Sunspring Metal Corporation

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

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders
Sunspring Metal Corporation

Opinion

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

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

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended December 31, 2025. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matters of the Company’s financial statements for the year ended December 31, 2025 are described as follows:

Revenue Recognition

The growth rate of sales revenue from some of the specific customers is significantly higher than the average sales revenue; therefore, the specific revenue from these customers was identified as a key audit matter. Refer to Note 4 to the financial statements for the related accounting policies on sales revenue.

Our audit procedures performed in regard to the key audit matter included the following:

We understood the design and implementation of the main internal controls for the abovementioned customer-specific sales revenue and tested if these controls were performed effectively.

We selected appropriate samples from the abovementioned customer-specific sales receipts and checked the customer orders, delivery orders and payment collections corresponding to sales revenue to confirm the validity of sales revenue.

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

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

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

Those charged with governance, including the audit committee, are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

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

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

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

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

The engagement partners on the audits resulting in this independent auditors' report are Shao-Chun Wu and Li-Tung Wu.

Deloitte & Touche
Taipei, Taiwan
Republic of China
Feb 25, 2026

Notice to Readers

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

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

SUNSPRING METAL CORPORATION

BALANCE SHEETS

DECEMBER 31, 2025 AND 2024

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

	2025		2024
ASSETS	Amount	%	Amount	%
CURRENT ASSETS
Cash and cash equivalents (Note 6)	$ 736,567	6	$ 748,448	6
Trade receivables-non-related parties (Note 8)	1,984,405	15	2,318,078	17
Trade receivables-related parties (Note 27)	14,229	-	2,071	-
Net finance lease receivables -current (Note 9)	18,296	-	-	-
Other receivables (Note 8)	42,600	-	44,383	-
Inventories (Note 10)	938,685	7	987,437	7
Other current assets (Note 27)	42,419	-	46,829	-
Total current assets	3,777,201	28	4,147,246	30
NON-CURRENT ASSETS
Financial assets at amortized cost – non-current (Notes 7 and 28)	310,341	2	16,009	-
Investments accounted for using equity method (Note 11)	5,246,625	40	5,293,367	38
Property, plant and equipment (Notes 12, 27 and 28)	3,497,580	26	3,894,182	28
Right-of-use assets (Notes 13 and 27)	256,055	2	489,820	4
Intangible assets (Note 14)	5,105	-	6,827	-
Deferred tax assets (Note 21)	104,320	1	67,705	-
Prepayments for machinery and equipment	70,589	1	60,694	-
Refundable deposits	6,701	-	6,590	-
Net finance lease receivables - non-current (Note 9)	27,461	-	-	-
Net defined benefit assets - non-current (Note 17)	26,678	-	24,304	-
Total non-current assets	9,551,455	72	9,859,498	70
TOTAL	$ 13,328,656	100	$ 14,006,744	100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term borrowings (Note 15 and 28)	$ 1,190,000	9	$ 1,100,000	8
Trade payables - non-related parties	478,469	4	321,647	2
Trade payables- related parties (Note 27)	1,631,713	12	2,025,962	15
Other payables- non-related parties (Note 16)	188,395	2	204,114	2
Other payables - related parties (Notes 16 and 27)	907,060	7	1,025,602	7
Current tax liabilities	16,185	-	3,761	-
Lease liabilities - current (Notes 13 and 27)	38,642	-	52,265	-
Current portion of long-term borrowings (Notes 15 and 28)	31,987	-	56,987	-
Other current liabilities	108	-	108	-
Total current liabilities	4,482,559	34	4,790,446	34
NON-CURRENT LIABILITIES
Long-term borrowings (Notes 15 and 28)	680,219	5	510,716	4
Deferred tax liabilities (Note 21)	271,625	2	232,545	2
Lease liabilities - non-current (Notes 13 and 27)	274,590	2	465,133	3
Deferred revenue (Note 23)	10,691	-	11,746	-
Guarantee deposits received	1,647	-	-	-
Total non-current liabilities	1,238,772	9	1,220,140	9
Total liabilities	5,721,331	43	6,010,586	43
EQUITY
Ordinary shares - par value of NT$10 per share	1,999,942	15	1,999,942	14
Capital surplus	1,911,126	14	1,911,126	14
Retained earnings
Legal reserve	946,488	7	891,513	6
Special reserve	72,908	1	334,900	3
Unappropriated earnings	2,860,406	21	2,931,585	21
Other equity	(183,545)	(1)	(72,908)	(1)
Total equity	7,607,325	57	7,996,158	57
TOTAL	$ 13,328,656	100	$ 14,006,744	100

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

SUNSPRING METAL CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

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

	2025		2024
	Amount	%	Amount	%
SALES (Notes 19 and 27)	$ 5,436,592	100	$ 6,712,483	100
COST OF GOODS SOLD (Notes 10, 20 and 27)	5,110,972	94	5,999,474	89
GROSS PROFIT	325,620	6	713,009	11
Realized gain on transactions with subsidiaries	9,256	-	1,105	-
GROSS PROFIT, NET	334,876	6	714,114	11
OPERATING EXPENSES (Notes 20 and 27)
Selling and marketing expenses	167,645	3	177,364	3
General and administrative expenses	188,639	4	192,998	3
Research and development expenses	15,018	-	16,460	-
Expected credit loss reversed (Note 8)	(599)	-	(199)	-
Total operating expenses	370,703	7	386,623	6
PROFIT (LOSS) FROM OPERATIONS	(35,827)	(1)	327,491	5
NON-OPERATING INCOME AND EXPENSES
Interest income	39,276	1	59,111	1
Other income (Notes 23 and 27)	20,288	-	13,870	-
Foreign exchange gain, net	56,074	1	95,755	1
Loss on financial assets at fair value through profit or loss, net	-	-	(518)	-
Share of profits of subsidiaries	54,639	1	194,483	3
Interest expense (Notes 23 and 27)	(33,174)	-	(53,903)	(1)
Other expenses	(871)	-	(970)	-
Total non-operating income and expenses	136,232	3	307,828	4
PROFIT BEFORE INCOME TAX	100,405	2	635,319	9
INCOME TAX EXPENSE (Note 21)	21,500	1	90,795	1
NET PROFIT FOR THE YEAR	78,905	1	544,524	8

(Continued)

SUNSPRING METAL CORPORATION
STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	2025		2024
	Amount	%	Amount	%
OTHER COMPREHENSIVE INCOME (LOSS)
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit plans	$ 3,609	-	$ 6,538	-
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of the financial statements of foreign operations	(110,637)	(2)	261,992	4
Income tax relating to items that may be reclassified subsequently to profit or loss (Note 21)	(721)	-	(1,308)	-
Other comprehensive income (loss) for the year, net of income tax	(107,749)	(2)	267,222	4
TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE YEAR	$ (28,844)	(1)	$ 811,746	12
EARNINGS PER SHARE (Note 22)
Basic	$ 0.39		$ 2.72
Diluted	$ 0.39		$ 2.70

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

SUNSPRING METAL CORPORATION

STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

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

	Equity Attributable to Owners of the Company (Note 18)
	Ordinary Shares	Capital Surplus	Retained Earnings			Other Equity Exchange Differences on Translation of the Financial Statements of Foreign Operations	Total Equity
			Special Reserve	Legal Reserve	Unappropriated Earnings
BALANCE AT JANUARY 1, 2024	$ 1,999,942	$ 1,911,126	$ 859,963	$ 270,462	$ 2,637,814	$ (334,900)	$ 7,344,407
Appropriation of 2023 earnings
Legal reserve	-	-	31,550	-	(31,550)	-	-
Special reserve	-	-	-	64,438	(64,438)	-	-
Cash dividends distributed by the Company - NT$0.8 per share	-	-	-	-	(159,995)	-	(159,995)
	-	-	31,550	64,438	(255,983)	-	(159,995)
Net profit for the year ended December 31, 2024	-	-	-	-	544,524	-	544,524
Other comprehensive income for the year ended December 31, 2024 net of income tax	-	-	-	-	5,230	261,992	267,222
Total comprehensive income for the year ended December 31, 2024	-	-	-	-	549,754	261,992	811,746
BALANCE AT DECEMBER 31, 2024	1,999,942	1,911,126	891,513	334,900	2,931,585	(72,908)	7,996,158
Appropriation of 2024 earnings
Legal reserve	-	-	54,975	-	(54,975)	-	-
Cash dividends distributed by the Company - NT$1.8 per share	-	-	-	-	(359,989)	-	(359,989)
Reversal of Special reserve	-	-	-	(261,992)	261,992	-	-
	-	-	54,975	(261,992)	(152,972)	-	(359,989)
Net profit for the year ended December 31, 2025	-	-	-	-	78,905	-	78,905
Other comprehensive income for the year ended December 31, 2025, net of income tax	-	-	-	-	2,888	(110,637)	(107,749)
Total comprehensive income (loss) for the year ended December 31, 2025	-	-	-	-	81,793	(110,637)	(28,844)
BALANCE AT DECEMBER 31, 2025	$ 1,999,942	$ 1,911,126	$ 946,488	$ 72,908	$ 2,860,406	$ (183,545)	$ 7,607,325

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

SUNSPRING METAL CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
(In Thousands of New Taiwan Dollars)

	2025	2024
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	$ 100,405	$ 635,319
Adjustments for:
Depreciation expenses	500,674	509,354
Amortization expenses	8,906	14,972
Expected credit loss reversed on trade receivables	(599)	(199)
Net loss on fair value changes of financial assets and liabilities at fair value through profit or loss	-	3,710
Interest expense	33,174	53,903
Interest income	(39,276)	(59,111)
Share of profits of subsidiaries	(54,639)	(194,483)
Impairment loss recognized (reversed) on non-financial assets	31,672	(20,420)
Unrealized gain on transactions with subsidiaries	(9,256)	(1,105)
Foreign currency exchange gain, net	(58,912)	(88,634)
Income from the sublease of the right-of-use asset	(14,040)	-
Changes in operating assets and liabilities
Trade receivables	334,374	325,395
Other receivables	18,814	(27,058)
Inventories	(17,477)	(1,688)
Other current assets	6,929	4,614
Trade payables	1,235	(327)
Other payables	(188,293)	1,527
Other current liabilities	8,429	(8,179)
Net defined benefit assets	-	(23)
Deferred revenue	(1,055)	(2,834)
Cash generated from operations	661,065	1,144,733
Interest received	37,200	60,711
Interest paid	(31,814)	(51,345)
Income taxes paid	(7,332)	(33,008)
Net cash generated from operating activities	659,119	1,121,091
CASH FLOWS FROM INVESTING ACTIVITIES
Decrease (increase) in financial assets at amortized cost	(294,332)	614,050
Payments for property, plant and equipment	(13,570)	(75,284)
Proceeds from disposal of property, plant and equipment	-	1,838
Increase in refundable deposits	(112)	-
Acquisition of intangible assets	(1,512)	(1,799)
Increase in finance lease receivables	(47,043)	-
Increase in other non-current assets	-	(3,076)
Increase in prepayments for machinery and equipment	(19,656)	(6,940)
Net cash generated from (used in) investing activities	(376,225)	528,789

(Continued)

SUNSPRING METAL CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
(In Thousands of New Taiwan Dollars)

	2025	2024
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds (repayments) from short-term borrowings	$ 90,000	$ (470,000)
Decrease in short-term bills payable	-	(399,727)
Proceeds from long-term borrowings	300,000	200,000
Repayments of long-term borrowings	(156,987)	(1,188,348)
Increase in guarantee deposits received	1,647	-
Increase (decrease) in other payables - related parties	(118,542)	372,278
Repayment of the principal portion of lease liabilities	(52,394)	(51,671)
Dividends paid	(359,989)	(159,995)
Net cash used in financing activities	(296,265)	(1,696,463)
EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS HELD IN FOREIGN CURRENCIES	1,490	111,301
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(11,881)	64,718
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR	748,448	683,730
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	$ 736,567	$ 748,448
The accompanying notes are an integral part of the financial statements.		(Concluded)

SUNSPRING METAL CORPORATION

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. GENERAL INFORMATION

Sunspring Metal Corporation (the "Company") was incorporated in July 1984. It mainly engaged in the manufacturing, processing and trading of water pipe switch accessories, gate valves, corks, copper pipe fittings and waterway sanitary equipment.

The Company was listed on the Taiwan Stock Exchange in November 2007.

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

2. APPROVAL OF FINANCIAL STATEMENTS

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

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

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

Amendments to IAS 21 "Lack of Exchangeability"

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

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

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

The initial application of the IFRSs endorsed and issued into effect by the FSC did not have any material impact on the accounting policies of the Company.

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

New, Amended and Revised Standards and Interpretations	Effective Date Announced by IASB (Note)
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture”	To be determined by IASB
IFRS 18 “Presentation and Disclosures in Financial Statements”	January 1, 2027 (Note 2)
IFRS 19 “Subsidiaries without Public Accountability : Disclosures” (including the 2025 amendment to IFRS 19)	January 1, 2027
Amendments to IAS 21 “Translation to a Hyperinflationary Presentation Currency”	January 1, 2027

Note : Unless stated otherwise, the above IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

Note2: On September 25, 2025, the FSC announced that IFRS 18 will take effect starting from January 1, 2028. Domestic entities could elect to apply IFRS 18 for an earlier period after the endorsement of IFRS 18 by the FSC.

IFRS 18 “Presentation and Disclosures in Financial Statements”

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

Items of income and expenses included in the statement of profit or loss shall be classified into the operating, investing, financing, income taxes and discounted operations categories.
The statement of profit or loss shall present totals and subtotals for operating profit or loss, profit or loss before financing and income taxes and profit or loss.
Provides guidance to enhance the requirements of aggregation and disaggregation: The Company and its subsidiaries shall identify the assets, liabilities, equity, income, expenses and cash flows that arise from individual transactions and other events and shall classify and aggregate them into groups based on shared characteristics, so as to result in the presentation in the primary financial statements of line items that have at least one similar characteristics. The Company and its subsidiaries shall disaggregate items with dissimilar characteristics in the primary financial statements and in the notes. The Company and its subsidiaries labels item as 'other' only if it cannot find a more informative label.
Disclosure on Management-defined Performance Measures (MPMs): When in public communications outside financial statements and communicating to users of financial statements management's view of an aspects of the financial performance of the Company and its subsidiaries as a whole, the Company and its subsidiaries shall disclose related information about its MPMs in a single note to the financial Statements, including the description of such measures, calculations, reconciliations to the subtotal or total specified by IFRS Accounting Standards and the income tax and non-controlling interest effects of related reconciliation items.

In addition, the IAS 7 "Statement of Cash Flows" has been amended as follows:

When the Company prepares its cash flow from operating activities using the indirect method, it should use operating profit or loss as the starting point for adjustment.
Interest and dividends received by the Company should be classified as investing activities, while interest and dividends paid should be classified as financing activities. If the Company is assessed to have a specific principal operating activity, the types of dividend income, interest income and interest expense reported in the income statement shall be considered to determine the classification
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of receiving dividends, receiving interest and paying interest in the cash flow statement. However, each of the above cash flows can only be classified in a single activity in the cash flow statement.

As of the date the financial statements were authorized for issue, the Company is continuously assessing the possible impact that the application of the above standards and interpretations will have on the Company's financial position and financial performance and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

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

b. Basis of preparation

The financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value and net defined benefit assets which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
3) Level 3 inputs are unobservable inputs for an asset or liability.

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

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

Current assets include:

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

Current liabilities include:

1) Liabilities held primarily for the purpose of trading;

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2) Liabilities due to be settled within 12 months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the consolidated financial statements are authorized for issue; and

3) Liabilities for which the Company does not have an unconditional right to defer settlement for at least 12 months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

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

d. Foreign currencies

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

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

Non-monetary items denominated in foreign currencies that are measured at fair value are retranslated at the rates prevailing at the date when the fair value is determined. Exchange differences arising from the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income; in which cases, the exchange differences are also recognized directly in other comprehensive income.

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

For the purpose of presenting financial statements, the assets and liabilities of the Company's foreign operations (including the subsidiaries in other countries that use currencies which are different from the Corporation) are translated into the New Taiwan dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising are recognized in other comprehensive income.

e. Inventories

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

f. Investments in subsidiaries

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

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

Changes in the Company's ownership interest in a subsidiary that do not result in the Company losing control of the subsidiary are equity transactions. The Company recognizes directly in equity any difference between the carrying amount of the investment and the fair value of the consideration paid or received.

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Profits or losses resulting from downstream transactions are eliminated in full only in the parent company's financial statements. Profits and losses resulting from upstream transactions and transactions between subsidiaries are recognized only in the parent company's financial statements only to the extent of interests in the subsidiaries that are not related to the Company.

g. Property, plant, and equipment

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

Property, plant and equipment in the course of construction are measured at cost less any recognized impairment loss. Cost includes professional fees and borrowing costs eligible for capitalization. Such assets are depreciated and classified to the appropriate categories of property, plant and equipment when completed and ready for their intended use.

Except for freehold land which is not depreciated, the depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effects of any changes in the estimates accounted for on a prospective basis.

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

h. Intangible assets

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

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

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

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

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually and whenever there is an indication that the assets may be impaired.

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

When an impairment loss is subsequently reversed, the carrying amount of the corresponding asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount (less amortization and depreciation) that would have been determined had no

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impairment loss been recognized on the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

j. Financial instruments

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

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

1) Financial assets

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

a) Measurement categories

Financial assets are classified into the following categories: financial assets at FVTPL, financial assets at amortized cost.

i. Financial asset at FVTPL

Financial assets are classified as at FVTPL when such financial assets are mandatorily classified as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

Financial assets at FVTPL are subsequently measured at fair value, with any remeasurement gains or losses on such financial assets are recognized in other gains or losses. Fair value is determined in the manner described in Note 26.

ii. Financial assets at amortized cost

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

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

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

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

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

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

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

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

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

ii) Breach of contract, such as a default;

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

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

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

b) Impairment of financial assets

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

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

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

For internal credit risk management purposes, the Company considers the following situations indication that a financial asset is in default (without taking into account any collateral held by the Company):

i. Internal or external information shows that the debtor is unlikely to pay its creditors.

ii. When a financial asset is more than 90 days past due unless the Company has reasonable and corroborative information to support a more lagged default criterion.

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

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c) Derecognition of financial assets

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

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

2) Financial liabilities

a) Subsequent measurement

Except the following situations, all the financial liabilities are measured at amortized cost using the effective interest method:

Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when such financial liabilities are held for trading.

Financial liabilities held for trading are stated at fair value, and any gains or losses on such financial liabilities are recognized in other gains or losses; any remeasurement gains or losses on such financial liabilities are recognized in other gains or losses.

b) Derecognition of financial liabilities

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

k. Revenue recognition

The Company identifies contracts with customers, allocates the transaction price to the performance obligations, and recognizes revenue when performance obligations are satisfied.

Sales of goods are recognized as revenue when the goods are delivered to the customer’s specific location/the goods are shipped/the goods are picked up because it is the time when the customer has full discretion over the manner of distribution and bears the risks of obsolescence. Revenue and trade receivables are recognized concurrently.

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

l. Leases

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

1) The Company as lessor

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

When the Company subleases a right-of-use asset, it classifies the sublease as a right-of-use asset (not the underlying asset). However, if the main lease is a short-term lease for which the merged

17 -

company is eligible for recognition exemption, the sublease is classified as an operating lease.

Under finance leases, lease payments include fixed payments. The net investment in a lease is measured and expressed as finance lease receivables, which is the sum of the present value of the lease payments receivable and the unguaranteed residual value, plus the original direct costs. Finance income is amortized over accounting periods to reflect the fixed rate of return that the Company can obtain from its net investment in leases not yet due in each period. For lease modifications not treated as separate leases, if the modification takes effect on the lease incorporation date, the lease is classified as an operating lease, and the modification is treated as a new lease, with the carrying amount measured at the balance of finance lease receivables as of the effective date of the modification. Other lease negotiations are adjusted for finance lease receivables in accordance with IFRS 9.

Under an operating lease, lease payments, excluding the incentives for the lease, are recognized as income on a straight-line basis over the relevant lease term. The original direct costs incurred in acquiring the operating lease are added to the carrying amount of the underlying asset and recognized as expenses on a straight-line basis over the lease term.

2) The Company as lessee

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

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the balance sheets.

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

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments, in-substance fixed payments, variable lease payments which depend on and index or a rate. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses the lessee's incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term or a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the balance sheets.

For sale and leaseback transactions, if the transfer of an asset satisfies the requirements of IFRS 15 to be accounted for as a sale, the Company recognizes only the amount of any gain or loss which relates to the rights transferred to the buyer-lessor, and adjusts the off-market terms to measure the sale proceeds at fair value. If the transfer does not satisfy the requirements of IFRS 15 to be accounted for as a sale, it is accounted for as a financing transaction.

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m. Government grants

Government grants are not recognized until there is reasonable assurance that the Company will comply with the conditions attached to them and that the grants will be received.

Government grants related to income are recognized in profit or loss on a systematic basis over the periods in which the Company recognizes as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Company should purchase, construct or otherwise acquire non-current assets are recognized as deferred revenue and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related costs are recognized in profit or loss in the period in which they become receivable.

The benefit of a government loan received at a below-market rate of interest is treated as a government grant measured as the difference between the proceeds received and the fair value of the loan based on prevailing market interest rates.

n. Employee benefits

1) Short-term employee benefits

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

2) Retirement benefits

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

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost and net interest on the net defined benefit assets are recognized as employee benefits expense in the period in which they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occurs. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit assets represent the actual surplus in the Company's defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

o. Taxation

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

1) Current tax

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

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

19 -

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

2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

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

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

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

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

3) Current and deferred taxes for the year

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

CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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

After evaluation by the management of the Company, there were no significant uncertainties in the accounting policies, estimates and underlying assumptions adopted by the Company.

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6. CASH AND CASH EQUIVALENTS

	December 31
	2025	2024
Cash on hand	$ 73	$ 73
Checking accounts and demand deposits	133,730	62,873
Time deposits with original maturities less than 3 months	602,764	685,502
	$ 736,567	$ 748,448

7. FINANCIAL ASSETS AT AMORTIZED COST

	December 31
	2025	2024
Non-current
Pledged time deposits	$ 310,341	$ 16,009

For information on financial asset pledges measured at amortized cost, please refer to the note 28.

8. TRADE RECEIVABLES AND OTHER RECEIVABLES

	December 31
	2025	2024
Trade receivables
Trade receivables	$ 1,984,645	$ 2,318,917
Less: Allowance for impairment loss	(240)	(839)
	$ 1,984,405	$ 2,318,078
Other receivable
Other receivable	$ 42,600	$ 44,383
Less: Allowance for impairment loss	-	-
	$ 42,600	$ 44,383

The average credit period of the sale of goods is 60-140 days. No interest is charged on trade receivables. The Company adopted a policy of using other publicly available financial information or its own trading records to rate its customers. In order to minimize credit risk, the management of the Company has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Company reviews the recoverable amount of each individual trade debt at the end of the year to ensure that adequate allowance is made for possible irrecoverable amounts. In this regard, the management believes the Company's credit risk was significantly reduced.

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

The Company writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For trade receivables that have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

Other receivable mainly consist of business tax refunds receivable and interest receivable. The Company adopted a policy of conducting with counterparties of good credit standing, and obtain adequate collateral when necessary to mitigate the risk of financial loss due to default. The Company continuously monitors credit exposure and the credit ratings of counterparty, credit rating information is assigned to counterparties based on their historical transaction records. The Company assesses the expected credit loss rate of other receivable to be 0% for the years ended December 31, 2025 and 2024.

The following table details the loss allowance of trade receivables:

	Not Past Due	Past Due 1 to 60 Days	Past Due 61 to 90 Days	Past Due Over 90 Days	Total
December 31, 2025
Expected credit loss rate	0%	0.1%-5.29%	12.12%	70.9%-100%
Gross carrying amount	$ 1,945,650	$ 38,978	$ 17	$ -	$ 1,984,645
Loss allowance (Lifetime ECL)	-	(236)	(4)	-	(240)
Amortized cost	$ 1,945,650	$ 38,742	$ 13	$ -	$ 1,984,405
December 31, 2024
Expected credit loss rate	0-0.01%	0.26%-2.92%	4.99%	63.15%-100%
Gross carrying amount	$ 2,108,454	$ 209,236	$ 1,227	$ -	$ 2,318,917
Loss allowance (Lifetime ECL)	(217)	(562)	(60)	-	(839)
Amortized cost	$ 2,108,237	$ 208,674	$ 1,167	$ -	$ 2,318,078

The movements of the loss allowance of trade receivables and other receivables were as follows:

	For the Year Ended December 31
	2025		2024
	Trade Receivables	Other Receivables	Trade Receivables	Other Receivables
Balance, beginning of year	$ 839	$ -	$ 1,002	$ 36
Expected credit loss (reversed)	(599)	-	(163)	(36)
Balance, end of year	$ 240	$ -	$ 839	$ -

9. FINANCE LEASE RECEIVABLE

	December 31, 2025
Undiscounted lease payment
The first Year	$ 19,136
The second Year	19,136
The third Year	8,771
	47,043
Less: Unearned financing income	( 1,286 )
Net investment in leases (expressed as finance lease receivable)	$ 45,757

In August and November of 2025, the Company subleased the leased right-of-use asset located in Huiguo Section, Xitun District, Taichung City. Since the remaining lease term of the main lease was fully subleased, it was classified as a finance lease.

The implied interest rate under the lease agreement remains unchanged after the contract date. As of December 31, 2025, the implied interest rate for the finance lease was 2.345% per annum.

The lease agreement between the Company and the lessee includes general risk management policies to mitigate the residual asset risk of the leased building at the end of the lease term.

The Company measures the allowance for loss on finance lease receivables based on expected credit losses over the lease term. As of December 31, 2025, there were no overdue lease receivables, and considering the counterparty's past default record, the future development of the related industries of the leased assets, and the value of the collateral, the Company believes that the aforementioned finance lease receivables have not been impaired.

10. INVENTORIES

	December 31
	2025	2024
Merchandise and finished goods	$ 387,868	$ 496,500
Work in process	231,443	221,690
Raw materials and supplies	319,374	269,247
	$ 938,685	$ 987,437

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

	For the Year Ended December 31
	2025	2024
Cost of goods sold	$ 5,008,423	$ 5,983,113
Unallocated fixed production overhead	69,928	33,092
Inventory write-downs (reversed)	31,672	(20,420)
Other	949	1,689
	$ 5,110,972	$ 5,997,474

Inventory write-downs reversed increase because of the inventory digestion.

11. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

	December 31
	2025	2024
Non-listed companies
Sunspring Holding Corporation (SSH)	$ 4,631,821	$ 4,673,005
Sunspring America Inc. (SSA)	582,471	584,484
Sunspring Automation Corporation (SAC)	32,333	35,878
	$ 5,246,625	$ 5,293,367

The Company's percentage of ownership and voting rights in subsidiaries at the end of the year are as follows:

Investor	Investee	Nature of Activities	Proportion of Ownership
			2025	2024
The Corporation	Sunspring Holding Corporation (SSH)	International investment	100	100
	Sunspring Automation Corporation (SAC)	Installation and sale of automatic control equipment	96.5	96.5
	Sunspring America Inc. (SSA)	Manufacturing and sales of sanitation, construction equipment, metal molds and hard parts	100	100
SSH	Sunspring International Corporation (SIC)	International investment	100	100
	Golden Faith International Corporation (GFI)	International investment	100	100
SIC	Sunspring Metal (Zhuhai) Corporation (SSZ)	Manufacturing and sales of sanitation, construction equipment, metal molds and hard parts	100	100
GFI	Sunspring Industrial Ltd. (SSI)	Manufacturing and sales of sanitation, construction equipment, metal molds and hard parts	100	100

The subsidiary SAC passed a board resolution in February 2025 to carry out a capital reduction of $42,000 thousand to offset losses and to use capital reserves of $634 thousand to cover losses. The resolution was approved by the shareholders' meeting in April 2025, with June 17, 2025 as the base date for capital reduction, and the change registration was completed on June 26, 2025.

Share of profit and loss from equity-accounted subsidiaries in 2025 and 2024 was recognized based on audited financial statements of the respective subsidiaries for the corresponding periods.

12. PROPERTY, PLANT AND EQUIPMENT

	For the Year Ended December 31, 2025
	Buildings	Machinery and equipment	Transportation equipment	Office equipment	Miscellaneous equipment	Construction in progress and equipment pending acceptance	Total
Cost
Beginning Balance	$1,932,435	$4,027,087	$ 36,692	$ 159,950	$1,075,005	$ 1,999	$7,233,168
Additions	2,000	1,270	-	-	654	5,837	9,761
Disposals	-	-	-	( 797 )	( 152 )	-	( 949 )
Reclassified Amount	-	3,905	106	954	48,848	( 5,735 )	48,078
Ending Balance	$1,934,435	$4,032,262	$ 36,798	$ 160,107	$1,124,355	$ 2,101	$7,290,058
Accumulated depreciation
Beginning Balance	$ 476,194	$2,093,692	$ 32,921	$ 155,346	$ 580,833	$ -	$3,338,986
Additions	44,438	308,223	1,168	2,436	98,176	-	454,441
Disposals	-	-	-	( 797 )	( 152 )	-	( 949 )
Ending Balance	$ 520,632	$2,401,915	$ 34,089	$ 156,985	$ 678,857	$ -	$3,792,478
Ending Balance, Net	$1,413,803	$1,630,347	$ 2,709	$ 3,122	$ 445,498	$ 2,101	$3,497,580
Beginning Balance, Net	$1,456,241	$1,933,395	$ 3,771	$ 4,604	$ 494,172	$ 1,999	$3,894,182
	For the Year Ended December 31, 2024
---	---	---	---	---	---	---	---
	Buildings	Machinery and equipment	Transportation equipment	Office equipment	Miscellaneous equipment	Construction in progress and equipment pending acceptance	Total
Cost
Beginning Balance	$1,929,772	$3,996,409	$ 36,692	$ 163,144	$1,021,868	$ 17,885	$7,165,770
Additions	4,922	2,730	-	-	1,444	54,165	63,261
Disposals	( 2,259 )	-	-	( 4,712 )	( 28,256 )	-	( 35,227 )
Reclassified Amount	-	27,948	-	1,518	79,949	( 70,051 )	39,364
Ending Balance	$1,932,435	$4,027,087	$ 36,692	$ 159,950	$1,075,005	$ 1,999	$7,233,168
Accumulated depreciation
Beginning Balance	$ 432,356	$1,787,599	$ 31,410	$ 155,317	$ 507,448	$ -	$2,914,130
Additions	46,097	306,834	1,511	2,903	100,900	-	458,245
Disposals	( 2,259 )	-	-	( 2,874 )	( 28,256 )	-	( 33,389 )
Reclassified Amount	-	( 741 )	-	-	741	-	-
Ending Balance	$ 476,194	$2,093,692	$ 32,921	$ 155,346	$ 580,833	$ -	$3,338,986
Ending Balance, Net	$1,456,241	$1,933,395	$ 3,771	$ 4,604	$ 494,172	$ 1,999	$3,894,182

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

Buildings
Main buildings 51 years
Others 9-20 years
Machinery and equipment 5-15 years
Transportation equipment 6 years
Office equipment 4-6 years
Miscellaneous equipment 3-16 years

Property, plant and equipment pledged as collateral for bank borrowings are set out in Note 28.

13. LEASE ARRANGEMENTS

a. Right-of-use assets

	December 31
	2025	2024
Carrying amounts
Land	$ 238,958	$ 405,547
Buildings	17,097	84,273
	$ 256,055	$ 489,820
	For the Year Ended December 31
	2025	2024
Additions to right-of-use assets	$ 6,065	$ 66,728
Depreciation charge for right-of-use assets
Buildings	$ 37,482	$ 41,410
Land	8,751	9,699
	$ 46,233	$ 51,109

Except for additions and the recognized depreciation expenses listed above, the Company's right-of-use assets did not have significant subleases or impairment in 2025 and 2024.

b. Lease liabilities

	December 31
	2025	2024
Carrying amounts
Current	$ 38,642	$ 52,265
Non-current	$ 274,590	$ 465,133

Range of discount rate for lease liabilities was as follows:

	December 31
	2024	2024
Land	1.74%	1.20%
Buildings	1.873%-2.35%	1.873%-2.35%

c. Material lease-in activities and terms

In May 2015, the Company signed a land lease contract in the Taichung Park of the Central Science Park with the Central Taiwan Science Park Bureau, National Science and Technology Council (As Ministry of Science and Technology before). The lease period was from May 2015 to December 2034.

The Company leased the plant from non-related parties, and the lease period was from January 2021 to December 2024. Refer to Note 27 for the leased plant of the Company and related parties.

In June 2022, to activate assets and improve its financial structure, the Company sold the real estate located in Huiguo Section, Xitun District, Taichung City in June 2022 for 607,162 thousand to Taiwan Life Insurance Co., Ltd., and leased it back for use. The lease period is from June 2022 to June 2028, a total of 6 years, and recognized a gain of $93,176 thousand. The right-of-use assets and lease liabilities are recognized in accordance with IFRS 16. For the part whose fair value is higher than the book value, the unrealized sale and leaseback benefits of the right-of-use assets are recognized according to the leaseback of $19,288 thousand and amortized during the lease period. The lessee shall notify the lessor in writing and obtain consent 12 months before the expiry date, so that the new contract will continue to lease the object of the lease without the right to purchase. The lease contract stipulates that the annual lease payments for the first three years and the next three years of the lease are $17,302 thousand and $17,917 thousand, respectively. In August and November of 2025, the Company subleased its assets through a finance lease, please refer to the Note 9.

d. Other lease information

The Company subleased its assets through a finance lease, please refer to the Note 9.

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

INTANGIBLE ASSETS

	December 31
	2025	2024
Computer software
Balance, beginning of year	$ 6,827	$ 8,789
Additions for the year	1,512	1,799
Amortization of the year	(3,234)	(3,761)
Balance, end of year	$ 5,105	$ 6,827

Computer software is depreciated using the straight-line method over the estimated useful lives of 3 to 5 years.

BORROWINGS

a. Short-term borrowings

	December 31
	2025	2024
Secured borrowings
Line of credit borrowings	$ 240,000	$ -
Unsecured borrowings
Line of credit borrowings	950,000	1,100,000
	$ 1,190,000	$ 1,100,000

28 -

	December 31
	2025	2024
Rate of interest per annum (%)
Secured borrowings	1.8	-
Unsecured borrowings	0.88-1.85	1.92-1.96
b. Long-term borrowings
	December 31
	2025	2024
Line of credit borrowings - due from January 2026 to July 2029, pay in installments from 2026 to 2029	$ 714,620	$ 571,607
Less: Current portion	(31,987)	(56,987)
Government loan discount (Note 24)	(2,414)	(3,904)
	$ 680,219	$ 510,716
Rate of interest per annum (%)	0.73-1.85	0.73-2.02

The Company has signed long-term credit contracts with the bank. According to the provisions of some credit contracts, the financial statements should maintain the specific financial ratio, which should be checked once every six months. As of the date the financial statements were authorized for issue, the Company has not violated the situation.

16. OTHER PAYABLES

	December 31
	2025	2024
Payables for related parties	$ 907,060	$ 1,025,602
Payables for salaries and bonuses	99,826	109,182
Payables for expenses	76,799	79,916
Payables for purchases of equipment	10,790	14,661
Others	980	335
	$ 1,095,455	$ 1,229,716

17. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

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

b. Defined benefit plans

The defined benefit plans adopted by the Company in accordance with the Labor Standards Act is operated by the government of the ROC. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Corporation contribute amounts equal to 2% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the

committee's name. Before the end of each year, the Company assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the "Bureau"); the Company has no right to influence the investment policy and strategy.

The amounts included in the balance sheets in respect of the Company's defined benefit plans were as follows:

	December 31
	2025	2024
Present value of defined benefit obligation	$ 33,147	$ 35,494
Fair value of plan assets	(59,825)	(59,798)
Net defined benefit assets	$ (26,678)	$ (24,304)

Movements in net defined benefit liabilities (assets) were as follows:

	Present Value of the Defined Benefit Obligation	Fair Value of the Plan Assets	Net Defined Benefit Liabilities (Assets)
Balance at January 1, 2024	$ 36,444	$ (53,883)	$ (17,439)
Service cost
Current service cost	246	-	246
Net interest expense (income)	455	(677)	(222)
Recognized in profit or loss	701	(677)	24
Remeasurement
Return on plan assets	-	(4,887)	(4,887)
Actuarial loss – changes in demographic assumptions	(753)	-	(753)
Actuarial loss – experience adjustments	(898)	-	(898)
Recognized in other comprehensive income	(1,651)	(4,887)	(6,538)
Contributions from the employer	-	(351)	(351)
Benefits paid	-	-	-
Balance at December 31, 2024	35,494	(59,798)	(24,304)
Service cost
Current service cost	243	-	243
Prior service cost	1,357	-	1,357
Net interest expense (income)	532	(897)	(365)
Recognized in profit or loss	2,132	(897)	1,235
Remeasurement
Return on plan assets	-	(4,164)	(4,164)
Actuarial loss – changes in financial assumptions	307	-	307
Actuarial loss – experience adjustments	248	-	248
Recognized in other comprehensive income	555	(4,164)	(3,609)
Contributions from the employer	-	-	-
Benefits paid	(5,034)	5,034	-
Balance at December 31, 2025	$ 33,147	$ (59,825)	$ (26,678)

Through the defined benefit plans under the Labor Standards Act, the Company is exposed to the following risks:

1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.

2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plans' debt investments.

3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:

	December 31
	2025	2024
Discount rates	1.375%	1.5%
Expected rates of salary increase	2.5%	2.5%

If possible reasonable changes in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation would increase (decrease) as follows:

	December 31
	2025	2024
The Corporation
Discount rate
0.25% increase	$ (607)	$ (728)
0.25% decrease	$ 634	$ 753
Expected rate of salary
0.25% increase	$ 617	$ 733
0.25% decrease	$ (594)	$ (712)

The above sensitivity analysis may not be representative of the actual change in the present value of the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

	December 31
	2025	2024
Expected contributions to the plan for the next year	$ -	$ -
Average duration of the defined benefit obligation	12 years	8 years

31 -

18. EQUITY

a. Ordinary shares

	December 31
	2025	2024
Number of shares authorized (in thousands)	500,000	500,000
Shares authorized	$ 5,000,000	$ 5,000,000
Number of shares issued and fully paid (in thousands)	199,994	199,994
Shares issued	$ 1,999,942	$ 1,999,942

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

b. Capital surplus

	December 31
	2025	2024
May be used to offset a deficit, distributed as cash dividends, or transferred to share capital
Issuance of ordinary shares	$ 1,911,126	$ 1,911,126

Note: Including the amount of issued share capital exceeding the par value during seasoned equity offering, and the amount transferred from capital reserves to employee shares when employee shares are executed and expired. Such capital surplus may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company's capital surplus and to once a year).

c. Retained earnings and dividends policy

Under the dividends policy as set forth in the Articles, where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, except when the accumulated amount a such legal reserve equals to the Company's total issued capital, and setting aside or reversing a special reserve in accordance with the laws and regulations. Any remaining profit together with any undistributed retained earnings shall be used by the Company's board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders' meeting for distribution of dividends and bonuses to shareholders.

The Company may distribute more than 20% of the profit after tax of the year as shareholder dividends based on financial, business, and operational considerations; based on capital expenditures, business expansion needs, and sound financial planning for sustainable development, when distributing shareholder dividends, it can be paid in the form of cash or stock, but the cash dividend is limited to not less than 20% of the total dividends distributed to shareholders in the current year.

If there is no profit or the distributable profit is far lower than the previous year's amounts distributed, or in consideration of financial, business and operating factors, the appropriation for capital reserve shall be in accordance with relevant laws or regulations or as requested by the authorities in charge.

A distribution plan is also to be made by the board of directors and should be resolved in the shareholder's meeting. The dividends could be distributed in whole or in part by cash after the resolution has been passed by more than half of the directors present at the meeting of the board of

directors, in which at least two-thirds of the total number of directors should be present. In addition, a report of such distribution shall be submitted to the shareholders' meeting.

For the policies on the distribution of compensation of employees and remuneration of directors after the amendment, refer to Note 20.

An appropriation of earnings to a legal reserve should be made until the legal reserve equals the Company's paid-in capital. The legal reserve may be used to offset deficits. If the Corporation has no deficit and the legal reserve has exceeded 25% of the Corporation's paid-in capital, the excess may be transferred to capital or distributed in cash.

The appropriations of cash dividends per share for 2024 and 2023 approved in the shareholders' meeting in May, 2025 and 2024, respectively, were as follows:

	Appropriation of Earnings		Dividends Per Share (NT$)
	For the Year Ended December 31		For the Year Ended December 31
	2024	2023	2024	2023
Legal reserve	$ 54,975	$ 31,550
Special reserve (reversed)	(261,992)	64,438
Cash dividends	359,989	159,995	$ 1.8	$ 0.8

The appropriations of earnings for 2025 had been proposed by the Company's board of directors on February 25, 2026. The appropriations and dividends per share were as follows:

	Appropriation of Earnings	Dividends Per Share (NT$)
Legal reserve	$ 8,179
Special reserve	110,636
Cash dividends		$ 1

d. Special reserve

	December 31
	2025	2024
Balance, beginning of year	$ 334,900	$ 270,462
Appropriations(Reversed)	(261,992)	64,438
Balance, end of year	$ 72,908	$ 334,900

If a special reserve appropriated on the first-time adoption of IFRSs relates to exchange differences on translation of the financial statements of foreign operations (including the subsidiaries of the Company), the special reserve will be reversed on a proportionate basis according to the Company's disposal of foreign operations; on the Company's loss of significant influence, however, the entire special reserve will be reversed. Additional special reserve should be appropriated for the amount equal to the difference between net debit balance reserves and the special reserve appropriated on the first-time adoption of IFRSs. Any special reserve appropriated may be reversed to the extent that the net debit balance reverses and, thereafter, distributed.

19. REVENUE

	For the Year Ended December 31
	2025	2024
Faucet parts	$ 3,330,169	$ 4,009,332
Faucet assemblies	2,106,423	2,703,151
	$ 5,436,592	$ 6,712,483

20. EMPLOYEE BENEFITS EXPENSE, DEPRECIATION AND AMORTIZATION EXPENSES

	Operating Costs	Operating Expenses	Total
For the Year Ended December 31, 2025
Employee benefits
Salary	$ 361,768	$ 171,979	$ 533,747
Labor and health insurance	44,583	21,457	66,040
Pension costs	10,930	11,027	21,957
Remuneration of directors	-	1,824	1,824
Other employee benefits	35,258	2,834	38,092
Depreciation expenses	457,651	43,023	500,674
Amortization expenses	5,332	3,574	8,906
For the Year Ended December 31, 2024
Employee benefits
Salary	$ 361,701	$ 181,513	$ 543,214
Labor and health insurance	44,552	21,196	65,748
Pension costs	11,318	10,057	21,375
Remuneration of directors	-	1,872	1,872
Other employee benefits	20,397	2,633	23,030
Depreciation expenses	461,226	48,128	509,354
Amortization expenses	10,715	4,257	14,972

Note 1: As of 2025 and 2024, the Company had an average of 912 employees and 923 employees, respectively. There were 4 directors who did not serve concurrently as employees for both years.

Note 2: As of 2025 and 2024, the average of employee benefits expense was $727 thousand and $711 thousand, respectively.

Note 3: As of 2025 and 2024 the average of employee salaries was $588 thousand and $591 thousand, respectively.

Note 4: The change in the average employee salaries was 0.5%.

Note 5: The remuneration, emoluments and business execution expenses of the directors of the Company are based on the industry norm, the attendance situation of the directors and the Company's Articles; the remuneration of managers and employees included salaries, retirement pensions, bonuses and compensation. The remuneration is determined in accordance with the individual contributions, qualifications, operating performance, degree of responsibility and industry norm. The remuneration of directors and key executives, according to the Company's Articles, is determined by the board of directors and the remuneration committee based on the Company's

overall operation performance, future trends, the individual participation in the Company's operation and the contribution value. Relevant performance appraisal and remuneration reasonableness are reviewed in a timely manner and submitted to the remuneration committee and the board of directors, in order to achieve a balance between the Company's sustainable operation and risk control.

In accordance with the amendment to the Securities and Exchange Act in August 2024, the Company follows to adopt an amendment to the Articles of Incorporation at the 2025 Shareholders' Meeting, stipulating that the Company shall allocate not less than 5% and not more than 5% of the Company's individual pre-tax profits before deducting the distribution of employee and director remuneration in the current year for employee remuneration and director remuneration, respectively, of which not less than 3% of the profit shall be allocated as grassroots employee remuneration. The compensation of employees and remuneration of directors for the years ended December 31, 2025 and 2024 which have been approved by the Corporation's board of directors on January 21, 2026 and January 22, 2025, respectively, were as follows:

	For the Year Ended December 31
	2025		2024
	Accrual rate	Amount	Accrual rate	Amount
Compensation of employees	25.29%	$ 33,991	6.69%	$ 45,563
Remuneration of directors	-	-	-	-

If there will be a change in the amounts after the annual consolidated financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate.

There was no difference between the actual amounts of compensation of employees and remuneration of directors and supervisors paid and the amounts recognized in the consolidated financial statements for the years ended December 31, 2024 and 2023.

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

21. INCOME TAXES

a. The income tax expense recognized in profit or loss

Major components of income tax expense are as follows:

	For the Year Ended December 31
	2025	2024
Current tax
Income tax of unappropriated earnings	$ -	$ 6,816
Land value increment tax	19,839	2,976
Adjustments for prior years	(83)	(490)
	19,756	9,302
Deferred tax
In respect of the current year	1,744	81,493
Income tax expense recognized in profit or loss	$ 21,500	$ 90,795

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

	For the Year Ended December 31
	2025	2024
Profit before tax from continuing operations	$ 100,405	$ 635,319
Income tax expense calculated at the statutory rate	$ 20,081	$ 127,064
Net profit or loss not included in taxation	(13,917)	(38,922)
Income tax of unappropriated earnings	19,839	2,976
Unrecognized deductible temporary differences and loss carryforwards	(4,420)	167
Adjustments for prior years’ tax	(83)	(490)
Income tax expense recognized in profit or loss	$ 21,500	$ 90,795

b. Deferred tax assets and liabilities

	For the Year Ended December 31, 2025
	Opening Balance	Recognized in Profit or Loss	Recognized in Other Comprehensive Income	Closing Balance
Deferred tax assets
Temporary differences
Allowance for inventory devaluation	$ 58,458	$ 6,333	$ -	$ 64,791
Others	9,247	(3,851)	(721)	4,675
	67,705	2,482	(721)	69,466
Loss carryforwards	-	34,854	-	34,854
	$ 67,705	$ 37,336	$ (721)	$ 104,320
Deferred tax liabilities
Temporary differences
Property, plant and equipment	$ 232,545	$ 30,692	$ -	$ 263,237
Others	-	8,388	-	8,388
	$ 232,545	$ 39,080	$ -	$ 271,625
	For the Year Ended December 31, 2024
	Opening Balance	Recognized in Profit or Loss	Recognized in Other Comprehensive Income	Closing Balance
Deferred tax assets
Temporary differences
Allowance for inventory devaluation	$ 63,369	$ (4,911)	$ -	$ 58,458
Others	11,205	(650)	(1,308)	9,247
	74,574	(5,561)	(1,308)	67,705
Loss carryforwards	46,224	(46,224)	-	-
	$ 120,798	$ (51,785)	$ (1,308)	$ 67,705

36 -

	For the Year Ended December 31, 2024
	Opening Balance	Recognized in Profit or Loss	Recognized in Other Comprehensive Income	Closing Balance
Deferred tax liabilities
Temporary differences
Property, plant and equipment	$ 202,837	$ 29,708	$ -	$ 232,545

c. Information about unused loss carryforwards

As of December 31, 2025, the relevant information regarding loss deductions is as follows:

Unused Balance	Expiry Year
$ 388	2020
21,716	2033
152,163	2035
$ 174,267

d. The information of unrecognized deferred income tax liabilities associated with investments

As of December 31, 2025 and 2024, the aggregate taxable temporary differences associated with investments in subsidiaries not recognized as deferred income tax liabilities amounted to $3,308,806 thousand and $3,352,003 thousand, respectively.

e. Income tax assessments

The tax returns of the Company through 2023 have been assessed by the tax authorities.

EARNINGS PER SHARE

	Net Profit Attributable to Owners of the Corporation	Number of Shares (In Thousands)	Earnings Per Share (NT$)
For the Year Ended December 31, 2025
Basic earnings per share
Profit for the year attributable to owners of the Corporation	$ 78,905	199,994	$ 0.39
Effect of potentially dilutive ordinary shares
Compensation of employees	-	1,768
Diluted earnings per share
Profit for the year attributable to owners of the Corporation plus effect of potentially dilutive ordinary shares	$ 78,905	201,762	$ 0.39

	Net Profit Attributable to Owners of the Corporation	Number of Shares (In Thousands)	Earnings Per Share (NT$)
For the Year Ended December 31, 2024
Basic earnings per share
Profit for the year attributable to owners of the Corporation	$ 544,524	199,994	$ 2.72
Effect of potentially dilutive ordinary shares
Compensation of employees	-	1,516
Diluted earnings per share
Profit for the year attributable to owners of the Corporation plus effect of potentially dilutive ordinary shares	$ 544,524	201,510	$ 2.70

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

23. GOVERNMENT GRANTS

In addition, as of December 31, 2025, the Company received an interest-free loan of $949,463 thousand from the government's "Welcome Taiwan Businessmen to Return to Taiwan Investment Action Plan" for capital expenditure and operating turnover. The loan will be paid in installments from 2022 to 2029 using prevailing market interest rates for an equivalent loan of 1.1%-1.6%, the fair value of the loan was estimated at $925,884 thousand on initial recognition. The difference of $23,578 thousand between the proceeds and the fair value of the loan is the benefit derived from the interest-free loan and has been recognized as deferred revenue. The revenue was transferred to other income when training expenses were incurred. For the years ended December 31, 2025 and 2024, the amount transferred to other income was $1,055 thousand and $2,079 thousand, respectively, and interest expense recognized on this loan was $2,446 thousand and $4,159 thousand, respectively, and interest paid was $957 thousand and $2,200 thousand, respectively.

If the company fails to comply with the key requirements of the project loan during the lending period, causing the National Development Fund to stop the appropriation of the commission fee for the loan, the company will pay the original agreed interest rate plus the annual interest rate instead.

24. NON-CASH TRANSACTIONS

The investment and financing activities of the non-cash transactions of the Company in 2025 and 2024 were $3,871 thousand and $12,023 thousand, respectively, under the accounts payable for equipment for the acquisition of property, plant and equipment.

25. CAPITAL MANAGEMENT

The Company manages its capital to ensure that entities in the Company will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance. The Company's overall strategy remains unchanged.

The capital structure of the Company consists of net debt (borrowings offset by cash and cash equivalents) and equity of the Company (comprising issued capital, reserves, retained earnings, other equity).

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

Key management personnel of the Company review the capital structure quarterly. As part of this review, the key management personnel consider the cost of capital and the risks associated with each class of capital. Based on recommendations of the key management personnel, in order to balance the overall capital structure, the Company may adjust the amount of dividends paid to shareholders, the number of new shares issued or repurchased, and the amount of new debt issued or existing debt redeemed.

26. FINANCIAL INSTRUMENTS

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

The Company’s management believes that the carrying amounts of financial assets and financial liabilities that are not measured at fair value approximate their fair values or that their fair value cannot be measured reliably.

b. Categories of financial instruments

	December 31
	2025	2024
Financial assets
Financial assets at amortized cost (1)	$ 3,094,843	$ 3,131,198
Financial liabilities
Financial liabilities at amortized cost (2)	5,009,664	5,135,846

1) The balances included financial assets measured at amortized cost, which comprise cash and cash equivalents, trade receivables, other receivables, refundable deposits and other financial assets.

2) The balances included financial liabilities measured at amortized cost, which comprise short-term borrowings, short-term bills payable, trade payables, other payables, long-term borrowings (including those due within one year) and guarantee deposits received.

c. Financial risk management objectives and policies

The Company’s major financial instruments include trade receivables, trade payables, lease liabilities and borrowings. The Company’s corporate treasury function provides services to the business, coordinates access to domestic and international financial markets, and monitors and manages the financial risks relating to the operations of the Company through internal risk reports that analyze exposures by degree and magnitude of risks. These risks include market risk (including foreign currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Company seeks to minimize the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Company’s policies approved by the board of directors, which provided written principles on foreign currency risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the internal auditors on a continuous basis. The Company did not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

38 -

39 -

1) Market risk

The Company’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below) and interest rates (see (b) below). The Company entered into a variety of derivative financial instruments to manage its exposure to the risks arising from some foreign currency net assets or net liabilities due to exchange rate or interest rate fluctuations.

There has been no change to the Company’s exposure to market risks or the manner in which these risks are managed and measured. The primarily financial risks were as follows:

a) Foreign currency risk

The Company engages in sales and purchase transactions denominated in foreign currencies, which expose the Company to foreign currency risk. Exchange rate exposures are managed within approved policy parameters utilizing foreign exchange forward contracts.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities (including those eliminated on consolidation) and of the derivatives exposed to foreign currency risk at the end of the year are set out in Note 30.

Sensitivity analysis

The Company was mainly exposed to the USD and RMB. When the NTD had changed by 1% against the USD, the pre-tax profit for the years ended December 31, 2025 and 2024 would have changed by $3,690 thousand and $4,388 thousand. When the NTD had changed by 1% against the RMB, the pre-tax profit for the years ended December 31, 2025 and 2024 would have changed by $1,802 thousand and $2,210 thousand, respectively.

In the management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign currency risk because the exposure at the end of the year did not reflect the exposure during the year.

b) Interest rate risk

The Company is exposed to interest rate risk because of deposits and loans at both fixed and floating interest rates. The carrying amounts of the Company’s financial assets and financial liabilities with exposure to interest rates at the end of the year were as follows:

	December 31
	2025	2024
Fair value interest rate risk
Financial assets	$ 913,105	$ 701,511
Financial liabilities	2,215,438	2,185,101
Cash flow interest rate risk
Financial assets	133,730	62,873

Sensitivity analysis

For financial assets and liabilities with floating interest rates, if interest rates had been 4 basis points (1%) higher or lower and all other variables were held constant, the Company’s pre-tax profit for the years ended December 31, 2025 and 2024 would have decreased or increased by $1,337 thousand and $629 thousand, respectively.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Company. At the end of the year, the Company’s maximum exposure to credit risk, which would cause a financial loss to the Company due to the failure of the counterparty to discharge its obligation, could be equal to the total of the carrying amount of the respective recognized financial assets as stated in the balance sheets.

The Company’s concentration of credit risk of 87% of total trade receivables both as of December 31, 2025 and 2024, respectively, was attributable to the Company’s three largest customers.

3) Liquidity risk

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

The Company relies on bank borrowings as a significant source of liquidity. As of December 31, 2025 and 2024, the Company had available unutilized bank loan facilities of $8,861,380 thousand and $10,328,393 thousand, respectively.

The liquidity and interest rate risk table below illustrates the maturity analysis of the financial liabilities of the Company within the repayment period. Non-derivative financial liabilities are prepared in terms of undiscounted cash flow on the earliest date when the Company may be required to satisfy the liabilities. The table had been drawn up based on the undiscounted gross inflows and outflows on those derivatives that require gross settlement.

	Less Than 1 Year	3 Months - 1 Year	1-5 Years	5+ Years
December 31, 2025
Non-interest bearing	$ 3,107,458	$ -	$ -	$ -
Lease liabilities	13,763	30,111	60,774	309,636
Fixed interest rate liabilities	1,190,000	31,987	680,219	-
	$ 4,311,221	$ 62,098	$ 740,993	$ 309,636
December 31, 2024
Non-interest bearing	$ 3,468,143	$ -	$ -	$ -
Lease liabilities	14,629	44,220	106,179	468,133
Fixed interest rate liabilities	1,125,000	31,987	514,620	-
	$ 4,607,772	$ 76,207	$ 620,799	$ 468,133

Further information on the maturity analysis of the lease financial liabilities was as follows:

	Less than 5 Year	5-10 Years	11-15 Years	16-20 Years	20+ Years
December 31, 2025
Lease liabilities	$ 104,648	$ 43,306	$ 43,306	$ 43,306	$ 179,718

41 -

Less than 5 Year	5-10 Years	11-15 Years	16-20 Years	20+ Years
December 31, 2024
Lease liabilities	$ 165,028	$ 63,692	$ 63,692	$ 277,057

27. TRANSACTIONS WITH RELATED PARTIES

Balances and transactions between the Corporation and its subsidiaries, which are related parties of the Corporation, have been eliminated on consolidation and are not disclosed in this note. Details of significant transactions between the Company and other related parties are disclosed below.

a. Related party name and category

Related Party	Relationship with the Company
SSI	Subsidiary
SSZ	Subsidiary
SSA	Subsidiary
SIC	Subsidiary
SAC	Subsidiary
Yang, Ching Chi	President
Huang, Bi Hua	Second-degree relationship of the key management
Yang, Ceng Fa	Second-degree relationship of the key management
Yang, Li Yu	Second-degree relationship of the key management
Yang, Kuei Feng	Second-degree relationship of the key management
Yang, Shu Chuan	Second-degree relationship of the key management
Yang, Shu Hui	Second-degree relationship of the key management

b. Sales revenue

For the Year Ended December 31
	2025	2024
Subsidiary
SSA	$ 55,768	$ 33,564
SSZ	28,120	61
SSI	1,115	922
	$ 85,003	$ 34,547

Sales to related parties were made at arm's length.

c. Purchases

For the Year Ended December 31
	2025	2024
Subsidiary
SSI	$ 1,175,639	$ 1,544,645
SSZ	1,208,676	1,480,525
	$ 2,384,315	$ 3,025,170

Purchases to related parties were made at arm's length.

d. Receivables from related parties

	For the Year Ended December 31
	2025	2024
Subsidiary
SSZ	$ 13,029	$ -
SSA	1,200	2,071
	$ 14,229	$ 2,071

e. Payables from related parties (Excluding loans from related parties)

Line Item	Related Party Name	December 31
		2025	2024
Trade payables	Subsidiary
	SSI	$ 838,420	$ 1,050,675
	SSZ	793,293	975,287
		$ 1,631,713	$ 2,025,962
Other payables	Subsidiary
	SIC	$ 911	$ 950
	SAC	627	-
		$ 1,538	$ 950

f. Loans from related parties

Line Item	Related Party Name	December 31
		2025	2024
Other payables	Subsidiary
	SSI	$ 422,357	$ 534,095
	SSZ	483,792	490,557
		$ 906,149	$ 1,024,652

The loans to related parties are interest-free and unsecured.

g. Prepayments

	For the Year Ended December 31
	2025	2024
Subsidiary SAC	$ 7,486	$ 2,485

h. Acquisition of property, plant and equipment

	For the Year Ended December 31
	2025	2024
Subsidiary SAC	$ 2,169	$ 9,473

i. Lease arrangements

The Company leased the plant from the second-degree relationship of the key management. The lease

period was from January, 2025 to December, 2026. Lease periods and collections of rentals are in compliance with the lease contracts. Rentals are collected on a monthly basis. The lease payments for the year ended December, 2025 and 2024 are both $6,117 thousand, respectively.

Line Item	Related Party Name	December 31
		2025	2024
Lease liability	Second-degree relationship of the key management	$ 6,065	$ 6,065
		For the Year Ended December 31
	Related Party Name	2025	2024
Interest expense
President and second-degree relationship of the key management		$ 52	$ 52

j. Other transactions

Line Item	Related Party Name	December 31
		2025	2024
Operating expense	SSA	$ 30,171	$ 31,118
Rent income	Subsidiary/Other	1,200	1,200
Other income	Subsidiary/Other	363	530
Manufacturing expense	Subsidiary/Other	111	50

k. Remuneration of key management personnel

	For the Year Ended December 31
	2025	2024
Short-term employee benefits	$ 49,911	$ 52,380
Post-employment benefits	2,067	2,097
	$ 51,978	$ 54,477

The remuneration of directors and other key executives is based on relevant internal management methods, and the performance of the management is also considered. After deliberation by the remuneration committee, it is submitted to the board of directors.

28. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets had been offered as collateral for deposits and bank loan facilities for use of electronics, leases and investments:

	December 31
	2025	2024
Pledged deposits (classified as Financial assets at amortized cost – non-current)	$ 310,341	$ 16,009
Property, plant and equipment	1,411,749	1,451,681
	$ 1,722,090	$ 1,467,690

44 -

29. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

The unrecognized commitments of the Company are as follow:

	December 31
	2025	2024
Acquisition of property, plant and equipment	$ 1,289	$ 3,221

30. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

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

	December 31, 2025			December 31, 2024
	Foreign Currency	Exchange Rate	Carrying Amount	Foreign Currency	Exchange Rate	Carrying Amount
Financial assets
Monetary items
USD (USD:NTD)	$ 79,913	31.43	$ 2,511,658	$ 85,766	32.785	$ 2,811,831
RMB (RMB:NTD)	42,790	4.496	192,383	49,348	4.478	220,981
Investment using equity method
USD (USD:NTD)	165,902	31.43	5,214,292	160,363	32.785	5,257,489
Financial liabilities
Monetary items
USD (USD:NTD)	91,654	31.43	2,880,683	99,151	32.785	3,250,659
RMB (RMB:NTD)	2,706	4.496	12,166	1	4.478	3

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

Foreign Currency	For the Year Ended December 31
	2025		2024
	Exchange Rate	Net Foreign Exchange Gain (Loss)	Exchange Rate	Net Foreign Exchange Gain
USD	31.18 (USD:NTD)	$ 63,646	32.112 (USD:NTD)	$ 73,984
RMB	4.333 (RMB:NTD)	(5,206)	4.454 (RMB:NTD)	21,252

31. SEPARATELY DISCLOSED ITEMS

a. Information about significant transactions and investees:

1) Financing provided to others. (Table 1)
2) Endorsements/guarantees provided. (None)
3) Marketable securities held (excluding investments in subsidiaries). (None)

4) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 2)

5) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 3)

6) Information on investees. (Table 4)

b. Information on investments in mainland China

1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area. (Table 5)

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

a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period. (Table 2)

b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period. (Tables 2)

c) The amount of property transactions and the amount of the resultant gains or losses. (None)

d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the year and the purposes. (None)

e) The highest balance, the end of year balance, the interest rate range, and total current period interest with respect to financing of funds. (Table 1)

f) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receipt of services. (None)

45 -

TABLE 1

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS

FOR THE YEAR ENDED DECEMBER 31, 2025

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

No.	Lender	Borrower	Financial Statement Account	Related Party	Highest Balance for the Period	Ending Balance	Actual Amount Borrowed (Note 3)	Interest Rate	Nature of Financing (Note 1)	Business Transaction Amount	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral		Financing Limit for Each Borrower	Aggregate Financing Limit
													Item	Value
1	SSI	The Corporation	Other receivables from related parties	Yes	$ 1,128,904	$ 422,357	$ 422,357	-	2	$ -	Operation turnover	$ -	-	$ -	$ 2,215,115 (Note 2)	$ 2,215,115 (Note 2)
2	SSZ	The Corporation	Other receivables from related parties	Yes	937,196	483,792	483,792	-	2	-	Operation turnover	-	-	-	2,153,596 (Note 2)	2,153,596 (Note 2)

Note 1: The nature of financing is numbered as follows:
1. A company that has business dealings with the lender.
2. A company with short-term financing needs.

Note 2: For those who need capital loans due to business transactions, the loan amount shall not exceed the amount of business transactions between the two parties. Fund loans required for short-term financing shall not exceed 40% of the net value of the lending company, provided that the target of the fund loan is the parent company or parent company in the Republic of China that directly and indirectly holds 100% of the voting shares of the company. For companies outside the Republic of China that directly and indirectly hold 100% of the voting shares, the limit shall not exceed 100% of the net value of the company that lent funds.

Note 3: Significant intercompany accounts and transactions have been eliminated.

46 -

TABLE 2

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2025

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

Company Name	Related Party	Relationship	Transaction Details				Abnormal Transaction		Notes/Accounts Receivable (Payable)
			Purchase/Sale	Amount (Note 1)	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
The Corporation	SSI	See Note 11 from consolidated financial statements.	Purchase	$ 1,175,639	29	(Note 2)	$ -	-	$ (838,420)	28
	SSZ	See Note 11 from consolidated financial statements.	Purchase	1,208,676	30	(Note 2)	-	-	(793,293)	26
SSI	The Corporation	See Note 11 from consolidated financial statements.	Sale	RMB 267,306	88	(Note 2)	-	-	RMB 187,344	95
SSZ	The Corporation	See Note 11 from consolidated financial statements.	Sale	RMB 273,278	88	(Note 2)	-	-	RMB 177,260	88

Note 1: Significant intercompany accounts and transactions have been eliminated.
Note 2: See Note 8 from consolidated financial statements.

47 -

TABLE 3

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL

DECEMBER 31, 2025

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

Company Name	Related Party	Relationship	Ending Balance (Note)	Turnover Rate (Times)	Overdue		Amounts Received in Subsequent Period	Allowance for Impairment Loss
						Amount			Actions Taken
SSI	The Corporation	See Note 11 from consolidated financial statements.	Other receivables	USD	13,438		USD	-	-	USD	6,576
SSI	The Corporation	See Note 11 from consolidated financial statements.	Trade receivables	USD	26,676	1.28	USD	8,794	See the operation of SSI	USD	-
SSZ	The Corporation	See Note 11 from consolidated financial statements.	Other receivables	USD	15,393		USD	-	-	USD	4,376
SSZ	The Corporation	See Note 11 from consolidated financial statements.	Trade receivables	USD	24,796	1.41	USD	11,275	See the operation of SSZ	USD	-

Note: Significant intercompany accounts and transactions have been eliminated.

TABLE 4

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTEES

FOR THE YEAR ENDED DECEMBER 31, 2025

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

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount		As of December 31, 2025			Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				December 31, 2025	December 31, 2024	Number of Shares	%	Carrying Amount
	Stock
The Corporation	SSH	Samoa	International investment	$ 1,404,738	$ 1,404,738	38,232,000	100	$ 4,631,821	USD 1,182	$ 37,359	Subsidiary
	SAC	Taichung City	Installment and selling of automatic control equipment	96,500	96,500	5,597,000	96.5	32,333	$ (5,635)	(3,513)	Subsidiary
	SSA	State of Delaware, USA	Production and sales of sanitation, construction equipment, metal molds, hardware parts and copper pipe fitting, etc.	500,748	500,748	1,715	100	582,471	USD 718	20,793	Subsidiary
SSH	GFI	Cayman Islands	International investment	USD 10,624	USD 10,624	8,900,000	100	USD 75,730	USD (1,006)	(Note 1)	Sub-Subsidiary
	SIC	Samoa	International investment	USD 23,632	USD 23,632	23,631,516	100	USD 71,536	USD 176	(Note 1)	Sub-Subsidiary

Note 1: Exempted from disclosure in accordance with regulations.
Note 2: Significant intercompany accounts and transactions have been eliminated.

TABLE 5

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA

FOR THE YEAR ENDED DECEMBER 31, 2025

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

Investee Company	Main Businesses and Products	Paid-in Capital	Method of Investment	Accumulated Outward Remittance for Investments from Taiwan as of January 1, 2025	Remittance of Funds		Accumulated Outward Remittance for Investments from Taiwan as of December 31, 2025	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss)	Carrying Amount as of December 31, 2024	Accumulated Repatriation of Investment Income as of December 31, 2024
					Outward	Inward
SSI	Production and sales of sanitation, construction equipment, metal molds, hardware parts, etc.	$ 931,900	(Note 3)	$ 792,610	$ -	$ -	$ 792,610	$ 31,278	100	$ 31,278	$ 2,364,301	$ -
		RMB 225,870		USD 23,964			USD 23,964	RMB 7,009		USD 1,003	USD 72,224
		USD 29,650
SSZ	Production and sales of sanitation, construction equipment, metal molds, hardware parts, etc.	856,468	(Note 4)	689,805	-	-	689,805	5,617	100	5,617	2,220,391	-
		RMB 214,124		USD 21,512			USD 21,512	RMB 1,415		USD 180	USD 70,646
		USD 27,250
Accumulated Outward Remittance for Investments in Mainland China as of December 31, 2025	Investment Amounts Authorized by the Investment Commission, MOEA	Upper Limit on the Amount of Investments Stipulated by the Investment Commission, MOEA
---	---	---
$ 1,482,415	$ 2,012,767	(Note 2)
USD 45,476	USD 62,140

Note 1: Investment profit or loss are recognized based on the financial statements audited by the accountants of the parent company in Taiwan.
Note 2: In accordance with the "Principles for the Review of Investment or Technical Cooperation in the Mainland Area" issued by the Investment Review Commission on August 29, 2008, the consolidated company obtained the certificate of the scope of operations of the operating headquarters approved by the Industrial Bureau of the Ministry of Economic Affairs, and there is no upper limit on the amount of investment in the mainland area.
Note 3: Reinvest in mainland companies through third-region investment establishment companies (GFI).
Note 4: Reinvest in mainland companies through third-region investment establishment companies (SIC).

51 -

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

ITEM	STATEMENT INDEX
MAJOR ACCOUNTING ITEMS IN ASSETS, LIABILITIES AND EQUITY
STATEMENT OF CASH AND CASH EQUIVALENTS	1
STATEMENT OF TRADE RECEIVABLES FROM UNRELATED PARTIES	2
STATEMENT OF INVENTORIES	3
STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD	4
STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT	Note 12
STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT	Note 12
STATEMENT OF CHANGES IN RIGHT-OF-USE ASSETS	5
STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION OF RIGHT-OF-USE ASSETS	5
INTANGIBLE ASSETS	Note 14
STATEMENT OF DEFERRED INCOME TAX ASSETS	Note 21
STATEMENT OF PREPAYMENT FOR MACHINERY AND EQUIPMENT	6
STATEMENT OF BANK BORROWINGS	7
STATEMENT OF TRADE PAYABLES TO UNRELATED PARTIES	8
STATEMENT OF OTHER PAYABLES	Note 16
STATEMENT OF LEASE LIABILITIES	9
STATEMENT OF DEFERRED INCOME TAX LIABILITIES	Note 21
MAJOR ACCOUNTING ITEMS IN PROFIT OR LOSS
STATEMENT OF NET REVENUE	10
STATEMENT OF OPERATING COSTS	11
STATEMENT OF MANUFACTURING EXPENSES	12
STATEMENT OF OPERATING EXPENSES	13
STATEMENT OF LABOR, DEPRECIATION AND AMORTIZATION BY FUNCTION	Note 20

STATEMENT 1

SUNSPRING METAL CORPORATION

STATEMENT OF CASH AND CASH EQUIVALENTS

DECEMBER 31, 2025

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

Item	Foreign Currency	Exchange Rate	Amount
Cash in banks
Demand deposits			$ 45,247
Foreign deposits
USD	2,459	31.43	77,275
RMB	2,065	4.496	9,284
EUR	44	36.9	1,636
HKD	30	4.038	123
JPY	820	0.2008	165
Foreign time deposits
USD	19,178	31.43	602,764
			736,494
Cash on hand			73
			$ 736,567

52 -

STATEMENT 2

SUNSPRING METAL CORPORATION

STATEMENT OF TRADE RECEIVABLES FROM UNRELATED PARTIES

DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars)

Client Name	Amount
Unrelated parties
MI Company	$ 1,565,148
HS Company	108,098
Others (Note)	311,399
	1,984,645
Less: Allowance for impairment loss	(240)
	$ 1,984,405

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

53 -

STATEMENT 3

SUNSPRING METAL CORPORATION

STATEMENT OF INVENTORIES

DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars)

Item	Cost	Net Realizable Value (Note)
Merchandise and finished goods	$ 453,610	$ 477,373
Work in process	277,585	342,935
Raw materials	506,998	500,884
	1,238,193	$ 1,321,192
Less: Allowance for inventory loss	(299,508)
	$ 938,685

Note: Refer to Note 4.

STATEMENT 4

SUNSPRING METAL CORPORATION

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars)

Investees	Balance, January 1, 2025		Ownership (%)	Share of Profit (Loss) of Subsidiaries Accounted for Using the Equity Method	Exchange Differences on Translating of Foreign Operations	Realized Gain	Balance, December 31, 2025			Net Equity Value	Original Investment Cost December 31, 2025
	Shares	Amount					Shares	Amount	Ownership (%)
Investments in subsidiaries
SSH	38,232,000	$ 4,673,005	100	$ 37,359	($ 87,206)	$ 8,663	38,232,000	$ 4,631,821	100	$ 4,628,765	$ 1,404,738
SAC	9,650,000	35,878	96.5	( 3,513)		( 32)	5,597,000	32,333	96.5	50,175	96,500
SSA	1,715	584,484	100	20,793	( 23,431)	625	1,715	582,471	100	579,331	500,748
Valuation using equity method		$ 5,293,367		$ 54,639	($ 110,637)	$ 9,256		$ 5,246,625		$ 5,258,271	$ 2,001,986

STATEMENT 5

SUNSPRING METAL CORPORATION

STATEMENT OF CHANGE IN RIGHT-OF-USE ASSETS

FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars)

	Balance at January 1, 2025	Additions	Decrease	Balance at December 31, 2025
Cost
Land	$ 463,216	$ -	($ 157,838)	$ 305,378
Building	217,901	6,065	( 79,220)	144,746
Total cost	681,117	$ 6,065	($ 237,058)	450,124
Accumulated depreciation
Land	57,669	$ 8,751	$ -	66,420
Building	133,628	37,482	( 43,461)	127,649
Total accumulated depreciation	191,297	$ 46,233	($ 43,461)	194,069
	$ 489,820			$ 256,055

STATEMENT 6

SUNSPRING METAL CORPORATION

STATEMENT OF PREPAYMENT FOR MACHINERY AND EQUIPMENT

DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars)

Supplier Name	Amount
SIEMENS INDUSTRY SOFTWARE (TW) CO., LTD.	$ 21,151
DAWWING TECHNOLOGY INC.	20,000
PREFACTOR TECHNOLOGY & RESEARCH CORPORATION	14,313
SUNSPRING AUTOMATION CORPORATION	7,486
Others (Note)	7,639
	$ 70,589

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

57 -

STATEMENT 7

SUNSPRING METAL CORPORATION

STATEMENT OF BANK BORROWINGS

DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars)

Type	Borrowing Period (Note 1)	Interest Rates (%)	Amount
Short-term secured loan	2025.10.07-2026.03.10	1.8	$ 240,000
Short-term credit loan
CTBC Bank Co., Ltd	2025.12.02-2026.06.02	0.88-1.83	$ 800,000
Taipei Fubon Commercial Bank Co., Ltd	2025.12.09-2026.01.09	1.85	150,000
			950,000
Long-term credit loan
Yuanta Commerical Bank, Co., Ltd. (Note 2)	2025.10.09-2027.12.29	1.85	400,000
ShinKong Commercial Bank Co., Ltd (Note 2)	2025.12.19-2027.06.13	1.82	200,000
			600,000
Long-term credit loan – Government loan, below-market rate of interest
CTBC Bank Co., Ltd. (Note 3)	2019.07.26-2029.07.26	0.725	114,620
			$ 1,904,620

Note 1: Shown maturity date is the last maturity date of all loans.
Note 2: Repayment method is to repay the principal in a lump sum at maturity, with interest charged monthly.
Note 3: Repayment is after grace period, amortize evenly in installments.

STATEMENT 8

SUNSPRING METAL CORPORATION

STATEMENT OF TRADE PAYABLES TO UNRELATED PARTIES

DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars)

Vendor Name	Amount
Runner (Xiamen) Corp.	$ 66,354
NEOPERL Far East LTD.	58,317
Guangzhou Seagull Kitchen and Bath Products Co., Ltd.	40,966
HANGZHOU PANASIA SANITARY WARE CO., LTD	38,393
PAREX INTERNATIONAL CORP.	26,693
Others (Note)	247,746
	$ 478,469

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

59 -

STATEMENT 9

SUNSPRING METAL CORPORATION

STATEMENT OF LEASE LIABILITIES

DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars)

Item	Lease Period	Discount Rate (%)	Amount
Land	2015.05-2034.12	1.74	$ 253,187
Building	2018.03-2028.06	1.873-2.35	60,045
			$ 313,232

STATEMENT 10

SUNSPRING METAL CORPORATION

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

Item	Shipments (In thousands of units)	Amount
Faucet parts	32,948	$ 3,353,759
Faucet assemblies	2,213	2,106,423
		5,460,182
Less: Sales return and allowance	114	(23,590)
Net Sales		$ 5,436,592

61 -

STATEMENT 11

SUNSPRING METAL CORPORATION

STATEMENT OF OPERATING COSTS

FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars)

Item	Amount
Raw materials, beginning of year	$ 440,093
Raw materials purchased	1,707,394
Work in progress transfer	266,166
Sale of raw materials	(86,978)
Others	(138,208)
Raw materials, end of year	(506,998)
Raw materials used	1,681,469
Direct labor	250,792
Manufacturing expenses	976,276
Manufacturing cost	2,908,537
Work in progress, beginning of year	250,059
Work in progress purchased	324,068
Finished goods transfer	94,522
Sale of semi-finished goods	(62,703)
Transfer to raw materials	(266,166)
Others	(20,242)
Work in progress, end of year	(277,585)
Cost of finished goods	2,950,490
Finished goods, beginning of year	300,044
Transfer to work in progress	(94,522)
Others	(6)
Finished goods, end of year	(265,644)
Production and operation cost	2,890,362
Merchandise, beginning of year	265,027
Merchandise purchased	2,029,927
Others	2,744
Merchandise, end of year	(187,966)
Cost of merchandise sold	5,000,094
Sale of raw materials and semi-finished goods	149,681
Incoming and selling operating costs	5,149,775
Inventory write-downs	31,672
Revenue from sale of scraps	(70,479)
Others	4
Operating costs	$ 5,110,972

STATEMENT 12

SUNSPRING METAL CORPORATION

STATEMENT OF TRADE MANUFACTURING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars)

Item	Amount
Depreciation	$ 457,651
Utility	113,908
Salary	110,976
Supplies	97,895
Other	195,846
	$ 976,276

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

63 -

STATEMENT 13

SUNSPRING METAL CORPORATION

STATEMENT OF OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars)

Item	Selling and Marketing Expenses	General and Administrative Expenses	Research and Development Expenses	Total
Salary	$ 69,840	$ 95,368	$ 6,771	$ 171,979
Depreciation expense	18,063	18,549	6,411	43,023
Storage and shipping expense	34,793	-	-	34,793
Export expense	26,050	-	-	26,050
Insurance	8,930	12,400	1,169	22,499
Others	9,969	62,322	667	72,958
	$ 167,645	$ 188,639	$ 15,018	$ 371,302

AI assistant

SSM — Audit Report / Information 2025

51964_rns_2026-03-30_098e3e1b-0f03-4ad2-8967-875f317ee811.pdf

Sunspring Metal Corporation

INDEPENDENT AUDITORS' REPORT

Opinion

Basis for Opinion

Key Audit Matters

Revenue Recognition

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

Auditors’ Responsibilities for the Audit of the Financial Statements

Notice to Readers

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL ASSETS AT AMORTIZED COST

8. TRADE RECEIVABLES AND OTHER RECEIVABLES

9. FINANCE LEASE RECEIVABLE

10. INVENTORIES

11. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

12. PROPERTY, PLANT AND EQUIPMENT

13. LEASE ARRANGEMENTS

16. OTHER PAYABLES

17. RETIREMENT BENEFIT PLANS

18. EQUITY

19. REVENUE

20. EMPLOYEE BENEFITS EXPENSE, DEPRECIATION AND AMORTIZATION EXPENSES

21. INCOME TAXES

23. GOVERNMENT GRANTS

24. NON-CASH TRANSACTIONS

25. CAPITAL MANAGEMENT

26. FINANCIAL INSTRUMENTS

27. TRANSACTIONS WITH RELATED PARTIES

28. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

29. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

30. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

31. SEPARATELY DISCLOSED ITEMS

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

SUNSPRING METAL CORPORATION

STATEMENT OF CASH AND CASH EQUIVALENTS

SUNSPRING METAL CORPORATION

STATEMENT OF TRADE RECEIVABLES FROM UNRELATED PARTIES

DECEMBER 31, 2025

SUNSPRING METAL CORPORATION

STATEMENT OF INVENTORIES

SUNSPRING METAL CORPORATION

SUNSPRING METAL CORPORATION

STATEMENT OF CHANGE IN RIGHT-OF-USE ASSETS

FOR THE YEAR ENDED DECEMBER 31, 2025

SUNSPRING METAL CORPORATION

STATEMENT OF PREPAYMENT FOR MACHINERY AND EQUIPMENT

SUNSPRING METAL CORPORATION

STATEMENT OF BANK BORROWINGS

SUNSPRING METAL CORPORATION

STATEMENT OF TRADE PAYABLES TO UNRELATED PARTIES

DECEMBER 31, 2025

SUNSPRING METAL CORPORATION

STATEMENT OF LEASE LIABILITIES

SUNSPRING METAL CORPORATION

SUNSPRING METAL CORPORATION

STATEMENT OF OPERATING COSTS

FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars)

SUNSPRING METAL CORPORATION

STATEMENT OF TRADE MANUFACTURING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2025

SUNSPRING METAL CORPORATION

STATEMENT OF OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2025

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