(Note 3)
MECL	Manufacture of earphones, microphone, receiver, batteries, speaker and other electronic component	428,667	(Note 2)	453,191	-	-	453,191	67,802	100.00%	67,802	3,977,655	2,282,120	(Note 3)
MECE	Manufacture and sales of microphone, receiver and speaker	2,813,322	(Note 2)	1,369,285	-	-	1,369,285	697,629	49.00%	329,434	3,816,947	498,288	(Note 3)
MECH	Manufacture and sales of microphone, receiver, speaker and mobile phone	457,062	(Note 2)	426,742	-	-	426,742	275,061	49.00%	150,981	1,540,032	431,543	(Note 3)
FUSZ	General administration	288,568	(Note 2)	310,763	-	-	310,763	( 2,081)	100.00%	( 2,066)	251,745	-	(Note 3)
ETCX	Retail sales of hearing products	20,232	(Note 2)	19,009	-	-	19,009	( 1,864)	100.00%	( 1,846)	( 40,496)		(Note 3)
ASCX	Manufacture and sales of hearing aid, hearing device and acoustics equipment	117,962	(Note 2)	315,461	-	-	315,461	119,437	100.00%	117,590	184,263	-	(Note 3)
FUXM	General administration	313,070	(Note 2)	302,995	-	-	302,995	( 2,063)	100.00%	( 2,028)	26,452	-	(Note 3)
DONG GUAN GET PINK	Manufacture and sales of earphones and speaker	70,812	(Note 2)	-	-	-	-	( 5,934)	33.00%	( 2,603)	13,653	-	(Note 3)

Note 1: Reinvesting in the investee in Mainland China through the parent company. Note 2: Through investing in an existing company in the third area, which then invested in the investee in Mainland China. Note 3: The financial statements that are audited and attested by R.O.C. parent company's CPA. Note 4: The amount in the table is translated into New Taiwan dollars at the closing exchange rates prevailing at the balance sheet date.

Company name	Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2025	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA (Note 5)
Merry Electronics Co., Ltd.	$ 3,307,943	$ 3,748,971	$ 11,452,695

Note 5: (2001) Tai-Cai-Zheng (1) Letter No. 006130 of Securities and Futures Commission, Ministry of Finance, R.O.C

Statement 1, Page1

MERRY ELECTRONICS CO., LTD.

STATEMENT OF CASH AND CASH EQUIVALENTS

DECEMBER 31, 2025

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Statement 1

Item	Description		Amount
Cash on hand			$ 193
Cash in banks
Checking accounts			8,075
Demand deposits			1,629,706
Foreign exchange deposits	USD	80,567 thousand ; exchange rate: 31.430	2,532,210
	EUR	5 thousand ; exchange rate: 36.900	177
	RMB	69,188 thousand ; exchange rate: 4.496	311,069
	HKD	205 thousand ; exchange rate: 4.038	829
	SGD	399 thousand ; exchange rate: 24.450	9,746
	JPY	8,025,584 thousand ; exchange rate: 0.2008	1,611,537
			$ 6,103,542

Statement 2, Page1

MERRY ELECTRONICS CO., LTD.

STATEMENT OF TRADE RECEIVABLES

DECEMBER 31, 2025

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Statement 2

Client Name	Amount	Note
A	$ 1,771,422
B	1,466,878
C	1,214,524
D	803,925
E	377,959
		The balance of each customer has not exceeded 5% of the accounts receivable
Others	1,675,454
	7,310,162
Less: Allowance for bad debts	( 16,665)
	$ 7,293,497

MERRY ELECTRONICS CO., LTD. STATEMENT OF INVENTORIES DECEMBER 31, 2025 (Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Statement 3

Item	Amount		Note
	Cost	Net Realizable Value
Finished goods	$ 1,281,078	$ 1,297,311	Net realizable value
Raw materials	153,388	153,388	Value replacement
Semi-finished goods	32	9	Net realizable value
	1,434,498	$ 1,450,708
Less: Allowance for slow moving inventories and valuation loss	( 91,510)
	$ 1,342,988

Statement 3, Page1

MERRY ELECTRONICS CO., LTD.

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2025

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Statement 4

Name	Beginning Balance		Addition		Decrease		Ending Balance			Market Value or Net Assets Value			Pledged as collateral
	Number of shares (in thousand)	Amount	Number of shares (in thousand)	Amount	Number of shares (in thousand)	Amount	Number of shares (in thousand)	Percentage of Ownership	Amount	Unit Price (in dollars)	Total Amount
MERRY ELECTRONICS (HK) CO., LTD	19,658	$ 5,427,109	-	$ 236,168	-	$ -	19,658	100%	$ 5,663,277	288.09	$ 5,663,277	None
DANNY DYNAMICS LIMITED	48,005	3,665,620	-	355,773	-	( 203,103)	48,005	100%	3,818,290	79.54	3,818,290	None
LEOHAB ENTERPRISE CO., LTD.	4,036	76,954	1,493	32,675	-	-	5,529	13.81%	109,629	19.83	109,629	None
MERRY ELECTRONICS (U.S.A.) CO., LTD.	999	37,730	1	38	-	( 1,397)	1,000	100%	36,371	36.37	36,371	None
MERRY ELECTRONICS (SINGAPORE) PTE., LTD.	800	2,651,893	-	231,091	-	( 2,507,901)	800	100%	375,083	468.85	375,083	None
MERRY ELECTRONICS (THAILAND) CO., LTD.	5,060	1,183,631	-	215,097	-	-	5,060	99.99%	1,398,728	276.43	1,398,728	None
MERRY HEALTHCARE CO., LTD.	27,992	301,700	2,000	191,480	-	-	29,992	100%	493,180	16.44	493,180	None
ASIAN ELITE INTERNATIONAL LTD.	-	148,143	-	-	-	( 15,149)	-	100%	132,994	-	132,994	None	Note
INDIGO ENTERPRISE INC.	-	601,385	-	-	-	( 98,611)	-	100%	502,774	-	502,774	None	Note
MERRY & LUXSHARE (VIETNAM) CO., LTD.	-	1,154,813	-	411,801	-	-	-	100%	1,566,614	-	1,566,614	None	Note
MUtek Electronics Co., Ltd.	3,060	12,861	-	-	-	( 309)	3,060	100%	12,552	4.10	12,552	None
Merry Capital Inc.	800	10,660	-	3,070	-	( 2,009)	800	100%	11,721	14.65	11,721	None
CDIB-Mac Limited Partnership	-	156,199	-	52,241	-	( 8)	-	43%	208,432	-	208,432	None	Note
DONPON PRECISION INC.	19,723	482,410	-	30,106	( 5,917)	( 59,169)	13,806	15.30%	453,347	32.84	453,347	None
SYNergy ScienTech Corp.	7,300	136,149	-	-	-	( 10,333)	7,300	7.78%	125,816	17.24	125,816	None
		16,047,257		1,759,540		( 2,897,989)			14,908,808		14,908,808
Accumulated impairment	-	( 292,249)		-		-			( 292,249)		( 292,249)	None
		$ 15,755,008		$ 1,759,540		($ 2,897,989)			$ 14,616,559		$ 14,616,559

Note: It is a limited company or limited partnership without shares.

Statement 4, Page1

MERRY ELECTRONICS CO., LTD. STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT FOR THE YEAR ENDED DECEMBER 31, 2025 (Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Statement 5

	Beginning Balance					Ending Balance
ITEM	Initial Cost	Revaluation Increment	Addition	Decrease	Transfer	Initial Cost	Revaluation Increment	Collateral

Note: "Property, Plant and Equipment": Please refer to Note 6(7).

(Reminder of page intentionally left blank)

Statement 5, Page1

Statement 6, Page1

MERRY ELECTRONICS CO., LTD.

STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT

FOR THE YEAR ENDED DECEMBER 31, 2025

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Statement 6

Item	Beginning Balance	Addition	Decrease	Ending Balance	Note

Note: "Property, Plant and Equipment": Please refer to Note 6(7).

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MERRY ELECTRONICS CO., LTD. STATEMENT OF BONDS PAYABLE DECEMBER 31, 2025 (Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Statement 7

Bonds Name	Trustee	Issuance Date	Interest Payment Date	Coupon Rate	Amount					Repayment Term	Collateral
					Total Issuance Amount	Repayment Paid	Ending Balance	Unamortized Premiums (Discounts)	Carrying Amount
Merry Electronics Co., Ltd.
The Fourth Domestic unsecured convertible	Taipei Fubon Commercial Bank Co., Ltd.	2024.07.10	-	0.00%	$ 2,500,000	$ -	$ 2,500,000	($ 72,741)	$ 2,427,259	Amortized with cash by bond's face value at maturity	None
Merry Electronics Co., Ltd.
The Fifth Domestic unsecured convertible	Taipei Fubon Commercial Bank Co., Ltd.	2024.07.22	-	0.00%	500,000	-	500,000	( 14,990)	485,010	Amortized with cash by bond's face value at maturity	None
Less: Current portion of corporate bonds payable										-
										$ 2,912,269

Statement 7, Page1

Statement 8, Page1

MERRY ELECTRONICS CO., LTD.

STATEMENT OF DEFERRED TAX LIABILITIES

DECEMBER 31, 2025

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Statement 8

Item	Description	Amount	Note

Note: "Deferred Tax Liabilities": Please refer to Note 6(26).

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MERRY ELECTRONICS CO., LTD. STATEMENT OF OPERATING REVENUE FOR THE YEAR ENDED DECEMBER 31, 2025 (Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Statement 9

Item	Quantity	Amount
Telephone receivables / speakers	203,809	$ 10,144,578
Headset speakers	12,565	14,345,924
Wireless electronic products	2,848	5,024,852
Others	246,420	2,976,643
		32,491,997
Less: Sales returns		( 44,702)
Sales discounts and allowances		( 32,001)
Net sales revenue		32,415,294
Technical service revenue		12,483
Net operating revenue		$ 32,427,777

Statement 9, Page1

MERRY ELECTRONICS CO., LTD. STATEMENT OF OPERATING COSTS FOR THE YEAR ENDED DECEMBER 31, 2025 (Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Statement 10

Item	Amount
Raw material at beginning of year	$ 244,102
Add: Raw material purchased during the year	6,656,276
Less: Raw material at end of year	( 152,779)
Used raw materials transferred to expenses	( 1,035)
Raw material sold	( 6,746,564)
Consumption of raw materials for the year	-
Supplies at beginning for the year	$ 188
Add: Supplies cost purchased during the year	16,432
Less: Supplies at end of year	( 609)
Less: Supplies sold	( 16,011)
Consumption of supplies for the year	-
Semi-finished goods at beginning for the year	9
Add: Semi-finished goods cost purchased during the year	20,362
Less: Semi-finished goods at end of year	( 32)
Semi-finished goods sold	20,339
Finished goods cost	-
Finished goods at beginning of year	1,265,765
Add: Finished goods cost purchased during the year	23,882,174
Less: Finished goods at end of year	( 1,281,078)
Finished goods transferred to expenses	( 490)
Cost of sales	23,866,371
Cost of raw materials sales	6,746,564
Cost of supplies sales	16,011
Cost of semi-finished goods sold	20,339
Loss on slow-moving inventories and valuation loss	11,618
Operating costs	$ 30,660,903

Statement 10, Page1

MERRY ELECTRONICS CO., LTD. STATEMENT OF ADMINISTRATIVE EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2025 (Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Statement 11

Item	Selling expenses	Administrative expenses	Research and development expense	Total	Note
Wages and salaries	$ 117,895	$ 360,019	$ 637,398	$ 1,115,312
Administrative service fee	76,357	3,122	-	79,479
Freight	14,900	322	1,069	16,291
Insurance expense	13,661	32,058	51,004	96,723
Service expense	258	45,915	5,185	51,358
Material cost	-	-	62,916	62,916
					The balance of each expense account has not exceeded 5% of the total expense
Other expenses	41,073	122,750	149,826	313,649
	$ 264,144	$ 564,186	$ 907,398	$ 1,735,728

Statement 11, Page1

MERRY ELECTRONICS CO., LTD. STATEMENT OF FINANCE COST FOR THE YEAR ENDED DECEMBER 31, 2025 (Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Statement 12

Item	Description	Amount	Note
Amortisation of discounts on bonds		$ 55,991
Bank borrowings		45,468
Accounts receivable financing		1,340
Lease liability		747
		$ 103,546

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Statement 12, Page1

MERRY ELECTRONICS CO., LTD. SUMMARY STATEMENT OF CURRENT PERIOD EMPLOYEE BENEFITS, DEPRECIATION, DEPLETION AND AMORTIZATION EXPENSES BY FUNCTION FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Statement 13

| Function

Nature	Year ended December 31, 2025			Year ended December 31, 2024
	Classified as Operating Costs	Classified as Operating Expenses	Total	Classified as Operating Costs	Classified as Operating Expenses	Total
Employee Benefit Expense
Wages and salaries	$ 4,965	$ 928,298	$ 933,263	$ 9,349	$ 1,007,946	$ 1,017,295
Shared-based payment	1,395	114,048	115,443	122	62,001	62,123
Labor and health insurance fees	434	81,898	82,332	491	70,668	71,159
Pension costs	171	40,244	40,415	205	35,815	36,020
Directors' remuneration	-	32,869	32,869	-	60,941	60,941
Other personnel expenses	294	58,531	58,825	378	55,013	55,391
Depreciation Expense	121	43,968	44,089	-	42,317	42,317
Amortization Expense	2,179	21,890	24,069	3,627	26,566	30,193

Note:

As at December 31, 2025 and 2024, the Company had 918 and 832 employees, there are 6 non-employee directors.
A company whose stock is listed for trading on the stock exchange or over-the-counter securities exchange shall additionally disclose the following information: (1) Average employee benefit expense in current year was $1,349 thousand ((Total employee benefit expense of current year - Total directors' remuneration of current year)/ (Number of employees of current year - Number of non-employee directors of current year)). Average employee benefit expense in previous year was $1,504 thousand ((Total employee benefit expense of previous year - Total directors' remuneration of previous year)/ (Number of employees of previous year - Number of non-employee directors of previous year)).

Statement 13, Page1

MERRY ELECTRONICS CO., LTD. SUMMARY STATEMENT OF CURRENT PERIOD EMPLOYEE BENEFITS, DEPRECIATION, DEPLETION AND AMORTIZATION EXPENSES BY FUNCTION (Cont.) FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Statement 13

(2) Average employee salaries in current year were $1,023 thousand (Total wages and salaries of current year/ (Number of employees of current year - Number of non-employee directors of current year)). Average employee salaries in previous year were $1,232 thousand (Total wages and salaries of previous year/ (Number of employees of previous year - Number of non-employee directors of previous year).

(3) Adjustments of average employee salaries were 16.94% (( Average wages and salaries of current year - Average wages and salaries of previous year)/ (Average wages and salaries of previous year).

(4) The Company set up an audit committee and therefore, it has no supervisors.

(5) The Company's Compensation Policy is as follows:

A. The directors' and managers' emoluments are distributed in accordance with 'Director and Manager Remuneration Management Regulation', except for the regulations stipulated in the laws or the Company's Articles of Incorporation.

B. The directors' and managers' performance assessment and salary compensation, which is determined based on the general pay levels in the same industry, also take into consideration the correlation between the individual's performance and the Company operational performance and future risk exposure.

C. The Remuneration Committee regularly assesses the degree to which performance goals for the directors and managers have been achieved, and sets the types and amount of their individual salary compensation based on the results of the reviews conducted in accordance with the performance assessment results, and reports it at a shareholders' meeting.

D. The managers' compensation is conducted in accordance with the Company's relevant management system such as 'Employee Compensation Distribution Regulations'.

E. Directors' emoluments include remuneration and transportation allowance.

F. Managers' and employees' emoluments include salaries, bonuses, employee compensation, restricted stocks and employee stock ownership trust, etc.

G. Managers' and employees' emoluments are calculated based on the general pay levels in the same industry, and by taking into account the individual work experience and performance, previous salaries and individual performance assessed in accordance with the 'Employee Performance Assessment Management Regulations'.

H. Directors' and managers' emoluments will be reviewed by the Remuneration Committee and resolved by the Board of Directors.

Statement 13, Page2

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MERRY — Audit Report / Information 2025

52085_rns_2026-04-16_18831976-3bf0-432a-9cbf-665315b39e5b.pdf

INDEPENDENT AUDITORS' REPORT TRANSLATED FROM CHINESE

Opinion

Basis for opinion

Key audit matters

Cut-off on sales revenue from distribution warehouse

Description

How our audit addressed the matter

Investments accounted for using equity method - valuation of inventories

Description

How our audit addressed the matter

Other matter - audits of the other auditors

Responsibilities of management and those charged with governance for the parent company only financial statements

MERRY ELECTRONICS CO., LTD.

MERRY ELECTRONICS CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2025 AND 2024

MERRY ELECTRONICS CO., LTD.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2025 AND 2024

1. HISTORY AND ORGANISATION

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE PARENT COMPANY ONLY FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

4. SUMMARY OF MATERIAL ACCOUNTING POLICIES

(1) Compliance statement

(2) Basis of preparation

(3) Foreign currency translation

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

(1) Critical accounting estimates and assumptions

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

(4) Transfer of financial assets

(5) Inventories

A. Subsidiaries:

(13) Long-term borrowings

(17) Capital surplus

(20) Operating revenue

A. Disaggregation of revenue from contracts with customers

(28) Supplemental cash flow information

7. RELATED PARTY TRANSACTIONS

(1) Relationship of related parties

C. Operating expenses

D. Receivables from related parties

(a) Accounts receivable

(b) Other receivables

E. Payables to related parties

(a) Accounts payable

(b) Other payables

F. Endorsements and guarantees provided to related parties

G. Key management compensation

8. PLEDGED ASSETS

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS

10. SIGNIFICANT DISASTER LOSS

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

12. OTHERS

(1) Capital management

(2) Financial instruments

Price risk

Cash flow and fair value interest rate risk

(b) Credit risk

13. SUPPLEMENTARY DISCLOSURES

MERRY ELECTRONICS CO., LTD.

STATEMENT OF CASH AND CASH EQUIVALENTS

DECEMBER 31, 2025

MERRY ELECTRONICS CO., LTD.

STATEMENT OF TRADE RECEIVABLES

DECEMBER 31, 2025

MERRY ELECTRONICS CO., LTD.

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2025

MERRY ELECTRONICS CO., LTD.

STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT

FOR THE YEAR ENDED DECEMBER 31, 2025

MERRY ELECTRONICS CO., LTD.

STATEMENT OF DEFERRED TAX LIABILITIES

DECEMBER 31, 2025

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MERRY Audit Report / Information 2025