Tecom Co., LTD.

Parent Company Only Financial Statements for the years ended December 31, 2025 and 2024 with Independent Auditors' Report

(Stock Symbol 2321)

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

Tecom Co., LTD
Parent Company Only Financial Statements for the years ended December 31, 2025 and 2024 with Independent Auditors’ Report
Table of contents

Items	Page
1. Cover page	1
2. Table of contents	2 ~ 3
3. Independent auditors’ report	4 ~ 7
4. Parent Company Only balance sheets	8 ~ 9
5. Parent Company Only statements of comprehensive income	10
6. Parent Company Only statements of changes in equity	11
7. Parent Company Only statements of cash flows	12 ~ 13
8. Notes to the Parent Company Only financial statements	14 ~ 57
(1) Company history and business scope	14
(2) Approval date and procedures of the parent company only financial statements	14
(3) New standards, amendments and interpretations adopted	14 ~ 15
(4) Summary of significant accounting policies	16 ~ 23
(5) Major sources of uncertainty arising from significant accounting judgments, estimates, and assumptions	23 ~ 24
(6) Explanation of significant accounts	24 ~ 43
(7) Related party transactions	43 ~ 47
(8) Pledged assets	47
(9) Significant Contingencies and Unrecognized Contract Commitments	48
(10) Significant subsequent events	48
(11) Others	48 ~ 57
(12) Other disclosures	57
(13) Segment information	57
9. Statements of significant accounts
Holding of significant marketable securities	Table 1
Significant inter-company transactions during the reporting period	Table 2
Information on investees	Table 3
Information on investments in Mainland China	Table 4
Information on investments in Mainland China -Directly or indirectly through third-region invest in Mainland China Major Transactions	Table 5
STATEMENT OF CASH AND CASH EQUIVALENTS	Statement 1
STATEMENT OF ACCOUNTS RECIVABLES	Statement 2
STATEMENT OF INVENTORIES	Statement 3
STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME	Statement 4
STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD	Statement 5
STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT	Statement 6
STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT	Statement 7
STATEMENT OF CHANGES IN INVESTMENT PROPERTIES	Statement 8
STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION OF INVESTMENT PROPERTIES	Statement 9
STATEMENT OF SHORT-TERM BORROWINGS	Statement 10
ACCOUNTS PAYABLES	Statement 11

Items	Page
STATEMENT OF OPERATING REVENUE	Statement 12
STATEMENT OF OPERATING COSTS	Statement 13
STATEMENT OF MANUFACTURING COSTS	Statement 14
STATEMENT OF SELLING EXPENSE	Statement 15
STATEMENT OF GENERAL AND ADMINISTRATIVE EXPENSES	Statement 16
STATEMENT OF RESEARCH AND DEVELOPMENT EXPENSES	Statement 17
SUMMARY OF EMPLOYEE BENEFITS DEPRECIATION AND
AMORTIZATION EXPENSES BY FUNCTION	Statement 18

Independent Auditors' Report

(2026) No. Finance-Auditing-Reporting- 25003805

The Board of Directors and Shareholders

Tecom Co., LTD.

Opinion

We have audited the accompanying parent company only balance sheets of Tecom Co., LTD. as of December 31, 2025 and 2024, and the related parent company only statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2025 and 2024, and notes to the parent company only financial statements, including the summary of significant accounting policies (together referred as “the parent company only financial statements”).

In our opinion, making Reference to the Audits of Component Auditors of our audit report the parent company only financial statements referred to above present fairly, in all material respects, the financial position of Tecom Co., LTD. as at December 31, 2025 and 2024, and its financial performance and its cash flows for the years ended December 31, 2025 and 2024, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits entrusted by the Company in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the "Auditors' Responsibilities for the Audit of the Parent Company Only Financial Statements" section of our report. We are independent of Tecom Co., LTD. in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the "Norm"), and we have fulfilled our other ethical responsibilities in accordance with the Norm. Based on our audits and the reports of our auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

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

The key audit matter about the parent company only financial statements of the Company for the year ended December 31, 2025 is as below:

Inventory Valuation

Description

Tecom Co., LTD. measures the inventories at the lower of cost and net realizable value. Please refer to Notes 5(2) for accounting assumptions and judgments, major sources of estimation uncertainty and information for inventory respectively. Please refer to Note 6(5) for the explanations about inventories. Inventory and allowance for inventory valuation loss are NT$100,714 thousand and NT$6,258 thousand, respectively as of December 31, 2025. Tecom Co., LTD. measures the inventories at the lower of cost and net realizable value. Due to the large inventory amount, Tecom Co. is at high risk of inventory impairment loss caused by the rapid changes in industry technology resulting in outdated products or lack of market sales value. Therefore, the valuation of inventories has been identified as a key audit matter.

How our audit addressed the matter

Our audit procedures performed for the above matter are as follows:

Assessed the rationality of policies on allowance for inventory valuation loss.
Selected specific part numbers and verified the net realizable value.
Checked the allowance for inventory valuation loss recognized.

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

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

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

Those charged with governance, including audit committee, are responsible for overseeing the financial reporting process of Tecom Co., LTD.

Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements

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

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

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

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

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

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

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

Accountants: Chiang, Cheng-Han Liu, Chien-Yu

For and on behalf of PricewaterhouseCoopers, Taiwan

Securities : Financial-Supervisory-Securitie

Competent s-Auditing-1130350413

Authority Financial-Supervisory-Securitie

Approved-certi s-Auditing-1090350620

fied No.

March 9, 2026

Tecom Co., LTD.

PARENT COMPANY ONLY BALANCE SHEETS

DECEMBER 31, 2025 and 2024

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

	ASSETS	Notes	December 31,2025		December 31,2024
			AMOUNT	%	AMOUNT	%
CURRENT ASSETS
1100	Cash and cash equivalents	6(1)	$ 56,666	6	$ 116,293	10
1136	Financial assets at amortized cost	6(3) and 8
	-current		3,399	-	23,512	2
1140	Contract assets - current	6(23)	-	-	1,199	-
1150	Notes receivables, net	6(4)	18,704	2	12,726	1
1160	Notes receivables from related	6(4) and 7
	parties, net		2,076	-	581	-
1170	Accounts receivables, net	6(4)	61,638	6	81,612	7
1180	Accounts receivables from related	6(4) and 7
	parties, net		8,855	1	16,628	2
1200	Other receivables	7	1,333	-	1,818	-
1220	Current income tax assets		-	-	-	-
130X	Inventories	6(5)	94,456	9	92,368	8
1410	Prepayments		12,260	1	13,998	1
1460	Non-current assets held for sale, net	6(6)	19,152	2	-	-
1470	Other current assets		344	-	655	-
11XX	Total current assets		278,883	27	361,390	31
NONCURRENT ASSETS
1517	Financial assets at fair value through	6(2) and 8
	other comprehensive income –
	non-current		227,223	22	229,551	19
1550	Investments accounted for using	6(7)
	equity method		202,702	19	206,361	18
1600	Property, plant and equipment	6(8) and 8	51,840	5	55,550	5
1755	Right-of-use assets	6(9) and 7	147,850	14	162,665	14
1760	Investment properties, net	6(10) and 8	21,283	2	22,296	2
1780	Intangible assets	6(11)	3,061	-	1,522	-
1840	Deferred income tax assets	6(30)	115,508	11	115,508	10
1900	Other noncurrent assets	8	1,814	-	12,411	1
15XX	Total noncurrent assets		771,281	73	805,864	69
1XXX	TOTAL ASSETS		$ 1,050,164	100	$ 1,167,254	100

(continued)

-8-

Tecom Co., LTD.
PARENT COMPANY ONLY BALANCE SHEETS
DECEMBER 31, 2025 and 2024
(EXRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Liabilities and Equity	Notes	December31,2025		December31,2024
		AMOUNT	%	AMOUNT	%
CURRENT LIABILITIES
2100	Short-term borrowings	6(12) and 8	$ 209,500	20	270,000	23
2130	Contract liabilities - current	6 (23)	9,189	1	12,109	1
2150	Notes payable		1,980	-	2,810	-
2170	Accounts payable	6 (13)	46,597	4	57,765	5
2180	Accounts payable from related parties	6 (13) and 7	3,520	-	3,601	-
2200	Other payables	6 (14) and 7	52,330	5	51,982	5
2250	Provisions for liabilities - current		2,796	-	5,302	-
2280	Lease liabilities - current	7	7,036	1	7,690	1
2320	Long-term liabilities - current portion	6 (16)(17) and 8	133,000	13	200,000	17
2399	Other current liabilities - others	6 (15)	9,285	1	8,185	1
21XX	Total current liabilities		475,233	45	619,444	53
Non-current liabilities
2530	Bonds payable	6 (16) and 7	-	-	133,000	11
2540	Long-term borrowings	6 (17) and 8	200,000	19	-	-
2550	Provisions for liabilities - non-current		1,158	-	1,444	-
2570	Deferred income tax liabilities	6 (30)	880	-	880	-
2580	Lease liabilities - non-current	7	155,183	15	168,195	15
2600	Other non-current liabilities	6 (7)(18)	25,048	3	44,995	4
25XX	Total noncurrent liabilities		382,269	37	348,514	30
2XXX	Total liabilities		857,502	82	967,958	83
Equity
	Share capital	6 (20)
3110	Ordinary shares		302,719	29	142,719	12
3120	Preferred shares		-	-	160,000	14
	Capital reserve	6 (21)
3200	Capital reserve		-	-	6,237	-
	Retained earnings	6 (22)
3350	Accumulated deficit		( 137,169)	( 13)	( 106,875)	( 9)
	Other equity
3400	Other equity		27,112	2	11,027	1
3500	Treasury stock	6 (20)	-	-	( 13,812)	( 1)
3XXX	Total Equity		192,662	18	199,296	17
	SIGNIFICANT CONTINGENT	9
	LIABILITIES AND UNRECOGNIZED
	CONTRACT COMMITMENTS
	SIGNIFICANT SUBSEQUENT EVENTS	10
3X2X	TOTAL LIABILITIES AND EQUITY		$ 1,050,164	100	1,167,254	100

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

Chairman: Wu, Su-Chiu
CEO: Tien, Ying-Juei
Accounting Manager: Li, Mei-Ling

Tecom Co., LTD.
DECEMBER 31, 2025 and 2024
PARENT COMPANY ONLY STATEMENTS OF OTHER COMPREHENSIVE INCOME
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS.)

	Item	Notes	2025		2024
			AMOUNT	%	AMOUNT	%
4000	Operating revenues	6(23) and 7	$ 464,314	100	$ 483,859	100
5000	Operating costs	6(5) and 7	( 292,425)	( 63)	( 313,036)	( 65)
5900	Gross profit		171,889	37	170,823	35
5910	Unrealized profit from sales		( 2,774)	-	( 6,325)	( 1)
5920	Realized profit from sales		6,325	1	6,286	1
5950	Gross profit, net		175,440	38	170,784	35
	Operating expenses	6(28)(29)
6100	Selling expenses		( 71,397)	( 16)	( 69,453)	( 14)
6200	Administrative expenses		( 52,690)	( 11)	( 47,874)	( 10)
6300	Research and development expenses		( 69,677)	( 15)	( 68,367)	( 14)
6450	Expected credit losses	12 (2)	( 7,345)	( 2)	( 596)	-
6000	Total operating expenses		( 201,109)	( 44)	( 186,290)	( 38)
6900	Operating loss		( 25,669)	( 6)	( 15,506)	( 3)
	Non-operating income and expense
7100	Interest income	6(24)	555	-	1,547	-
7010	Other income	6(25) and 7	22,414	5	20,870	4
7020	Other gains and losses	6(26)	( 11,497)	( 2)	314	-
7050	Financial costs	6(27) and 7	( 18,001)	( 4)	( 19,648)	( 4)
7070	Share of profit of subsidiaries, associates and joint ventures accounted for using the equity method	6(7)
			20,059	4	( 2,271)	-
7000	Total non-operating income and expenses		13,530	3	812	-
7900	Loss before income tax		( 12,139)	( 3)	( 14,694)	( 3)
7950	Income tax expense	6(30)	( 112)	-	-	-
8200	Net loss		( $ 12,251)	( 3)	( $ 14,694)	( 3)
	Other comprehensive income, net
	Not to be reclassified to profit or loss in subsequent periods
8311	Remeasurements of defined benefit plans	6(19)	$ 1,113	-	$ 4,568	1
8316	Unrealized valuation gains or losses from equity instruments investments measured at fair value through other comprehensive income	6(2)
			2,105	1	3,803	1
8300	Other comprehensive income, net		$ 3,218	1	$ 8,371	2
8500	Total comprehensive income		( $ 9,033)	( 2)	( $ 6,323)	( 1)
	Losses per share	6 (31)
9750	Basic earnings per share		( $ 0.76)	( $ 0.76)		1.09)
9850	Diluted earnings per share		( $ 0.76)	( $ 0.76)		1.09)

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

Chairman: Wu, Su-Chiu
CEO: Tien, Ying-Juei
Accounting Manager: Li, Mei-Ling

Tecom Co., LTD.
PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY
YEARS ENDED DECEMBER 31, 2025 and 2024
(EXRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

	Share capital
	Notes	Ordinary shares	Capital reserve	Legal reserve	Accumulated deficit	Unrealized Gain (Loss) on Financial Assets at Fair value through other comprehensive income	Treasury stock	Total equity
2024
Balance at January 1, 2024		$ 142,719	$ 160,000	$ 6,237	($ 116,306)	$ 26,781	($ 13,812)	$ 205,619
Net loss for the year		-	-	-	( 14,694 )	-	-	( 14,694 )
Other comprehensive income (loss) for the year	6(2)(19)	-	-	-	4,568	3,803	-	8,371
Total comprehensive income for the year		-	-	-	( 10,126 )	3,803	-	( 6,323 )
Disposal of equity instruments at fair value through other comprehensive income	6(2)	-	-	-	19,557	( 19,557 )	-	-
Balance at December 31, 2024		$ 142,719	$ 160,000	$ 6,237	($ 106,875)	$ 11,027	($ 13,812)	$ 199,296
2025
Balance at January 1, 2025		$ 142,719	$ 160,000	$ 6,237	($ 106,875)	$ 11,027	($ 13,812)	$ 199,296
Net loss for the year		-	-	-	( 12,251 )	-	-	( 12,251 )
Other comprehensive income (loss) for the year	6(2)(19)	-	-	-	1,113	2,105	-	3,218
Total comprehensive income for the year	6(21)	-	-	-	( 11,138 )	2,105	-	( 9,033 )
Conversion of convertible preferred shares	6 (20)	160,000	( 160,000 )	-	-	-	-	-
Disposal of parent company's shares by subsidiaries treated as treasury share transactions	6 (20)(21)	-	-	( 6,237 )	( 5,176 )	-	13,812	2,399
Disposal of equity instruments at fair value through other comprehensive income	6(2)	-	-	-	( 13,980 )	13,980	-	-
Balance at December 31, 2025		$ 302,719	$ -	$ -	($ 137,169 )	$ 27,112	$ -	$ 192,662

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

Chairman: Wu, Su-Chiu
CEO: Tien, Ying-Juei
Accounting Manager: Li, Mei-Ling

Tecom Co., LTD.
PARENT COMPANY ONLY STATEMENTS OF CASH FLOW
For the years ended December 31,2025 and 2024
(EXRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

	Notes	2025	2024
Cash flows from operating activities:
Loss before income tax		($ 12,139)	($ 14,694)
Adjustments for:
The profit or loss items:
Depreciation expenses	6(8)(9)(10)(28)	18,158	21,262
Amortization expenses	6(11)(28)	1,608	1,259
Expected credit losses	12(2)	7,345	596
Interest expense	6(27)	18,001	19,648
Interest income	6(24)	( 555)	( 1,547)
Dividend income	6(25)	( 8,628)	( 8,440)
Share of loss (profit) of subsidiaries and joint ventures accounted for using the equity method	6(7)	( 20,059)	2,271
Prepayments for investments transferred to losses	6(26)	10,000	-
Unrealized profit (loss) from sales		( 3,552)	39
Changes in operating assets and liabilities :
Changes in operating assets
Contract assets		1,199	8,892
Notes receivables		( 5,978)	2,843
Notes receivables from related parties		( 1,495)	( 480)
Accounts receivables		19,951	6,074
Accounts receivables from related parties		451	526
Other receivables		412	1,124
Inventories		( 2,088)	13,334
Prepayments		1,738	( 9,592)
Other current assets		311	1,462
Changes in operating liabilities
Contract liabilities		( 2,920)	7,074
Notes payables		( 830)	740
Accounts payables		( 11,168)	5,636
Accounts payables to related parties		( 81)	346
Other payables		518	( 1,283)
Provisions for liabilities		( 2,792)	137
Other current liabilities		1,100	1,617
Accrued pension liabilities		( 8,933)	( 8,838)
Cash inflows (outflows) operating activities		( 426)	50,006
Interest received		555	1,853
Interest paid		( 17,984)	( 19,733)
Dividends received		9,251	21,474
Income tax paid		( 41)	-
Net cash flows inflows (outflows) operating activities		( 8,645)	53,600

(continued)

Tecom Co., LTD.
PARENT COMPANY ONLY STATEMENTS OF CASH FLOW
For the years ended December 31,2025 and 2024
(EXRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

	Notes	2025	2024
Cash flows from investing activities:
Decrease in financial assets at amortized cost		$ 20,113	$ 61,261
Proceeds from disposal of financial assets at fair value through other comprehensive income		4,434	40,441
Acquisition of property, plant and equipment	6(32)	( 1,299 )	( 4,601 )
Acquisition of intangible assets	6(11)	( 3,147 )	( 1,732 )
Decrease in guaranteed deposits paid		577	67
Net cash inflows from investing activities		20,678	95,436
Cash flows from financing activities:
Increase in short-term borrowings	6(33)	811,500	1,868,000
Decrease in short-term borrowings	6(33)	( 872,000 )	( 1,922,000 )
Increase in long-term borrowings	6(33)	200,000	-
Decrease in long-term borrowings	6(33)	( 200,000 )	-
Increase (decrease) in guaranteed deposits received	6(33)	( 7 )	332
Repayment of principal portion of lease liabilities	6(33)	( 11,153 )	( 11,609 )
Net cash outflows from financing activities		( 71,660 )	( 65,277 )
Net increase (decrease) in cash and cash equivalents		( 59,627 )	83,759
Cash and cash equivalents at the beginning of the year	6(1)	116,293	32,534
Cash and cash equivalents at the end of the year	6(1)	$ 56,666	$ 116,293

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

Chairman: Wu, Su-Chiu
CEO: Tien, Ying-Juei
Accounting Manager: Li, Mei-Ling

-14-

Tecom Co., LTD.
NOTES TO SEPARATE FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2025 and 2024
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS,
EXCEPT AS OTHERWISE INDICATED)

COMPANY HISTORY AND BUSINESS SCOPE

Tecom Co., LTD. (the “Company”) was incorporated as a company limited by shares under the provisions of the Company Act of the Republic of China (R.O.C.). The Company is primarily engaged in Research, development, manufacture and sales of private branch exchange (PBX) systems and its components and peripherals, as well as agency sales of mobile phone related products. This company is held by Teco Electric & Machinery Co., Ltd. with 63.52% of the shares, which is the ultimate parent company of the Company.

APPROVAL DATE AND PROCEDURES OF THE PARENT COMPANY ONLY FINANCIAL STATEMENTS

The parent company only financial statements were authorized for issuance by the Board of Directors on March 9, 2026.

NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS ADOPTED

(1). Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards accounting standards as endorsed by the Financial Supervisory Commission (“FSC”)
New standards, interpretations and amendments endorsed by the FSC effective from 2025 are as follows:

New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IAS 21 “Lack of Exchangeability”	January 1, 2025

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

(2). Effect of new issuances of or amendments to IFRSs that the came into effect as endorsed by the FSC but not yet adopted by the Company

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

New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 9 and IFRS 7 “Amendments to the Classification and Measurement of Financial Instruments”	January 1, 2026
Amendments to IFRS 9 and IFRS 7 “Contracts Referencing Nature-dependent Electricity”	January 1, 2026
IFRS 17 “Insurance Contract”	January 1, 2023
Amendments to IFRS 17 “Insurance Contract”	January 1, 2023
Amendments to IFRS 17 “Initial Application of IFRS 17 and IFRS 9 - Comparative Information”	January 1, 2023
Annual Improvements to IFRS Accounting Standards—Volume 11	January 1, 2026

Except for those explained as follows, the above standards and interpretations have no significant impact on the Company’s financial condition and financial performance based on the Company’s assessment. Relevant affected amounts will be disclosed upon completion of assessment.

IFRS 9 and Amendments to IFRS 7 ‘Amendments to Classification and Measurement of Financial Instruments’

A. Clarifying the recognition and derecognition dates of some financial assets and liabilities, and adding the provision that an entity is permitted to deem a financial liability (or a part of a

financial liability) that is settled in cash using an electronic payment system discharged before the settlement date if, and only if, the entity has initiated the payment instruction and the following conditions are met:

i. the entity does not have the ability to withdraw, stop or cancel the payment instruction;
ii. the entity does not have the practical ability to access the cash to be used for the settlement due to the payment instruction; and
iii. the settlement risk associated with the electronic payment system is not significant.

B. Updating the disclosure requirements for equity instruments designated as fair value through other comprehensive income (FVTOCI) through an irrevocable election, the fair value should be disclosed by category, without the need to disclose fair value information for each individual item. Additionally, the amount of fair value gains or losses recognized in other comprehensive income during the reporting period should be disclosed, separately showing the fair value gains or losses related to investments derecognized during the reporting period and those related to investments still held at the end of the reporting period; and the cumulative gains or losses transferred to equity upon derecognition of investments during the reporting period.

(3). IFRSs issued by IASB but not yet endorsed by the FSC

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

New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture”	To be determined by IASB
IFRS 18 “Presentation and Disclosure in Financial Statements”	January 1, 2027 (Note)
IFRS 19 “Subsidiaries without Public Accountability”	January 1, 2027
Amendments to IAS21 “The Effects of Changes in Foreign Exchange Rates”	January 1, 2027

Note: The FSC issued a press release on September 25, 2025 to declare that public companies will apply International Financial Reporting Standards 18 (hereinafter referred to as “IFRS 18”) since the fiscal year of 2028. Entities that require to apply IFRS 18 in advance may elect to apply IFRS 18 in advance after FSC’s endorsement.

IFRS 18 “Presentation and Disclosure in Financial Statements”

IFRS 18 “Presentation and Disclosure in Financial Statements” will replace IAS 1, and update the structure of statements of comprehensive income, increase the disclosure of management-defined performance measures, and enhance guidance on the principles of aggregation and disaggregation in the primary financial statements or in the notes.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Unless otherwise stated, the principal accounting policies applied in the preparation of these separate financial statements set out below have been consistently applied to all the periods presented.

(1) Compliance statement

These separate financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Statements by Securities Issuers.

(2) Basis of preparation

A. Except for the following items, these separate financial statements have been prepared under the historical cost convention :

(a) Financial assets at fair value through profit or loss.
(b) Financial assets at fair value through other comprehensive income.
(c) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.

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

(3) Foreign currency translation

Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). The separate financial statements are presented in "New Taiwan Dollars (NTD)", which is the Company's functional and presentation currency.

Foreign currency transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.
Monetary assets and liabilities denominated in foreign currencies are re-translated at the exchange rates prevailing at the end of the financial reporting period. Exchange differences arising upon re-translation are recognized in profit or loss.
Non-monetary assets and liabilities denominated in foreign currencies at fair value through profit or loss are re-translated at the exchange rates prevailing at the end of the financial reporting period. The translation differences are recognized in profit or loss as part of the fair value gain or loss. Non-monetary assets and liabilities at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the end of the financial reporting period. The translation differences are recognized in other comprehensive income. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.
All foreign exchange gains and losses are presented in the statement of comprehensive income within "other gains (losses)".

(4) Classification of current and non-current items

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

(a) Assets arising from operating activities that are to be realized, or are intended to be sold or consumed within the normal operating cycle;
(b) Assets held mainly for trading purposes;
(c) Assets that are expected to be realized within twelve months after the reporting period;

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(d) Except cash or equivalents that are restricted for exchange or payment of liabilities within the next twelve months after the reporting period.

The Company classifies all assets not meeting the above criteria as non-current assets.

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

(a) Liabilities that are to be settled within the normal operating cycle;
(b) Liabilities arising mainly from trading purposes;
(c) The liabilities due within the next twelve months after the reporting period;
(d) The Company does not have the right to defer settlement of the liability for at least twelve months after the reporting period.

The Company classifies all liabilities not meeting the above criteria as non-current liabilities.

(5) Cash equivalents

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

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

Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Company has made an irrevocable election at initial recognition to recognize changes in fair value in other comprehensive.
A regular way purchase or sale of financial assets at fair value through other comprehensive income are recognized and derecognized, as applicable, using trade date accounting.
At initial recognition, the Company measures the financial assets at fair value plus transaction costs. The Company subsequently measures the financial assets at fair value. The changes in fair value of equity instruments are recognized in other comprehensive income. The cumulative gain or loss recognized in other comprehensive income shall not be reclassified to profit or loss upon derecognition, but instead shall be transferred to the "retained earnings" item. Dividends are recognized in profit or loss as dividend revenue when the Company's right to receive payment of the dividend is established, it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend can be measured reliably.

(7) Financial assets at amortized cost

Financial assets at amortized cost are those that meet all of the following criteria:

(1) The objective of the Company's business model is to be achieved by collecting contractual cash flows.
(2) The assets' contractual cash flows represent solely payments of principal and interest.

A regular way purchase or sale of financial assets at amortized cost are recognized and derecognized, as applicable, using trade date accounting.
At initial recognition, the Company measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognized in profit or loss when the asset is derecognized or impaired.
The Company's time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.
The bank deposit which is subject to restriction on use does not meet the definition of cash and cash equivalents, and is classified as financial assets measured at amortized cost.

(8) Accounts and notes receivable

Accounts and notes receivable entitle the Company a legal right to receive consideration in exchange for transferred goods or rendered services.
The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

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(9) Impairment of financial assets

At each balance sheet date, the Company shall assess whether the credit risk on financial assets at amortized cost and lease payments receivables has increased significantly since initial recognition. The Company shall consider all the reasonable and provable information (including foreseeing information). If the credit risk on the financial assets has not increased significantly since initial recognition, the Company shall measure the loss allowance for that instrument at an amount equal to 12-month expected credit losses. If the credit risk on a financial instrument has increased significantly since initial recognition, the Company shall measure the loss allowance for that instrument at an amount equal to lifetime expected credit losses. For those accounts receivables or contract assets not containing significant financing component, the Company shall measure the loss allowance at an amount equal to lifetime expected credit losses.

(10) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to receive cash flows from the financial asset have expired.

(11) Leasing arrangements (lessor) – operating leases

Lease income from an operating lease net of any incentives given to the lessee is recognized in profit or loss on a straight-line basis over the lease term.

(12) Inventories

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

(13) Non-current assets held for sale

A non-current asset is classified as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use, and its sale is highly probable, and is measured at the lower of its carrying amount and fair value less costs to sell.

(14) Investments accounted for under equity method/subsidiaries and associates

Subsidiaries are all entities (including structured entity) controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
Unrealized gains on transactions between the Company and its subsidiaries are eliminated to the extent of the Company's interest in the subsidiaries. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.
The Company's share of its subsidiaries' post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Company's share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company should continue to recognize losses in proportion to its ownership.
Changes in a parent's ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transaction with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
In the case that an associate issues new shares and the Company does not subscribe or acquire new shares proportionately, which results in a change in the Company's ownership percentage of the associate but maintains significant influence on the associate, then 'capital reserve' and 'investments accounted for under the equity method' shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Company's ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognized in other comprehensive income in relation

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to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

The related enterprises refer to all individuals over which the Company has significant influence but no control. Generally, they are directly or indirectly holding more than 20% of the voting rights of the Company. The Company adopts the equity method for investment in related enterprises, and the acquisition is recorded in cost.
An investment in an associate is adjusted thereafter to recognize the Company's share of profit or loss and other comprehensive income of the associate in profit or loss and other comprehensive income accordingly. If the Company's share of losses of an associate equals or exceeds its interest in the associate (including any receivables without collaterals), the Company discontinues recognizing its share of further losses. After the Company's interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.
When the equity changes of non-operating income and other comprehensive income of the affiliated companies occur without affecting the ratio of shareholding in the affiliated companies, the Company shall record such equity changes in "Capital Reserves" in proportion to the ratio of shareholding.
The Company's share of unrealized profits or losses arising from transactions between the Company and associates are eliminated. Unless transactions provide evidence of an impairment loss of the assets transferred, the unrealized losses shall be eliminated as well. Appropriate adjustments of accounting policies of the associates have been made to be uniform with the accounting policies of the Company.
When the Company disposes of an associate, if the Company loses significant influence of the associate, the amount previously recognized in other comprehensive income which relates to the associate, the accounting treatment shall be the same as disposal of the related assets and liabilities. That is, if a gain or loss previously recognized in other comprehensive income by the Company would be reclassified to profit or loss on the disposal of the related assets or liabilities, the Company reclassifies the gain or loss to profit or loss. If the Company still has significant influence over the associate, the Company shall only reclassify to profit or loss the proportion of the gain or loss that had previously been recognized in other comprehensive income relating to that reduction in ownership interest.
According to the Accounting Standards for the Preparation of Financial Reports of Securities Issuers, the income and other comprehensive income of the individual financial report in the current period should be the same as the apportionment of the income and other comprehensive income belonging to the parent company in the consolidated financial report based on the basis of consolidation. The equity of the individual financial report should be the same as the equity belonging to the parent company in the consolidated financial report based on the basis of consolidation.

(15) Property, plant and equipment

Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.
Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
Plant and equipment that apply cost model are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each component of property, plant and equipment that is significant in relation to the total cost of the item is depreciated separately.
The residual value, the useful life, and depreciation method of an item of property, plant, and equipment shall be reviewed at each financial year-end and, if expectations of residual value and useful life differ from previous estimates, or there are significant changes in the pattern in which the asset's future economic benefits are expected to be consumed, the changes shall be accounted for as a change in an accounting estimate in accordance with IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors." The estimated useful lives of property, plant and equipment are as follows:

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Buildings and structures
25 ~ 55 years
Machinery equipment
3 ~ 5 years
Test equipment
3 ~ 5 years
Other equipment
2 ~ 5 years

(16) Lessee's lease transactions — Right-of-use Assets / Lease liability

The Company recognizes right-of-use assets and lease liabilities for all leases at the inception of the lease. When a lease contract is a short-term lease or a lease of a low-value underlying asset, the lease payments are recognized as an expense on a straight-line basis over the lease term.
Lease liabilities are recognized at the present value of the lease payments outstanding at the inception of the lease, discounted at the Company's incremental borrowing rate of interest. Lease payments are fixed rental payments.
Right-of-use assets are recognized at cost at the inception of the lease, which is the original measurement of lease liabilities and any original direct costs incurred.

Right-of-use assets are measured by cost model subsequently. The Company shall depreciate the right-of-use assets from the commencement date to the earlier of the useful life of the right-of-use asset or the end of the lease term. When re-evaluating lease liabilities, any re-measurement amounts of lease liabilities shall be adjusted accordingly with the right-of-use asset.

(17) Investment properties

Investment properties are recognized as cost and are subsequently measured under the cost model. Depreciation is recorded by the straight-line method on assets other than land, with a useful life ranging from 10 to 55 years.

(18) Intangible assets

Intangible assets including computer software and technology are amortized on a straight-line basis over its estimated useful life of 1 to 3 years.

(19) Impairment of non-financial asset

If any indication an asset may be impaired is present, the Company shall assess the recoverable amount of the asset at the balance sheet date. If the recoverable amount of the asset is less than it carrying amount, impairment loss shall be recognized. Recoverable amount is the higher of the asset's net fair value and its value in use. If the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss shall be reversed. The increased carrying amount of an asset attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined, net of amortization or depreciation, had no impairment loss been recognized for the asset in prior years.

(20) Borrowings

Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognized initially at fair value, net of transaction costs incurred. Subsequently, any difference between the proceeds, net of transaction costs, and the redemption value is recognized in profit or loss over the period of the borrowings as interest expenses using the effective interest method.
When it is likely that some or all of the credit limit will be drawn down, the cost incurred at the establishment of the limit is recognized as transaction costs of the loan and deferred to be recognized as an adjustment to the effective interest rate when advances are made; when it is unlikely that some or all of the credit limit will be drawn down, the cost is recognized as a prepayment and amortized over the period related to the limit.

(21) Notes and accounts payable

Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.
The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(22) Derecognition of financial liabilities

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

(23) Bonds payable

Ordinary corporate bonds issued by the Company are initially recognized at fair value less transaction costs. Any difference between the proceeds (net of transaction costs) and the redemption value is presented as an addition to or deduction from bonds payable, which is amortized to profit or loss over the period of bond circulation using the effective interest method as an adjustment to 'finance costs.

(24) Provisions

Provisions for warranty are recognized when the Company has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognized as interest expense. Provisions are not recognized for future operating losses.

(25) Employee benefit

Short-term employee benefits

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

Pensions

(1) Defined contribution plans

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

(2) Defined benefit plans

A. Net obligation under a defined benefit plan is defined as the present value of the amount of pension benefits that employees will receive on retirement for their services with the Company in current period or prior periods. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no deep market in high-quality corporate bonds, the Company uses interest rates of government bonds (at the balance sheet date) instead.

B. Remeasurements arising on defined benefit plan are recognized in other comprehensive income in the period in which they arise and are recorded as retaining earnings.

Employees' compensation and directors' and supervisors' remuneration

Employees' compensation and directors' and supervisors' remuneration are recognized as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequent actual distributed amounts is accounted for as changes in estimates.

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(26) Income tax

The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.
The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the shareholders meeting resolves the earning distribution.
Deferred income tax is recognized using the liability method under the balance sheet approach, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is not recognized for temporary differences arising from the initial recognition of assets or liabilities in a transaction that is not a business combination and, at the time of the transaction, affects neither accounting profit nor taxable profit or loss, and does not result in equal taxable and deductible temporary differences. Deferred income tax arising from temporary differences related to investments in subsidiaries is not recognized when the timing of the reversal of such differences is controlled by the Company, and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred income tax is measured using the tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date and that are expected to apply when the related deferred income tax assets are realized or the deferred income tax liabilities are settled.
Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At the end of the balance sheet date, unrecognized and recognized deferred income tax assets are reassessed.
Current income tax assets and liabilities are offset and the net amount is reported in the balance sheets when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheets when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.
A deferred tax asset shall be recognized for the carryforward of unused tax credits to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilized.

(27) Share capital

Ordinary shares are classified as equity. The classification of preferred shares is based on the evaluation of the specific rights attached to the preferred shares in relation to the substance and definition of the contractual agreement and financial liabilities and equity instruments. When the basic characteristics of financial liabilities are displayed, they are classified as liabilities, otherwise they are classified as equity. The net amount after deducting income tax from the increase in costs directly related to the issuance of new shares is listed in equity as a price deduction.
When the Company repurchases the issued shares, the consideration paid shall be recognized as a reduction of shareholders' equity after netting off any directly attributable incremental costs. When the repurchased shares are reissued, the difference between the sales proceeds received and the carrying amount, net of any directly attributable incremental costs and any related income taxes, shall be recognized as an adjustment to equity.

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(28)Revenue recognition

1. Sales of goods

(1) The Company is engaged in manufacture and sales of communication systems, and smart electromechanical related products. Sales are recognized when control of the products has been transferred, when the products are delivered to the customer, and there is no unfulfilled obligation that could affect the customer's acceptance of the products. Delivery occurs when the products have been shipped to a specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied.

(2) Sales revenue is recognized based on the price specified in the contract, net of the estimated sales discounts. Historical experience is usually used to estimate the sales discounts. Revenue is recognized only to the extent that it is highly probable that a significant reversal in the amount will not occur, and shall be re-estimated at each balance sheet date. A refund liability is recognized at expected sales discounts payable to customers in relation to sales made until the end of the reporting period. The sales are made mainly with a credit term of open account 30 to 120 days. As the time interval between the transfer of committed goods or services and the payment of customer does not exceed one year, the Company does not adjust the transaction price to reflect the time value of money.

(3) The Company's obligation to provide a repair for faulty products under the standard warranty terms is recognized as a provision when sales are made.

(4) An accounts receivable is recognized when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

(5) If Customer shall pay the contract price according to the payment terms agreed upon. If the customer pays in advance before the transfer of goods control, it shall be recognized as a contract liability and recognized as revenue after the transfer of goods control.

2. Costs of obtaining contracts with customers

Although the incremental costs incurred in obtaining customer contracts are expected to be recoverable, as the related contract period is less than one year, such costs are expensed upon occurrence.

(29) Government grants

Government grants shall be recognized at fair value when there is reasonable assurance that the Company will comply with the conditions attaching to them, and that the grants will be received. Government grants shall be recognized in profit or loss on a systematic basis over the periods in which the Company recognizes as expenses the related cost for which the grants are intended to compensate.

5. MAJOR SOURCES OF UNCERTAINTY ARISING FROM SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES, AND ASSUMPTIONS

The preparation of these separate financial statements requires management to make critical judgements in applying the Company's accounting policies and make critical assumptions at the end of the financial reporting period and estimates concerning future events. The resulting accounting estimates and assumptions might be different from the actual results, and will be continually evaluated and dusted based on historical experience and other factors; and the related information is addressed below:

(1) Critical judgments in applying the Company's accounting policies

None.

(2)Critical accounting estimates and assumptions

Evaluation of inventories

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

As of December 31,2025, the carrying amount of the Company’s inventories were $94,456.

Cash and cash equivalents

(1)Cash and cash equivalents

	December 31, 2025	December 31, 2024
	$ -	$ 20
Cash on hand	53,796	104,850
Checking accounts and demand deposits	2,870	-
Time deposits	-	11,423
Deposits in transit	$ 56,666	$ 116,293

The Company transacts with a variety of financial institutions with high credit quality for the purpose of dispersing credit risk, so it expects that the probability of counterparty default is low.
The information of cash classified as "Financial assets at amortized cost" due to restrictions on use is stated in Note 8.

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

Items	December 31, 2025	December 31, 2024
Non-current items:
Equity instruments
Listed and OTC stocks	$ 200,024	$ 200,024
Emerging market stocks	-	18,415
Unlisted ,non-OTC stocks, and stocks in emerging market	87	87
	200,111	218,526
Fair value adjustments	27,112	11,025
	$ 227,223	$ 229,551

The Company has elected to classify equity investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. As of December 31, 2025 and 2024 the fair value above is respectively $227,223 and $229,551.
Amounts recognized in profit or loss and comprehensive income in relation to the financial assets at fair value through other comprehensive income is listed below

2025

2024

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Equity instruments at fair value through other comprehensive income

Changes in fair value recognized in other comprehensive income (loss)	$ 2,105	$ 3,803
Accumulated gains (losses) transferred to retained earnings due to derecognition	($ 13,980)	$ 19,557
Dividend income recognized in profit or loss
Those held at the end of the current period	$ 8,518	$ 8,440

Costs of financial assets at fair value through other comprehensive income sold in 2025 amounted to $18,414, proceeds from the disposal amounted to $4,434. The accumulated losses recognized in other comprehensive income transferred to retained earnings amounted to $13,980.
Details of the Company’s financial assets at fair value through other comprehensive income pledged to others are provided in Note 8.

(3) Financial assets at amortized cost

Items	December 31, 2025	December 31, 2024
Current items:
Demand deposit	$ 2,000	$ 22,805
Time deposits	1,399	707
Total	$ 3,399	$ 23,512

Amounts recognized in profit or loss in relation to financial assets at amortized cost are listed below:

	2025	2024
Interest income	$ 133	$ 975

Without considering other credit enhancements, the amounts representing the maximum credit risk exposure of financial assets at amortized cost as of December 31, 2025 and 2024 are $3,399 and $23,512, respectively.
Please refer to Note 8 for the details of financial assets at amortized cost pledged as collaterals.
As the counterparty of the Company's investment in time deposits are financial institutions of good credit quality, the default risk is expected to be extremely low.

(4) Notes and Accounts Receivable (including from related party)

	December 31, 2025	December 31, 2024
Notes receivable	$ 18,704	$ 12,726
Notes receivable from related party	2,076	581
Less: Loss allowance	-	-
	$ 20,780	$ 13,307
Accounts receivable	$ 62,275	$ 82,899
Accounts receivable from related party	8,855	16,628
Less: Loss allowance	( 637)	( 1,287)
	$ 70,493	$ 98,240

The aging analysis of notes and accounts receivable is as follows :

	December 31, 2025		December 31, 2024
	Accounts receivable	Notes receivable	Accounts receivable	Notes receivable
	$ 62,967	$ 20,780	$ 84,589	$ 13,307
Not past due
Less than 30 days past due	2,110	-	3,875	-
Between 31 and 90 days past due	142	-	2,919	-
Between 91 and 180 days past due	5,911	-	6,472	-
Between 181 and 270 days past due	-	-	1,455	-
More than 271 days past due	-	-	217	-
	$ 71,130	$ 20,780	$ 99,527	$ 13,307

The aging analysis is based on the number of days overdue.

The accounts receivables and notes receivables as of December 31, 2025 and 2024 were due to the contracts with customers. As of January 1, 2024, the balance of account receivables from contracts with customers was $121,797.
Without considering other credit enhancements, the amounts most representing the maximum credit risk exposure of notes receivables as of December 31, 2025 and 2024 are $20,780 and $13,307, respectively. The amounts most representing the maximum credit risk exposure of accounts receivables as of December 31, 2025 and 2024 are $70,493 and $98,240, respectively.
Please refer to Note 12(2) for the information on the credit risk of accounts and notes receivables.

(5) Inventories

	December 31, 2025
	Cost	Loss allowance	Carrying amount
Finished goods	$ 67,140	($ 4,339)	$ 62,801
Work in process	2,913	-	2,913
Raw materials	30,661	( 1,919)	28,742
	$ 100,714	($ 6,258)	$ 94,456
	December 31, 2024
	Cost	Loss allowance	Carrying amount
Finished goods	$ 82,596	($ 28,420)	$ 54,176
Work in process	3,482	-	3,482
Raw materials	56,208	( 21,498)	34,710
	$ 142,286	($ 49,918)	$ 92,368

Inventory costs recognized as expenses or losses are as follows :

	2025	2024
Cost of inventories sold	$ 261,759	$ 287,287
Inventory valuation losses	8,487	7,808

(6) Non-current assets held for sale

The Group resolved by the board of directors on October 31, 2025 to sell the whole shares of investments in three associates accounted for using equity method, and transferred the relevant account to non-current assets held for sale. The transactions have been completed in January 2026. Those non-current assets held for sale as of December 31, 2025 amounted to $19,152.

(7) Investments accounted for using equity method/Other non-current liabilities

	2025	2024
At January 1	$ 196,468	$ 211,812
Share of profit or loss of investments	20,059	( 2,271)
accounted for using equity method
Earnings distribution of investments accounted for using equity method (	623)	( 13,034)
Realized (unrealized) gross profit from sales	3,551	( 39)
The Company’s treasury shares sold by subsidiaries	2,399	-
Transferred to non-current assets held for sale	( 19,152)	-
At December 31	$ 202,702	$ 196,468
	December 31, 2025	December 31, 2024
---	---	---
Subsidiary :
Baycom Opto-Electronic Technology Co., LTD.	$ 195,716	$ 188,156
Wuhan Dongxun Technology Co., Ltd.	6,986	( 9,893)
Associate :
A-Tel Inc.	-	-
Taian Technology Sdn. Bhd.	-	3
E-JOY Electronic International Co., LTD. (Note)	-	6,895
Tecnos International Consultation Co., LTD (Note)	-	9,752
Teco Tour Travel Service Co., LTD. (Note)	-	1,555
	$ 202,702	$ 196,468

Note: Those have been transferred to non-current assets held for sale in October 2025. Please refer to the explanations in Note 6(6).

The information about the Company's subsidiaries, please refer to Note 4 (3) in the Company's 2025 consolidated financial statements
Associate

(1) The Company has no individual significant associate.
(2) Aggregate information of carrying amounts and operation results of the Company's individual insignificant associates was as follows:

As of December 31, 2025 and 2024, the carrying amount of the Company's individual insignificant associates are $0 and $18,205, respectively.

	2025	2024
Profit (loss) from continuing operations	($ 10,543)	($ 5,470)
Other comprehensive income (net after tax)	-	-
Total comprehensive income for the year	($ 10,543)	($ 5,470)

(8) Property, plant and equipment

Buildings structures	and Machinery equipment	Test equipment	Other equipment	Total

At January 1, 2025

Cost	$ 122,724	$ 966	$ 133	$ 11,957	$ 135,780
Accumulated depreciation and impairment	( 74,072)	( 585)	( 70)	( 5,503)	( 80,230)
	$ 48,652	$ 381	$ 63	$ 6,454	$ 55,550
2025
At January 1	$ 48,652	$ 381	$ 63	$ 6,454	$ 55,550
Additions	-	-	182	952	1,134
Depreciation expense	( 2,209)	( 179)	( 95)	( 2,361)	( 4,844)
At December 31	$ 46,443	$ 202	$ 150	$ 5,045	$ 51,840
December 31, 2025
Cost	$ 122,724	$ 966	$ 315	$ 8,200	$ 132,205
Accumulated depreciation and impairment	( 76,281)	( 764)	( 165)	( 3,155)	( 80,365)
	$ 46,443	$ 202	$ 150	$ 5,045	$ 51,840
	Buildings structures	and Machinery equipment	Test equipment	Other equipment	Total
At January 1, 2024
Cost	$ 93,818	$ 1,183	$ 133	$ 13,943	$ 109,077
Accumulated depreciation and impairment	( 54,936)	( 792)	( 26)	( 5,360)	( 61,114)
	$ 38,882	$ 391	$ 107	$ 8,583	$ 47,963
2024
At January 1	$ 38,882	$ 391	$ 107	$ 8,583	$ 47,963
Additions	-	178	-	2,672	2,850
Reclassifications (Note)	11,582	-	-	-	11,582
Depreciation expense	( 1,812)	( 188)	( 44)	( 4,801)	( 6,845)
At December 31	$ 48,652	$ 381	$ 63	$ 6,454	$ 55,550
December 31, 2024
Cost	$ 122,724	$ 966	$ 133	$ 11,957	$ 135,780
Accumulated depreciation and impairment	( 74,072)	( 585)	( 70)	( 5,503)	( 80,230)
	$ 48,652	$ 381	$ 63	$ 6,454	$ 55,550

Note: Reclassified from investment properties to property, plant and equipment.
1. The major components of the building and construction of the Company are buildings, which are depreciated over 55 years, and the rest are decoration projects, which are depreciated over 25 years.
2. Please refer to Note 8 for the information on property, plant and equipment pledge as collaterals.

(9) Lease transactions - lessee

The underlying assets leased by the Company include land, buildings and business vehicles, etc., and the lease periods after considering the extension options and the period of the contract are usually from 1 to 23 years. The lease contracts are negotiated individually and include various terms and conditions. In addition to the leased assets not being used as collateral for borrowing, there are no other restrictions.
The lease period of part of the buildings and equipment does not exceed 12 months, and the underlying assets of the lease payments for assets of low value are copy machines, etc.
The carrying amount of right-of-use assets and depreciation expenses recognized are shown as below :

Carrying amount

December 31, 2025

December 31, 2024

Land	$ 147,314	$ 161,846
Building	536	819
	$ 147,850	$ 162,665
	Depreciation expense
---	---	---
	2025	2024
Land	$ 7,753	$ 8,092
Building	4,548	4,548
Transportation equipment (business car)	-	367
	$ 12,301	$ 13,007

Additions to the right-of-used assets for the years ended December 31, 2025 and 2024 amounted to $4,265 and $3,680, respectively.
The information on profit or loss related to lease contracts is shown as below :

	2025	2024
Items affecting current profit or loss
Interest expense on the lease liabilities	$ 4,161	$ 4,517
Expenses for short-term lease contracts	$ 3,617	$ 2,379
Expenses for the leases of low-value assets	$ 241	$ 222

The cash outflows arising from leases for the years ended December 31, 2025 and 2024 amounting to $19,172 and $18,727, respectively.
When determining the lease term, all facts and circumstances that would give rise to economic incentives for the exercise of any extension options were taken into consideration. If a significant event occurs that affects the evaluation of exercising any extension options, the lease term will be re-estimated.

(10) Investment property

	Buildings and structures
January 1,2025
Cost	$ 56,241
Accumulated depreciation and impairment	( 33,945)
	$ 22,296
2025
January 1	$ 22,296
Depreciation expense	( 1,013)
December 31	$ 21,283
December 31, 2025
Cost	$ 56,241
Accumulated depreciation and impairment	( 34,958)
	$ 21,283
	Buildings and structures
January 1,2024
Cost	$ 85,147
Accumulated depreciation and impairment	( 49,859)
	$ 35,288
2024
January 1	$ 35,288
Depreciation expense	( 1,410)
Reclassifications (Note)	( 11,582)
December 31	$ 22,296
December 31, 2024
Cost	$ 56,241
Accumulated depreciation and impairment	( 33,945)
	$ 22,296

Note: Reclassified from investment properties to property, plant and equipment.

Rental income and direct operating expenses of investment properties :

	2025	2024
Rental income from investment properties	$ 10,907	$ 10,904
Direct operating expenses arising from investment properties generating rental income	$ 344	$ 428

The fair value of the investment properties held by the Company as December 31, 2025 and 2024 amounted to both $101,512 and $91,397, respectively, which is based on the valuation result from the third parties and belongs to level 3 fair value.

(11) Intangible assets

	Computer software	Technology	Total
January 1, 2025
Cost	$ 2,846	$ -	$ 2,846
Accumulated amortization	( 1,324)	-	( 1,324)
	$ 1,522	$ -	$ 1,522
2025
At January 1	$ 1,522	$ -	$ 1,522
Additions	3,147	-	3,147
Amortization expenses	( 1,608)	-	( 1,608)
At December 31	$ 3,061	$ -	$ 3,061
December 31, 2025
Cost	$ 4,445	$ -	$ 4,445
Accumulated amortization	( 1,384)	-	( 1,384)
	$ 3,061	$ -	$ 3,061
	Computer software	Technology	Total
January 1, 2024
Cost	$ 1,642	$ 2,144	$ 3,786
Accumulated amortization	( 799)	( 1,835)	( 2,634)
	$ 843	$ 309	$ 1,152
2024
At January 1	$ 843	$ 309	$ 1,152
Additions	1,732	-	1,732
Amortization expenses	( 950)	( 309)	( 1,259)
Others	( 103)	-	( 103)
At December 31	$ 1,522	$ -	$ 1,522
December 31, 2023
Cost	$ 2,846	$ -	$ 2,846
Accumulated amortization	( 1,324)	-	( 1,324)
	$ 1,522	$ -	$ 1,522
Intangible assets are amortized as follows :
	2025		2024
Operating costs	$ 188		$ 168
Selling expenses	705		471
Administrative expenses	216		69
Research and development expenses	499		551
	$ 1,608		$ 1,259

-32-

(12) Short-term borrowings

Type of borrowings	December 31, 2025	Interest rate range	Collateral
Bank borrowings
Secured borrowings	$ 128,000	2.05%–2.48%	Please refer to Note 8.
Credit borrowings	81,500	2.05%–2.59%	None.
	$ 209,500
Type of borrowings	December 31, 2024	Interest rate range	Collateral
Bank borrowings
Secured borrowings	$ 155,000	2.29%–2.64%	Please refer to Note 8.
Credit borrowings	115,000	2.30%–2.995%	None.
	$ 270,000

The interest expenses arising from long-term and short-term borrowings recognized in profit or loss for the years 2025 and 2024 amounted to $11,146 and $12,434, respectively.

(13) Accounts payables

	December 31, 2025	December 31, 2024
Accounts payables	$ 50,117	$ 61,355
Accrued accounts payables	-	11
	$ 50,117	$ 61,366

(14) Other payables

	December 31, 2025	December 31, 2024
Payables for Salaries	$ 23,483	$ 19,734
Accrued expense payables	13,481	15,952
Others	15,366	16,296
	$ 52,330	$ 51,982

(15) Other current liabilities

	December 31, 2025	December 31, 2024
Refund liability	$ 8,624	$ 7,223
Others	661	962
	$ 9,285	$ 8,185

(16) Bonds payable

	December 31, 2025	December 31, 2024
Private placement bonds payable	$ 133,000	$ 133,000
Less: the current portion	(133,000)	-
	$ -	$ 133,000

The Company issued the first domestic unsecured payable company bonds in Taiwan in 2021 with a total amount of NT$133,000, each with a face value of NT$1,000, fully issued according to the face value of the bond, with a coupon rate of 2%, and a circulation period of 5 years from November 17, 2021 to November 17, 2026.

The unsecured ordinary corporate bonds will be repaid in cash at the maturity date, and the interest will be paid annually.

(17) Long-term borrowing

Type of borrowing	Borrowing period and repayment term	Interest rate range	Collateral	December 31, 2025
Bank Secured	May 23, 2025~ May 23, 2028.	2.45%	Note 8	200,000
Borrowings	Interests shall be paid monthly, and the principal shall be repaid at maturity.
Less: the current portion				( 200,000 )
				$ -
Type of borrowing	Borrowing period and repayment term	Interest rate range	Collateral	December 31, 2024
Bank Secured	December 29, 2021~ December 29, 2024. Interests shall be paid monthly, and the principal shall be repaid at maturity.	2.54%	Note 8	200,000
Borrowings
Less: the current portion				( 200,000 )
				$ -

(18) Other non-current liabilities

	December 31, 2025	December 31, 2024
Accrued pension liabilities	$ 22,282	$ 32,329
Credit balance of investments accounted for using equity method	-	9,893
Guaranteed deposits received	2,766	2,773
	$ 25,048	$ 44,995

(19) Pensions

1.(1) The Company has a defined benefit pension plan in accordance with the Labor Standards Law of Taiwan, covering all regular employees' service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees' monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee.

(2) The amounts recognized in the balance sheets are as follows :

	December 31, 2025	December 31, 2024
Present value of defined benefit obligations contributed	($ 50,171)	($ 57,329)
Fair value of plan assets	27,089	24,194
Net defined benefit liability	(23,082)	(33,135)
Cumulative unadjusted amount	800	806
Net liabilities recognized in the balance sheets	($ 22,282)	($ 32,329)

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

2025	Present value of Defined benefit obligations	Fair value of plan assets	Net defined benefit Liability
At January 1	($ 57,329)	$ 24,194	($ 33,135)
Current service costs	( 130)	-	( 130)
Interest income (expenses)	( 917)	387	( 530)
	( 58,376)	24,581	( 33,795)
Remeasurements
Actuarial gains	-	1,505	1,505
Effects of changes in financial assumptions	871)	-	( 871)
Experience adjustments	479	-	479
	( 392)	1,505	1,113
Pension fund contributions	-	9,600	9,600
Paid pension	8,597	( 8,597)	-
At December 31	($ 50,171)	$ 27,089	($ 23,082)
2024	Present value of Defined benefit obligations	Fair value of plan assets	Net defined benefit Liability
---	---	---	---
At January 1	($ 65,199)	$ 18,638	($ 46,561)
Current service costs	( 184)	-	( 184)
Interest income (expenses)	( 782)	224	( 558)
	( 66,165)	18,862	( 47,303)
Remeasurements
Actuarial gains	-	2,351	2,351
Effects of changes in financial assumptions	1,487	-	1,487
Experience adjustments	730	-	730
	2,217	2,351	4,568
Pension fund contributions	-	9,600	9,600
Paid pension	6,619	( 6,619)	-
At December 31	($ 57,329)	$ 24,194	($ 33,135)

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

(5) The principal actuarial assumptions used in calculating pension are summarized as follows :

	2025	2024
	1.30%	1.60%
Discount rate	1.70%	1.70%
Future salary increases rate

The assumption of future mortality is estimated based on the sixth empirical life table in Taiwan.

The analysis of the present value of the definite benefit obligations for changes in the main assumptions adopted is as follows:

	Discount rate		Future salary increases rate
	Increase by 1%	Decrease by 1%	Increase by 1%	Decrease by 1%
December 31, 2025
Effect on Present value of defined benefit obligations	($ 2,911)	$ 2,978	$ 2,459	($ 2,419)
December 31, 2024
Effect on Present value of defined benefit obligations	($ 3,603)	$ 3,690	$ 3,106	($ 3,052)

The sensitivity analysis above is based on the analysis of the impact of a single assumption change with other assumptions unchanged. In practice, many assumptions may be correlated. The methods used in the sensitivity analysis in this period are the same as those used in calculation of net pension liabilities in the balance sheets.

The method and assumptions used in the sensitivity analysis in this period are the same as those in the previous period.

(6) The Company plans to contribute $9,600 to the pension plan in 2026.
(7) As of December 31, 2025, the weighted average duration of the pension plan is 6 years. The amount of pension that the Company plans to pay is $5,696 in 2026.

2.(1) Effective since July 1, 2005, the Company has established a defined contribution pension plan (New Plan) under the Labor Pension Act, covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based on $6\%$ of the employees' monthly salaries and wages to the employees' individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
(2) The pension costs recognized under the defined contribution pension plans of the Company were $7,995 and $6,266 for the years ended December 31, 2025 and 2024, respectively.

(20) Ordinary shares

As of December 31, 2024, the Company's authorized capital was $9,450,000 (including 20,000 thousand shares which are for employee stock option), and the paid-in capital was $302,719, with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.

The Company's outstanding shares are shown as below: (Unit: share)

	2025	2024
January 1	14,132,908	14,132,908
The Company's shares disposed by subsidiaries	139,020	-
Conversion of convertible preferred shares	16,000,001	-
December 31	30,271,929	14,132,908

The Company’s outstanding preferred shares are shown as below: (Unit: share)

	2025	2024
January 1	16,000,001	16,000,001
Conversion of convertible preferred shares	(16,000,001)	-
December 31	-	16,000,001

On October 12, 2012, the Company resolved by the Extraordinary Meeting of Shareholders to handle the cash capital increase by convertible preferred shares through private placement. The purpose of the cash capital increase is to increase working capital. The number of private placement shares is 333,333,350, and the subscription price per share is $1.5. The capital increase has raised $500,000, and the change registration has been completed. The main rights and obligations of this convertible preferred shares issued by private placement are shown as below:

(1) The dividends of preferred shares are not cumulative.

(2) The dividends of preferred shares shall be paid before distributing dividends to ordinary shareholders, which are calculated at an annual interest rate of 3% based on the issue price.

(3) Except when the dividends of ordinary shares distributed in the year of the aforementioned dividends exceed 3% of the par value, preferred shares shall not participate in the distribution of ordinary shares' earnings or capital reserves before the conversion.

(4) The issuance period of these preferred shares is five years. After that period, if the shareholders do not perform the conversion, the preferred stock dividend has been changed to "3% annual interest and cumulative".

(5) The preferred shareholders have the right to vote, to elect, and to be elected.

(6) When the Company issues new shares by cash, preferred shareholders have the same preemptive stock options as ordinary shareholders

(7) When the Company distributes the residual assets, the preferred shareholders have the same order and percentage as ordinary shareholders.

(8) According to Article 68 of the "Regulations Governing the Offering and Issuance of Securities by the Issuer," the private placement preferred shares issued can apply for public offering after three years from the date of delivery of private placement securities.

(9) The preferred shareholders have no right to sell back.

(10) Investors may submit conversion applications to the issuing company at any time, except for suspension period, since the date from two years after the issuance of preferred shares. Each preferred share shall be converted into 1 ordinary share.

(11) The Board of Directors is authorized to formulate the issuance, conversion, and other related matters of preferred shares in accordance with the relevant laws and regulations.

(12) If the Company executes capital reduction, which gives rise to shares held by shareholders reduced based on the percentage of ownership, the accumulated dividend rights of preferred shares before the capital reduction will not be eliminated due to the capital reduction. After the capital reduction, the dividends shall be accumulated according to the number of shares reduced.

The Company has approved by the board of directors' resolution on October 31, 2025 to acquire the conversion application from the whole shareholders of preferred shares. Each preferred share is convertible into one ordinary share. The registration of the aforementioned conversion has been completed.
Treasury stock

(1) The subsidiary of the Company, BAYCOM OPTO-ELECTRONICS TECHNOLOGY CO., LTD., acquired 6,447 thousand of shares of the Company in 2011 for group strategic investment plans. The carrying amount per share is $4.89, and the total carrying amount is $31,496. The amount recognized in treasury stock for the 2,821 shares calculated by the percentage of ownership of 43.76% is $13,784.

-36-

(2) The subsidiary of the Company, BAYCOM OPTO-ELECTRONICS TECHNOLOGY CO., LTD. disposed 318 thousand shares of the Company in 2025 for group strategic investment plan. The cost amounted to $31,560, and the proceeds from the disposal amounted to $5,481. The number of shares calculated in accordance with 43.76% of ownership by the Company is 139 thousand shares, and the treasury shares written off amounted to $13,812. Besides, as the subsidiary's disposal of the Company's shares is treated as treasury share transaction, $6,237 of capital surplus and $5,176 of accumulated deficit have been written down, $11,413 in total.

(3) After capital reduction, subscription of odd shares, and sales, the number of shares held by BAYCOM OPTO-ELECTRONICS TECHNOLOGY CO., LTD. are 0 thousand and 318 thousand, respectively, as of December 31, 2025 and 2024. The average carrying amount per share amounted to both $99.34, and the fair value per share amounted to both $15.45 as of December 31, 2024.

(21) Capital reserve

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

	2025		2024
	Change in net equity of associates		Change in net equity of associates
January 1	$	6,237	$	6,237
Disposal of the parent company's shares treated as treasury share transaction	(	6,237)		-
December 31	$	-	$	6,237

(22) Retained earnings (accumulated deficits)

According to the Article of Incorporation, the annual net income of the Company shall be appropriated in accordance with the priorities listed as follows:

(1) Tax payment.
(2) Recovery of losses.
(3) Appropriation of 10% for legal reserve unless the total legal reserve accumulated has already reached the amount of Groups' authorized capital.
(4) Appropriation or reversal of special reserve pursuant to applicable law or regulation.
(5) Distribution of preferred shares dividends
(6) The Board of Directors proposes to the shareholders meeting for resolutions to distribute the amount of net profit, which includes the balance of the undistributed profit from the previous year, as dividends to the shareholders.

The Company's dividend distribution policy is subject to the Company's current and future investment environment, fund requirements, competition from local and abroad, and capital budgets, as well as taking into consideration the interests of shareholders, balance dividend, and long-term financial planning. The Board of Directors shall prepare a proposal for the distribution of dividends to shareholders each year in accordance with the law. The proportion of cash dividends distributed from the aforementioned shareholders' dividends each year shall not exceed 50%, but shall not be lower than 5%. However, this dividend distribution policy can be adjusted by the Board of Directors after resolution and submitted to the shareholders' meeting for resolution according to the actual operating conditions.
Except for covering the accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used

for any other purpose. However, the legal reserve may be distributed by issuing new shares or by cash, for the portion in excess of 25% of the paid-in capital.

In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
The accumulated deficits off-set for 2024 were resolved by the shareholders meeting on June 19, 2025.

(23) Operating revenue

	2025	2024
	$ 464,314	$ 483,859

Revenue from contracts with customers

Disaggregation of revenue from contracts with customers

The Company's revenue can be divided into major product lines and geographical regions as follows:

2025:

	Business communication system			Intelligent electromechanical system and others			Total
	Taiwan	USA	Others	Taiwan	USA	Others
Revenue from contracts with external customers	$382,827	$ 186	$ 366	$65,545	$1,731	$13,659	$464,314

2024:

	Business communication system			Intelligent electromechanical system and others			Total
	Taiwan	USA	Others	Taiwan	USA	Others
Revenue from contracts with external customers	$385,338	$7,357	$363	$65,959	$313	$24,529	$483,859

Contract assets and liabilities

(1) The contract assets and contract liabilities related to revenue from contracts with customers recognized by the Company are as follows:

	December 31, 2025	December 31, 2024	January 1, 2024
	$ -	$ 1,199	$ 10,091
Contract liabilities - construction contracts
Contract liabilities - product sales	$ 9,189	$ 12,109	$ 5,035
contracts

(2) Contract liabilities at the beginning of the period recognized as revenue in the current period

	2025	2024
Product sales contract	$ 6,552	$ 3,312
(24)Interest income
	2025	2024
Interests from bank deposits	$ 555	$ 1,547
(25)Other income
	2025	2024
Rent income	$ 11,240	$ 11,000
Dividend income	8,628	8,440
Other income - others	2,546	1,430
	$ 22,414	$ 20,870
(26)Other gains and losses
	2025	2024
Foreign currency exchange gains	$ 915	$ 2,153
Depreciation of investment properties	( 1,013)	( 1,410)
Prepayments for investments transferred to losses	( 10,000)	-
(Note)
Other gains and losses	( 1,399)	( 429)
	($ 11,497)	$ 314

Note: As the transaction of contract deposit for subscription of shares was not performed, the deposits were transferred to other losses.

(27)Financial cost

	2025	2024
Interest expense	$ 18,001	$ 19,648

(28)Additional information on nature of expenses

	2025	2024
Employee benefits expense	$ 148,797	$ 141,392
Depreciation expense	18,158	21,262
Amortization expense	1,608	1,259
	$ 168,563	$ 163,913

(29)Employee benefit expenses

	2025	2024
Wages and salaries	$ 122,085	$ 116,542
Labor and health insurance fees	12,048	12,071

Pension expenses
8,655
7,008
Other personnel expenses
6,009
5,771
$ 148,797
$ 141,392

According to the Company's Articles of Incorporation, the Company shall allocate remuneration to employees at the rate of 1%–10% of annual profits, and to directors at the rate of no higher than 5% of annual profits during the period; provided, however, that when the Company has accumulated losses, the profits shall be preserved to make up for losses, before distributing to employees and directors.
The amount shall be accrued based on the profit condition as of the current period for the years ended December 31, 2025 and 2024. Since as of December 31, 2025 and 2024, the Company incurs accumulated deficit, the amounts accrued are $0.
The information about the employees' and directors' remuneration resolved by the board of directors is available at the Market Observation Post System website..

(30) Income tax

Income tax expenses

(1) Components of income tax expense:

	2025	2024
Current income tax :
Current income tax on profits for the year	$ -	$ -
Underestimation on income tax in prior years	112	-
Total current income tax	112	-
Deferred income tax:
Origination and reversal of temporary differences	-	-
Total deferred income tax	-	-
Income tax expenses (benefits)	$ 112	$ -

(2) Amount of taxes related to other comprehensive income. : None.

(3) Amount of income tax on income directly debited or credited in equity : None.

The relationship between income tax expenses and accounting profit :

	2025	2024
Income tax calculated by profit (loss) before tax($) multiplying the enacted tax rates	2,428)	($ 2,939)
Items that shall be excluded based on tax laws	3,735	90
Tax exempt income based on tax laws	( 5,738)	7,117
Temporary differences not recognized as deferred tax( assets	11,535)	( 4,268)
Overestimation on income tax in prior years	112	-
Tax losses not recognized as deferred tax assets	15,966	-
Income tax expenses	$ 112	$ -

The amounts of deferred income tax assets or liabilities arising from temporary differences and tax losses are as follows:

	2025
	At January 1	Recognized in Profit or Loss	Recognized in Other Comprehensive Income	Recognized in equity	December 31
Tax loss	$ 115,508	$ -	$ -	$ -	$ 115,508
Temporary differences
-Deferred tax liabilities:
Remeasurement of defined obligations	($ 880)	$ -	$ -	$ -	($ 880)
	2024
---	---	---	---	---	---
	At January 1	Recognized in Profit or Loss	Recognized in Other Comprehensive Income	Recognized in equity	December 31
Tax loss	$115,508	$ -	$ -	$ -	$115,508
Temporary differences
-Deferred tax liabilities:
Remeasurement of defined obligations	($ 880)	$ -	$ -	$ -	($ 880)

Expiration dates of unused taxable loss and amounts of unrecognized deferred income tax assets are as follows:

December 31, 2025
Year incurred	Amount filed/assessed	Unused amount	Unrecognized deferred income tax assets	Year of expiration
2016	$ 99,269	$ 99,269	$ 99,269	2026
2017	116,640	116,640	116,640	2027
2018	62,637	62,637	62,637	2028
2019	95,985	95,985	95,985	2029
2021	498,607	498,607	64,210	2031
2022	19,804	19,804	-	2032
2023	53,460	53,460	-	2033
2025	69,879	69,879	-	2035
	$ 1,016,281	$ 1,016,281	$ 438,741
December 31, 2024
---	---	---	---	---
Year incurred	Amount filed/assessed	Unused amount	Unrecognized deferred income tax assets	Year of expiration
2015	$ 278,639	$ 278,639	$ 278,639	2025
2016	99,269	99,269	99,269	2026
2017	116,640	116,640	116,640	2027
2018	62,637	62,637	62,637	2028
2019	95,985	95,985	90,021	2029
2021	498,607	498,607	-	2031
2022	19,804	19,804	-	2032
2023	53,165	53,165	-	2033
	$ 1,224,746	$ 1,224,746	$ 647,206

As described in Note 12(4) of the financial statements, the Company continues improving the operating condition, thus, tax losses may be utilized in future periods have been recognized as deferred income tax assets.

Deductible temporary differences not recognized deferred income tax assets :

	December 31, 2025	December 31, 2024
Deductible temporary differences	$ 76,358	$ 120,904

Profit-seeking Enterprise Income Taxes of the Company have been verified by the tax collection authority until 2022.

(31) Losses per share

	2025
	Amount after tax	Weighted average number of ordinary shares outstanding (in thousands of shares)	Losses per share (in dollars)
Basic losses per share
Net loss attributable to shareholders of the parent	($ 12,251)	16,016	($ 0.76)
	2024
	Amount after tax	Weighted average number of ordinary shares outstanding (in thousands of shares)	Losses per share (in dollars)
Basic losses per share
Losses attributable to shareholders of the parent	($ 14,694)
less: preferred shares dividends	(720)
Losses attributable to ordinary shareholders of the parent	($ 15,414)	14,133	($ 1.09)
Diluted losses per share
Losses attributable to shareholders of the ordinary shareholders of the parent	($ 15,414)	14,133
Effect of dilutive potential ordinary shares 3% of cumulative convertible preferred shares	-	-
Losses attributable to shareholders of the ordinary shareholders of the parent plus the effect of potential ordinary shares	($ 15,414)	14,133	($ 1.09)

As the Company incurred loss for the years ended December 31, 2025 and 2024, there is no effect of dilutive potential ordinary shares. Therefore, diluted losses per share equal to basic losses per share..

(32) Supplemental information on cash flows

Investing activities with partial cash payments :

	2025	2024
Purchase of property, plant and equipment	$ 1,134	$ 2,850
Add: Opening balance of payables on equipment	187	2,724
Less: Ending balance of payables on equipment	-	( 187)
Less: Opening balance of prepayments for equipment	22)	( 808)
Add: Ending balance of prepayments for equipment	-	22
Cash paid in current period	$ 1,299	$ 4,601

Financing activities not affecting cash flows:

	2025	2024
Share capital transferred from convertible preferred shares	$ 160,000	$ -

(33) Changes in liabilities from financing activities

	Long-term borrowings		Corp. bonds (including the current portion)	Lease principal repayment	Guaranteed deposits from financing activities
	Short-term (including the Borrowings current portion)
January 1, 2025	$ 270,000	$ 200,000	$ 133,000	$ 175,885	$ 2,773
Changes in cash flows from financing activities	( 60,500)	-	-	( 11,153)	( 7)
Interest expenses	-	-	-	4,161	-
Interest expenditures	-	-	-	( 4,161)	-
Modification in lease liabilities	-	-	-	( 6,778)	-
Increase in lease liabilities	-	-	-	4,265	-
December 31, 2024	$ 209,500	$ 200,000	$ 133,000	$ 162,219	$ 2,766
	Long-term borrowings		Corp. bonds (including the current portion)	Lease principal repayment	Guaranteed deposits from financing activities
---	---	---	---	---	---
	Short-term (including the Borrowings current portion)
January 1, 2024	$324,000	$200,000	$133,000	$183,814	$2,773
Changes in cash flows from financing activities	(54,000)	-	-	(11,609)	-
Interest expenses	-	-	-	4,517	-
Interest expenditures	-	-	-	(4,517)	-
Increase in lease liabilities	-	-	-	3,680	-
December 31, 2024	$270,000	$200,000	$133,000	$175,885	$2,773

7. RELATED PARTY TRANSACTIONS

(1) Parent Company and the final Controller

The Company is controlled by TECO Electric & Machinery Co., Ltd. (registered in Taiwan), which owns 63.52% of the shares of the Company, and is the ultimate parent company and ultimate controller of the Company. The remaining 36.48% is held by the public.

(2)Names and relationships of related parties

Names of related parties	Related Party Category
Baycom Opto-Electronic Technology CO., LTD.	Subsidiary
Wu Han Tecom Co., Ltd	Subsidiary
TECO Electric & Machinery Co., Ltd	Parent Company
Guandehong Technology Co., Ltd.	Substantive related party
Taiwan Ericsson Co., Ltd.	Substantive related party
WANTGO.COM CO., LTD.	Substantive related party
Wuxi Teco Electric & Machinery Co., Ltd	Fellow subsidiary
JIE ZHENG PROPERTY SERVICE & MANAGEMENT CO., LTD.	Fellow subsidiary
Tecnos International Consulting Co., Ltd.	Fellow subsidiary
INFORMATION TECHNOLOGY TOTAL SERVICES CO., LTD.	Fellow subsidiary
TONG DAI CO., LTD.	Fellow subsidiary
Dong An Asset Development Management Co., Ltd.	Fellow subsidiary
AN-SHIN FOOD SERVICES CO.,LTD.	Fellow subsidiary
Teco Tour Travel Service co., ltd.	Fellow subsidiary
Yatec Engineering Corporation	Fellow subsidiary
E-JOY Electronic International Co., LTD.	Fellow subsidiary
A-OK TECHNICAL SERVICE CO., LTD.	Fellow subsidiary
TAIWAN PELICAN EXPRESS CO., LTD.	Fellow subsidiary
TAISAN ELECTRIC CO., LTD.	Fellow subsidiary
Taian (Subic) Electric Co., Ltd.	Fellow subsidiary
Shanghai TECO Electric & Machinery Co., Ltd.	Fellow subsidiary
TECO Australia Pty Limited (TAC)	Fellow subsidiary
TECO - Westinghouse Motor Company	Fellow subsidiary
TECO Westinghouse Motor Industrial Canada	Fellow subsidiary
TECO New Zealand Ltd.	Fellow subsidiary
YUBANTEC INDIA PRIVATE LIMITED	Other related party

~44~

(3)Significant transactions and balances with related parties

Opearing revenue

	2025	2024
Sales of goods :
- Wuhan Dongxun Technology Co., Ltd.	$ 12,611	$ 15,395
- Parent company	8,365	8,454
- Fellow subsidiary	6,065	4,916
- Subsidiary	-	30
	$ 27,041	$ 28,795

Sales are based on normal commercial terms and conditions

Purchases of goods

	2025	2024
Purchases of goods
- Wuhan Dongxun Technology Co., Ltd.	$ 14,761	$ 19,690
- Parent company	5,234	2,739
	$ 19,995	$ 22,429

Purchases of goods are based on normal commercial terms and conditions.

Receivables from related parties

	December 31, 2025	December 31, 2024
Notes receivables:
- Fellow subsidiary	$ 2,076	$ 581
Accounts receivables:
- Wu Han Tecom Co., Ltd.	7,121	13,478
- Fellow subsidiary	96	1,636
- Parent company	1,638	1,514
	8,855	16,628
Other receivables
- Subsidiary	407	179
- Substantive related party	11	11
	418	190
Allowance for bad debts	-	-
Subtotal	418	190
Total	$ 11,349	$ 17,399

Receivables from related parties mainly arise from sales transactions, with a maturity of 30 to 120 days after the date of sale.

Payables to related parties

	December 31, 2025	December 31, 2024
Accounts payables:
- Wu Han Tecom Co., Ltd.	$ 432	$ 3,123
- Parent company	3,088	478
	$ 3,520	$ 3,601
Other payables to related parties :
- Wu Han Tecom Co., Ltd	$ 3,617	$ 2,931
- Baycom Opto-Electronics Technology Co., Ltd.	1,820	-
- Parent company	248	280
- Fellow subsidiary	162	72
	$ 5,847	$ 3,283

The accounts payable to related parties are mainly from purchase transactions, and payment shall be made within 25 to 90 days after receipt of goods. There is no interest attached to the payables.

5. Other related party transactions

	December 31, 2025	December 31, 2024
Bonds payable (including the current portion)
- Baycom Opto-Electronic Technology Co., Ltd.	$ 133,000	$ 133,000
	2025	2024
Interest expenses-bonds payable
- Baycom Opto-Electronic Technology Co., Ltd.	$ 2,660	$ 2,667
	2025	2024
Service costs/other expense
- Wu Han Tecom Co., Ltd	$ 25,777	$ 23,683
- Parent company	1,765	1,554
- Fellow subsidiaries	529	238
	$ 28,071	$ 25,475

6. Lease transactions – lessee

(1) The Company rents offices and parking areas from fellow subsidiaries. The periods of the lease contracts are 1 year. The rents are paid at the end of each month or quarter.

The Company rents cars from the parent company. The lease period is 1 year, and the rents are paid at the end of each month.

(2) Acquisition of right-of-use assets

Fellow subsidiary	December 31, 2025	December 31, 2024
	$ 3,680	$ 3,680

(3) Rent expenses

	2025	2024
Parent company	$ -	$ 347
Fellow subsidiary	91	91
Total	$ 91	$ 438

(4) Lease liability

Interest expenses	2025	2024
Fellow subsidiary	$ 50	$ 50

Leasing transaction—Lessor

In 2025 and 2024, the Company received rental income of $5,926 and $5,928 respectively from leasing part of the plants and offices to related parties, which is collected on a monthly basis.

Baycom Opto-Electronic Technology Co., Ltd. $ 5,857 $ 5,855
Substantive related party 69 73

(4) Key management compensation

	2025	2024
Short-term employee benefits	$ 12,493	$ 12,856
Post-employment benefits	354	353
Total	$ 12,847	$ 13,209

PLEDGED ASSETS

The details of the Company’s restricted assets are as follows :

	Carrying amount
Assets Item	December 31, 2025	December 31, 2024	Purpose
Bank deposits (recognized as financial assets at amortized cost)	$ 3,399	$ 23,512	Lease security deposit and borrowing restrictions
Guaranteed deposits paid	-	681	Guarantee for the customs duties
Financial assets at fair value through other comprehensive income—non-current	227,136	219,620	Guarantee for bank loans
Plant in Hsinchu	67,726	70,948	Guarantee for bank loans
	$ 298,261	$ 314,761

-48-

9. SIGNIFICANT CONTINGENCIES AND UNRECOGNIZED CONTRACT COMMITMENTS

(1) Contingencies

None.

(2) Commitments

As of December 31, 2025, the Company commissioned banks to issue the guaranteed bills and guarantee letters for the fulfillment of sale contracts and bids, with a total amount of $4,729.

10. SIGNIFICANT SUBSEQUENT EVENTS

(1) The Company has resolved by the board of directors on March 9, 2026 to make up for accumulated deficit by capital reduction amounting to $137,169. The capital reduction ratio is 45.312174%. The proposal is pending to be resolved by the regular shareholders meeting.

(2) The Company has resolved by the board of directors on March 9, 2026 to handle capital increase by private placement of ordinary shares. The upper limit of the issuance is 7,500 thousand shares, and the issuance may be separated into three times within one year after the date of the shareholders meeting's resolution.

11. OTHERS

(1) Capital management

The Company's objectives when managing capital are to safeguard the Company's ability to operate with the goal to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, The Company may issue new shares or sell assets to reduce debts. The Company monitors capital on the basis of the debt capital ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including 'current and non-current borrowings' as shown in the consolidated balance sheet) less cash and cash equivalents. Total capital is calculated as 'equity' as shown in the consolidated balance sheet add the total net debts.

The strategy of capital management is the same in 2025 and 2024. The Company is committed to improving the capital structure and reducing the debt-to-capital ratio through appropriate planning and management. The debt to capital ratios as of December 31, 2025 and 2024 are shown as below:

| | December 31, 2025
$ 542,500 | December 31, 2024
$ 603,000 |
| --- | --- | --- |
| Total borrowings | ( 56,666) | ( 116,293) |
| Less: cash and cash equivalents | 485,834 | 486,707 |
| Net debt | 192,662 | 199,296 |
| Total equity | $ 678,496 | $ 686,003 |
| Total capital | | |
| Debt to capital ratio | 72% | 71% |

(2) Financial instruments

1. Financial instruments by category

	December 31, 2025	December 31, 2024
Financial assets
Financial assets at fair value through other comprehensive income
Investments in equity instruments elected to be designated	$ 227,223	$ 229,551
measured at fair value through other comprehensive income (current and non-current)
Financial asset at amortized cost

	56,666	116,293
Cash and cash equivalents	3,399	23,512
Financial assets at amortized cost	20,780	13,307
Notes receivable	70,493	98,240
Accounts receivable	1,333	1,818
Other receivables	1,814	2,391
Guaranteed deposits paid	$ 381,708	$ 485,112
	December 31, 2025	December 31, 2024
Financial liabilities
Financial liabilities at amortized cost
Short-term borrowings	$ 209,500	$ 270,000
Notes payables	1,980	2,810
Accounts payables	50,117	61,366
Other payables	52,330	51,982
Bonds payables (including current portion)	133,000	133,000
Long-term borrowings (including current portion)	200,000	200,000
Guaranteed deposits received	2,766	2,773
	$ 649,693	$ 721,931
	$ 162,219	$ 175,885

2. Risk management policies

(1) The Company's operation is influence by several financial risks, including market risk (including foreign exchange risk, interest rate risk and price risk), credit risk, and liquidity risk. The Company's overall risk management policy focuses on the unpredictable item of financial markets and seeks to reduce the risk that potentially pose adverse effects on the Company's financial position and financial performance.

(2) Risk management is executed by the Company's finance department by following authorized policies. The finance department cooperates with the Company's operating units, and takes charge in identifying, evaluating and hedging financial risks.

The Management has a written policy covering overall risk management. It also has written policies covering specific issues, such as exchange rate risk, interest rate risk, credit risk, derivative and non-derivative financial instruments used, and the investment of excess working capital.

3. Significant financial risks and degrees of financial risks

(1) Market risk

Foreign exchange risk

A. The Company operates on a cross-border basis, so it is exposed to foreign exchange risks arising from the differences between the functional currencies of the Company and its subsidiaries, primarily USD and CNY. The related foreign exchange risks arise from future commercial transactions and assets and liabilities already recognized.

B. The Company manages its foreign exchange risk through the Company Finance Department. To manage the foreign exchange risk arising from future business transactions and recognized assets and liabilities, all companies within the Company are regularly reviewed by the Company Finance Department for exchange rate fluctuations. When future business transactions, recognized assets or liabilities are priced in currencies other than the functional currency of the entity, foreign exchange risk arises.

C. The Company's businesses involve a number of non-functional currencies (the Company's functional currency is NTD), so they are affected by exchange rate fluctuations. The foreign assets and liabilities with significant exchange rate fluctuations are as follows:

	December 31, 2025
	Foreign currency amount(thousand)	Exchange rate	Carrying amount (NT)
(Foreign currency: Functional currency)
Financial assets
Monetary items
USD : TWD	$ 450	31.430	$ 14,144
CNY : TWD	2,113	4.496	9,500
Non-monetary items: none.
Financial liabilities
Monetary items
USD : TWD	$ 976	31.430	$ 30,676
CNY : TWD	993	4.496	4,465
Non-monetary items: none.
	December 31, 2024
---	---	---	---
	Foreign currency amount(thousand)	Exchange rate	Carrying amount (NT)
(Foreign currency: Functional currency)
Financial assets
Monetary items
USD : TWD	$ 516	32.785	$ 16,917
CNY : TWD	3,520	4.478	15,763
Non-monetary items: none.
Financial liabilities
Monetary items
USD : TWD	$ 1,095	32.785	$ 35,900
CNY : TWD	1,358	4.478	6,081
Non-monetary items: none.

D. The total amount of all exchange gains (losses) (including realized and unrealized) recognized by the Company due to exchange rate fluctuations was $915 and $2,153, respectively, for the years ended December 31, 2025 and 2024.

E. The information that would be materially affected by the exchange rate fluctuations is as follows:

	2025
	Sensitivity Analysis
	Effect on profit and loss	Effect on profit and loss	Effect on profit and loss
(Foreign currency: Functional currency)
Financial assets
Monetary items
USD : TWD	1%	$ 141	$	-
CNY : TWD	1%	95		-
Non-monetary items: none.
Financial liabilities
Monetary items
USD : TWD	1%	($ 307)	$	-
CNY : TWD	1%	( 45)		-
Non-monetary items: none.
	2024
---	---	---	---	---
	Sensitivity Analysis
	Effect on profit and loss	Effect on profit and loss	Effect on profit and loss
(Foreign currency: Functional currency)
Financial assets
Monetary items
USD : TWD	1%	$ 169	$	-
CNY : TWD	1%	158		-
Non-monetary items: none.
Financial liabilities
Monetary items
USD : TWD	1%	($ 359)	$	-
CNY : TWD	1%	( 61)		-
Non-monetary items: none.

Price risk

A. The Company's financial instruments, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity instruments, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.
B. The Company mainly invests in financial instruments comprised of shares and open-ended funds issued by the domestic companies. The value of financial

instruments is susceptible to the market price risk arising from uncertainties about the future performance of equity markets. A change of increase or decrease 1% in the price of the aforementioned financial assets at fair value through other comprehensive income could increase or decrease the Company's other comprehensive income for the years ended December 31, 2025 and 2024 by $2,272 and $2,296, respectively.

Cash flow and fair value interest rate risk

A. The Company's main interest rate risk arises from short-term and long-term borrowings with variable rates which expose the Company to cash flow interest rate risk. During the years ended December 31, 2025 and 2024, the Company's borrowings at variable rates were denominated in USD and NTD.

B. Borrowings of the Company are measured at amortized cost and the interest rate will be repriced according to the contractual agreement every year, thus the Company is exposed to the risk of future market rate fluctuations.

C. If interest rates on borrowings had increased or decreased 1% with all other variables held constant, net income after-tax for the years ended December 31, 2025 and 2024 would have decreased or increased by $4,340 and $4,824, respectively, mainly as a result of interest expenses varying by floating rate borrowings.

(2) Credit risk

A. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments. The company is exposed to credit risks from accounts receivables that the counterparty is unable to pay off by the payment term, and the contractual cash flows at amortized cost.

B. The Company manages credit risk in terms of the Company. The Company only accepts banks or institutions assessed to be with good credit quality as correspondent bank or financial institutions. Based on internal credit policies, the Company shall manage and implement credit risk analysis before determining payment terms and delivery terms with new customers. Internal risk control evaluates customers' credit quality by considering the financial condition, past experiences, and other factors. The individual risk limits are established by the management level according to the internal rating, and the credit limit is monitored regularly.

C. Credit risk impairment assessment of financial assets at amortized cost under general model:

(1) The Company adopts IFRS 9 assuming that if the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition; if past due over 90 days, a default has occurred.

(2) The Company has taken into consideration of the forward-looking considerations to adjust historical and current information and consider the credit ratings of the issuing banks to estimate the expected credit losses.

(3) The financial assets at amortized cost held by the Company include time deposits in banks and restricted deposits in banks, the credit ratings of which are all good, without any overdue in the past. Considering the overall economic environment without significant changes, the risk of credit loss is extremely low and the impact on the financial statements is also small.

D. Indicators that the Company used to determine investment in debt instruments is credit-impaired are as follows:

(1) significant financial difficulty of the issuer, or it is becoming probable that the issuer will enter bankruptcy or other financial reorganization;

(2) the disappearance of an active market for that financial asset because of the financial difficulties of the issuer;

(3) the issuer delays or refuses the payments of interests or principal;

(4) Unfavorable changes in national or regional economic conditions that result in the default of the issuer.

E. The Company writes off the amount of financial assets at are not reasonably to be recovered after the recourse procedures. However, the Company will keep the legal procedures of recourse to preserve the right of debts.

F. Credit Risk Impairment Assessment of Accounts Receivable and Notes

-52-

Receivable :

(1) The Company estimates the expected credit losses based on the simplified approach with a loss rate method for the accounts receivables and notes receivables grouped by customers' ratings.

(2) The Company has incorporated an adjustment to the loss rate based on past and current information over a certain period to estimate the provision for losses on accounts receivables and notes receivables as of December 31, 2025 and 2024, as follows:

	Group 1	Group 2	Group 3	Group 4	Group 5	Total
December 31, 2025
Expected loss rate	0.03%–1%	0.03%–2%	0.03%–5%	0.03%–10%	0.03%–100%
Total carrying amount	$ 46,978	$ 12,567	$ 17,724	$ 9,196	$ 5,445	$ 91,910
Loss allowance	$ -	$ -	$ 12	$ 288	$ 337	$ 637
	Group 1	Group 2	Group 3	Group 4	Group 5	Total
December 31, 2024
Expected loss rate	0.03%–1%	0.03%–2%	0.03%–5%	0.03%–10%	0.03%–30%
Total carrying amount	$ 59,220	$ 9,545	$ 16,931	$ 23,737	$ 3,401	$ 112,834
Loss allowance	$ 771	$ -	$ -	$ 414	$ 102	$ 1,287

(3) The Company’s allowances of trade receivables are shown as below :

	2025	2024
	Accounts receivables	Accounts receivables
At January 1	$ 1,287	$ 691
Provision for impairment loss	7,345	-
Write-off due to bad debt	( 7,995)	596
At December 31	$ 637	$ 1,287

(3) Liquidity risk

A. Cash flow forecasting is performed in the various departments of the Company and aggregated by the Company treasury. The Company treasury monitors rolling forecasts of the Company's liquidity requirements to ensure it has sufficient cash to meet operational needs.

B. The Company of unutilized borrowing amounts are shown as below s:

	December 31, 2025	December 31, 2024
Floating Rate
expiry within 1 year	$ 333,479	$ 258,977

C. The table below analyses the Company’s non-derivative financial liabilities based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities:
December 31, 2025	Less than 1 year	Between 1 and 2 years	Between 2 and 5 years	More than 5 years
Short-term borrowings	$ 211,319	$ -	$ -	$ -
Notes payables	1,980	-	-	-
Accounts payables	50,117	-	-	-
Other payables	52,330	-	-	-
Bonds payable	135,332	-	-	-
Lease liabilities	10,980	10,930	32,040	149,519
Long-term borrowings (including current portion)	5,000	5,000	202,083	-
Non-derivative financial liabilities:
Non-derivative financial liabilities:
---	---	---	---	---
December 31, 2024	Less than 1 year	Between 1 and 2 years	Between 2 and 5 years	More than 5 years
Short-term borrowings	$ 271,860	$ -	$ -	$ -
Notes payables	2,810	-	-	-
Accounts payables	61,366	-	-	-
Other payables	51,982	-	-	-
Bonds payable	2,660	135,332	-	-
Lease liabilities	11,965	11,110	33,330	166,652
Long-term borrowings (including current portion)	200,423	-	-	-
Non-derivative financial liabilities:

The Company does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis to be significantly earlier, nor expect the actual cash flow amount to be significantly different.

(3) Fair value information

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

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the listed, over-the-counter, and emerging market stocks invested by the Company shall be attributed accordingly.

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

Level 3 : Unobservable inputs for the asset or liability.

Please refer to Note 6(10) for the fair value information on investment properties measured at cost.
Financial instruments not measured at fair value:

Except for those listed in the table below, the carrying amounts of the Company's cash and cash equivalents, financial assets at amortized cost, notes receivables, accounts receivables, other receivables and guaranteed deposits paid (listed other non-current assets and financial assets measured at amortized cost), short-term borrowings, notes payables, accounts payables, other payables, long-term borrowings (including current portion), and guaranteed deposits received approximate to their fair values:

	December 31, 2025
	Carrying amount	Fair value
		Level 1	Level 2	Level 3
Financial liabilities :
Bonds payables
(Including current portion)	$ 133,000	$ -	$ -	$ 133,000
	December 31, 2024
	Carrying amount	Fair value
		Level 1	Level 2	Level 3
Financial liabilities :
Bonds payables
(Including current portion)	$ 133,000	$ -	$ -	$ 133,000

The related information on financial instruments classified based on the nature of assets and liabilities, characteristics and fair value hierarchy is as follows:

(1) The related information on the nature of the assets and liabilities is as follows

December 31, 2024	Level 1	Level 2	Level 3	Total
Assets
Fair value on a recurring basis
Financial assets at fair value through other comprehensive income - Equity instruments	$227,136	$ -	$ 87	$227,223
Debt : None.
December 31, 2023	Level 1	Level 2	Level 3	Total
Assets
Fair value on a recurring basis
Financial assets at fair value through other comprehensive income - Equity instruments	$229,464	$ -	$ 87	$229,551
Debt : None.

(2) The methods and assumptions the Company used to measure fair value are as follows:

A. The Company used market quoted prices as their fair values (that is, Level 1), which is closing price of listed and OTC shares, and shares in emerging market.

B. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques.

C. When assessing non-standard and low-complexity financial instruments, the Company adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.

There is no transfer between level 1 and level 2 in 2025 and 2024.
Changes of level 3 of financial instruments in 2025 and 2024:

	Equity securities
January 1, 2025	$ 87
Gains recognized in other comprehensive income	-
December 31, 2025	$ 87
	Equity securities
---	---
January 1, 2024	$ 1,101
Gains recognized in other comprehensive income	2,936
Transferred to level 1	(3,950)
December 31, 2024	$ 87

(4) The future financial fitness plan

As of December 31, 2025, the debt-to-capital ratio was 83%, which is lower than the ratio during the same period last year. The active plans for financial fitness were shown as below:

Operation perspective: In order to strengthen operational performance, in addition to continuously developing forward-looking products, combining the new world trend, and observing the movement of the global economy, we will deepen management and strengthen financial structure in the future to enhance shareholder return on equity. The related important point is shown below:

(1) Combine the digital management system integrated in hardware and software with energy service company (ESCO) model, and coordinate with the equipment replacement subsidy for commercial service industry from the government, to save energy and decrease costs.

(2) Combine Smart Operation & Maintenance (Smart O&M) with energy management system, to empower the twin transition of decarbonization and intelligentization, and decrease the carbon emission and electricity consumption of the plants, production lines, and buildings.

(3) Keep deeply cultivating in relevant products including intelligent building intercom system, intelligent security surveillance system, and intelligent office business communication system, etc., and actively develop solutions for industries targeted application scenarios in industries.

(4) To continue adjusting the channel structure, introduce the agency of new products, improve product quality, strengthen after-sales maintenance services, and establish diversified internet service system to enhance profitability.

(5) At the core of ESG solutions, strengthen the cooperation with domestic and foreign leading electromechanical manufacturers, provide one-stop solutions, to accelerate the twin transition of enterprises.

(6) Build up AI and digital student ecosystem, to assist customers with the introduction of intelligent energy management system.

Financial perspective: Keep to maintain support from bank. The Company continues improving the management capacity and profitability to strengthen financial structure. With the successful operation of open-source savings and the support of major shareholders- TECO Electric Co., Ltd. as well as the continuous improvement of operational performance, the Company has successfully obtained continuous support from major banks for short-term and mid-to-term funds. For large and large orders, it also obtains project quotas from banks to

support them. The Company's operations are not short of funds.

Organization perspective: Simplify the original three business unit into information and communication business unit and energy management business unit, strictly evaluation the performance of each department, consolidate core staffs, to enhance the operating motivation; decrease unnecessary expenditures, to increase cash inflows in the future, and improve operating effectiveness.

12. OTHER DISCLOSURES

(1) Significant transactions information

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

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Refer to Table 3.

(3) Information on investments in Mainland China

A. Basic information: Refer to Table 4.
Significant transactions, either directly or indirectly through a third area, with investee companies in China: Please refer to Table 5.

13. SEGMENT INFORMATION

N/A

Tecom Co., LTD.

Holding of significant marketable securities (not including subsidiaries, associates and joint ventures)

For the year ended December 31, 2025

Table 1

Securities held by Tecom Co., LTD.	Marketable securities Taiwan High Speed Rail Corporation(Ordinary shares)	Relationship with the securities issuer The parent company is its legal person director	General ledger account Financial assets measured at fair value through other comprehensive income, non-current	Number of shares 8,112,000	As of December 31, 2025
					Carrying amount $ 227,136	Ownership 0.14%	Fair value $ 227,136	Footnote Note 1
Tecom Co., LTD.	NEOVIDEO TECHNOLOGY CORPORATION(Ordinary shares)	None	Financial assets measured at fair value through other comprehensive income, non-current	1,066,667	87	19.39%	87
Baycom Opto-Electronics Technology Co., Ltd.	Fuhua Investment Trust Guardian Fund	None	Financial assets measured at fair value through profit or loss, current	545,765	11,867	-	11,867
Baycom Opto-Electronics Technology Co., Ltd.	Fuhua Investment Trust Ruihua Fund	None	Financial assets measured at fair value through profit or loss, current	796,109	10,111	-	10,111
Baycom Opto-Electronics Technology Co., Ltd.	Tecom Co., LTD.(unsecured corporate bonds)	Parent Company	Financial assets measured at amortized cost -,non-current	-	133,000	-	133,000	Note 2

Note 1: The Ordinary shares of the Company held by the Company are required for bank secured loans, and it is used as a secured. Please refer to Note 8 for details.
Note 2 The company issued the first domestic unsecured payable company bonds in Taiwan in 2021 with a total amount of NT$133,000, each with a face value of NT$1,000, fully issued according to the face value of the ticket, with a coupon rate of 2%, and a circulation period of 5 years from November 17, 2021 to November 17, 2026.
The principal of the ordinary company bonds without warranty shall be paid in cash once according to the face value of the bonds, and the interest shall be paid annually. Since the private placement targets are Baycom Opto-Electronics Technology Co., Ltd. included in the consolidation individual, the relevant transactions have been written off when preparing the combined financial statements.

Tecom Co., LTD.

Significant inter-company transactions during the reporting period

For the year ended December 31, 2025

Table 2

Expressed in thousands of

NTD

(Except as otherwise

indicated)

Transaction

Number (Note 1)	Company name	Counterparty	Relationship (Note 2)	General ledger account	$	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets (Note 3)
0	Tecom Co., LTD.	Wu Han Tecom Co., Ltd.	1	Sales revenue	$	12,611	Based on terms of agreement	2%
0	Tecom Co., LTD.	Wu Han Tecom Co., Ltd.	1	Purchases		14,761	Based on terms of agreement	2%
0	Tecom Co., LTD.	Wu Han Tecom Co., Ltd.	1	Service expenses		25,777	Based on terms of agreement	4%
1	Baycom Opto-Electronics Technology Co., Ltd.	Tecom Co., LTD.	2	Financial assets measured at amortized cost, current		133,000	Based on terms of agreement	11%

Note 1: The information of transactions between the Company and the consolidated subsidiaries should be noted in "Number" column.

(1) Number 0 represents the Company.
(2) The consolidated subsidiaries are numbered in order from number 1.

Note 2: The transaction relationships with the counterparties are as follows:

If one of the subsidiaries has already disclosed the transactions between the subsidiaries, the other subsidiary does not need to disclose it again.

(1) The Company to the consolidated subsidiary.
(2) The consolidated subsidiary to the Company.
(3) The consolidated subsidiary to another consolidated subsidiary.

Note 3: In calculating the ratio, the transaction amount is divided by consolidated total assets for balance sheet accounts and is divided by consolidated total revenues for income statement accounts.

Note 4: Based on general sale or purchase conditions.

Note 5: Only transactions with a value of more than one million are disclosed, and transactions between related parties are not disclosed separately.

Tecom Co., LTD.

Information on investees

For the year ended December 31, 2025

Table 3

Investor Tecom Co., LTD.	Investee Baycom Opto-Electronics Technology Co., Ltd.	Location Taiwan	Main business activities Research, manufacture and sales of optical fiber communication systems and optical fibers, optical fiber cables and their components	Initial investment amount			Shares held as at December 31, 2025			Net profit (loss) of the investee	Investment income (loss) recognized by the Company
				December 31,2025	December 31,2024	Number of shares	Ownership	Carrying amount
Tecom Co., LTD.	A-Tel Inc.	Guatemala	Operating telecommunications system service business	63,177	63,177	596,925	28.19	-	(42,961)	-	Note 1
Tecom Co., LTD.	Taian Technology Sdn. Bhd.	Malaysia	Production and sales of gate opening equipment industry	8,360	8,360	1,100,000	10	3	-	-
Tecom Co., LTD.	E-JOY ELECTRONICS INTERNATIONAL CO., LTD.	Taiwan	Wholesale of telecommunication equipment, wholesale of precision instruments and wholesale of electrical appliances, etc.	999	999	641,129	4.90	7,410	12,934	515	Note 2
Tecom Co., LTD.	TECNOS INTERNATIONAL CONSULTANT CO., LTD	Taiwan	Operation of talent dispatch service, project contracting service and education and training business	2,499	2,499	752,592	5.26	10,162	19,185	1,033	Note 2
Tecom Co., LTD.	TECO TOUR TRAVEL SERVICE CO., LTD.	Taiwan	Operating a travel service business	2,912	2,912	480,000	16.00	1,580	(470)	24	Note 2

Note 1: This company has invested in A-Tel Inc. receivables of $55,254 and has 100% impairment loss in the previous year.
Note 2: Those have been transferred to non-current assets held for sale in October 2025.

Tecom Co., LTD.

Information on investments in Mainland China

For the year ended December 31, 2025

Table 4

Investee in Mainland China	Main business activities	Paid-in capital	Investment method	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2025	Amount of investments remitted or recovered during the period			Net income of investee for the year ended December 31, 2025	Ownership inheld by the Company (inirect) or indirect)	Investment income (loss) recognized by the Company for the year ended December 31, 2025	Book value of investments in Mainland China as of December 31, 2025	Accumulate amount of investment income remitted back to Taiwan as of December 31, 2025	Note
					Remitted to Mainland China	Remitted back to Taiwan	Net income of investee for the year ended December 31, 2025
Wu Han Tecom Co., Ltd.(Note 1)	Engage in technical development, production, sales and technical service of telecommunications network information related products.	$ 6,950	Through investment in a third region and reinvesting in a mainland company	$ 6,950	$ -	$ -	$ 6,950	$ 13,310	100	$ 16,879	$ 6,986	$ -	Note 7
Company name		Accumulated amount of remittance from Taiwan to Mainland China				Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)				Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
Wu Han Tecom Co., Ltd.		$ 6,950				$ 681,144				$ 266,495

Note 1 : The company has remitted US$995,000 to Tecom Global Tech Investment (B.V.I.) Limited, which US$200,000 has been remitted to invest in Wu Han Tecom Co., Ltd.

Tecom Global Tech Investment (B.V.I.) Limited has remitted back the investment fund in March, 2023, and the legal cancellation procedures have been completed in October, 2023,

Note 2 : The company has remitted US$15,050,000 to Tecom Global Tech Investment Pte Limited, which US$15,000,000 has been remitted to invest in Wu Xi Tecom Co., Ltd. It was dissolved and liquidated in January 2021.

Note 3 : The company has remitted US$1,500,000 to Tecom Tech Investment (B.V.I.) Limited, and all the investment has been remitted out of Tecom Communication Technology (Xiamen) Co., Ltd. and Beijing Tecom Innovation Technology Co., Ltd.

Dissolution and liquidation were completed in October 2017 and May 2019 respectively.

Note 4 : As of December 31, 2025, the upper limit of the company's investment in the mainland was $266,495 , which was 60% of the consolidated net worth of$ 444,159.

Note 5 : When the above Mainland investment project was completed, the investment limit of the company to Mainland China was 60% of the net value of the company's Third Quarter 2010, which is $2,933,752, amounting to $1,760,251.

Note 6 : The investment profit and loss recognized in this period is based on the financial information for the same period not audited by the certified accountant.

Note 7 : There are upstream transactions occurred $18.

Tecom Co., LTD.

Information on investments in Mainland China – Directly or indirectly through third-region invest in mainland China Major transactions

For the year ended December 31, 2025

Table 5

Expressed in thousands of NTD

(Except as otherwise indicated)

Investee in Mainland	Sales revenue		Accounts receivables		Other expenses		Account payables
China	Amount	%	Amount	%	Amount	%	Amount	%
Wuhan Dongxun	$ 12,611	1.72%	$ 7,121	0.58%	$ 25,777	3.52%	$ 432	0.06%
Technology Co., Ltd
	Other payables		Purchase		Other income
	Amount	%	Amount	%	Amount	%
Wuhan Dongxun	$ 3,617	0.46%	$ 14,761	2.02%	$ 7,322	1.00%
Technology Co., Ltd

~Table 5 Page 1~

Statement 1 pl

Tecom Co., LTD

STATEMENT OF CASH AND CASH EQUIVALENTS

DECEMBER 31, 2025

Statement 1

Expressed in thousands of New Taiwan dollars

Item	Description	Amount
		$ -
Petty cash
Bank Deposits
Demand deposits		39,409
—NTD		11,879
—Foreign currency	USD	377,939.34 FX 31.43
		2,476
	Others	2,870
Deposits in transit
—NTD	The maturities are from January 22, 2025 to July 22, 2025, with annual interest rate of 1.28% ~ 1.585%.	32
Checking accounts		$ 56,666

Statement 2
Stated 2025-04-20
2025-04-20

Tecom Co., LTD

STATEMENT OF ACCOUNTS RECEIVABLES

DECEMBER 31, 2025

Customer Name	Amount	Notes
General customers—
Songyu Technology Co., Ltd.	$ 6,873
Commerce Development Research Institute	3,680
Others	51,722	None of the miscellaneous items exceed 5% of the balance of this item. The amount of accounts receivable longer than 1 year is $0.
	62,275
Less: Allowance for bad debts	( 637)
	61,638
Related Parties—
TECO Electric & Machinery Co., Ltd	1,638
Wuhan Dongxun Technology Co., Ltd.	7,121
Others	96	None of the related parties exceed 5% of the balance of this item. The amount of accounts receivable longer than 1 year is $0.
	8,855
Less: Allowance for bad debts	-
	8,855
Total	$ 70,493

Statement 2 pl

Statement 3

Tecom Co., LTD

STATEMENT OF INVENTORIES

DECEMBER 31, 2025

Statement 3

Expressed in thousands of New Taiwan dollars

Items	Amount		Note	Collateral
	Cost	Net Realizable Value
Finished goods	$ 67,140	$ 114,727	Measure at net realizable value	None.
Work in process	2,913	4,824	Measure at net realizable value	None.
Raw materials	30,661	52,069	Measure at net realizable value	None.
	100,714	$ 171,620
Less: Allowance for loss for market price decline and obsolete and slow-moving inventories	( 6,258)
	$ 94,456

Statement 3 pl

Statement 4

Tecom Co., LTD

STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31, 2025

Statement 4

Expressed in thousands of New Taiwan dollars

Name	Beginning Balance		Additions		Decrease		Ending Balance		Colateral
	Number of shares	Fair value	Number of shares	Amount	Number of shares	Amount	Number of shares	Fair value
Taiwan High Speed Rail Corporation	8,112,000	$ 225,514	-	$ 1,622	-	$ -	8,112,000	$ 227,136	Note
NEOVIDEO TECHNOLOGY CORPORATION	1,066,667	87	-	-	-	-	1,066,667	87
International Integrated Systems, Inc	76,706	3,950	-	483	76,706	4,433	-	-
		$ 229,551		$ 2,105		$ 4,433		$ 227,223

Note: Please refer to Note 8 for the explanations on the shares pledged to banks as collaterals for long-term borrowings.

Statement 4 pl

Tecom Co., LTD

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2025

Statement 5

Expressed in thousands of New Taiwan dollars

Balance, January 1, 2025
Increases in Investment (Note 1) Decrease in Investment (Note 2) Balance, December 31, 2025
Market price or equity net value

Investees	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Own ship	Amount	Unit price	Total price	Pledged as collateral
Baycom Opto-Electronic Technology CO., LTD.	14,700,741	$ 188,156	-	$ 7,560	-	-	14,700,741	43.76%	14,700,741	$ 188,156	-	None
Wuhan Dongxun Technology Co., Ltd.	200,000	( 9,893)	-	16,879	-	-	200,000	100.00%	200,000	( )	9,893	-
A-Tel Inc.	596,925	-	-	-	-	-	596,925	28.19%	596,925	-	-	None
Taian Technology Sdn Bhd.	1,100,000	3	-	-	-	( 3)	1,100,000	10.00%	1,100,000	3	-	None
E-JOY Electronic International Co., LTD.	598,403	6,895	42,726	515	-	( 7,410)	-	0.00%	598,403	6,895	42,726	None
Tecnos International Consulting Co., Ltd.	725,899	9,752	26,693	1,034	-	( 10,786)	-	0.00%	725,899	9,752	26,693	None
Teco Tour Travel Service Co., LTD.	480,000	1,555	-	24	-	( 1,579)	-	0.00%	480,000	1,555	-	None
		$ 196,468		$ 26,012		($ 19,778)				$ 196,468

Note 1: Increases in the current period include adjustments including gains and losses on investments accounted for using equity method and recognition of realized gross profit from sales, etc.
Note 2: Decreases in the current period include cash dividends paid by investee companies amounting to $624, transfer to non-current assets held for sale amounting to $19,152, and recognition of losses on investments amounting to $3.

Statement 5 pl

Statement 6
Expressed in thousands of New Taiwan dollars

Tecom Co., LTD

STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT

FOR THE YEAR ENDED DECEMBER 31, 2025

Item	Beginning balance	Increase in the period	Decrease in the period	Reclassification in the period	Ending balance	Pledged as collateral
Buildings and structures	$ 122,724	$ -	$ -	$ -	$ 122,724	Note 1
Machinery equipment	966	-	-	-	966	None
Test equipment	133	182	-	-	315	None
Other equipment	11,957	952	( 4,709)	-	8,200	None
	$ 135,780	$ 1,134	($ 4,709)	$ -	$ 132,205

Note 1: The carrying amount of property, plant and equipment, and investment properties pledged as collaterals to the banks is $67,726.

Statement 6 pl

Statement 7

Tecom Co., LTD

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

FOR THE YEAR ENDED DECEMBER 31, 2025

Statement 7
Expressed in thousands of New Taiwan dollars

| Item | Beginning balance
($ 74,072) | Increase in the period
($ 2,209) | Decrease in the period
$ - | Reclassification in the period
$ - | Ending balance
($ 76,281) |
| --- | --- | --- | --- | --- | --- |
| Buildings and structures | | | | | |
| Machinery equipment | ( 585) | ( 179) | - | - | ( 764) |
| Test equipment | ( 70) | ( 95) | - | - | ( 165) |
| Other equipment | ( 5,503) | ( 2,361) | 4,709 | - | ( 3,155) |
| | ($ 80,230) | ($ 4,844) | $ 4,709 | $ - | ($ 80,365) |

Statement 7 pl

Statement 8
Expressed in thousands of New Taiwan dollars

Tecom Co., LTD

STATEMENT OF CHANGES IN COSTS OF INVESTMENT PROPERTIES

FOR THE YEAR ENDED DECEMBER 31, 2025

| Item | Beginning balance
$ 56,241 | Increase in the period
$ - | Decrease in the period
$ - | Transfer in the period
$ - | Ending balance
$ 56,241 | Pledged as collateral
Note |
| --- | --- | --- | --- | --- | --- | --- |
| Buildings and structures | | | | | | |

Note: The carrying amount of property, plant and equipment, and investment properties pledged as collaterals to the banks is $67,726.

Statement 8 pl

Statement 9

Expressed in thousands of New Taiwan dollars

Tecom Co., LTD

STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION OF INVESTMENT PROPERTIES

FOR THE YEAR ENDED DECEMBER 31, 2025

| Item | Beginning balance
(\$ 33,945) | Increase in the period
(\$ 1,013) | Reclassification in the period
\$ - | Ending balance
(\$ 34,958) | Note |
| --- | --- | --- | --- | --- | --- |
| Buildings and structures | | | | | |

Statement 9 pl

Statement 10

Tecom Co., LTD

STATEMENT OF SHORT-TERM BORROWINGS

DECEMBER 31, 2025

Statement 10
Expressed in thousands of New Taiwan dollars

Type of Loan	Descriptions	Ending Balance	Period of contract	Range of Interest Rate	Credit Facility	Collateral
Secured Loan	Mortgage	$ 128,000	2025/9/19~2026/10/8	2.05%~2.48%	$ -	Y
Unsecured Loan	Credit Loan	81,500	2025/9/19~2026/10/8	2.05%~2.59%	-	N
		$ 209,500

Note: The carrying amount of financial assets at fair value through other comprehensive income – non-current pledged as collaterals to the banks is $227,136.

Statement 10 pl

Statement 11
pl

Tecom Co., LTD

STATEMENT OF ACCOUNTS PAYABLES

DECEMBER 31, 2025

Statement 11
Expressed in thousands of New Taiwan dollars

Vendor Name	Amount	Footnotes
General manufacturers—
HONOR TONE Ltd.	$ 17,476
Arrow Electronics, Inc.	2,905
Others	26,216	None of the suppliers exceeds 5% of the balance of this item.
	46,597
Related parties—
TECO Electric & Machinery Co., Ltd	3,088
Wuhan Dongxun Technology Co., Ltd.	432
	3,520
Total	$ 50,117

Statement 12
Statement 12 p1

Tecom Co., LTD

STATEMENT OF OPERATING REVENUE

FOR THE YEAR ENDED DECEMBER 31, 2025

Statement 12
Expressed in thousands of New Taiwan dollars

Items	Quantity	Amount
Net operating income
Business communication system	149,761 sets	$ 404,217
Smart electromechanical system	13,354 sets and others	85,156
		489,373
Less: Sales return		( 2,447)
Sales discount		( 22,612)
		$ 464,314

Statement 13
Statement 13 pl

Tecom Co., LTD

STATEMENT OF OPERATING COSTS

FOR THE YEAR ENDED DECEMBER 31, 2025

Expressed in thousands of New Taiwan dollars

Items	Amount
Direct raw materials
Raw materials at January 1, 2025	$ 56,208
Add: Raw materials purchased	100,800
Transferred from work in process and finished goods	137,705
Less: Raw materials at December 31,(2025	30,661)
Raw materials sold	( 17,882)
Transferred to maintenance costs	( 215)
Transferred to expenses	( 19,636)
Raw materials consumed in the period	226,319
Direct labor	6,397
Manufacturing overhead	29,265
Manufacturing cost	261,981
Add: Work in process at January 1, 2025	3,482
Less: Work in process at December 31,(2025	2,913)
Transferred to raw materials	( 70,440)
Transferred to expenses	( 509)
Finished goods cost	$ 191,601
Add: Finished goods at January 1, 2025	82,596
Finished goods purchased	101,501
Less: Finished goods at December 1, 2025	( 67,140)
Transferred to raw material	( 67,265)
Transferred to maintenance costs	( 235)
Transferred to expenses	( 27,150)
Costs of goods sold	213,908
Costs of raw materials sold	17,882
Service costs	21,729
Inventory valuation losses	8,487
Warranty costs	( 1,930)
Maintenance costs	450
Manufacturing overhead not allocated	24,769
Other operating costs	7,130
Total operating costs	$ 292,425

Statement 14 p1

Tecom Co., LTD

MANUFACTURING COSTS

FOR THE YEAR ENDED DECEMBER 31, 2025

Statement 14

Expressed in thousands of New Taiwan dollars

Items	Amounts	Footnotes
Processing cost	$ 27,229
Salary expenditure	13,162
Depreciation expense	4,691
Other expenses	8,952	None of the items exceeds 5% of the balance of this item.
Less: Unallocated Manufacturing Overhead	( 24,769)
	$ 29,265

Statement 15 pI

Tecom Co., LTD

STATEMENT OF SELLING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2025

Statement 15

Items	Amounts	Footnotes
Salary expenditure	$ 38,972
Insurance expense	5,183
Depreciation	4,779
Other expenses	22,463	None of the items exceeds 5% of the balance of this item.
	$ 71,397

Expressed in thousands of New Taiwan dollars

Statement 16 p1

Tecom Co., LTD

STATEMENT OF GENERAL AND ADMINISTRATIVE EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2025

Statement 16
Expressed in thousands of New Taiwan dollars

Items	Amounts	Footnotes
Salary expenditure	$ 29,758
Depreciation	5,453
Service expenditure	4,417
Insurance expense	2,702
Other expenses	10,360	None of the items exceeds 5% of the balance of this item.
	$ 52,690

Statement 17 p1

Tecom Co., LTD

STATEMENT OF RESEARCH AND DEVELOPMENT EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2025

Statement 17

Expressed in thousands of New Taiwan dollars

Items	Amounts	Footnotes
Salary expenditure	$ 33,569
Service expenditure	24,536
Indirect materials	3,787
Other expenses	7,785	None of the items exceeds 5% of the balance of this item.
	$ 69,677

Statement 18
Expressed in thousands of New Taiwan dollars

Tecom Co., LTD

SUMMARY OF EMPLOYEE BENEFITS, DEPRECIATION AND AMORTIZATION EXPENSES BY FUNCTION

FOR THE YEAR ENDED DECEMBER 31, 2025

Type	2025			2024
	belongs to business cost	belongs to business expense	Total	belongs to business cost	belongs to business expense	Total
Employee Benefit Expenses
Salary Expenses	$ 19,786	$ 99,257	$ 119,043	$ 17,269	$ 96,495	$ 113,764
Labor health insurance	2,297	9,751	12,048	2,358	9,713	12,071
Pension Expenses	1,143	7,512	8,655	1,181	5,827	7,008
Director's remuneration	-	3,042	3,042	-	2,778	2,778
Other employee benefit expenses	1,346	4,663	6,009	1,419	4,352	5,771
Depreciation expense	4,691	13,467	18,158	7,131	14,131	21,262
Amortization expenses	188	1,420	1,608	168	1,091	1,259

As of December 31, 2025 and 2024 the amount of employee of the Company was 136 people and 158 people. Among them, the number of directors who are not concurrently employees is 7.
Companies which are listed on the stock exchange or traded on the OTC securities trading center shall be disclosure of the following information :

(1) The average employee benefit cost is 1,130 thousand in this period.
The average employee benefit cost is 918 thousand in the previous period.

(2) The average employee salary expenses are 923 thousand in this period.
The average employee salary expenses are 753 thousand in the previous period.

(3) The change in the average employee salary is 22.58%.

(4)

A. This company has a company charter and the "Method for Paying Director and Functional Member Remuneration". According to the degree of participation and contribution of the directors and functional members in the operation of the Company, and reference to the domestic industry standards, the corresponding remuneration is regulated. In addition to director remuneration and business execution expenses, the Company shall pay the director's remuneration not more than 5% of the profits of the year, but when the Company has accumulated losses, it should be made up. The above remuneration shall be evaluated and proposed by the Salary Remuneration Committee, and then submitted to the Board of Directors for deliberation and decision.

B. This company has a company charter and the "Performance Reward Method for Senior Management Level", which regulates the remuneration payment standards and performance evaluation for managers. The Salary Remuneration Committee shall evaluate and propose, and then submit it to the Board of Directors for deliberation and decision.

C. The salary & benefits policy of this company: The salary of the employees of this company is determined based on their educational background, professional knowledge and skills, and professional years of experience, and the annual salary adjustment is based on the Company's operating conditions, the employee's work performance, and the market conditions to determine the items and amount of salary adjustment.

AI assistant

Tecom Co., Ltd. — Audit Report / Information 2026

52005_rns_2026-05-11_f26ad8f5-bb29-4589-9621-e2c21d3b2f8a.pdf

Opinion

Basis for Opinion

Key Audit Matters

Inventory Valuation

Description

How our audit addressed the matter

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

Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements

Tecom Co., LTD.

PARENT COMPANY ONLY BALANCE SHEETS

DECEMBER 31, 2025 and 2024

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

1. Sales of goods

2. Costs of obtaining contracts with customers

(29) Government grants

5. MAJOR SOURCES OF UNCERTAINTY ARISING FROM SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES, AND ASSUMPTIONS

Equity instruments at fair value through other comprehensive income

(3) Financial assets at amortized cost

(4) Notes and Accounts Receivable (including from related party)

(9) Lease transactions - lessee

7. RELATED PARTY TRANSACTIONS

(1) Parent Company and the final Controller

5. Other related party transactions

6. Lease transactions – lessee

9. SIGNIFICANT CONTINGENCIES AND UNRECOGNIZED CONTRACT COMMITMENTS

(1) Contingencies

(2) Commitments

10. SIGNIFICANT SUBSEQUENT EVENTS

11. OTHERS

(1) Capital management

(2) Financial instruments

1. Financial instruments by category

2. Risk management policies

3. Significant financial risks and degrees of financial risks

(1) Market risk

Price risk

Cash flow and fair value interest rate risk

(2) Credit risk

(4) The future financial fitness plan

12. OTHER DISCLOSURES

(1) Significant transactions information

(2) Information on investees

(3) Information on investments in Mainland China

13. SEGMENT INFORMATION

Tecom Co., LTD

STATEMENT OF CASH AND CASH EQUIVALENTS

DECEMBER 31, 2025

Tecom Co., LTD

STATEMENT OF ACCOUNTS RECEIVABLES

DECEMBER 31, 2025

Tecom Co., LTD

STATEMENT OF INVENTORIES

DECEMBER 31, 2025

Tecom Co., LTD

STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31, 2025

Tecom Co., LTD

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2025

Tecom Co., LTD

STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT

FOR THE YEAR ENDED DECEMBER 31, 2025

Tecom Co., LTD

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

FOR THE YEAR ENDED DECEMBER 31, 2025

Tecom Co., LTD

STATEMENT OF CHANGES IN COSTS OF INVESTMENT PROPERTIES

FOR THE YEAR ENDED DECEMBER 31, 2025

Tecom Co., LTD

STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION OF INVESTMENT PROPERTIES

FOR THE YEAR ENDED DECEMBER 31, 2025

Tecom Co., LTD

STATEMENT OF SHORT-TERM BORROWINGS

DECEMBER 31, 2025

Tecom Co., LTD

STATEMENT OF ACCOUNTS PAYABLES

DECEMBER 31, 2025

Tecom Co., Ltd. Audit Report / Information 2026