Stock Code: 2434

Mospec Semiconductor Corp. & Subsidiaries

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

Address: No. 76, Zhongshan Rd., Xinshi Dist., Tainan City
Telephone: (06)599-1621

Consolidated Financial Statements

Items	Page
1.Cover	1
2.Contents	2
3.Representation Letter	3
4.Independent Auditors’ Report	4~6
5.Consolidated Balance Sheet	7
6.Consolidated Statements of Comprehensive Income	8
7.Consolidated Statements of Changes in Equity	9
8.Consolidated Statements of Cash Flows	10
9.Notes to the Consolidated Financial Statements
(1) History and organization	11
(2) Date and procedures of authorization of financial statements for issue	11
(3) Newly issued or revised standards and interpretations	11~15
(4) Summary of significant accounting policies	15~31
(5) Sources of Significant Accounting Judgments, Estimates and Assumptions Uncertainty	31~32
(6) Description of Significant Accounts	32~47
(7) Related Party Transaction	47
(8) Pledged Assets	47~48
(9) Significant Contingent Liabilities and Unrecognized Commitments	48
(10) Significant Disaster Losses	48
(11) Significant Subsequent Events	48
(12) Others	48~54
(13) Additional Disclosures
1. Information on Significant Transactions and Information on Investees	54、56~60
2. Investment information in Mainland China	54、61
(14) Segments Information	55

Representation Letter

The entities that are required to be included in the combined financial statements of Mospec Semiconductor Corp. as of and for the year ended December 31, 2025, under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standard 10, "Consolidated Financial Statements". In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Mospec Semiconductor Corp. and Subsidiaries do not prepare a separate set of combined financial statements.

Very truly yours,

Mospec Semiconductor Corp.
by

Weng, Shu-Chen
Person in Charge

March 6, 2026

Independent Auditors’ Report

The Board of Directors and Shareholders

Mospec Semiconductor Corp.

Opinion

We have audited the accompanying consolidated financial statements of Mospec Semiconductor Corporation and its subsidiaries (the “Company”), which comprise the consolidated balance sheets as of the December 31, 2025 and 2024, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025 and 2024, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effort by the Financial Supervisory Commission of the ROC.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2025. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have identified the following key audit matters to be communicated in the audit report:

Revenue Recognition

Revenue of the Company is primarily from manufacture and sales of diode and transistor products. As the contents in the order and practical items usually require judging and determining the performance obligations and the point in time that the performance obligations are satisfied, we present it as one of the key audit matters.

The auditor's procedures include (but are not limited to) evaluating the appropriateness of revenue recognition accounting policies, understanding and testing the effectiveness of the internal control established by management for revenue recognition; performing analytical procedures on gross profit margin; selecting samples to perform transaction detail testing and reviewing significant terms and conditions in contracts; performing cut-off testing and subsequent review to confirm that revenue is recognized in the correct period.

We also consider the appropriateness of disclosures on operating revenue in Note 4 and Note 6 to the consolidated financial statements.

Assessment on Impairment of Non-Financial Assets

The carrying amount of property, plant and equipment of Mospec Semiconductor Corp. and its subsidiaries was NT$439,225 thousand as of December 31, 2025, accounting for approximately 63% of the total assets, and is considered material to the consolidated financial statements. Due to the impact of market fluctuations and the economic downturn in recent years, the operating unit has incurred losses, indicating a potential impairment of assets. Consequently, management performed an impairment test on the relevant cash-generating units (CGUs), using net fair value as the recoverable amount. Since the estimation of the recoverable amount of the relevant CGUs involves significant management judgment, we present it as one of the key audit matters.

The main audit procedures include, but are not limited to, analyzing the reasonableness of the recoverable amount adopted by management; obtaining the underlying data used by management to assess the recoverable amount, including valuation reports for property, plant and equipment and related assumptions, and discussing with management; evaluating the professional competence, capabilities, and or reputation of the valuer in the relevant field; and verifying whether the source data in the valuation report is relevant and reliable to recalculate the recoverable amount for management's impairment assessment.

We also consider the appropriateness of disclosures on property, plant and equipment in Note 4, Note 5, and Note 6 to the consolidated financial statements.

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

Management's responsibility is to prepare consolidated financial statements that fairly present the financial position in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the Financial Supervisory Commission of the ROC, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

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

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

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express the opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group 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 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 of the Group that were of most significance in the audit of the consolidated financial statements of the fiscal year 2025 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matter

We have also audited the parent company only financial statements of Mospec Semiconductor Corporation and its subsidiaries as of and for the years ended December 31, 2025 and 2024 on which we have issued an unmodified opinion.

For and on behalf of Ernst & Young Global Limited, Taiwan
The competent authority approves the public issuance of the company's financial report
Approved-certified No.: Jin-Guan-Certificate No. 1010045851
No.: Jin-Guan-Certificate No. 1040030902

Li, Fang-Wen

Accountant:
Chiu, Wan-Ru

March 6, 2026

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Mospec Semiconductor Corporation and Subsidiaries

CONSOLIDATED BALANCE SHEETS

As of December 31, 2025 and 2024

Unit: NT$ 1,000

ASSETS			December 31, 2025		December 31, 2024		LIABILITIES AND EQUITY			December 31, 2025		December 31, 2024
Code	Account Item	Note	Amount	%	Amount	%	Code	Account Item	Note	Amount	%	Amount	%
	CURRENT ASSETS							CURRENT LIABILITIES
1100	Cash and cash equivalents	4 and 6.1	$20,887	3	$40,161	6	2100	Short-term loans	6.9	$60,000	9	$127,085	17
1110	Financial assets at fair value through profit or loss	4 and 6.2	83,292	12	95,628	13	2130	Contract Liabilities - Current		108	0	-	-
1150	Notes receivable, net	4 and 6.3, 15	665	0	319	0	2170	Accounts payable		4,037	1	4,602	1
1170	Accounts receivable, net	4 and 6.4, 15	10,234	2	9,274	1	2180	Accounts payable - Related Parties		141	0	-	-
1200	Other accounts receivable, net		2,922	0	878	0	2200	Other payable		16,739	2	9,100	1
1220	Current tax assets		78	0	319	0	2220	Other payable- Related Parties		33	0	-	-
130x	Inventories	4 and 6.5	4,934	1	7,835	1	2322	Current portion of long-term liabilities	4 and 6.10	31,253	4	20,240	3
1476	Other current financial assets	8	-	-	59,013	8	2360	Net defined benefit liability	4 and 6.11	1,306	0	1,115	0
1479	Other current assets	4 and 6.6	36,762	5	12,515	2	2399	Other current liabilities		214	0	116	0
11xx	Total current assets		159,774	23	225,942	31	21xx	Total current liabilities		113,831	16	162,258	22
	NON-CURRENT ASSETS							NON-CURRENT LIABILITIES
1600	Property, plant and equipment	4 and 6.7 and 8	439,225	63	405,372	56	2540	Long-term loans	6.10 and 7	70,023	10	48,539	7
1755	Right-of-use assets	4 and 6.16	3,155	0	3,213	0	2550	Non-current provisions	4 and 6.12	46,212	7	46,212	6
1840	Deferred income tax assets	4 and 6.20	3,410	0	3,410	0	2570	Deferred tax liabilities	4 and 6.20	2,000	0	-	-
1900	Other non-current assets	6.8 and 8	97,958	14	91,336	13	25xx	Total non-current liabilities		118,235	17	94,751	13
15xx	Total non-current assets		543,748	77	503,331	69
							2xxx	Total liabilities		232,066	33	257,009	35
								EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT
							3100	Capital stock	6.13
							3200	Capital surplus	6.13	370,000	53	370,000	51
							3300	Retained earnings	6.14	101,419	14	101,419	14
							3300	Retained earnings	6.13
							3310	Legal reserve		525	0	-	-
							3320	Special reserve		4,401	1	-	-
							3350	Accumulated deficit		1,088	0	5,246	1
								Total retained earnings		6,014	1	5,246	1
							3400	Other equity interest		(5,977)	(1)	(4,401)	(1)
							31xx	Total equity attributable to owners of parent		471,456	67	472,264	65
							3xxx	Total equity		471,456	67	472,264	65
1xxx	Total assets		$703,522	100	$729,273	100		Total liabilities and equity		$703,522	100	$729,273	100

Please refer to the Notes in the consolidated financial statements

Chairman: Weng Shu Chen

Manager: Tarng Bennet Yun

Accounting Executive: Yen Yung Sen

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Mospec Semiconductor Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31, 2025 and 2024

Unit: NT$ 1,000

Code	Accounting Item	Note	2025		2024
			Amount	%	Amount	%
4000	OPERATING REVENUE	4 and 6.14	$45,551	100	$50,713	100
5000	OPERATING COSTS	4 and 6.17	(53,514)	(116)	(44,799)	(88)
5900	GROSS PROFIT FROM OPERATIONS		(7,963)	(16)	5,914	12
6000	OPERATING EXPENSES
6100	Selling expenses		(8,309)	(18)	(7,722)	(15)
6200	Administrative expenses		(40,002)	(88)	(38,442)	(76)
6300	Research and development expenses		(5,812)	(13)	(7,134)	(14)
6450	Expected credit impairment benefit	4 and 6.15	(7)	0	56	0
	Total operating expenses	4 and 6.5	(54,130)	(119)	(53,242)	(105)
6900	Net operating income (loss)		(62,093)	(135)	(47,328)	(93)
7000	NON-OPERATING INCOME AND EXPENSES
7100	Interest income	4 and 6.18	889	2	3,235	6
7010	Other income	4 and 6.18	12,944	28	6,665	13
7020	Other gains and losses	4 and 6.18	53,525	118	49,174	97
7050	Finance costs	4 and 6.18 and 7	(4,481)	(10)	(6,500)	(13)
	Total non-operating income and expenses		62,877	138	52,574	103
7900	Profit (loss) before tax		784	2	5,246	10
7950	Tax income	4 and 6.20	(16)	0	-	-
8200	Profit (loss)		768	2	5,246	10
8300	Other comprehensive income	4 and 6.19
8360	Components of other comprehensive income that will be reclassified to profit or loss
8361	Financial statement translation differences of foreign operations		(1,576)	(3)	3,685	7
	Other comprehensive income(loss), net		(1,576)	(3)	3,685	7
8500	Total comprehensive income		(808)	(1)	8,931	17
8600	NET INCOME ATTRIBUTABLE TO:
8610	Shareholders of the parent	4 and 6.20	768	2	5,246	10
8700	COMPREHENSIVE INCOME ATTRIBUTABLE TO:
8710	Shareholders of the parent		(808)	(1)	8,931	17
	EARNINGS PER SHARE (NT$)
9750	Basic earnings (loss) per share	4 and 6.21	$0.02		$0.14
9850	Diluted earnings (loss) per share	4 and 6.21	$0.02		$0.14

Please refer to the Notes in the consolidated financial statements

Chairman: Weng Shu Chen

Manager: Tarng Bennet Yun

Accounting Executive: Yen Yung Sen

English Translation of Consolidated Financial Statements Originally Issued in Chinese
Mospec Semiconductor Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the years ended December 31, 2025 and 2024
Unit: NT$ 1,000

	Item	Equity Attributable to Shareholders of the Parent
		Capital - Common Stock	Capital Surplus	Retained Earnings			Others	Total Equity
				Legal reserve	Special reserve	Unappropriated retained earnings (accumulated deficit)	Exchange differences on translation of foreign financial statements
Code		3110	3200	3310	3320	3350	3410	3xxx
A1	BALANCE, JANUARY 1, 2024	$370,000	$193,260	$ –	$ –	$(91,841)	$(8,086)	$463,333
C11	Other changes in capital surplus:
D1	Capital Surplus used to offset accumulated deficits	–	(91,841)	–	–	91,841	–	–
D3	Net income (loss)	–	–	–	–	5,246	–	5,246
D5	Net comprehensive income (loss)	–	–	–	–	–	3,685	3,685
Z1	BALANCE, DECEMBER 31, 2024	$370,000	$101,419	$ –	$ –	5,246	$(4,401)	$472,264
A1	BALANCE, JANUARY 1, 2025	$370,000	$101,419	$ –	$ –	5,246	$(4,401)	$472,264
B1	Appropriation and distribution of retained earnings :
B3	Legal reserve appropriated	–	–	525	–	(525)	–	–
D1	Special reserve appropriated	–	–	–	4,401	(4,401)	–	–
D3	Net income (loss)	–	–	–	–	768	–	768
D5	Net comprehensive income (loss)	–	–	–	–	–	(1,576)	(1,576)
Z1	BALANCE, DECEMBER 31, 2025	$370,000	$101,419	$525	$4,401	$1,088	$(5,977)	$471,456

Please refer to the Notes in the consolidated financial statements

Chairman: Weng Shu Chen
Manager: Tarng Bennet Yun
Accounting Executive: Yen Yung Sen

English Translation of Consolidated Financial Statements Originally Issued in Chinese
Mospec Semiconductor Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2025 and 2024
Amounts in NT$ thousands Unless otherwise specified

Unit: NT$ 1,000

Code	Item	2025	2024	Code	Item	2025	2024
		Amount	Amount			Amount	Amount
AAAA	CASH FLOWS FROM OPERATING ACTIVITIES			BBBB	CASH FLOWS FROM INVESTING ACTIVITIES
A10000	Net income before tax	$784	$5,246	B00100	Acquisition of financial assets at fair value through profit or loss	(25,758)	-
A20000	Adjustments:			B00200	Proceeds from disposal of financial assets at fair value through profit or loss	99,188	8,128
A20010	Adjustments to reconcile profit (loss):			B02700	Acquisition of property, plant and equipment	(742)	-
A20100	Depreciation expense	28,514	24,916	B02800	Proceeds from disposal of property, plant and equipment	-	2,368
A20300	Expected credit loss (gain)	7	(56)	B06500	Increase in other financial assets	-	(3,744)
A20400	Net loss (gain) on financial assets or liabilities at fair value through profit or loss	(61,094)	(52,095)	B06600	Decrease in other financial assets	59,013	-
A20900	Interest expense	4,481	6,500	B07100	Increase in prepayments for business facilities	(70,179)	(43,757)
A21200	Interest income	(889)	(3,235)	B07200	Decrease in prepayments for business facilities	2,168	268
A21300	Dividend income	(705)	(596)	BBBB	Net cash flows from (used in) investing activities	63,690	(36,737)
A22500	Loss (gain) on disposal of property, plan and equipment	-	(945)
A29900	Loss (gain) from price recovery of inventory	(814)	(6,731)	CCCC	CASH FLOWS FROM FINANCING ACTIVITIES
A20010	Total reconcile profit (loss)	(30,500)	(32,242)	C00100	Increase in short-term loans	90,000	128,067
				C00200	Decrease in short-term loans	(156,962)	(90,000)
A30000	Changes in operating assets and liabilities			C01600	Proceeds from long-term loans	55,000	60,000
A31000	Changes in operating assets			C01700	Repayment of long-term loans	(22,503)	(27,921)
A31130	Decrease (increase) in notes receivable	(346)	1,118	C03000	Increase in guarantee deposits received	2,000	-
A31150	Decrease in accounts receivable	(967)	6,847	CCCC	Net cash flows from financing activities	(32,465)	70,146
A31180	Decrease (increase) in other receivable	(1,851)	274
A31200	Increase (decrease) in inventories	3,787	5,212	DDDD	EFFECT OF EXCHANGE RATE CHANGES ON CASH AND	(1,949)	2,470
A31240	Decrease (increase) in other current assets	(24,247)	(2,743)	EEEE	NET INCREASE IN CASH AND CASH EQUIVALENTS	(19,274)	12,893
A32000	Changes in operating liabilities			E00100	Cash and cash equivalents at beginning of period	40,161	27,268
A32125	Increase (decrease) in contract liabilities	108	(124)	E00200	Cash and cash equivalents at end of period	$20,887	$40,161
A32150	Increase (decrease) in accounts payable	(565)	1,790
A32160	Increase in other payable from related partie	141	-
A32180	Increase (decrease) in other payable	8,327	1,114
A32190	Increase in other payable- Related Parties	33	-
A32200	Decrease in provisions	-	(6,601)
A32230	Increase (decrease) in other current liabilities	98	11
A32240	Increase (decrease) in net defined benefit liability	191	99
A30000	Total changes in operating assets and liabilities	(15,291)	6,997
A33000	Cash inflow (outflow) generated from operations	(45,007)	(19,999)
A33100	Interest received	1,015	3,229
A33200	Dividend received	705	596
A33300	Interest paid	(5,169)	(6,493)
A33500	Income taxes paid	(94)	(319)
AAAA	Net cash flows from (used in) operating activities	(48,550)	(22,986)

Please refer to the Notes in the consolidated financial statements

Chairman: Weng Shu Chen
Manager: Tarng Bennet Yun
Accounting Executive: Yen Yung Sen

English Translation of Consolidated Financial Statements Originally Issued in Chinese

MOSPEC SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2024 AND 2023

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

History and organization

(1) Mospec Semiconductor Corp. (the "Company") was established and approved in March, 1987 in Gangqian Village, Xinshi District, Tainan City, at No. 76 Zhongshan Road. The company primarily engages in the manufacturing, processing, and sales of power transistors and diodes.

(2) The Company's shares were approved for trading on the Taipei Exchange in November, 1998 and subsequently received approval to be listed and traded on the Taiwan Stock Exchange in September, 2000.

Date and procedures of authorization of financial statements for issue

The consolidated financial statements of the Company and its subsidiaries (the "Group") for the years ended December 31, 2025 and 2024 were approved by the Board of Directors on March 6, 2026.

Newly issued or revised standards and interpretations

(1) Accounting policy changes resulting from the first-time adoption of IFRS.

The Company has adopted the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), International Financial Reporting Interpretations or Interpretations (IFRICs), approved by the Financial Supervisory Commission (FSC) and applicable for accounting years beginning on or after January 1, 2025, which did not have a significant impact on the Group upon first-time application.

(2) As of the publication date of the financial report, the Group has not yet adopted the following new standards, interpretations and amendments recognized by the FSC that have been issued by the International Accounting Standards Board:

Item	New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
1	IFRS 17, “Insurance Contracts”	January 1, 2023
2	“Classification and Measurement of Financial Instruments” (Amendments to IFRS 9 and IFRS 7)	January 1, 2026
3	Annual Improvements to IFRS Accounting Standards—Volume 11	January 1, 2026
4	Contracts involving reliance on natural power (Amendments to IFRS 9 and IFRS 7)	January 1, 2026

IFRS 17, "Insurance Contracts"

This standard provides a comprehensive model for insurance contracts, including all accounting-related aspects (recognition, measurement, presentation, and disclosure principles). The core of the standard is a general model, under which the initial recognition of insurance contract groups is measured as the sum of the present value of the fulfillment cash flows and the contractual service margin. The carrying amount as of the end of each reporting period is the sum of the remaining coverage liabilities and the incurred claims liabilities.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements

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

In addition to the general model, specific application methods (variable fee approach) are provided for contracts with direct participation features; and a simplified approach (premium allocation approach) for short-term contracts.

This standard, which was issued in May 2017, was subsequently amended in 2020 and 2021. The effective date of the amendment was postponed by two years in the transitional provisions, from January 1, 2021, to January 1, 2023. The amendment also provided additional exemptions, simplified certain provisions to reduce adoption costs, and modified certain provisions to make them more easily interpretable in certain circumstances. The standard will supersede the transitional standard, IFRS 4, "Insurance Contracts," upon its effective date.

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

The amendments include:

(a) Clarify that a financial liability is derecognized on the settlement date and describe the accounting treatment for settlement of financial liabilities using an electronic payment system before the settlement date.

(b) Clarify how to assess the contractual cash flow characteristics of financial assets that include environmental, social and government (ESG)-linked features and other similar contingent features.

(d) Require additional disclosures in IFRS 7 for financial assets and liabilities with contractual terms that reference a contingent event (including those that are ESG-linked), and equity instruments fair value through other comprehensive income.

Annual Improvements to IFRS Accounting Standards—Volume 11

(a) Amendments to IFRS 1

Amend the explanations on hedge accounting of first-time adoption of the standard, to improve their consistency with the requirements in IFRS 9

(b) Amendments to IFRS 7

Amend to update an obsolete cross-reference associated with gain or loss on derecognition.

Amend to improve part of the wording in the Guidance on implementing, including introduction, disclosure of deferred difference between fair value and transaction price, and credit risk disclosures.

(d) Amendments to IFRS 9

Amend to add cross-reference to clarify how a lessee accounts for the derecognition of a lease liability, and the transaction price.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements

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

(e) Amendments to IFRS 10
Amend to remove from paragraph B74 of the standard an inconsistency with paragraph B73.

(f) Amendments to IAS 7
Amended paragraph 37 of the standard to replace the term “cost method.”

Contracts involving reliance on natural power (Amendments to IFRS 9 and IFRS 7)

These amendments include:

(a) Clarifying the application of the "for self-use" requirement.
(b) Allowing the application of hedging accounting when contracts are used as hedging instruments.
(c) Increasing disclosure requirements in the notes to financial statements to help investors understand the impact of such contracts on the company's financial performance and cash flows.

The amendments are applicable to the annual reporting periods beginning on or after January 1, 2026, which have no material impact on the Group.

(3) As of the publication date of the financial report, the following IFRSs that have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Item	New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
1	Amendments to IFRS 10 and IAS 28, “Sale or contribution of assets between an investor and its associate or joint venture”	To be determined by International Accounting
2	IFRS 18 “Presentation and Disclosure in Financial Statements”	January 1, 2027(Note)
3	Disclosure Initiative – “Subsidiaries without Public Accountability” (IFRS 19)	January 1, 2027
4	Converted to monetary terms under conditions of high inflation (amendments to International Accounting Standard 21 and International Accounting Standard 29)	January 1, 2027

(Note) : The Financial Supervisory Commission issued a press release on September 25, 2025, announcing Taiwan's alignment with Financial Reporting Standard No. 18 in 2028.

(1) Amendments to IFRS 10 and IAS 28, “Sale or contribution of assets between an investor and its associate or joint venture”

This plan is designed to address the inconsistency between IFRS 10 "Consolidated Financial Statements" and IAS 28 "Investments in Associates and Joint Ventures" regarding the treatment of the loss of control over an associate or joint venture when using the subsidiary as the cost for the investment. IAS 28 requires the elimination of the portion of gain or loss resulting from upstream transactions when non-monetary assets are contributed to acquire interests in associates or joint ventures, while IFRS 10 requires the full gain or loss on the loss of control over a subsidiary to be recognized. This amendment restricts the provision of IAS 28, and when the assets that constitute a business are sold or contributed, as defined in IFRS 3, the resulting gain or loss should be fully recognized.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements

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

This amendment also modifies IFRS 10 to require that when an investor and its associates sell or contribute a subsidiary that does not meet the definition of a business under IFRS 3, the resulting gain or loss should only be recognized to the extent of the non-controlling interest in the subsidiary.

(2) IFRS 18 “Presentation and Disclosure in Financial Statements”

The standard will replace IAS 1 “Presentation of Financial Statements.” The primary changes are as follows:

(a) Increasing comparability of the income statements

Items in the statement of profit or loss will need to be classified into categories: operating, investing, financing, income taxes and discontinued operations. The first three categories are new, to improve the structure of income statements. The standard also requires entities to provide newly defined subtotals (including operating profit or loss). The standard improves the income statement’s structure and newly defined subtotals, which makes companies' financial performance easier to compare and provides a consistent starting point for investors' analysis

(b) Enhancing transparency of management performance measurement

Explanations on requiring entities to disclose specific indicators related to income statements (management-defined performance measures (MPM)).

The standard sets out enhanced guidance on how to organize information and whether to provide it in the primary financial statements or in the notes. The changes are expected to provide more detailed and useful information. The standard also requires entities to provide more transparency about operating expenses, helping investors to find and understand the information they need.

(3) Disclosure Initiative – “Subsidiaries without Public Accountability” (IFRS 19)

The standard permits subsidiaries without public accountability to provide reduced disclosure when applying IFRS accounting standards in their financial statements. IFRS 19 is optional for subsidiaries that are eligible and sets out the disclosure requirements for subsidiaries that elect to apply it.

(4) Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates and IAS 29 Financial Reporting in Hyperinflationary Economies: Translation into a Presentation Currency in a Hyperinflationary Economy

These amendments include the following:

(a) Clarify that when a reporting entity’s functional currency is not that of a hyperinflationary economy and its financial statements are translated into a presentation currency of a hyperinflationary economy, the results of operations and financial position shall be translated using the closing exchange rate at the date of the most recent statement of financial position.

(b) Specify that, in the above circumstances, when the presentation currency subsequently ceases to be that of a hyperinflationary economy, the reporting entity shall not retranslate amounts reported in prior periods.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements

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

(c) When both the functional currency and the presentation currency are those of a hyperinflationary economy, the reporting entity shall apply the requirements set out in paragraph 34 of IAS 29.

The actual applying dates of the abovementioned standards and interpretations issued by IASB not yet endorsed by FSC are subject to FSC’s regulations. The Group is assessing the potential impacts from new or amended standards or interpretations in (2), but temporarily unable to reasonably estimate the impacts from the abovementioned standards or standards. The other new or amended standards or interpretations have no material impact on the Group.

Summary of significant accounting policies

(1) Compliance statement

The consolidated financial statements of the Group for the years ended December 31, 2025 and December 31, 2024 have been prepared in accordance with the Financial Reporting Standards for Issuers of Securities as approved and issued by the FSC and effective IFRS, IAS, IFRICs and SICs.

(2) Basis of preparation

Except for financial instruments at fair value, the consolidated financial statements have been prepared under the historical cost convention, unless otherwise stated. All financial information presented in New Taiwan dollars has been rounded to the nearest thousand.

(3) Basis of consolidation

Principles of preparation of the consolidated financial statements

The Group “controls” an entity when it is exposed to, 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. In particular, the Group only controls an entity when it has the following three control elements:

(1) Power over the investee (i.e., having existing rights that give the investor the current ability to direct relevant activities)
(2) Exposure or rights to variable returns from the investor's involvement with the investee, and
(3) The ability to use the investor's power over the investee to affect the amount of the investor's returns.

As the Group directly or indirectly holds less than the majority of voting or similar rights of an investee, the Group considers all relevant facts and circumstances to assess whether it has power over the investee, including:

(1) Contractual agreements with other vote-holding investors of the investee
(2) Rights arising from other contractual agreements
(3) Voting rights and potential voting rights

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

As facts and circumstances indicate a change in one or more of the three elements of control, the Group reassesses whether it still maintains control over the investee.

From the acquisition date (i.e. the date when control is obtained), subsidiaries are fully included in the consolidated financial statements until the date control ceases. The accounting period and accounting policies of the subsidiary's financial statements are consistent with those of the parent company. All intra-group account balances, transactions, unrealized profits and losses resulting from intra-group transactions, and dividends are eliminated in full.

In case of changes in the equity interest in subsidiaries where control is not lost, such transactions are accounted for as equity transactions.

The total comprehensive profit(loss) of the subsidiary is allocated to the owners of the parent company and non-controlling interests, even if the non-controlling interests result in a deficit balance.

If the Group loses control of a subsidiary,

(1) the assets (including goodwill) and liabilities of the subsidiary are derecognized;
(2) any non-controlling interests are derecognized at their carrying amounts;
(3) the fair value of the consideration received is recognized;
(4) any investment retained is measured at its fair value;
(5) Any amounts previously recognized in other comprehensive income related to the subsidiary are reclassified to profit or loss for the current period. Alternatively, they may be directly transferred to retained earnings in accordance with the requirements of other applicable IFRS;
(6) The resulting difference is recognized as profit or loss for the current period.

The entities included in the preparation of the consolidated financial statements are as follows:

Name of Investor	Name of Subsidiary	Main business activities	Ownership(%)
			December 31, 2025	December 31, 2024
The Company	NHM (BVI)	Regular investment	100.00%	100.00%
	Holding Ltd.
NHM (BVI)	H&M	Manufacturing, processing and trading of new electronic components	100.00%	100.00%
Holding Ltd.	Semiconductor (Sichuan) Ltd.

(4) Foreign currency transactions

The consolidated financial statements of this Group are presented in New Taiwan Dollars, which is the functional currency of the Company. Each entity within the Group determines its own functional currency and measures its financial statements using that functional currency.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Foreign currency transactions within the group are recorded in the functional currency using the exchange rates on the transaction dates. As of each reporting period, foreign currency monetary items are translated using the closing exchange rates, while foreign currency non-monetary items measured at fair value are translated using the exchange rates on the valuation date. Foreign currency non-monetary items measured at historical cost are translated using the exchange rates on the original transaction dates.

Except as described below, exchange differences arising from the settlement or translation of monetary items are recognized as profit or loss in the period in which they occur:

(1) Exchange differences arising from foreign currency borrowings incurred to acquire qualifying assets, if considered as an adjustment to interest costs, are capitalized as part of the cost of those assets.

(2) Foreign currency items subject to IFRS 9 "Financial Instruments" are treated in accordance with the accounting policies for financial instruments.

(3) Exchange differences arising from monetary items that form part of a reporting entity's net investment in a foreign operation are initially recognized in other comprehensive income and reclassified to profit or loss on disposal of the net investment.

When the gains or losses of non-monetary items are recognized in other comprehensive income, any exchange components of such gains or losses shall be recognized in other comprehensive income. On the other hand, the gains or losses of non-monetary items are recognized in profit or loss, any exchange components of such gains or losses shall be recognized in profit or loss.

(5) Translation of foreign currency financial statements

When preparing the consolidated financial statements, the assets and liabilities of foreign operating entities are converted into New Taiwan Dollars at the closing exchange rate on the balance sheet date, while the revenue and expense items are converted at the average exchange rate for the period. The resulting exchange differences are recognized in other comprehensive income and reclassified from equity to profit or loss on disposal of the foreign operating entity. In the case of partial disposals involving subsidiaries with foreign operating entities or equity investments in associates or joint ventures with foreign operating entities, the portion of the retained equity containing financial assets denominated in foreign currency is also accounted for as a disposal.

When a subsidiary containing foreign operations is partially disposed of without losing control, the proportionate amount of the cumulative translation adjustment previously recognized in other comprehensive income is reclassified to the non-controlling interest of the foreign operations, rather than recognized in profit or loss. When a joint venture or associate containing foreign operations is partially disposed of without losing significant influence or joint control, the cumulative translation adjustment is proportionately reclassified to profit or loss.

As a result of acquiring foreign operating organizations, the Group recognizes the goodwill generated and fair value adjustments made to their assets and liabilities at their book values, which are then treated as the assets and liabilities of foreign operating organizations and reported in their functional currencies.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

(6) The classification standards for assets and liabilities are as follows:

If an asset meets any of the following conditions, it is classified as a current asset, otherwise it is a non-current asset:

A. Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;
B. Assets held mainly for trading purposes;
C. Assets that are expected to be realized within twelve months from the balance sheet date;
D. Cash or cash equivalents, except for those restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

If a liability meets any of the following conditions, it is classified as a current liability, otherwise it is a non-current liability:

A. Liabilities that are expected to be settled within the normal operating cycle;
B. Liabilities arising mainly from trading activities;
C. Liabilities that are to be settled within twelve months from the balance sheet date;
D. The Group does not have the right at the balance sheet date to defer settlement of the liability for at least twelve months after the reporting period.

(7) Cash or cash equivalents

Cash and cash equivalents refer to cash, demand deposits, and short-term highly liquid investments that are readily convertible into imprest cash and are subject to insignificant risk of changes in value, including term deposits or investments with maturities of three months or less.

(8) Financial instruments

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

Financial assets and liabilities within the scope of IFRS 9 "Financial Instruments" are measured at fair value upon initial recognition, which can be directly attributed to financial assets and liabilities (excluding financial assets and financial liabilities measured at fair value through profit or loss). The transaction cost of acquiring or issuing such financial assets and financial liabilities is added or subtracted from the fair value of those financial assets and financial liabilities.

A. Recognition and Measurement of Financial Assets

All financial assets resulting from regular transactions by the Group are recognized and derecognized based on the accounting treatment on the transaction date.

The Group classifies financial assets into subsequently measured at amortized cost, measured at fair value through other comprehensive income, or measured at fair value through profit or loss based on the following two criteria:

a. The business model for managing financial assets
b. The nature of contractual cash flow of the financial asset

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Financial assets measured at amortized cost

Financial assets that meet both of the following conditions are measured at amortized cost and are presented in the balance sheet as notes receivable, accounts receivable, financial assets measured at amortized cost, and other receivables:

a. Business model for managing financial assets: Holding financial assets to collect contractual cash flows.
b. Nature of contractual cash flow of the financial asset: Cash flows solely represent principal repayments and interest on the outstanding principal amount.

These financial assets (excluding those involved in hedge relationships) are subsequently measured at amortized cost “the original recognition amount, less principal repayments, plus or minus the cumulative amortization of the difference between the original amount and the maturity amount (using the effective interest method), and adjusted for any loss allowance”. Gains or losses are recognized in profit or loss when the asset is derecognized, through the amortization process, or when an impairment gain or loss is recognized.

Interest is recognized in profit(loss) when using the effective interest method (by multiplying the effective interest rate by the total book value of the financial asset) or in the following circumstances:

a. For purchased or originated credit-impaired financial assets, interest is calculated using the credit-adjusted effective interest rate applied to the amortized cost of the financial asset.
b. For those financial assets that do not belong to the former category but have become credit impaired subsequently, they are measured at amortized cost using the effective interest rate method.

Financial assets measured at fair value through other comprehensive income

Financial assets that meet the following two conditions are measured at fair value through other comprehensive income and presented in the balance sheet as fair value through other comprehensive income financial assets:

a. The business model for managing the financial asset is to both collect contractual cash flows and sell financial assets.
b. Nature of contractual cash flow of financial assets: cash flows consist solely of payments of principal and interest on the principal amount outstanding.

The recognition of gains and losses related to these financial assets is as follows:

a. Before derecognition or reclassification, except for impairment gains or losses and foreign exchange gains or losses recognized in profit or loss, the gains or losses are recognized in other comprehensive income.
b. When derecognizing financial assets or financial liabilities, any previously recognized accumulated gains or losses in other comprehensive income will be reclassified from equity to profit or loss as reclassification adjustments, except for impairment gains or losses and foreign exchange gains or losses recognized in profit or loss.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements

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

c. Interest calculated using the effective interest method (by multiplying the effective interest rate by the total book value of the financial assets) or the following is recognized in profit or loss:

(a) For credit-impaired financial assets acquired or created, the credit-adjusted effective interest rate is multiplied by the amortized cost of the financial assets.

(b) For financial assets that do not belong to the former category but become credit-impaired subsequently, they are measured at amortized cost using the effective interest method.

In addition, for equity instruments within the scope of IFRS 9 and not held for trading or recognized as consideration in a business combination accounted for under IFRS 3, and for which there is no irrevocable election to present subsequent changes in fair value in profit or loss, they are recognized at fair value on initial recognition with any subsequent changes in fair value reported in other comprehensive income. The amount recognized in other comprehensive income cannot subsequently be transferred to profit or loss (upon disposal of such equity instruments, the cumulative amount recognized in other equity is directly transferred to retained earnings), and such financial assets measured at fair value through other comprehensive income are presented on the balance sheet. Dividends from such investments are recognized in profit or loss, unless they clearly represent a recovery of part of the cost of the investment.

Financial assets at fair value through profit or loss

All financial assets, except those measured at amortized cost or through other comprehensive income based on specific criteria mentioned earlier, are measured at fair value through profit or loss and reported on the balance sheet as financial assets at fair value through profit or loss.

This type of financial asset is measured at fair value, and any gains or losses resulting from the re-measurement are recognized in the income statement, including any dividends or interest earned from the financial asset.

B. Impairment of financial assets

The Group recognizes and measures the allowance for losses on investments in debt instruments measured at fair value through other comprehensive income and financial assets measured at amortized cost using expected credit losses. Investments in debt instruments measured at fair value through other comprehensive income or loss are recognized as an allowance for losses in other comprehensive income or loss and do not reduce the carrying amount of the investments.

The Group measures expected credit losses by considering the following factors:

a. By determining an unbiased and probability-weighted amount through the evaluation of various possible outcomes.

b. Time value of money

c. Reasonable and supportable information about past events, current conditions, and forecasts of future economic conditions (available without undue cost or effort as of the balance sheet date)

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

The method for measuring impairment losses is described as follows:

a. Measurement of expected credit losses over a 12-month period includes financial assets that have not experienced a significant increase in credit risk since initial recognition or those that are determined to have low credit risk at the balance sheet date. In addition, it also includes impairment losses measured using the expected credit loss approach over the remaining life of the financial asset as of the previous reporting period, but which no longer meet the significant increase in credit risk condition since initial recognition as of the current balance sheet date.

b. Measurement of expected credit losses over the remaining life of financial assets includes those that have had a significant increase in credit risk since initial recognition or that are credit-impaired at the reporting date, as well as those that are purchased or originated credit-impaired financial assets.

c. For trade receivables or contract assets within the scope of IFRS 15, the Group measures the allowance for credit losses using the expected credit loss model over the remaining period of credit risk.

d. For lease receivables within the scope of International Financial Reporting Standard 16, the Group measures the allowance for credit losses using the expected credit loss method over the remaining lease term.

On each balance sheet date, the Group evaluates whether there has been a significant increase in credit risk of financial instruments since their initial recognition by comparing the changes in default risk of the financial instruments between the balance sheet date and the initial recognition date. Please refer to Note 12 for information related to credit risk.

C. Derecognition of financial assets

The financial assets held by the Group will be derecognized under any of the following conditions:

a. The contract right to cash flows from the financial asset has expired.

b. The financial asset has been transferred and substantially all risks and rewards of ownership of the asset have been transferred to others.

c. The financial asset has not been transferred or retained almost all risks and rewards of the asset's ownership, but the control over the asset has been transferred.

When a financial asset is derecognized as a whole, any difference between the book value of the asset and the consideration received or receivable is recognized in profit or loss, except for any cumulative gain or loss previously recognized in other comprehensive income and subsequently reclassified to profit or loss.

D. Liabilities and equity instruments

Classification of liabilities and equity

The Group's issued liabilities and equity instruments are classified as financial liabilities or equity instruments based on the substance of the contractual arrangements and the definitions of financial liabilities and equity instruments.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Equity instruments

Equity instruments refer to any contracts that evidence a residual interest in the assets of the Group after deducting all its liabilities. The Group's issued equity instruments are recognized at the amount of the proceeds received, net of any directly attributable issuance costs.

Hybrid Instruments

The Group recognizes the financial liability and equity components of its issued convertible bonds based on their contractual terms. For the issued convertible bonds, the economic characteristics and risks of the embedded call and put options are evaluated prior to separating the equity component.

The portion of the liability not involving derivatives, which has a fair value that is substantially the same and is not convertible, is classified as a financial liability measured at amortized cost until conversion or redemption. For the embedded derivatives that are not closely related to the economic characteristics and risks of the host contract (such as call and put options embedded that cannot be measured at fair value at each reporting date), they are classified as financial liability components and measured at fair value through profit or loss. The equity component is determined by deducting the financial liability component from the fair value of the convertible bond and is not remeasured subsequently. If the issued convertible bonds do not have any equity component, they are treated in accordance with IFRS 9 as hybrid instruments.

The transaction costs are allocated to the liability and equity components of the issued convertible bonds based on the proportion of their respective carrying amounts.

When the holders of the convertible bonds exercise their conversion rights before the maturity date, the book value of the liability component is adjusted to its carrying amount at conversion date as the basis for recording the issuance of common stocks.

Financial Liabilities

Financial liabilities that fall within the scope of IFRS 9 are initially classified as either fair value through profit or loss financial liabilities or amortized cost financial liabilities.

Financial Liabilities at Fair Value through Profit or Loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated as at fair value through profit or loss.

Financial liabilities are classified as held for trading when one of the following conditions is met:

a. The main purpose of the financial asset is to be sold in the short term;
b. This condition refers to a situation where a financial instrument or a group of financial instruments is recognized as part of a recognizable group of financial instruments managed under a consolidated basis at its initial recognition, and there is evidence of short-term profit-taking activity associated with the group of financial instruments in the near term;
c. It is a derivative instrument (excluding financial guarantee contracts or derivatives designated as effective hedging instruments).

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements

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

For contracts containing one or more embedded derivative instruments, the overall mixed contract may be designated as a financial liability measured at fair value through profit or loss when either of the following factors can provide more relevant information at initial recognition:

a. The designation eliminates or significantly reduces a measurement or recognition inconsistency;
b. A group of financial assets, financial liabilities or both are managed on a fair value basis in accordance with a documented risk management or investment strategy and information on this investment portfolio, which is provided internally to management, is also based on fair value.

Any benefit or loss resulting from the remeasurement of such financial liabilities is recognized in profit or loss, which includes any interest paid on the financial liabilities.

Financial liabilities measured at amortized cost

Financial liabilities measured at amortized cost include accounts payable and loans, which are measured using the effective interest method after initial recognition. When a financial liability is derecognized or amortized, any related gains or losses and the amortization amount are recognized in profit or loss.

The calculation of the amortized cost takes into account the discount or premium and transaction costs incurred at the time of acquisition.

Derecognition of Financial Liabilities.

Financial liabilities shall be derecognized when the obligation of the financial liability is discharged, canceled or expired.

When significant modifications (whether due to financial difficulties or not) are made to the terms of the existing financial liabilities or when the Group exchanges debt instruments with creditors that have significant differences in terms, the original liability shall be derecognized and the new liability shall be recognized. When a financial liability is derecognized, the difference between the book value and the total consideration paid or payable (including non-cash assets transferred or liabilities assumed) shall be recognized in profit or loss.

E. Offsetting of Financial Assets and Liabilities

Financial assets and financial liabilities shall only be offset and presented on a net basis in the balance sheet when there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis or to realize the asset and settle the liability simultaneously.

(9) Derivative Financial Instruments

The Group holds or issues derivative financial instruments to hedge against exchange rate and interest rate risks. Designated and effective hedging instruments are reported in the balance sheet as hedging derivative assets or liabilities, while others that do not qualify as designated and effective hedging instruments are reported in the statement of financial position as financial assets or financial liabilities measured at fair value through profit or loss.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

The initial recognition of derivative financial instruments is based on their fair value at the date of the derivative financial instrument contract and subsequently measured at fair value. As the fair value of a derivative instrument is positive, it is classified as a financial asset; when the fair value is negative, it is classified as a financial liability. Changes in the fair value of derivative instruments are recognized directly in profit or loss, except for those involving cash flow hedges and net investment hedges of foreign operations that are considered effective, the gains and losses are recognized in profit or loss or equity items depending on the type of hedging.

Embedded derivatives in non-financial assets or non-financial liabilities are treated as independent derivative financial instruments when their economic characteristics and risks are not closely related to the host contract and the host contract is not measured at fair value through profit or loss.

(10) Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place in either:

(1) The principal market for the asset or liability, or
(2) If there is no principal market, the most advantageous market for the asset or liability

The principal market or the most advantageous market must be accessible by the Group to make the transaction.

The fair value measurement of assets or liabilities uses the assumptions that market participants would use when pricing the assets or liabilities, assuming that the market participants are acting in their economic best interest.

The fair value measurement of non-financial assets takes into account the ability of market participants to generate economic benefits by using the asset in its highest and best use or by selling the asset to another market participant who would use the asset in its highest and best use.

The Group employs valuation techniques that are appropriate and have sufficient data available in the relevant circumstances to measure fair value, while maximizing the use of observable inputs and minimizing the use of unobservable inputs.

(11) Inventory

The inventory is valued at the lower of cost or net realizable value on an item-by-item basis.

Cost refers to the cost incurred to bring the inventory to its present location and condition for sale or use:

Raw materials : valued using the weighted average method based on the actual purchase cost.

finished and work-in-progress goods : It includes direct materials, labor, and fixed manufacturing overhead allocated at normal capacity levels, but excludes borrowing costs.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Net realizable value refers to the estimated selling price less the costs of completion and sales expenses under normal conditions.

Provision of labor services are accounted for in accordance with IFRS 15 and are not within the scope of inventory.

(12) Property, plant, and equipment

Property, plant, and equipment are recognized at cost, including the costs of dismantling, removing, and restoring the location of the asset and necessary interest incurred during the construction phase. They are then reduced by accumulated depreciation and accumulated impairment losses. If a significant component of property, plant, and equipment has a useful life and depreciation method that is different from the remainder, it is separately depreciated. When significant components of property, plant, and equipment are subject to periodic revaluation, they are treated as individual assets and are recognized using specific useful lives and depreciation methods. Any resulting carrying amount of the revalued component is derecognized in accordance with IAS 16. If significant overhaul costs meet the recognition criteria, they are recognized as part of the cost of replacing the asset, while other repairs and maintenance expenses are recognized in profit or loss.

Depreciation is provided on a straight-line basis over the estimated useful lives of the following assets:

Assets	Useful life
Real estate and buildings	7-51 years
Machinery and equipment	2-10 years
Other equipment	2-15 years

After the initial recognition, if a real estate, plant, or equipment item or any significant component is disposed of or expected to generate no future economic benefits through use or disposal, it should be derecognized and any resulting gain or loss recognized.

The residual value, useful life, and depreciation method of real estate, plant, and equipment are evaluated at the end of each financial year. Any changes in the estimated values compared to the previous estimates are recognized as accounting estimate changes.

(13) Leases

Upon the establishment of a contract, the Group assesses whether the contract constitutes or contains a lease. If the contract transfers the right to control the use of a recognized asset for a period of time in exchange for consideration, the contract is deemed to be or to contain a lease. In order to evaluate whether the contract transfers the right to control the use of a recognized asset for a period of time, the Group assesses whether it has the following over the entire period of use:

(1) The right to obtain substantially all of the economic benefits from the use of the identified assets;
(2) The right to direct the use of the identified assets.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

For contracts that contain a lease (or lease component), the Group treats each lease component as a separate lease and accounts for it separately from non-lease components in the contract. If a contract contains a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the contract to the lease component based on the relative standalone price of each lease component and the aggregate standalone price of the non-lease components in the contract. The relative standalone price of the lease and non-lease components is based on the price charged by the lessor (or a similar supplier) for each component (or similar components), respectively. If the standalone price is not readily observable, the Group maximizes the use of observable information to estimate the standalone price.

Lessee

Except for leases of low-value assets or short-term leases, when the Group is a lessee under a lease contract, it recognizes a right-of-use asset and a lease liability for all leases.

On the commencement date, the Group measures the lease liability at the present value of the lease payments that are not yet paid on that date. If the implicit rate of interest in the lease is readily determinable, the lease payments are discounted using that rate. If the implicit rate is not readily determinable, the lessee's incremental borrowing rate is used. On the commencement date, the lease payments included in the lease liability comprise the following payments related to the right to use the underlying asset that are unpaid on that date:

fixed payments (including any in-substance fixed payments), less any lease incentives receivable;
Variable lease payments that are based on an index or a rate (initially measured using the index or rate as at the commencement date);
The amounts expected to be payable by the lessee under residual value guarantees;
The exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

After the commencement date, the Group measures the lease liability using the effective interest method, with the lease liability increased to reflect interest on the lease liability and reduced by lease payments made.

On the commencement date, the Group measures the right-of-use asset at cost, which includes:

The initial measurement of the lease liability;
Any lease payments made at or before the commencement date, less any lease incentives received;
Any initial direct costs incurred by the lessee; and
The estimated cost of dismantling, removing and restoring the underlying asset, or of restoring the underlying asset to the condition required by the terms and conditions of the lease.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

The subsequent measurement of the right-of-use asset is based on the cost model, which means it is measured at cost less accumulated depreciation and accumulated impairment losses.

If ownership of the underlying asset transfers to the Group at the end of the lease term, or if the cost of the right-of-use asset reflects that the Group is reasonably certain to exercise a purchase option, then depreciation is provided over the useful life of the asset from the commencement date until the end of the useful life of the asset. Otherwise, depreciation is provided over the useful life of the asset from the commencement date until the earlier of the end of the useful life of the asset or the end of the lease term.

The Group applies IAS 36, "Impairment of Assets," to assess whether a right-of-use asset has suffered any impairment and to recognize any impairment losses.

Except for leases of low-value assets or short-term leases, the Group recognizes right-of-use assets and lease liabilities on the balance sheet, and recognizes depreciation expense and interest expense separately in the statement of comprehensive income.

For leases of low-value assets or short-term leases, the Group may choose to recognize the lease payments as an expense under a straight-line method or another systematic basis over the lease term.

(14) Intangible assets

Intangible assets acquired separately are initially measured at cost. Intangible assets acquired through a business combination are measured at their fair value at the acquisition date. Subsequently, intangible assets are measured at cost less accumulated amortization and impairment losses, i.e., using the cost model. Internally generated intangible assets that do not meet the recognition criteria are expensed when incurred.

Intangible assets are classified as having either a finite or indefinite useful life.

Intangible assets with finite useful lives are amortized over their useful lives and are tested for impairment when there are indicators of impairment. The amortization period and method for intangible assets with finite useful lives are reviewed at least at the end of each financial year. If the estimated useful life of the asset differs from previous estimates or the expected pattern of consumption of future economic benefits has changed, the amortization method or period is adjusted and treated as an accounting estimate change.

Intangible assets with indefinite useful lives are not amortized, but they are subject to impairment testing at the individual asset or cash-generating unit level annually. The useful life of intangible assets with indefinite useful lives is assessed each reporting period to determine if there are any events or circumstances that continue to support their classification as indefinite. If the useful life is changed from indefinite to finite, the new accounting treatment is applied prospectively.

Any gains or losses arising from the derecognition of intangible assets are recognized as profits/losses.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Summary of the accounting policies for intangible assets of the Group are as follows:

Useful life	computer software cost
Amortization method	Finite(5 years)
Internal or external acquisition.	straight-line method
	External

(15) Non-financial asset impairment

At the end of each reporting period, the Group evaluates whether there are indicators of impairment for all assets that fall within the scope of IAS 36 "Impairment of Assets". If there are indicators of impairment or if certain assets require an annual impairment test, the Group conducts an impairment test on an individual asset or on the cash-generating unit to which the asset belongs. If the carrying amount of the asset or cash-generating unit exceeds its recoverable amount, the Group recognizes an impairment loss. The recoverable amount is the higher of the net fair value or value in use.

At the end of each reporting period, the Group also assesses whether there are indications that previously recognized impairment losses for assets other than goodwill may no longer exist or may have decreased. If such indications exist, the Group estimates the recoverable amount of the asset or cash-generating unit. If the recoverable amount increases due to changes in the estimated service potential of the asset, the impairment loss is reversed. However, the carrying amount after reversal cannot exceed the asset's carrying amount if no impairment loss had been recognized, net of depreciation or amortization.

Impairment losses and reversals for continuing operations are recognized as profits/losses.

(16) Provisions

The recognition criteria for liability provisions is that a present obligation (legal or constructive) has arisen from past events, and it is probable that outflow of resources embodying economic benefits will be required to settle the obligation, and the amount of the obligation can be reliably estimated. When the company expects some or all of the liability provisions to be reimbursed, it is recognized as a separate asset only when the reimbursement is virtually certain. If the time value of money is significant, liability provisions are discounted at a pre-tax rate that reflects the specific risks of the liability. The increase in the liability amount due to the passage of time during discounting is recognized as borrowing cost.

The liability to pay a levy is recognized progressively if the obligating event occurs over a period of time.

Provisions for dismantling, restoration and similar costs

Provisions for dismantling, removal of property, plant and equipment and restoration of the site on which they are located are measured at the present value of the estimated cash flows required to settle the obligation, and the costs of dismantling are recognized as part of the cost of the asset. The cash flows are discounted using a rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as interest expense. Estimates of future dismantling costs are reviewed and adjusted for appropriateness at the end of each reporting period. Changes in estimates of future dismantling costs or changes in the discount rate increase or decrease the related asset cost.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

(17) Revenue Recognition

The Group's revenue from contracts with customers primarily includes sales of goods and rendering of services, and the accounting treatment is described as follows:

Sales of Goods

The Group manufactures and sells goods. Revenue and accounts receivable are recognized when the promised goods are delivered to the customer and the customer obtains control over them (i.e. the ability to direct the use of and obtain substantially all of the remaining benefits from the goods). The main products are power transistors, diodes, and solar cell chips, and revenue is recognized based on the contractually agreed price.

The credit period for the sale of goods is 30 to 120 days. For most contracts, when control over the goods is transferred and the Group has an unconditional right to receive payment, accounts receivable are recognized. Such accounts receivable are usually short-term and do not constitute a significant portion of the Group's financial statements. For a few contracts, the Group has transferred the goods to the customer but does not yet have an unconditional right to receive payment. In such cases, contract assets are recognized, and the impairment loss is measured based on the expected credit loss amount over the asset's life, in accordance with IFRS 9.

(18) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction, or production of qualifying assets are capitalized as part of the cost of the asset. All other borrowing costs are recognized as expenses in the period incurred. Borrowing costs include interest and other costs related to borrowing funds.

(19) Retirement benefits plan

The retirement policy of the Company applies to all regular employees, and the retirement benefits of the employees are fully deposited into the Labor Retirement Reserve Supervisory Committee and stored in the Retirement Fund Account. As the above-mentioned retirement benefits are deposited in the name of the Labor Retirement Reserve Supervisory Committee and are completely separated from the Company, they are not included in the aforementioned consolidated financial statements. The retirement benefits of the employees of overseas subsidiaries are handled in accordance with local laws and regulations.

For defined contribution retirement benefits plans, the Company's monthly contribution rate for employee retirement benefits shall not be less than 6% of the employee's monthly salary, and the amount contributed shall be recognized as expenses in the current period. The overseas subsidiaries contribute and recognize expenses in the current period according to the specific proportion in the local area.

(20) Income tax

Income tax expenses (benefits) refer to the aggregate amount included in determining the current period's income statement and related to current income tax and deferred income tax.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Current Income Tax

Current income tax payable (receivable) for the current period and prior periods is measured using the enacted or substantially enacted tax rates and laws at the end of the reporting period. Current income tax relating to items recognized in other comprehensive income or directly in equity is recognized in other comprehensive income or equity, respectively, and not in profit or loss.

The portion of the undistributed earnings subject to additional income tax is recognized as income tax expense on the date of the shareholder resolution to distribute the earnings.

Deferred Income Tax

Deferred income tax is calculated on the temporary differences between the tax base of assets and liabilities and their book values on the balance sheet date.

All taxable temporary differences, except for the following two items, are recognized as deferred income tax liabilities:

(1) The original recognition of goodwill; or the original recognition of assets or liabilities not arising from a business combination, which, at the time of the transaction, neither impacts accounting profit nor taxable income (loss), and does not result in equal temporary differences between taxable and deductible amounts at the time of the transaction.

(2) Temporary differences arising from investments in subsidiaries, associates, and joint ventures that are not expected to reverse in the foreseeable future and over which the entity has control.

Deferred income tax assets arising from deductible temporary differences, unused tax losses and unused tax credits are recognized only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilized, except for the following two items:

(1) This relates to the deductible temporary differences arising from the original recognition of assets or liabilities not resulting from business combination transactions, which, at the time of the transaction, neither affect accounting profit nor tax income (loss), and do not result in the recognition of equal taxable and deductible temporary differences at the time of the transaction.

(2) The deductible temporary differences arising from investments in subsidiaries, associates, and joint ventures, provided it is probable that the differences will reverse in the foreseeable future and sufficient taxable income will be available against which the differences can be utilized.

Deferred tax assets and liabilities are measured based on the tax rates and laws that are enacted or substantively enacted at the end of the reporting period, and reflect the tax consequences of expected asset realizations or liability settlements in the current period. The measurement of deferred tax assets and liabilities reflects the tax consequences of the expected recovery of assets or the settlement of liabilities at their carrying amounts as of the end of the reporting period. Deferred tax items that are not recognized in profit or loss are recognized in other comprehensive income or directly in equity, depending on the nature of the transaction. Deferred tax assets are reviewed and recognized at the end of each reporting period.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Deferred tax assets and liabilities can only be offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax is levied by the same tax authority as the income tax levied on the same taxable entity.

According to the Amendments to IFRS 12, "International Tax Reform - Pillar 2 Blueprint," temporary exceptions, therefore, prohibit the recognition of deferred tax assets and liabilities for Pillar 2 income taxes and also prohibit the disclosure of related information.

Sources of Significant Accounting Judgments, Estimates and Assumptions Uncertainty

In preparing the consolidated financial statements, the management of the Group is required to make judgments, estimates and assumptions as of the end of the reporting period, which affect the reported amounts of revenue, expenses, assets and liabilities, and the disclosure of contingent liabilities. However, the uncertainty associated with these significant assumptions and estimates may result in significant adjustments to the carrying amounts of assets or liabilities in future periods.

Estimates and Assumptions

Information on the sources of uncertainty related to the significant estimates and assumptions made about the future as of the end of the reporting period may result in significant risks of material adjustments to the book value of assets and liabilities in the next financial year. The following are the details:

(1) Fair Value of Financial Instruments

When the fair value of financial assets and financial liabilities recognized in the balance sheet cannot be obtained from an active market, fair value will be determined using valuation techniques including income approach (e.g. discounted cash flow model) or market approach. Changes in the assumptions used in these models will affect the fair value of the reported financial instruments. Please refer to Note 12 for details.

(2) Impairment of Non-Financial Assets

Impairment occurs when the carrying amount of an asset or cash-generating unit exceeds its recoverable amount. The recoverable amount is the higher of fair value less costs to sell and value in use. The calculation of fair value less costs to sell is based on the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date, less the costs of disposal. The value in use is based on a discounted cash flow model. The estimation of cash flows is based on a five-year budget, excluding any restructuring that the Group has not committed to, or significant future investments needed to enhance the asset performance of the cash-generating unit being tested. The recoverable amount is sensitive to the discount rate used in the discounted cash flow model and the expected future cash inflows and growth rate based on extrapolation.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

(3) Income Tax

The uncertainty in income tax arises from the interpretation of complex tax regulations, the amount and timing of future taxable income. The actual results from extensive international business relationships and long-term and complex contracts may differ from the assumptions made, or changes in these assumptions in the future may require adjustments to the income tax benefit or expense already recognized in the future. The provision for income tax is based on reasonable estimates made based on possible audit results of the tax authorities in the countries where the consolidated companies operate. The amount recognized is based on various factors, such as past tax audit experience and different interpretations of tax regulations by taxpayers and tax authorities. These differences may raise various issues due to the location of individual companies within the Group.

Unused tax losses and tax credits for future periods and deductible temporary differences are recognized as deferred tax assets within the scope of probable future taxable income or deductible temporary differences. The determination of the amount of deferred tax assets recognized is based on estimates of future taxable income and probable temporary differences, as well as future tax planning strategies at the time and level when they may occur.

As of December 31, 2025, please refer to Note 6 for the explanation of the deferred tax assets not yet recognized by the Group.

(4) Accounts receivable - estimated impairment loss

The estimated impairment loss for accounts receivable of the Group is measured by expected credit losses during the existence of accounts receivable. The credit losses are measured by the difference between the present value of the contractual cash flows (book value) and the expected cash flows to be collected (forward-looking information). However, the impact of discounting on short-term accounts receivable is insignificant, and credit losses are measured by the undiscounted difference. If actual cash flows in the future are less than expected, significant impairment losses may arise, please refer to Note 6 for more details.

(5) Inventory

The estimated net realizable value of inventory is determined by considering the possibility of inventory impairment, obsolescence, or decline in selling price. The most reliable evidence of the expected realizable value of inventory at the time of estimation is used for this purpose, as described in Note 6.

Description of Significant Accounts
Cash and cash equivalents

	As of December 31, 2025	As of December 31, 2024
Cash on hand	$373	$289
Check and cash in bank	20,514	39,872
Total	$20,887	$40,161

As of December 31, 2024, the Group also held NT$59,013 thousand in time deposits with a maturity of more than 3 months, which were recorded under other financial assets - current items based on the maturity date of the time deposits, with an interest rate of 5.20-5.28% as of December 31, 2024.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Financial assets measured at fair value through profit or loss

	As of December 31, 2025	As of December 31, 2024
Mandatory fair value measurement through profit or loss: stock	$83,292	$95,628
Current	$83,292	$95,628

The Group does not provide collateral for financial assets measured at fair value through profit or loss.

Notes receivable, net

	As of December 31, 2025	As of December 31, 2024
Notes receivable - generated from operations.	$665	$319
Less: allowance for doubtful accounts	—	—
Total	$665	$319

The Group did not provide any notes receivable as collateral for its loans.

The impairment and related information on allowance for doubtful accounts are evaluated in accordance with IFRS 9. Please refer to Note 6.15 for more details, and for information related to credit risk, please refer to Note 12.

Accounts receivable, net

	As of December 31, 2025	As of December 31, 2024
Accounts receivable	$10,314	$9,347
Less: allowance for doubtful accounts	(80)	(73)
Total	$10,234	$9,274

The Group did not provide any accounts receivable as collateral for its loans.

The credit period provided by the Group to its customers is usually between 30 to 120 days. As of December 31, 2025 and December 31, 2024, the total book value was NT$10,979 thousand and NT$9,666 thousand, respectively. The information on the allowance for doubtful accounts for the year 2025 and 2024 is detailed in Note 6.15, and for information related to credit risk, please refer to Note 12.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Inventories

	As of December 31, 2025	As of December 31, 2024
Raw material	$2,215	$4,137
Work in process	393	98
Finished goods	2,326	3,600
Total	$4,934	$7,835

The inventory costs recognized as expenses for the fiscal years 2025 and 2024 by the Group were NT$ 53,514 thousand and NT$ 44,799 thousand, respectively, including inventory write-down (reversal) of (NT$ 814 thousand) and (NT$ 6,731 thousand), respectively. Due to the disposal of some obsolete inventory in the same period of the previous year, there was a situation of inventory reversal benefit.

The Group did not provide any inventories as collateral for its loans.

Other current assets

	As of December 31, 2025	As of December 31, 2024
Excess business tax paid	$35,002	$12,041
Prepaid expense	1,485	445
Temporary debits	248	—
Others	27	29
Total	$36,762	$12,515

Property, Plant and Equipment

	As of December 31, 2025	As of December 31, 2024
Property, plant and equipment used by the Company	$439,225	$405,372
	Land	Buildings
---	---	---
Cost:
January 1, 2025	$178,778	$276,255
Additions	—	742
Disposals	—	—
Transfers	—	—
Effect of exchange rate changes	—	284
December 31, 2025	$178,778	$277,281

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

	Land	Buildings	Machinery and Equipment	Other Equipment	Total
January 1, 2024	$178,778	$271,993	$814,432	$239,902	$1,505,105
Additions	—	—	—	—	—
Disposals	—	(380)	(80,019)	(50,593)	(130,992)
Reclassification	—	1,952	6,044	4,410	12,406
Effect of exchange rate changes	—	2,690	4,184	11	6,885
Other changes	—	—	5,677	—	5,677
December 31, 2024	$178,778	$276,255	$750,318	$193,730	$1,399,081
	Land	Buildings	Machinery and Equipment	Other Equipment	Total
---	---	---	---	---	---
Depreciation and impairment
January 1, 2025	$—	$150,914	$682,465	$160,330	$993,709
Depreciation	—	8,041	11,943	8,463	28,447
Disposals	—	—	(20,009)	—	(20,009)
Effect of exchange rate changes	—	185	581	3	769
December 31, 2025	$—	$159,140	$674,980	$168,796	$1,002,916
January 1, 2024	$—	$142,407	$742,624	$202,574	$1,087,605
Depreciation	—	8,442	8,061	8,343	24,846
Disposals	—	(380)	(78,597)	(50,592)	(129,569)
Effect of exchange rate changes	—	445	2,453	5	2,903
Other changes	—	—	7,924	—	7,924
December 31, 2024	$—	$150,914	$682,465	$160,330	$993,709

Net book value

December 31, 2025	$178,778	$118,141	$92,783	$49,523	$439,225
December 31, 2024	$178,778	$125,341	$67,853	$33,400	$405,372

Please refer to Note 8 for information on the provision of collateral with real estate, plants and equipment.

Other Noncurrent Asset

	As of December 31, 2025	As of December 31, 2024
Prepayments for equipment	$66,179	$59,670
Excess business tax paid	31,779	31,666
Total	$97,958	$91,336

Please refer to Note 8 for details regarding the equipment advances provided as collateral.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Short-Term Loans

Nature of Loans	As of December 31, 2025	As of December 31, 2024
Unsecured loans	$—	$30,000
Secured loans	60,000	97,085
Total	$60,000	$127,085
Maturity date	2026/6/26～2026/11/25	2025/6/25～2025/11/11
Interest rate	2.525%	2.775%～5.36%
Unused portion	$—	$—

The above bank secured loans are secured by other financial assets - current, please refer to Note 8 for details on the collateral.

Long-Term Loans

As of December 31, 2025, the details of long-term loans are as follows:

Creditor	As of December 31, 2025	Annual Interest Rate(%)	Loan Content
Secured loans by First Bank	$ 1,450	2.350%	The loan is repayable in monthly installments of principal from February 8, 2023 to February 8, 2028, with monthly interest payments.
Unsecured loans by First Bank	8,218	2.220%	The loan is repayable in monthly installments of principal from June 20, 2023 to June 20, 2028, with monthly interest payments.
Unsecured loans by First Bank	2,055	2.220%	The loan is repayable in monthly installments of principal from June 20, 2023 to June 20, 2028, with monthly interest payments.
Secured loans by First Bank	14,450	2.525%	The loan is repayable in monthly installments of principal from May 6, 2024 to May 6, 2027, with monthly interest payments.
Secured loans by First Bank	22,366	2.525%	The loan is repayable in monthly installments of principal from August 7, 2024 to August 7, 2029, with monthly interest payments.
Secured loans by First Bank	14,489	2.525%	The loan is repayable in monthly installments of principal from June 2, 2025 to June 2, 2030, with monthly interest payments.
Secured loans by First Bank	23,248	2.525%	The loan is repayable in monthly installments of principal from October 13, 2025 to October 13, 2030, with monthly interest payments.
Secured loans by First Bank	15,000	2.525%	The loan is repayable in monthly installments of principal from December 24, 2025 to December October 24, 2030, with monthly interest payments.
Subtotal	101,276
Less: Current portion	(31,253)
Total	$ 70,023

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

As of December 31, 2024, the details of long-term loans are as follows:

Creditor	As of December 31, 2024	Annual Interest Rate(%)	Loan Content
Secured loans by First Bank	$2,095	2.350%	The loan is repayable in monthly installments of principal from February 8, 2023 to February 8, 2028, with monthly interest payments.
Unsecured loans by First Bank	11,380	2.220%	The loan is repayable in monthly installments of principal from June 20, 2023 to June 20, 2028, with monthly interest payments.
Unsecured loans by First Bank	2,845	2.220%	The loan is repayable in monthly installments of principal from June 20, 2023 to June 20, 2028, with monthly interest payments.
Secured loans by First Bank	24,343	2.525%	The loan is repayable in monthly installments of principal from May 6, 2024 to May 6, 2027, with monthly interest payments.
Secured loans by First Bank	28,116	2.525%	The loan is repayable in monthly installments of principal from August 7, 2024 to August 7, 2029, with monthly interest payments.
Subtotal	68,779
Less: Current portion	(20,240)
Total	$48,539

Please refer to Note 8 for details on the collateral for the First Bank secured loan.

11. Retirement Benefits Plan

Defined contribution plans

The employee retirement plan established by the Group is a defined contribution plan under the "Labor Pension Act". Pursuant to the Act, the Group is required to contribute to each employee's individual retirement account every month, and the contribution rate must be no less than 6% of the employee's monthly salary. The Group has already established an employee retirement plan in accordance with the Act and contributes 6% of each employee's monthly salary to employees' pension accounts every month.

In 2025 and 2024, the Group recognized retirement benefit plan expenses of NT$ 1,258 thousand and NT$ 1,233 thousand, respectively.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Provision for Liabilities

	Decommissioning, Restoration, and Remediation Costs
January 1, 2025	$—
Current use	—
December 31, 2025	$—
January 1, 2024	$6,601
Current use	(6,601)
December 31, 2024	$—
Noncurrent—December 31, 2025	$—
Noncurrent—December 31, 2024	$—

Decommissioning, Restoration, and Remediation Costs

The provision recognizes pollution prevention and control costs related to land owned by the Group, which are estimated based on the best estimate of future possible investment amounts.

Equity

(1) Common stock

As of December 31, 2025 and 2024, the authorized capital stock of the Company was NT$1,800,000 thousand divided into 180,000 thousand shares with a par value of NT$10 per share. The issued and outstanding common stock of the Company was NT$370,000 thousand divided into 37,000 thousand shares with a par value of NT$10 per share (including 27,489 thousand shares of privately placed common stock). Each share is entitled to one vote and to receive dividends.
The Board of Directors of the Company passed resolutions on April 8, April 15, September 7, and October 8, 2009 to issue privately placed common stock totaling NT$276,300 thousand (NT$42,439 thousand after reducing capital to offset accumulated losses).
The Board of Directors of the Company passed a resolution on December 28, 2010 to issue privately placed new shares of common stock totaling NT$48,375 thousand (NT$7,430 thousand after reducing capital to offset accumulated losses).
The Board of Directors of the Company passed a resolution on June 8, 2011 to issue privately placed new shares of common stock totaling NT$66,750 thousand (NT$10,253 thousand after reducing capital to offset accumulated losses).
The Board of Directors of the Company passed a resolution on February 26, 2013 to issue privately placed new shares of common stock totaling NT$96,150 thousand (NT$14,769 thousand after reducing capital to offset accumulated losses).
In order to improve its financial structure, the Company passed a resolution at the shareholders' meeting on June 29, 2020 to reduce its capital to offset accumulated losses by NT$536,021 thousand, with a reduction ratio of 75.9214%.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements

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

The Board of Directors of the Company passed a resolution on September 24, 2020 to issue privately placed new shares of common stock totaling NT$100,000 thousand.
The Board of Directors of the Company passed a resolution on March 11, 2021 to issue privately placed new shares of common stock totaling NT$100,000 thousand.
The rights and obligations of the privately placed new shares are generally the same as those of the common stock already issued by the Company. However, according to the Securities and Exchange Act, the privately placed common stock cannot be freely transferred within three years after the issuance. Except for the restrictions on transferability under the Securities and Exchange Act, and subject to completing the public issuance and waiting for three years from the delivery date, the privately placed common stock has the same rights and obligations as the common stock already issued by the Company.

(2) Capital Reserve

Item	2025.12.31	2024.12.31
Issuance premium	$101,419	$101,419

B. According to laws and regulations, capital reserves can only be used to offset company losses. When the company has no losses, the capital reserves generated from the premium on the issuance of shares and donations received may be allocated to increase capital up to a certain percentage of paid-in capital each year. The aforementioned capital reserves may also be distributed as cash dividends in proportion to the shareholders' original shares.

(3) Earnings Distribution and Dividend Policy

According to the Company's articles of incorporation, if there are profits in the annual financial statements, they shall be distributed in the following order:

A. Payment of taxes and other government charges.
B. Offset of accumulated losses.
C. Appropriation of at least 10% of the net income for the legal reserve.
D. Appropriation or transfer to other special reserves as required by laws and regulations.
E. Other remaining profits shall be proposed by the Board of Directors for distribution as dividends, subject to the approval of the shareholders at the shareholders' meeting.

The Company's dividend policy takes into consideration the current and future development plans, investment environment, capital requirements, domestic and international competitive conditions, and shareholder interests. The Company shall allocate not less than 50% of the distributable profits for dividends to shareholders each year. Dividends may be paid in cash or shares, with the cash portion not less than 50% of the total dividend amount.

According to the Company Act, the legal reserve shall be appropriated until it reaches an amount equal to the Company's paid-in capital. The legal reserve may be used to offset losses. When there are no accumulated losses, any excess in the legal reserve over 25% of the paid-in capital may be distributed to shareholders in the form of new shares or cash, in proportion to their shareholdings.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements

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

When the Company distributes its distributable profits, it is required by law to allocate the remaining balance of the special reserve after first-time adoption of IFRS and the net amount of other equity deduction to offset the special reserve. In the event that the net amount of other equity deduction is reversed, the Company may allocate the reversed portion to the special reserve for distribution of profits.

The board of directors and the shareholders' meeting of the Company held on March 6, 2026 and May 27, 2025, respectively, proposed and resolved the earnings appropriation and distribution plans, along with the dividends per share for the fiscal years 2025 and 2024, as listed below:

	Earnings appropriation and distribution of		Dividends per share (NT$)
	2025	2024	2025	2024
Legal reserve	$77	$525
special reserve	691	4,401
Cash dividends	—	—	$ —	$ —

The Company's annual general meeting of shareholders held on June 12, 2024, approved the resolution of proposal for the 2023 deficit compensation of NT$91,841 thousand from the capital surplus.

Due to accumulated losses in 2023, the company passed a resolution at its shareholders' meeting on June 12, 2024 not to distribute any profits

For information regarding the estimation basis and recognition amount of employee and director remuneration, please refer to Note 6.17.

Net revenue

	2025	2024
Revenue from customer contracts
Net revenue from sale of goods	$45,551	$50,713

The revenue information related to customer contracts for the Group in 2025 and 2024 are as follows:

Revenue breakdown

	2025	2024
	Semiconductor	Semiconductor
Sales of Goods	$45,551	$50,713
Revenue recognition timing:
At a certain time	$45,551	$50,713

Expected credit gain(loss)

	2025	2024
Operation expense—Expected credit gain
Accounts receivable	$(7)	$56

For information related to credit risk, please refer to Note 12 in the financial statements.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

The accounts receivable of the Group (including notes and accounts receivable) are measured for impairment using the lifetime expected credit loss method. The relevant explanation of the assessment of the allowance for impairment on December 31, 2025 and 2024 is as follows:

Historical credit loss experience of accounts receivable showed no significant difference in loss patterns among different customer groups. Therefore, a non-segmented approach was adopted using the provision matrix to measure the allowance for impairment. The related information is as follows:

December 31, 2025	Not Overdue	Days Past Due				Total
		Within 90 days	91-180 days	181-365 days	Over 366 days
Total book value	$665	$9,708	$606	$—	$—	$10,979
Loss rate	0%	0.78%	0.78%	50%	100%
Lifetime expected credit losses	—	(76)	(4)	—	—	(80)
Subtotal	$665	$9,632	$602	$—	$—	$10,899
Book value						$10,899
December 31, 2024	Not Overdue	Days Past Due				Total
---	---	---	---	---	---	---
		Within 90 days	91-180 days	181-365 days	Over 366 days
Total book value	$319	$8,659	$688	$—	$—	$9,666
Loss rate	0%	0.78%	0.78%	50%	100%
Lifetime expected credit losses	—	(68)	(5)	—	—	(73)
Subtotal	$319	$8,591	$683	$—	$—	$9,593
Book value						$9,593

Note: All notes receivable of the Group are not overdue.

The information on the changes in the loss allowance of accounts receivable for the years ended December 31, 2025 and 2024 of the Group is presented below:

	Accounts Receivable
January 1, 2025	$73
Addition (Reversal)	7
Effect of exchange rate changes	—
December 31, 2025	$80
January 1, 2024	$126
Addition (Reversal)	(56)
Effect of exchange rate changes	3
December 31, 2024	$73

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Lease

(1) As a lessee

The lease term for the real estate (land) contract that the company leased is 50 years.

The effect of the lease on the financial position, financial performance, and cash flows of the Group is explained as follows:

A. The amount recognized on the balance sheet

The carrying amounts of the right-of-use asset

	2025.12.31	2024.12.31
Land	$3,155	$3,213

B. The amount recognized in the statement of comprehensive income

Depreciation of right-of-use assets

	2025	2024
Land	$67	$70

C. Revenue and expenses related to leasing activities for the lessee

	2025	2024
Expenses related to leases of low-value assets (excluding expenses related to leases of low-value assets with a lease term of 12 months or less)	$108	$259

D. Cash outflows related to the lessee and leasing activities

The total cash outflows related to leasing activities for the Group were NT$108 thousand and NT$259 thousand for the years ended December 31, 2025 and 2024, respectively.

(2) As a lessor

The Group has entered into commercial property lease agreements for its own properties for a term of six years.

	2025	2024
Rental income from operating leases	$224	$—

Summary of Employee Benefits, Depreciation, and Amortization Expenses by Function:

| By function
By item | 2025 | | | 2024 | | |
| --- | --- | --- | --- | --- | --- | --- |
| | Classified as operating costs | Classified as operating expenses | Total | Classified as operating costs | Classified as operating expenses | Total |
| Employees’ Benefits | | | | | | |
| Salaries | $3,334 | $17,581 | $20,915 | $1,041 | $18,358 | $19,399 |
| Health and Labor Insurance | 449 | 1,842 | 2,291 | 144 | 1,785 | 1,929 |
| Pensions | 139 | 1,119 | 1,258 | 69 | 1,164 | 1,233 |
| Others | 297 | 1,076 | 1,373 | 73 | 952 | 1,025 |
| Depreciation(Note) | 13,641 | 10,815 | 24,456 | 10,039 | 10,621 | 20,660 |
| Amortization | — | — | — | — | — | — |

Note : The depreciation provision for the solar power generation equipment of the Group is recorded as an expense under other expenses.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

According to the Company's regulations, if there is profit for the year, no less than 1% shall be allocated for employee remuneration and no more than 2% for director remuneration. However, if the Company has accumulated losses, the amount to make up for such losses shall be reserved in advance. The aforementioned employee remuneration may be provided in the form of stocks or cash and shall be resolved by the board of directors with the consent of at least two-thirds of the attending directors and a majority of the total number of directors, and shall be reported to the shareholders' meeting. For information on employee and director compensation approved by the board of directors, please refer to the "Market Observation Post System" of the Taiwan Stock Exchange.

In accordance with its profitability of 2025, the Company estimated the remuneration to employees and directors at 1% each, and recognized NT$8 thousand for each, which were accounted as salary expenses.

For the year ended December 31, 2024, based on the Company's profitability, remuneration to employees and directors was accrued at 1% and 1%, respectively. The recognized remuneration amounts for employees and directors amounted to NT$54 thousand and NT$54 thousand, respectively, which were included under salary expenses.

The actual distribution of employee remuneration for 2024 was NT$54 thousand, which shows no material difference from the amount recognized as an expense in the 2024 financial statements.

The estimated remuneration for directors and supervisors of the Company for the year 2024 has not yet been actually distributed.

Non-operating income and expenses

(1) Interest Income

	2025	2024
Amortized cost financial asset - Bank deposit interest	$889	$3,235

(2) Other Income

	2025	2024
Other Income - Others	$12,015	$6,069
Dividend	705	596
Rent income	224	—
Total	$12,944	$6,665

(3) Other income and expenses

	2025	2024
Gain (loss) on disposal of property, plant and equipment	$ —	$945
Net foreign exchange gain	1,803	3,699
Gain on financial assets at fair value through profit (Note)	61,094	52,095
Other expenses - Depreciation of solar power equipment	(4,058)	(4,256)
Other expenses - Others	(5,314)	(3,309)
Total	$53,525	$49,174

Note: This is generated by the financial assets mandatorily measured at fair value through profit or loss.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

(4) Financial Cost

	2025	2024
Interest on bank loans	$(4,481)	$(6,500)
Total	$(4,481)	$(6,500)

Components of Other Comprehensive Income

	2025
	Current period generated	Reclassification adjustments For the Period	Other Comprehensive Income	Income tax benefit (expense)	After-Tax Amount
Items that may be subsequently reclassified to profit or loss:
Exchange differences arising from the translation of the financial statements of foreign operating entities	$(1,576)	—	$(1,576)	—	$(1,576)
	2024
	Current period generated	Reclassification adjustments For the Period	Other comprehensive Income	Income tax benefit (expense)	After-tax Amount
Items that may be subsequently reclassified to profit or loss:
Exchange differences arising from the translation of the financial statements of foreign operating entities	$3,685	—	$3,685	—	$3,685

Income Tax

(1) The major components of income tax expense for 2025 and 2024 are as follows:

Income tax expense recognized in profit or loss

	2025	2024
Current income tax expense:
Current tax expense recognized in the current year	$(16)	$—
Deferred income tax expense:
The origination and reversal of temporary differences	—	—
Income tax expense recognized in profit or loss	$(16)	$—

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Income tax recognized in other comprehensive profit or loss

	2025	2024
Deferred income tax expense:
Foreign exchange differences arising from the translation of financial statements of foreign operating entities	$—	$—
Income tax related to other components of comprehensive income	$—	$—

(2) The adjustments to income tax expense for the year and the amount of income tax computed at the applicable statutory tax rates are as follows:

	2025	2024
Pretax gain/loss from continuing operations	$784	$5,246
Income tax expense calculated at statutory tax rates	$157	$1,049
Tax effect of tax-exempt income	(13,360)	(10,538)
Tax effects of non-deductible expenses	2,052	3,475
Tax effects of deferred tax assets/liabilities	—	6,014
Additional 5% income tax on unappropriated earnings	16	—
Tax effects of other tax adjustments	10,151	—
Income tax expense recognized in income statement	$16	$—

(3) The following deferred tax assets (liabilities) balances are related to the items below:

	2025
	Beginning balance	Recognized in profit or loss	Recognized in other comprehensive income	Ending balance
Temporary difference
Unrealized holiday bonus deduction	$202	$—	$—	$202
Unrealized intercompany transactions	287	—	—	287
Unrealized exchange losses	178	—	—	178
Unrealized exchange gains	(9)	—	—	(9)
Land value increment tax reserve	(46,203)	—	—	(46,203)
Defined benefit liabilities, net	3,409	—	—	3,409
Other	(666)	—	—	(666)
Deferred tax (expense) benefit		$—	$—
Deferred tax assets (liabilities), net	$(42,802)			$(42,802)
The information expressed in the balance sheet is as follows:
Deferred tax assets	$3,410			$3,410
Deferred tax liabilities	$(46,212)			$(46,212)

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

	2024
	Beginning balance	Recognized in profit or loss	Recognized in other comprehensive income	Ending balance
Temporary difference
Unrealized holiday bonus deduction	$202	$—	$—	$202
Unrealized intercompany transactions	287	—	—	287
Unrealized exchange losses	178	—	—	178
Unrealized exchange gains	(9)	—	—	(9)
Land value increment tax reserve	(46,203)	—	—	(46,203)
Defined benefit liabilities, net	3,409	—	—	3,409
Other	(666)	—	—	(666)
Deferred tax (expense) benefit		$—	$—
Deferred tax assets (liabilities), net	$(42,802)			$(42,802)
The information expressed in the balance sheet is as follows:
Deferred tax assets	$3,410			$3,410
Deferred tax liabilities	$(46,212)			$(46,212)

(4) The information regarding the Company's unused tax losses is summarized as follows:

Occurrence Year	Loss Amount	Unused Balance		Last Offset Year
		As of December 31, 2025	As of December 31, 2024
2016	42,651	42,651	42,651	2026
2017	80,089	80,089	80,089	2027
2018	86,733	86,733	86,733	2028
2019	81,565	81,565	81,565	2029
2020	126,450	126,450	126,450	2030
2021	36,656	36,656	36,656	2031
2022	35,259	35,259	35,259	2032
2024	38,410	38,410	38,410	2034
2025	78,744	78,744	—	2035
		$606,557	$527,813

(5) Unrecognized Deferred Income Tax Assets

As of December 31, 2025 and 2024, the total amount of unrecognized deferred income tax assets of the Company amounted to NT$230,370 thousand and NT$224,236 thousand, respectively.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

(6) Status of Income Tax Filing

As of December 31, 2025, the settlement and filing of profit-seeking enterprise income tax for the Company have been approved by the tax authorities up to the fiscal year 2023.

21. Earnings (loss) per share

The calculation of basic earnings per share is based on the net income attributable to the shareholders of the parent company for the period divided by the weighted average number of outstanding common shares during the year.

The calculation of diluted earnings per share is determined by dividing the net income attributable to the shareholders of the parent company for the period by the weighted average number of outstanding ordinary shares during the period, adjusted for the effects of all dilutive potential ordinary shares, including stock options and convertible bonds. This calculation reflects the potential dilution that could occur if all dilutive securities were exercised or converted into ordinary shares.

(1) Basic earnings per share

	As of December 31, 2025	As of December 31, 2024
Net loss attributable to common stockholders (NT$ thousands)	$768	$5,246
Weighted average shares outstanding – basic (thousands of shares)	37,000	37,000
Weighted average number of common shares after adjusted by dilutive effects (thousands of shares)	37,000	37,000
Basic earnings per share(loss) (NT$)	$0.02	$0.14
Diluted earnings (loss) per share (NT$)	$0.02	$0.14

There were no significant changes in the number of outstanding common shares or potential common shares during the reporting period subsequent to the financial statements' issuance and before their approval for release.

7. Related party Transactions

There were no material related party transactions during the reporting period.

The Remuneration of the Major Management Personnel of the Group

	2025	2024
Short-term employee benefits	$2,037	$2,010

8. Pledged Assets

The Group has the following assets as collateral:

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Item	Carrying Amount		Contents of Secured Debt
	December 31, 2025	December 31, 2024
Land - buildings and structures	$206,000	$120,000	long-term loans
Other current financial assets	—	59,013	short-term loans
Prepayments for Equipment	4,647	8,994	long-term loans
	$210,647	$188,007

Significant Contingent Liabilities and Unrecognized Commitments

As of December 31, 2024, the standby L/C provided to financial institutions for subsidiaries' secured loans amounted to NT$38,063 thousand.

Significant Disaster Losses

None.

Significant Subsequent Events

None.

Others
Categories of financial instruments

Financial assets

	2025.12.31	2024.12.31
FVTPL:
MFVTPL	$83,292	$95,628
Amortized cost
Cash and cash equivalent(not including cash on hand)	20,514	39,872
Notes and accounts receivable	10,899	9,593
Other receivables	2,922	878
Other current financial assets	—	59,013
Subtotal	34,335	109,356
Total	$117,627	$204,984
Financial liabilities
	2025.12.31	2024.12.31
Amortized cost:
Short-term loans	$60,000	$127,085
Accounts payable	20,950	13,702
Long-term loans(including current portion)	101,276	68,779
Total	$182,226	$209,566

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Financial risk management and policy

The primary objective of financial risk management for the Group is to manage market risk, credit risk, and liquidity risk related to the operational activities, and to identify, measure, and manage these risks according to the policies and risk preferences.

The Group has established appropriate policies, procedures, and internal controls in accordance with relevant regulations for the management of the aforementioned financial risks. Significant financial activities are subject to review by the board of directors and similar audit committee units in accordance with relevant regulations and internal control systems. During the execution of financial management activities, the Group must strictly comply with the relevant regulations for financial risk management that have been established.

Market risk

The market risk of the Group refers to the risk that the fair value or cash flows of its financial instruments may fluctuate due to market price changes. Market risks mainly include currency risk, interest rate risk, and other price risks.

In practice, it is rare for a single risk variable to change independently, and the changes in various risk variables are usually interrelated. However, the sensitivity analysis of each risk variable below does not consider the interactive effects of related risk variables.

(1) Currency risk

The Group's currency risk is mainly related to its operating activities (when the currency used for income or expenses is different from the Company's functional currency) and net investments in foreign operations.

For some foreign currency receivables and payables of the Group that are denominated in the same currency, a natural hedging effect is generated for the corresponding positions. For some other foreign currency items, forward foreign exchange contracts are used to manage currency risk. However, as the natural hedging and hedging through forward foreign exchange contracts do not comply with the hedge accounting requirements, the Company does not adopt hedge accounting for these items. In addition, the net investment in foreign operations is regarded as a strategic investment, and therefore, the Group does not hedge against it.

The sensitivity analysis of the Group's currency risk mainly focuses on the major foreign currency monetary items at the end of the financial reporting period, and analyzes the impact of a 1% increase or decrease in the relevant foreign currency exchange rate on the Group's income and equity. The Group's currency risk is mainly affected by fluctuations in the US dollar and the Chinese yuan. The sensitivity analysis information is as follows:

A. If the New Taiwan Dollar appreciates/depreciates by 1% against the US Dollar, it will increase of NT$ 49 thousand and NT$71 thousand in the net income of the Group for the fiscal year 2025 and 2024, respectively.

B. If the New Taiwan Dollar appreciates/depreciates by 1% against the Chinese Yuan, it will result in a decrease and increase of NT$ 9 thousand and NT$158 thousand in the net income of the Group for the fiscal year 2025 and 2024, respectively.

C. If the New Taiwan Dollar appreciates/depreciates by 1% against the Japanese Yuan, it will result in a increase of NT$ 0 and NT$ 21 thousand in the net income of the Group for the fiscal year 2025 and 2024, respectively.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

(2) Interest rate risk

The sensitivity analysis of interest rate risk mainly focuses on the interest rate sensitive items as of the end of the financial reporting period, including floating rate investments and floating rate borrowings. Assuming a one-year accounting period, when the interest rate rises/falls by 10 reference points, the impact on the profit or loss of the Group for the years ended December 31, 2025 and 2024 will be a decrease of (NT$1,408 thousand) and (NT$970 thousand), respectively.

Credit Risk Management

Credit risk refers to the risk of financial loss due to the counterparty's failure to fulfill the obligations specified in the contract. The credit risk of this Group is mainly caused by business activities (mainly accounts receivable and notes) and financial activities (mainly bank deposits and various financial instruments).

Each unit of the Group follows the policies, procedures, and controls for credit risk management. All credit risk assessments consider factors such as the counterparty's financial condition, credit rating agencies' ratings, past transaction experiences, current economic environment, and internal rating standards of the Group. The Group also uses certain credit enhancement tools (such as prepayments and insurance) to reduce the credit risk of specific counterparties at appropriate times.

As of December 31, 2025 and 2024, the percentage of the top ten customers' accounts receivable to the Group's total accounts receivable was 67.07% and 78%, respectively. The credit concentration risk of other accounts receivable is relatively low.

The finance department of the Group manages the credit risk of bank deposits and other financial instruments in accordance with the Group's policy. The Group's counterparties are well-established domestic and foreign financial institutions, so there is no significant credit risk.

The Group uses IFRS 9 to evaluate expected credit losses, and the relevant information on credit risk assessment is as follows:

Category	Indicator	The method for measuring expected credit losses	Total Carrying Amount
			2025.12.31	2024.12.31
Simplified method(Note)	—	Expected credit losses during the remaining term	$ 10,979	$9,666

Note: Include notes and accounts receivable.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

5. Liquidity risk management

The Group maintains financial flexibility through cash and cash equivalents, highly liquid marketable securities, bank borrowings, and financing leases. The table below summarizes the contractual maturities of non-derivative financial liabilities of the Group as of the reporting date, based on the earliest date on which the payments are due and using undiscounted cash flows, including the agreed interest. For interest cash flows paid at floating rates, the undiscounted interest amount is derived based on the implied yield curve as of the end of the reporting period.

Non-derivative financial liabilities

	Less than 1 Year	2-3 Years	4-5 Years	More Than 5 Years	Total
2025.12.31
Loans	$ 93,423	47,701	25,146	—	$166,270
Accounts payable	$20,950	—	—	—	$20,950
Non-derivative financial liabilities
	Less than 1 Year	2-3 Years	4-5 Years	More Than 5 Years	Total
2024.12.31
Loans	$148,787	37,341	12,884	—	$199,012
Accounts payable	$13,702	—	—	—	$13,702

The disclosure of the table above regarding derivative financial liabilities is presented using the total undiscounted cash flow.

6. Adjustment of Liabilities from Financing Activities

Adjustment information of liabilities for the year 2025 as follows:

	Short-term loans	Long-term loans	Guarantee deposit received	Total amount of liabilities from financing activities
As of January 1, 2025	$127,085	$68,779	$—	$195,864
Cash flow	(66,962)	32,497	2,000	(32,465)
Non-cash change	(123)	—	—	(123)
As of December 31, 2025	$60,000	$101,276	$2,000	$163,276

Adjustment information of liabilities for the year 2024 as follows:

	Short-term loans	Long-term loans	Total amount of liabilities from financing activities
As of January 1, 2024	$85,260	$36,700	$121,960
Cash flow(Note)	38,067	32,079	70,146
Non-cash change	3,758	—	3,758
As of December 31, 2024	$127,085	$68,779	$195,864

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Fair Value of Financial Instruments

(1) Valuation technology and assumptions used to measure fair value of financial instruments.

Fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The methods and assumptions used by the Group to measure or disclose the fair value of financial assets and financial liabilities are as follows:

a. Cash and cash equivalents, accounts receivable, deposits paid, accounts payable, and other current liabilities are measured at their carrying amounts, which approximate their fair values, primarily because these instruments have short maturities.

b. Financial assets and financial liabilities that are traded in active markets and have standard terms and conditions, such as publicly traded stocks, securities, bonds, and futures, are measured using quoted market prices.

c. Equity instruments that are not traded in active markets, such as privately placed stocks, stocks of public companies not traded in active markets, and stocks of unlisted companies, are measured using market-based methods. This involves estimating fair value using information such as prices of similar instruments that have been traded in active markets or other relevant information (such as discounts for lack of liquidity, price-to-earnings ratios of similar companies, and price-to-book ratios of similar companies).

d. Debt instruments, investments, bank loans, corporate bonds, and other non-current liabilities that do not have quoted market prices are measured using valuation techniques that take into account the counterparty quotes or appropriate valuation techniques. Valuation techniques are based on discounted cash flow analysis, with assumptions for interest rates and discount rates obtained from similar instruments and relevant information (such as dividend yield curves from the TPEx, Reuters commercial paper rate average quotes, and credit risk).

e. Derivative financial instruments that do not have quoted market prices are valued using counterparty quotes or using a discounted cash flow analysis based on dividend yield curves for the remaining term of the derivative. For options, counterparty quotes, appropriate option pricing models (such as Black-Scholes Model), or other valuation methods (such as Monte Carlo Simulation) are used to determine fair value.

(2) Fair Value of Financial Instruments Measured Using Amortized Cost

The carrying amount of financial assets and liabilities measured using amortized cost is considered to be a reasonable approximation of their fair values.

(3) Information on Fair Value Hierarchy of Financial Instruments

Please refer to Note 12, 8 for the fair value hierarchy information for financial instruments of the Group.

Fair Value Hierarchy

(1) Definition of Fair Value Hierarchy

All assets and liabilities measured or disclosed at fair value are classified into their respective levels within the fair value hierarchy based on the significance of the inputs used in measuring the fair value of the asset or liability. The three levels of inputs are defined as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability..

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

(2) Fair Value Measurement Hierarchy Information

The Company did not have any non-recurring assets measured at fair value, and the fair value hierarchy information for recurring assets and liabilities is as follows:

As of December 31, 2025:

	Level 1	Level 2	Level 3	Total
Financial assets measured at fair value:
Financial assets at fair value through profit or loss
Share	$83,292	$—	$—	$83,292
As of December 31, 2024:
	Level 1	Level 2	Level 3	Total
Fair value measured financial assets:
Financial assets at fair value through profit or loss
Share	$95,628	$—	$—	$95,628

Transition between Level 1 and Level 2 of the fair value hierarchy

There were no transitions between Level 1 and Level 2 of the fair value hierarchy for the recurring fair value measurements of assets and liabilities for 2025 and 2024.

Information on Financial Assets and Liabilities in Foreign Currencies with Significant Effect

The significant foreign currency financial assets and liabilities information of the Group is as follows:

	As of December 31, 2025
	Foreign Currency	Exchange Rate	New Taiwan Dollar
Financial asset
Currency:
US dollar	$164	31.4300	$5,155
Chinese Yuan	$3	4.4960	$13
Financial liability
Currency:
US dollar	$7	31.4300	$220
Chinese Yuan	$213	4.4960	$957
	As of December 31, 2024
	Foreign Currency	Exchange Rate	New Taiwan Dollar
Financial asset
Currency:
US dollar	$2,018	32.7850	$66,160
Chinese Yuan	$3,529	4.4780	$15,803
Japanese Yuan	$10,022	0.2099	$2,104
Financial liability
Currency:
US dollar	$1,800	32.7850	$59,013

The above information is disclosed based on the foreign currency book amounts (converted to the functional currency).

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Due to the wide variety of functional currencies used in foreign currency transactions by the Group, it is not feasible to disclose the impact of each significant foreign currency separately. Therefore, the gains and losses on exchange of each currency are aggregated and disclosed. In 2025 and 2024, the Group had gains of NT$1,803 thousand and gains of NT$3,699 thousand, respectively, on the exchange of monetary financial assets and financial liabilities.

10. Capital Management

The primary objective of capital management for the Group is to ensure a sound credit rating and favorable financing costs, in order to support business operations and maximize shareholder equity. The Group manages and adjusts its capital structure based on operating and economic conditions, and may achieve the goal of maintaining and adjusting its capital structure by adjusting dividend payments, returning capital, or issuing new shares.

13. Addition Disclosure

1. Information related to Significant Transactions

(1) Financings provided: See Table 1 attached;
(2) Endorsement/guarantee provided: See Table 2 attached;
(3) Marketable securities held: See Table 3 attached;
(4) Total purchases from or sales to related parties of at least NT$100 million or 20% of the paid-in capital: None;
(5) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: None;
(6) The business relationship between the parent and the subsidiaries and significant transactions between them: See Table 4 attached.
(7) Information on investees: See Table 5.

2. Investment information in Mainland China

(1) Investment information in Mainland China: please refer to Table 6.
(2) Significant transaction matters with the subsidiaries in Mainland China directly or indirectly through third-party territories, as well as their prices, payment terms, and unrealized gains or losses:

a. Purchased amount and percentage, as well as the year-end balance and percentage of related payables: None.
b. Sales amount and percentage, as well as the year-end balance and percentage of related receivables: None.
c. End-of-period balance and purpose of notes endorsed/guaranteed or provided with collateral: None.
d. Property transaction amount and the resulting gain or loss amount: None.
e. Maximum balance, year-end balance, interest rate range, and total interest amount for financing: None.
f. Other significant transaction matters that have a significant effect on current profit or financial position: None.

Mospec Semiconductor Corp. and subsidiaries
Notes to the Consolidated Financial Statements
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

14. Segments Information

The operational segment information is provided to the main operational decision-makers for resource allocation and performance evaluation purposes. The primary operational decision-maker of the Group considers the Group as a single operational segment and uses Group-wide information for resource allocation and performance evaluation, hence there is no need to disclose the profit or loss, assets, and liabilities information of operational segments.

2. Geographic information

(1) Revenue from external customers: Revenue is classified based on the country where the customer is located.

Nation	2025	2024
China	$25,643	$24,371
Korea	8,045	10,276
Hong kong	2,219	5,264
India	3,414	4,756
Taiwan	3,536	3,071
Other	2,694	2,975
Total	$45,551	$50,713

(2) Non-Current Assets:

Nation	As of December 31, 2025	As of December 31, 2024
China	$175,108	$184,612
Taiwan	362,230	315,309
Total	$537,338	$499,921

Non-current assets do not include financial instruments and deferred tax assets.

3. Major Customers Information

The sales amounts to a single customer, which accounted for more than 10% of the net revenue in the fiscal years 2025 and 2024, are as follows:

Customer	2025		2024
	Amount	Percentage of sales(%)	Amount	Percentage of sales(%)
Company A	$12,995	29%	$10,409	21%
Company B	6,516	14%	5,501	11%

Mospec Semiconductor Corp. and subsidiaries' notes to the Consolidated Financial Statements

(Expressed in thousands of NT$, unless otherwise indicated)

Loans to others

Table 1

Number (Note 1)	Creditor	Borrower	General ledger account (Note 2)	Is a related party	Maximum outstanding balance during the year ended December 31, 2024(Note 3)	Balance at December 31, 2024	Actual amount drawn down	Interest rate	Nature of loan (Note 4)	Amount of transactions with borrower (Note 5)	Reason for short-term financing (Note 6)	Allowance for doubtful accounts	Collateral		Limit on loans granted to a single party	Ceiling on total loans granted	Footnote
													Item	Value
0	The Company	H&M Semiconductor (Sichuan) Ltd.	Receivables from related parties	Y	$188,832	$188,832	$164,049	—	2	—	Working capital requirement	—	—	—	$188,582	$188,582	(Note 7, 9)

Note 1: The members filled in for the loans provided by the Company or subsidiaries are as follows:
(1) The Company is '0'.
(2) The subsidiaries are numbered in order starting from '1'

Note 2: Fill in the name of account in which the loans are recognized, such as receivables-related parties, current account with stockholders, prepayments, temporary payments, etc.

Note 3: Fill in the maximum outstanding balance of loans to others during the year ended December 31, 2025

Note 4: The column of "Nature of loan" shall fill in:
(1) "Business transaction" is 1.
(2) "Short-term financing" is 2.

Note 5: Fill in the amount of business transactions when nature of the loan is related to business transactions, which is the amount of business transactions occurred between the creditor and borrower in the current period.

Note 6: Fill in purpose of loan when nature of loan is for short-term financing, for example, repayment of loan, acquisition of equipment, working capital, etc.

Note 7: The Company's operational procedures for making loans to others stipulate that the total amount of external loans provided by the Company shall not exceed 40% of the net equity. However, this limitation does not apply to foreign companies in which the Company directly or indirectly holds 100% of voting shares.

For a single company, loans shall not exceed 40% of the Company's net equity.

Note 8: The amounts of funds to be loaned to others which have been approved by the Board of Directors of a public company in accordance with Article 14, Item 1 of the "Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies" should be included in its published balance of loans to others at the end of the reporting period to reveal the risk of loaning the public company bears, even though they have not yet been appropriated. However, this balance should exclude the loans repaid when repayments are done subsequently to reflect the risk adjustment. In addition, if the Board of Directors of a public company has authorized the Chairman to loan funds in instalments or in revolving within certain lines and within one year in accordance with Article 14, Item 2 of the "Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies", the published balance of loans to others at the end of the reporting period should also include these lines of loaning approved by the Board of Directors, and these lines of loaning should not be excluded from this balance even though the loans are repaid subsequently, for taking into consideration that they could be loaned again thereafter.

Note 9: This transaction was written off when the consolidated financial statements were prepared.

Mospec Semiconductor Corp. and subsidiaries' notes to the Consolidated Financial Statements

(Expressed in thousands of NT$, unless otherwise indicated)

Guarantees and endorsements for other parties

Table 2

Number (Note 1)	Endorser/Guarantor	Party being endorsed/guaranteed		Limit on endorsements/guarantees provided for a single party (Note 3)	Maximum outstanding endorsement / guarantee amount during the period (Note 4)	Outstanding endorsement/guarantee amount at December 31, 2024 (Note 5)	Actual amount drawn down (Note 6)	Amount of endorsements/guarantees secured with collateral	Ratio of accumulated endorsement/guarantee amount to net asset value of the endorser/guarantee company	Ceiling on total amount of endorsements/guarantees provided (Note 3)	Provision of endorsements/guarantees by parent company to subsidiary (Note 7)	Provision of endorsements/guarantees by subsidiary to parent company (Note 7)	Provision of endorsements/guarantees to the party in Mainland China (Note 7)
		Company name	Relationship with the endorser/guarantor (Note 2)
0	Mospec Semiconductor Corp.	H&M Semiconductor (Sichuan) Ltd.	2	$235,728	$97,428	$ –	$ –	$ –	0.00%	$235,728	Y	N	Y

Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:
(1) The Company is '0'.
(2) The subsidiaries are numbered in order starting from '1'.

Note 2: Relationship between the endorser/guarantee and the party being endorsed/guaranteed is classified into the following six categories; fill in the number of category each case belongs to:
(1) Having business relationship.
(2) Subsidiary which owned more than 50 percent by the guarantor.
(3) An investee owned more than 50 percent in total by both the guarantor and its subsidiary.
(4) The parent company that directly or indirectly through its subsidiaries holds more than 50% of the common stock equity of the company.
(5) The parent company fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project.
(6) Due to joint venture, all capital contributing shareholders make endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.
(7) The companies in the same industry provide among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other.

Note 3: According to the operational procedures for endorsement guarantee, when the Company directly or indirectly holds more than 90% of the ordinary voting shares, it may provide endorsement guarantee up to 10% of the Company's latest net worth in order to ensure the amount of money. However, there is no such limit for endorsement guarantee between companies in which the Company directly or indirectly holds 100% of the voting shares. However, the amount of endorsement guarantees shall not exceed 50% of the net worth of the latest financial statements of the Company. Based on the Company's net assets of NT$471,456 thousand as of December 31, 2025, the maximum guarantee amount for a single enterprise shall be NT$235,728 thousand, or 50% of the Company's net assets, where the maximum limit for endorsing guarantees is also NT$235,728 thousand or 50% of the net value as of December 31, 2025.

Note 4: Fill in the year-to-date maximum outstanding balance of endorsements/guarantees provided as of the reporting period.

Note 5: The amount approved by the Board of Directors should be filled in. However, if the Chairman is authorized to decide on the matter in accordance with Article 12, Paragraph 8 of the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies, it refers to the amount determined by the Chairman.

Note 6: Fill in the actual amount of endorsements/guarantees used by the endorsed/guaranteed company.

Note 7: Fill in 'Y' for those cases of provision of endorsements/guarantees by listed parent company to subsidiary, provision by subsidiary to listed parent company, and provision to the party in Mainland China.

Mospec Semiconductor Corp. and subsidiaries' notes to the Consolidated Financial Statements

(Expressed in thousands of NT$, unless otherwise indicated)

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

Table 3

Securities held by	Category of Marketable Securities (Note 1)	Name of Marketable Securities(Note 1)	Relationship with the securities issuer(Note 2)	Genearl ledger account	As of December 31, 2025				Footnote
					Number of shares	Book value (Note 3)	Ownership (%)	Fair value
Mospec Semiconductor Corp.	OTC stock	Taiwan Speciality Chemicals Corporation	—	Financial asset measured at fair value through profit/loss	263,583	$83,292	0.18%	$83,292	—

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities within the scope of IFRS9, "Financial instruments: recognition and measurement".
Note 2: Leave the column blank if the issuer of marketable securities is non-related party.
Note 3: Fill in the amount after adjusted at fair value and deducted by accumulated impairment for the marketable securities measured at fair value; fill in the acquisition cost or amortised cost deducted by accumulated impairment for the marketable securities not measured at fair value.
Note 4: The number of shares of securities and their amounts pledged as security or pledged for loans and their restrictions on use under some agreements should be stated in the footnote if the securities presented herein have such conditions.
Note 5: As it is a financial product, there is no shares or ownership percentage.

Mospec Semiconductor Corp. and subsidiaries' notes to the Consolidated Financial Statements

(Expressed in thousands of NT$, unless otherwise indicated)

Significant inter-company transactions during the reporting periods

Table 4

Number (Note 1)	Company name	Counterparty	Relationship (Note 2)	Transaction(Note 4)
				General ledger account	Amount (Note 4)	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 3)
0	Mospec Semiconductor Corp.	H&M Semiconductor(Sichuan) Ltd.	1	Sale	1,268	There is no comparable transaction with unrelated parties for the sales price. Net 4 to 10 months from the end of the month upon issuance of invoice.	3%
				Purchase	14,052	There is no comparable transaction with unrelated parties for the purchase price. Net 4 to 10 months from the end of the month upon issuance of invoice.	31%
				Other receivables	164,049	Fund financing	23%

Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:
(1) The Company is '0'.
(2) The subsidiaries are numbered in order starting from '1'.

Note 2: Relationship between transaction company and counterparty 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.):
(1) Parent company to subsidiary.
(2) Subsidiary to parent company
(3) 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

Note 4: This transaction was written off when the consolidated financial statements were prepared.

Mospec Semiconductor Corp. and subsidiaries' notes to the Consolidated Financial Statements

(Expressed in thousands of NT$, unless otherwise indicated)

Information on investees (not including investee company of Mainland China)

Table 5

Investor	Investee (Note 1, Note 2)	Location	Main business activities	Currency	Initial investment amount(thousand dollar)		Shares held as of December 31, 2024			Net profit (loss) of the investee For the year ended December 31, 2025 (Note 2)	Investment profit (loss) recognized by the Company For the year ended December 31, 2025 (Note 3)	Footnote
					Balance as of December 31, 2025	Balance as of December 31, 2024	Number of shares	Ownership (%)	Book value
The Company	NHM B.V.I. Holdings Ltd.	Quastishy Building P.O.Box 4389, Road Town, Tortola, British Virgin Islands.	Reinvestment activities	NTD	$466,874	$466,874	10,804,742	100.00%	$46,936	$(10,263)	$(10,050)	(Note 4)

Note 1: If a public company is equipped with an overseas holding company and takes consolidated financial report as the main financial report according to the local law rules, it can only disclose the information of the overseas holding company about the disclosure of related overseas investee information.
Note 2: If situation does not belong to Note 1, fill in the columns according to the following regulations:
(1) The columns of "Investee", "Location", "Main business activities", "Initial investment amount" and "Shares held as at December 31, 2025" should fill orderly in the Company's (public company's) information on investees and every directly or indirectly controlled investee's investment information, and note the relationship between the Company (public company) and its investee each (ex. direct subsidiary or indirect subsidiary) in the "footnote" column.
(2) The "Net profit (loss) of the investee for the year ended December 31, 2025" column should fill in amount of net profit (loss) of the investee for this period.
(3) The "Investment profit (loss) recognized by the Company for the year ended December 31, 2025" column should fill in the Company (public company) recognized investment profit(loss) of its direct subsidiary and recognized investment profit (loss) of its investee accounted for under the equity method for this period. When filling in recognized investment profit (loss) of its direct subsidiary, the Company (public company) should confirm that direct subsidiary's net profit (loss) for this period has included its investment profit (loss) which shall be recognised by regulations.
Note 3: The investment profit (loss) recognized by the Company include unrealized profit (loss) between affiliates.
Note 4: This transaction was written off when the consolidated financial statements were prepared.

Mospec Semiconductor Corp. and subsidiaries' notes to the Consolidated Financial Statements

(Expressed in thousands of NT$, unless otherwise indicated)

Information on investments in Mainland China

Table 6

Investee in Mainland China	Main business activities	Paid-in capital	Investment method (Note 1)	Accumulated outflow of investment from Taiwan as of 2024/1/1	Investment flows for the period		Accumulated outflow of investment from Taiwan as of December 31, 2024	Net income (losses) of the investee	Ownership held by the Company (direct of indirect) (%)	Investment income(loss) recognized by the Company for the year ended December 31, 2024(Note 2,4)	Book value of investments in Mainland China as of December 31, 2024	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2024
					Outflow	Inflow
H&M Semiconductor (Sichuan) Ltd.	Manufacturing, processing and trading of new electronic components	$296,190 (US$ 10,000 thousand)	2 NHM B.V.I. Holdings Ltd.	$296,190	$—	$—	$296,190	$(11,646)	100.00%	$(11,653)	$21,622	$—
Accumulated Investment in Mainland China as of December 31, 2025					Investment Amounts Authorized by Investment Commission, MOEA					Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA(Note 3)
$296,190 (US$ 10,000 thousand)					$296,190 (US$ 10,000 thousand)					$282,874 (Net worth $471,456 thousand*60%)

Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:
(1) Directly invest in a company in Mainland China
(2) Through investing in an existing company, in the third area (please specify the investing company in that third region).
(3) Others
Note 2: The financial statements that are audited and attested by R.O.C. parent company's CPA.
Note 3: Pursuant to the 'Guidelines Governing the Review of Investment or Technical Cooperation in the Mainland Area' dated on August 29, 2008, the total amount of investment shall not exceed 60% of the Company's net worth.
Note 4: This transaction was written off when the consolidated financial statements were prepared.

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MOSPEC — Annual Report 2025

52082_rns_2026-04-30_a4bd86eb-e7f6-42f5-a3d2-2b488266e6e6.pdf

Mospec Semiconductor Corp. & Subsidiaries

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

Consolidated Financial Statements

Table of contents

Representation Letter

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

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Other Matter

Financial assets measured at amortized cost

Financial assets measured at fair value through other comprehensive income

Financial assets at fair value through profit or loss

B. Impairment of financial assets

Equity instruments

Hybrid Instruments

Financial Liabilities

Financial Liabilities at Fair Value through Profit or Loss

Financial liabilities measured at amortized cost

Derecognition of Financial Liabilities.

E. Offsetting of Financial Assets and Liabilities

(9) Derivative Financial Instruments

Lessee

Current Income Tax

Deferred Income Tax

11. Retirement Benefits Plan

Defined contribution plans

(6) Status of Income Tax Filing

21. Earnings (loss) per share

(1) Basic earnings per share

7. Related party Transactions

8. Pledged Assets

5. Liquidity risk management

6. Adjustment of Liabilities from Financing Activities

10. Capital Management

13. Addition Disclosure

1. Information related to Significant Transactions

2. Investment information in Mainland China

14. Segments Information

2. Geographic information

3. Major Customers Information

More from MOSPEC

MOSPEC Annual Report 2025