Yong Yi International Group Co., Ltd.
And Subsidiaries
Consolidated Financial Statements for the
Years Ended December 31, 2025 and 2024
and Independent Auditors’ Report

INDEPENDENT AUDITORS J REPORT

The Board of Directors and Stockholders
Yong Yi International Group Co., Ltd

Opinion

We have audited the consolidated financial statements of Yong Yi International Group Co., Ltd. (formerly: Kayee International Group Co., Ltd.) and its subsidiaries (the "Group"), which comprise the consolidated balance sheets as of December 31, 2025 and 2024, the consolidated statements of comprehensive income, consolidated statements of changes in equity, and consolidated statements of cash flows for the years ended December 31, 2025 and 2024, and notes to the consolidated financial statements, including a summary of significant accounting policies.

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

Basis for Opinion

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

Key Audit Matters

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

Key audit matters for the Group’s consolidated financial statements for the year ended December 31, 2025 are stated as follows:

Valuation of inventories

Yong Yi International Group Co., Ltd. and its subsidiaries have been actively expanding into the beauty care market. For the year ended December 31, 2025, sales of body care products accounted for 77% of the Group's consolidated revenue. Skincare and beauty-related products typically have short life cycles and are time-sensitive in nature. As a result, their net realizable value is highly susceptible to fluctuations in market conditions and sales performance, which may give rise to potential inventory obsolescence and impairment losses.

Management determines the net realizable value of inventories by exercising significant judgment and estimates as of the balance sheet date. Each inventory item is assessed individually, with the lower of cost or net realizable value recognized. For items with specific expiration dates, management further considers their usability and marketability in the assessment. If the net realizable value is lower than cost, an inventory write-down is recognized.

Due to the judgment involved in assessing the net realizable value of inventory and the potentially material impact on the consolidated financial statements, we considered inventory valuation to be a key audit matter.

Please refer to Notes 4(6), 5(2), and 6(5) to the consolidated financial statements for further details.

Our audit procedures in response to this key audit matter included the following:

Obtained and evaluated the Group’s inventory valuation policy to assess the criteria and methodology for recognizing write-downs, and confirmed the application of the policy during the reporting period.
Participated in the year-end physical inventory observation to identify obsolete, damaged, or unsellable items.
Obtained the inventory aging report and performed aging tests, including sample testing of inventory items by tracing part numbers to inventory movement records and reviewing product expiration dates, to validate the accuracy of aging classifications and assess their impact on inventory valuation.
Obtained the net realizable value report of inventories, assessed the calculation methodology, and performed sample testing by tracing key data to supporting documents. We also recalculated the inventory valuation to verify that the lower of cost and net realizable value was properly applied and that appropriate write-downs were recognized.

Existence of Revenue from Major Customers

Yong Yi International Group Co., Ltd. and its subsidiaries are primarily engaged in the sale of kitchenware, household items, personal care products, electronics, and sports equipment. Revenue from major customers has a significant impact on the Group's consolidated financial statements. Due to the inherent high risk associated with revenue recognition and the materiality of sales to major customers, we identified the existence of revenue from these customers as one of the key audit matters.

Please refer to Notes 4(11) and 6(17) to the consolidated financial statements for further details.

Our audit procedures in response to this key audit matter included the following:

Obtained an understanding of internal controls related to the sales process and assessed the control procedures performed by management.
Inspected credit assessment documentation for major customers and cross-checked it against publicly available information.
Reviewed credit approval documents for major customers.
Obtained detailed sales listings for major customers and performed sampling to verify supporting documentation such as sales invoices and delivery records.
Sent confirmation requests to selected major customers to confirm outstanding accounts receivable balances.
Reviewed subsequent collection information for major customers and verified the related supporting documents.

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

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

In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease its operations, or has no realistic alternative but to do so. Those charged with governance including members of the Audit Committee are responsible for overseeing the Group's financial reporting process.

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

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

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we

exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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

The engagement partners on the audit resulting in this independent auditors' report are
Lai, Chia-Yu and Lin, Chi-Ping.

Baker Tilly Clock & Co
March 12, 2026

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flow in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China. For the convenience of readers, the independent auditors' report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors' report and consolidated financial statements shall prevail

Yong Yi International Group Co., Ltd. And Subsidiaries
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars)

ASSETS		Note	December 31, 2025		December 31, 2024
Code	Accounting Item		Amount	%	Amount	%
11xx	Current assets
1100	Cash and cash equivalents	6(1)	$ 477,196	59	$ 199,847	20
1136	Current financial assets at amortized cost	6(2),8	13,038	2	488,365	49
1170	Accounts receivable	6(3)	45,406	6	43,673	4
1200	Other receivables	6(4)	1,875	—	16,786	2
1220	Current tax assets	6(19)	236	—	532	—
130X	Inventories, net	6(5)	66,214	8	27,211	3
1410	Prepayments	6(6)	21,146	2	21,788	2
1479	Other current assets		5	—	15	—
11xx	Total current assets		625,116	77	798,217	80
15xx	Non-current assets
1600	Property, plant and equipment	6(7)、8	182,407	22	181,879	18
1755	Right-of-use assets	6(8)	4,595	1	8,818	1
1780	Intangible assets		174	—	297	—
1840	Deferred tax assets	6(19)	115	—	886	—
1995	Other non-current assets	6(9)	2,429	—	4,716	1
15xx	Total non-current assets		189,720	23	196,596	20
	Total assets		$ 814,836	100	$ 994,813	100

Please refer to the accompanying notes to the consolidated financial statements.

(Continued)

Yong Yi International Group Co., Ltd. And Subsidiaries
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars)

LIABILITIES AND EQUITY		Note	December 31, 2025		December 31, 2024
Code	Accounting Item		Amount	%	Amount	%
21xx	Current liabilities
2100	Current portion of current borrowings	6(10)	$ 4,003	1	$ —	—
2130	Current contract liabilities	6(17)	2,038	—	1,656	—
2170	Accounts payable		4,327	1	8,273	1
2180	Accounts payable – related parties	7	345	—	—	—
2200	Other payables	6(11)	18,718	2	23,486	2
2230	Current tax liabilities	6(19)	2,419	—	6,113	1
2280	Current lease liabilities	6(8)	2,398	—	3,619	—
2322	Long-term borrowings due within one year	6(12)	5,473	1	—	—
2399	Other current liabilities, others		952	—	1,043	—
21xx	Total current liabilities		40,673	5	44,190	4
25xx	Non-current liabilities
2540	Non-current portion of non-current borrowings	6(12)	112,737	14	118,210	12
2550	Non-current provisions	6(13)	94,076	12	94,076	10
2560	Current tax liabilities-non current	6(19)	—	—	2,392	—
2570	Deferred tax liabilities	6(19)	1,777	—	329	—
2580	Non-current lease liabilities	6(8)	2,345	—	4,936	1
2600	Other non-current liabilities		610	—	610	—
25xx	Total non-current liabilities		211,545	26	220,553	23
2xxx	Total liabilities		252,218	31	264,743	27
3xxx	Equity	6(15)
3110	Ordinary share		455,487	56	455,487	46
3200	Capital surplus		334,206	41	333,570	34
3300	Retained earnings
3310	Legal reserve		70,586	9	70,586	7
3320	Special reserve		10,896	1	10,896	1
3350	Accumulated Deficit		(302,795)	(37)	(135,003)	(14)
3400	Other equity interest	6(16)	(5,762)	(1)	(5,466)	(1)
3xxx	Total equity		562,618	69	730,070	73
	Total liabilities and equity		$ 814,836	100	$ 994,813	100

Please refer to the accompanying notes to the consolidated financial statements.

Yong Yi International Group Co., Ltd. And Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars, except for earnings per share amount)

Code	Accounting Item	Note	2025		2024
			Amount	%	Amount	%
4000	Operating revenue	6(17) ~ 7	$ 299,444	100	$ 301,923	100
5000	Operating costs	6(5) ~ 7	(273,411)	(91)	(264,641)	(88)
5900	Gross profit from operations		26,033	9	37,282	12
6000	Operating expenses
6100	Selling expenses		(125,509)	(42)	(108,418)	(36)
6200	Administrative expenses		(58,894)	(20)	(56,697)	(19)
6450	Expected credit impairment loss		—	—	11,970	4
6000	Total operating expenses		(184,403)	(62)	(153,145)	(51)
6900	Net operating loss		(158,370)	(53)	(115,863)	(39)
7000	Non-operating income and expenses
7100	Interest income		14,841	5	34,515	11
7010	Other income	6(18)	1,379	—	649	—
7020	Other gains and losses	6(18)	(18,477)	(6)	(43,448)	(14)
7050	Finance costs	6(18)	(2,845)	(1)	(2,666)	(1)
7000	Total non-operating income and expenses		(5,102)	(2)	(10,950)	(4)
7900	Loss from continuing operations before tax		(163,472)	(55)	(126,813)	(43)
7950	Tax expense	6(19)	(4,320)	(1)	(8,190)	(3)
8200	Loss from continuing operations		(167,792)	(56)	(135,003)	(46)
	Other comprehensive income
8360	Items that may be reclassified subsequently to profit or loss
8361	Exchange differences on translating the financial statements of foreign operations		(296)	—	2,876	1
8300	Total other comprehensive (loss)income		(296)	—	2,876	1
8500	Total comprehensive income		(168,088)	(56)	(132,127)	(45)
8600	Net loss attributable to:
8610	Shareholders of the parent		$ (167,792)	(56)	$ (135,003)	(46)
8700	Total comprehensive loss attributable to:
8710	Shareholders of the parent		$ (168,088)	(56)	$ (132,127)	(45)
	Loss per share	6(20)
9750	Basic		$ (3.68)		$ (2.96)
9850	Diluted		$ (3.68)		$ (2.96)

Please refer to the accompanying notes to the consolidated financial statements.

Yong Yi International Group Co., Ltd. And Subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars)

Code	Items	Equity Attributable to Shareholders of the Parent						Total Equity
		Common Stocks	Capital Surplus	Retained Earnings			Others
				Legal Capital Reserve	Special Capital Reserve	Accumulated deficit	Exchange Differences on Translation of Foreign Financial Statements
A1	BALANCE, JANUARY 1, 2024	$ 455,487	$ 330,913	$ 150,590	$ 10,896	$ (80,004)	$ (8,342)	$ 859,540
B13	Legal reserve used to offset accumulated deficits	—	—	(80,004)	—	80,004	—	—
N1	Employee share-based payment	—	2,657	—	—	—	—	2,657
D1	Net loss in 2024	—	—	—	—	(135,003)	—	(135,003)
D3	Other comprehensive income in 2024	—	—	—	—	—	2,876	2,876
Z1	BALANCE, DECEMBER 31, 2024	$ 455,487	$ 333,570	$ 70,586	$ 10,896	$ (135,003)	$ (5,466)	$ 730,070
N1	Employee share-based payment	—	636	—	—	636	—	636
D1	Net loss in 2025	—	—	—	—	(167,792)	—	(167,792)
D3	Other comprehensive loss in 2025	—	—	—	—	—	(296)	(296)
Z1	BALANCE, DECEMBER 31, 2025	$ 455,487	$ 334,206	$ 70,586	$ 10,896	$ (302,795)	$ (5,762)	$ 562,618

Please refer to the accompanying notes to the consolidated financial statements.

Yong Yi International Group Co., Ltd. And Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
(In Thousands of New Taiwan Dollars)

Code	Description	2025	2024
		Amount	Amount
AAAA	Cash flows from (used in) operating activities
A10000	Profit from continuing operations before tax	$ (163,472)	$ (126,813)
A20010	Adjustments:
A20100	Depreciation expense	8,735	8,088
A20200	Amortization expense	123	156
A20300	Expected credit impairment profit	—	(11,970)
A20900	Finance costs	2,845	2,666
A21200	Interest income	(14,841)	(34,515)
A21900	Share-based payments	636	2,657
A22500	Gain on disposal of property, plan and equipment	(638)	—
A29900	Other adjustments to reconcile loss	—	94,076
A29900	Gain on lease modification	(136)	(223)
A30000	Changes in operating assets and liabilities:
A31150	Accounts receivable	(1,733)	48,131
A31180	Other receivables	12,539	(12,615)
A31200	Inventories	(39,003)	(24,257)
A31230	Prepayments	642	(9,066)
A31240	Other current assets	10	20
A32125	Contract liabilities	382	(2,741)
A32150	Accounts payable	(3,946)	5,191
A32160	Accounts payable – related parties	345	—
A32180	Other payable	(4,768)	2,399
A32230	Other current liabilities	(91)	(574)
A33000	Cash outflow generated from operations	(202,371)	(59,390)
A33100	Interest received	17,213	38,199
A33300	Interest paid	(2,845)	(2,666)
A33500	Income taxes paid	(7,963)	(16,289)
AAAA	Net cash flows from (used in) operating activities	(195,966)	(40,146)

(Continued)

Yong Yi International Group Co., Ltd. And Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
(In Thousands of New Taiwan Dollars)

Code	Description	2025	2024
		Amount	Amount
BBBB	Cash flows from (used in) investing activities
B00040	Acquisition of financial assets at amortized cost	—	(182,571)
B00050	Proceeds from disposal of financial assets at amortized cost	475,327	—
B02700	Acquisition of property, plant and equipment	(4,567)	(129,913)
B02800	Proceeds from disposal of property, plant and equipment	638	—
B03800	Decrease in refundable deposits	3,641	1,095
B04500	Acquisition of intangible assets	—	(219)
B06700	Increase in other non-current assets	(1,354)	—
BBBB	Net cash flows from (used in) investing activities	473,685	(311,608)
CCCC	Cash flows from (used in) financing activities
C00100	Increase in short-term borrowings	4,003	—
C01600	Proceeds from long-term debt	—	118,210
C03000	Increase in guarantee deposits received	—	610
C04020	Payments of lease liabilities	(4,164)	(4,954)
CCCC	Net cash flows from (used in) financing activities	(161)	113,866
DDDD	Effect of exchange rate changes on cash and cash equivalents	(209)	2,349
EEEE	Net increase (decrease) in cash and cash equivalents	277,349	(235,539)
E00100	Cash and cash equivalents at beginning of period	199,847	435,386
E00200	Cash and cash equivalents at end of period	$ 477,196	$ 199,847

Please refer to the accompanying notes to the consolidated financial statements.

Yong Yi International Group Co., Ltd. And Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2025 and 2024
(Expressed in thousands of New Taiwan Dollars, unless otherwise specified)

1. HISTORY AND ORGANIZATION

Yong Yi International Group Co., Ltd. (the “Company”; the Company and entities within the Company are collectively referred herein as the “Group”) was set up on the British Cayman Islands on May 28, 2015. The establishment is for restructuring the organization by applying to Taiwan Stock Exchange Co., Ltd. for stock listing. The Company was restructured on August 20, 2015 to obtain the equity of Yong Yi International Holding Co., Ltd. via share conversion (intermediate holding company incorporated in the British Virgin Islands). After the reorganization, the Company became the holding company of all the merged entities. The Company’s stock has been officially listed on the Taiwan Stock Exchange since January in 2018. The Group is mainly engaged in the trading of kitchenware, household goods, electronic and electrical appliances, body care and sports equipment.

The consolidated financial statements are presented in the Thousands of New Taiwan Dollars.

2. AUTHORIZATION OF THE CONSOLIDATED FINANCIAL STATEMENTS

The accompanying consolidated financial statements were approved and authorized for issue by the Board of Directors on March 12, 2026.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

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

Amendments to IAS 21 "Lack of Exchangeability"

The application of the amendments to IAS 21 "Lack of Exchangeability" is not expected to result in any significant changes to the Company's accounting policies.

(2) The IFRS Accounting Standards endorsed by the FSC for application starting from 2026

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

A. Amendments to IFRS 9 and IFRS 7 "Amendments to the Classification and Measurement of Financial Instruments"

a. Amendments to Application Guidance on the classification of financial assets:

A) If a financial asset includes a contingency that could change the timing or amount of contractual cash flows, and the nature of the contingency is not directly related to changes in basic lending risks and costs (e.g., whether the debtor achieves a specific carbon emission reduction), such financial assets still meet the "Solely Payments of Principal and Interest":

The contractual cash flows arising in all possible scenarios (before and after the contingency occurs) are solely payments of principal and interest; AND
The cash flows in all possible scenarios do not differ significantly from the cash flows of a financial instrument with the same terms but without the contingency.

B) Clarifies that "non-recourse" financial assets refer to cases where the entity's ultimate right to receive cash flows is contractually limited to cash flows generated by specific assets.

C) Clarifies that "contractually linked instruments" establish a waterfall payment structure with multiple tranches of securities, creating concentrations of credit risk and resulting in disproportionate allocations of cash shortfalls among tranches.

b. Amendments to Application Guidance on the derecognition of financial liabilities:

Clarifies that financial liabilities should be derecognized on the settlement date. However, when an entity uses an electronic payment system to settle a liability, it may elect to derecognize the liability before the settlement date if:

A) The entity has no practical ability to withdraw, stop, or cancel the payment instruction;

B) The entity has no practical ability to access the cash used for settlement due to the payment instruction; AND

C) The settlement risk associated with the electronic payment system is not significant.

The Company shall apply these amendments retrospectively without restating prior periods, and the cumulative effect of initial application shall be recognized on the date of initial application. However, an entity may elect to restate prior periods only if it is possible to do so without the use of hindsight.

Upon initial application of the IFRS Accounting Standards effective in 2026, the Company expects to adjust the derecognition timing for financial liabilities related to outstanding checks from the 'check date' to the 'date of clearance by the counterparty.' Additionally, green electricity purchase contracts previously subject to IFRS 9 will be re-evaluated and treated as 'executory contracts.' The Company will not restate comparative information.

The Company assesses that the application of the aforementioned amendments and interpretations will not have a material impact on its financial position or financial performance.

(3) The IFRS Accounting Standards in issue but not yet endorsed and issued into effect by the FSC

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

Note 1: Unless stated otherwise, the above IFRS Accounting Standards are effective for annual reporting periods beginning on or after their respective effective dates.

Note 2: The FSC announced on September 25, 2025, that enterprises in Taiwan shall apply IFRS 18 from January 1, 2028. Early adoption is permitted once endorsed by the FSC.

A. Amendments to IFRS 10 and IAS 28: "Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

The amendments stipulate that when the Company sells or contributes assets to an associate (or joint venture), or when the Company loses control of a subsidiary but retains significant influence (or joint control) over it, the Company shall recognize the full amount of gain or loss resulting from such transactions, provided that the aforementioned assets or the former subsidiary constitute a "business" as defined in IFRS 3 "Business Combinations."

Furthermore, if the Company sells or contributes assets to an associate (or joint venture), or loses control of a subsidiary in a transaction with an associate (or joint venture) while retaining significant influence (or joint control), but the aforementioned assets or the former subsidiary do not constitute a "business," the Company shall recognize the gain or loss resulting from the transaction only to the extent of the unrelated investors' interests in the associate (or joint venture). That is, the Company's share of the gain or loss shall be eliminated.

B. IFRS 18 "Presentation and Disclosure in Financial Statements" and Related Consequential Amendments

a. IFRS 18 will replace IAS 1 "Presentation of Financial Statements." Key changes under this standard include:

A) The Company is required to assess whether it has specified main business activities related to investing in particular types of assets or providing financing to customers. Based on this assessment, income and expenses in the statement of profit or loss shall be classified into operating, investing, financing, income tax, and discontinued operations categories.

B) The statement of profit or loss shall present totals and subtotals for operating profit or loss, profit or loss before financing and income taxes, and profit or loss.

C) Provides guidance to enhance the requirements of aggregation and disaggregation: The Corporation and its subsidiaries shall identify the assets, liabilities, equity, income, expenses, and cash flows that arise from individual transactions or other events and shall classify and aggregate them into groups based on shared characteristics, so as to result in the presentation in the primary financial statements of line items that have at least one similar characteristic. The Corporation and its subsidiaries shall disaggregate items with dissimilar characteristics in the primary financial statements and in the notes. The Corporation and its subsidiaries label items as “other” only if it cannot find a more informative label.

D) Disclosures on Management-defined Performance Measures (MPMs): When in public communications outside financial statements and communicating to users of financial statements management’s view of an aspect of the financial performance of the Corporation and its subsidiaries as a whole, the Corporation and its subsidiaries shall disclose related information about its MPMs in a single note to the financial statements, including the description of such measures, calculations, reconciliations to the subtotal or total specified by IFRS Accounting Standards, and the income tax and non-controlling interests effects of related reconciliation items.

b. Consequential Amendments to IAS 7 "Statement of Cash Flows"

A) When the Company prepares cash flows from operating activities using the indirect method, it shall use "operating profit or loss" as the starting point for the reconciliation.

B) Interest and dividends received shall be classified as investing activities, while interest and dividends paid shall be classified as financing activities. If the Company determines that it has specified main business activities, it must consider the classification of dividend income, interest income, and interest expense presented in the statement of profit or loss to determine the corresponding classification of these cash flows in the statement of cash flows. However, each of these cash flows can only be classified into a single category within the statement of cash flows.

Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Corporation and its subsidiaries are continuously assessing the other impacts of the above amended standards and interpretations on the Corporation and its subsidiaries' financial position and financial performance and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are used in the preparation of the accompanying consolidated financial statements. These policies have been consistently applied to all the periods presented unless otherwise stated.

(1) Statement of compliance

The consolidated financial statements have been prepared in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers", International Financial Reporting Standards (IFRSs), International Accounting Standards (IASs), IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission (FSC) of Taiwan (collectively referred to as the "IFRSs").

(2) Basis of preparation

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

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

1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. derived from prices); and

3) Level 3 inputs are unobservable inputs for the assets or liability.

(3) Criteria for Classifying Assets and Liabilities as Current or Non-current

Current assets include:

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

Current liabilities include:

1) Lilities held primarily for trading purposes of trading;
2) Liabilities due to be settled within 12 months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the consolidated financial statements are authorized for issue; and
3) Liabilities for which the Group does not have an unconditional right to defer settlement for at least 12 months after the reporting period.

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

(4) The basis for the consolidated financial statements

1) Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (its subsidiaries) in which the Company is exposed, or has right, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. Intra group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

Total comprehensive income of subsidiaries is attributed to the shareholders of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions.

2)Subsidiaries included in consolidated financial statements

The detail information of the subsidiaries at the end of the reporting period was as follows:

Investor	Investee	Main business	Percentage of Ownership		Note
			December 31, 2025	December 31, 2024
The Company	Yong Yi International Holding Co., Ltd	Reinvestment inholding and operation of international trading business	100.00	100.00	Note 1
Yong Yi International Holding Co., Ltd	Kayee Corp. Ltd.	Operation of retail and wholesale business in Taiwan.	100.00	100.00
Yong Yi International Holding Co., Ltd	Vitafoss Investment Holding (HK) Co, Limited	Reinvestment in holding business	100.00	100.00	Note 2
Kayee International Holding(HK) Co., Limited	Vitafoss International Trading Co.. Ltd.	Operation of retail and wholesale business in Mainland China	100.00	100.00	Note 3
Kayee International Holding(HK) Co., Limited	Vitafoss Trading Co.,Ltd..	Provides international business with labor service	100.00	100.00	Note 4

Note 1: Yong Yi International Holding Co., Ltd (BVI), in addition to its primary business in investment holding, has established a Taiwan Branch to engage in international trade.
Note 2: Formerly known as Kayee International Holding(HK) Co., Limited, the Company changed its name to Vitafoss Investment Holding (HK) Co, Limited This change was approved by the Companies Registry of the Hong Kong Special Administrative Region on March 6, 2025.
Note 3: Formerly known as TKX Int'l Trading Co.,Ltd. the Company changed its name to Vitafoss International Trading Co.. Ltd. following approval from the Shenzhen Market Supervision and Administration Bureau on May 19, 2025.
Note 4: Formerly known as KE MO House CO., Ltd., the Company changed its name to Vitafoss Trading Co.,Ltd. following approval from the Shenzhen Market Supervision and Administration Bureau on May 20, 2025.

3) Subsidiaries excluded from the consolidated financial statements: None.

(5) Foreign Currencies

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

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

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

Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

The Company’s financial statements are presented in its functional currency, the New Taiwan Dollar or NTD, while each of its subsidiaries’ financial statements are presented in their functional currencies. Therefore, for the purpose of presenting the consolidated financial statements, assets and liabilities are translated to NTD at the exchange rates of the Group’s functional currency prevailing at the end of the reporting period; equities are translated to NTD at historical rates; and income and expense items are translated to NTD at the average exchange rates for the period. The resulting currency translation differences are recognized in exchange differences on translating foreign operations and accumulated in equity.

(6) Inventory

Inventories include raw materials, materials, finished goods, work in progress and trading goods. Inventory is measured by the cost and the value of net realization, comparing costs with net realizable value is based on individual items except for those in same inventory category. Net realizable value means under normal circumstances the balance after the estimated cost required to complete the investment and sale is deducted. The Group’s inventory write-downs may arise due to the obsolescence caused by customization. The net realizable value is estimated based on inventory age and historical experience. Inventories are recorded at the weighted-average cost on the balance sheet date.

(7) Property, Plant and Equipment

Property, plant and equipment are recognized at cost, and measured at cost less accumulated depreciation and accumulated impairment losses.

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

Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

(8) Intangible Assets

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

Any gain or loss arising on the disposal or retirement of an item of intangible assets is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

(9) Impairment of Tangible and Intangible Assets

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

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

When an impairment loss subsequently reverses, the carrying amount of the asset or a cash-generating unit is increased to the revised estimate of its recoverable amount, but the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

(10) Financial Instruments

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

Financial Assets

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

a. Measurement categor

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

1) Financial assets are classified as at FVTPL when such a financial assets are mandatorily classified or designated as at FVTPL.

Financial assets at FVTPL are subsequently measured at fair value. Any gain or loss arising from remeasurement is recognized in profit or loss. The net gain or loss recognized in profit or loss does not incorporate any dividends or interest earned on such a financial asset.

2) Financial assets at amortized cost

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

a) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
b) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

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

a) Purchased or originated credit impaired financial assets, for which interest income is calculated by applying the credit adjusted effective interest rate to the amortized cost of such financial assets; and
b) Financial assets that are not credit impaired on purchase or origination but have subsequently become credit impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods.

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

b. Impairment of financial assets

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

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

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

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

a) Internal or external information show that the debtor is unlikely to pay its creditors.
b) When a financial asset is more than 90 days past due unless the Company has reasonable and corroborative information to support a more lagged default criterion

The Group recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

c. Derecognition of Financial Assets

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

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

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

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

Financial Liabilities

(a) Subsequent Evaluation

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

(b) Derecognition of Financial Liabilities

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

(11) Revenue Recognition

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

Revenue of Sale of Goods

Revenue of sale of goods comes from sale of kitchenware, household goods, electronic and electrical appliances, body care and sports equipment. Sales of these goods are recognized as revenue and accounts receivables when the goods are shipped and the legal ownership are transferred. The deposits paid by customers are classified as contract liabilities before the goods are shipped and the legal ownership are transferred.

(12) Leases

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

The Group as lessee

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

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

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

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments.

The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses the lessee’s incremental borrowing rate.

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

(13) Loans Cost

Other than those stated above, borrowing costs are recognized in profit or loss in the period in which they are incurred.

(14) Provision for Liabilities

A provision is recognized when the Group has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and the amount of the obligation can be estimated reliably.

The provision is measured at the present value of the best estimate of the expenditures required to settle the obligation at the end of the reporting period.

Where the provision is measured using the estimated cash flows to settle the present obligation, its carrying amount is the present value of those cash flows.

(15) Employee Benefit

a. Short-term employee benefits

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

b. Retirement benefits

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

c. Termination benefits

A liability for a termination benefit is recognized at the earlier of when the Group can no longer withdraw the offer of the termination benefit and when the Group recognizes any related restructuring costs.

(16) Share-based payment transactions

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

b. For the cash-settled share-based payment arrangements, the employee services received and the liability incurred are measured at the fair value of the liability to pay for those services, and are recognized as compensation cost and liability over the vesting period. The fair value of the liability shall be remeasured at each balance sheet date until settled at the settlement date, with any changes in fair value recognized in profit or loss.

(17) Taxation

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

a. Current tax

The Group’s current tax liabilities are computed based on legal tax rates at the end of the reporting period.

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

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

b. Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, net operating loss carryforwards that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, except for circumstances that the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deductible temporary differences associated with such investments are only recognized as deferred income assets only when it is probable that there will be sufficient taxable profits to utilize the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered. The deferred tax assets which originally not recognized is also reviewed at the end of each reporting period and recognized to the extent that it is probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered.

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

c. Current and deferred tax for the year

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

5. CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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

Management continually evaluates estimates and underlying assumptions. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Information about significant assumptions and estimates that involve a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is as follows:

(1) Critical Accounting Judgments

1) Revenue Recognition

In accordance with IFRS 15, the Group determines whether it is acting as a principal or an agent in a transaction by assessing whether it has obtained control of specified goods or services before transferring them to the customer. If the Group is acting as an agent, it recognizes revenue on a net basis.

The Group is considered a principal if one or more of the following criteria are met:

a. The Group obtains control of the goods or other assets from a third party before transferring them to the customer;

b. The Group controls the right to a service to be performed by another party, and has the ability to direct that party to provide the service to the customer on the Group’s behalf;

c. The Group integrates the goods or services obtained from other parties with other goods or services in providing a specified good or service to the customer.

(2) Key Sources of Estimation Uncertainty

1) Impairment of Inventories

The net realizable value of inventories is estimated as the selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Such estimates are based on the current market conditions and the historical experience of selling similar products. Changes in market conditions may have a material impact on the outcome of these estimates.

2) Impairment Assessment of Property, Plant and Equipment, Right-of-use Assets, and Intangible Assets

Impairment of property, plant and equipment, right-of-use assets, and intangible assets is assessed based on their recoverable amount, which is the higher of fair value less costs of disposal and value in use. Changes in market prices, future cash flows, or discount rates may affect the recoverable amounts of these assets, which could result in the recognition of additional impairment losses or the reversal of previously recognized impairment losses by the Group.

3) Income Taxes

Uncertainty in income tax arises from the interpretation of complex tax laws, as well as the amount and timing of future taxable income. Due to the Group's extensive international operations and the long-term and complex nature of certain contracts, actual outcomes may differ from the assumptions made, or those assumptions may change in the future, potentially requiring adjustments to recognized tax assets and liabilities.

The recognition of income taxes is based on reasonable estimates of potential outcomes of tax audits conducted by tax authorities in the jurisdictions in which the Group operates. Such estimates are based on various factors, including historical audit experience and differences in the interpretation of tax laws between the taxable entities and their respective tax authorities.

Deferred tax assets related to unused tax losses, tax credits, and deductible temporary differences are recognized to the extent that it is probable that future taxable income or taxable temporary differences will be available. The assessment of the recoverability of deferred tax assets involves judgment regarding the timing and level of future taxable profits, as well as the feasibility of future tax planning strategies.

4) Contingent Losses Related to Contractual Commitments

The Group is involved in certain legal proceedings that are still pending rulings by the judicial authorities. These proceedings may give rise to contingent losses arising from contractual commitments. The provision for such liabilities is highly dependent on management's judgment and the legal opinions provided by the Group's external counsel. If the final judgment is unfavorable to the Group, the provision recognized for such liabilities may be subject to significant adjustments.

CONTENTS OF SIGNIFICANT ACCOUNTS

6.1 CASH AND CASH EQUIVALENTS

	Dec. 31, 2025	Dec. 31, 2024
Cash on hand and revolving funds	$ 84	$ 169
checking and demand deposits	185,061	191,809
Cash equivalents
Time deposits with maturities of less than three months	292,051	7,869
	$ 477,196	$ 199,847

As of December 31, 2025 and 2024, the interest rate ranges for bank time deposits with original maturities of less than three months were 0.3%~3.48% and 4.42%, respectively.

6.2 FINANCIAL ASSETS AT AMORTIZED COST

	Dec. 31, 2025	Dec. 31, 2024
Current
Certificate deposits with original maturity date over 3 months	$ 8,992	$ 488,365
Restricted time deposits	4,046	—
	$ 13,308	$ 488,365

The annual interest rate ranges for time deposits with original maturities of more than three months were 0.95% and 4.40% to 4.85% as of December 31, 2025 and 2024, respectively.
As of December 31, 2025, the interest rate for restricted time deposits was 1.10%.
For the information regarding financial assets measured at amortized cost pledged as collateral for short-term borrowings, please refer to Note 8.

6.3 ACCOUNTS RECEIVABLE, NET

	Dec. 31, 2025	Dec. 31, 2024
At amortized cost
Gross carrying amount	$ 106,767	$ 103,455
Less: Loss allowance	(61,361)	(61,361)
Subtotal	45,406	42,094
Measured at fair value through profit or loss	—	1,579
Accounts receivable, net	$ 45,406	$ 43,673

1) The Group's average credit period granted for sales of goods is 30 to 120 days after month-end. The credit period is determined based on the customer's financial condition and historical payment record. In certain cases, the Group may require customers to make advance payments in order to reduce the risk of financial loss arising from payment defaults.
2) The Group has not pledged any trade receivables as collateral.
3) The Group applies the simplified approach under IFRS 9 to recognize an allowance for expected credit losses (ECL) on trade receivables based on their lifetime ECL. For certain individual customers with known credit impairment, the Group recognizes full impairment losses. For other receivables, the Group uses a provision matrix to calculate lifetime ECL, taking into consideration the customers' past default history, current financial condition, and prevailing economic conditions. Based on the Group's historical credit loss experience, there is no significant difference in loss patterns among different customer groups; therefore, the provision matrix is not segmented by customer group, and expected credit loss rates are determined solely based on the number of days past due.
4) The following table detailed the loss allowance of accounts receivable based on the Group's provision matrix.

December 31, 2025

Items	Gross carrying amount	Loss allowance (lifetime ECLs)	Amortized cost
Aging terms
Neither past due nor impaired	$ 44,141	$ —	$ 44,141
Past due but not impaired
Past due within 30 days	1,050	—	1,050
Past due 31-90 days	208	—	208
Over 181 days	7		7
Individual identification (Note)	61,361	(61,361)	—
Total	$ 106,767	$ (61,361)	$ 45,406

December 31, 2024

Items	Gross carrying amount	Loss allowance (lifetime ECLs)	Amortized cost
Aging terms
Neither past due nor impaired	$ 42,582	$ —	$ 42,582
Past due but not impaired
Past due within 30 days	1,089	—	1,089
Past due 31-90 days	2	—	2
Individual identification (Note)	61,361	(61,361)	—
Total	$ 105,034	$ (61,361)	$ 43,673

Note: Accounts receivable specifically identified amounting to $31,557 thousand were insured under an accounts receivable insurance policy with the Export-Import Bank of the Republic of China. As of August 2024, the Group had received an insurance compensation of $10,234 thousand. The remaining balance is pending confirmation by the bank. Based on the Group's assessment, the full remaining balance has been provided for as expected credit losses.4) Movements of the loss allowance for accounts receivable.

5) Movements of the loss allowance for accounts receivable.

	2025	2024
Balance, beginning of period	$ 61,361	$ 72,101
Add:Reversal of impairment	—	(10,740)
Less:Amounts written off	—	—
Balance, end of period	$ 61,361	$ 61,361

6) Accounts Receivable Measured at Fair Value Through Profit or Loss

For certain accounts receivable, the Group derecognizes the related receivables from the consolidated balance sheet at the time of transfer, as these receivables are sold to banks without recourse. Under such arrangements, the sale occurs when the Group's customers default on payments for reasons other than commercial disputes. Upon transfer, the bank becomes the creditor of the receivable and may further assign the receivable to a third party without the Group's consent or the Group raising objections. The credit risk of non-payment not arising from commercial disputes is borne by the bank.

The Group's business model for managing such accounts receivable is neither held solely to collect contractual cash flows nor held both to collect contractual cash flows and to sell financial assets. Accordingly, these accounts receivable are measured at fair value through profit or loss.

6.4 OTHER RECEIVEABLES

	Dec. 31, 2025	Dec. 31, 2024
Amortized at cost
Gross carrying amount	$ 1,875	$ 150,123
Less: Loss allowance	—	(133,337)
Other receivable, net	$ 1,875	$ 16,786

1) Please refer to Notes 6.24 and 5. for relevant information on other receivables.
2) Movements of the loss allowance for other receivable.

	2025	2024
Balance, beginning of period	$ 133,337	$ 178,209
Less: Current period reversal	—	(1,230)
Less: Amounts written off	(133,337)	(43,642)
Balance, end of period	$ —	$ 133,337

6.5 INVENTORIES AND COST OF SALES

	Dec. 31, 2025	Dec. 31, 2024
Merchandise	$ 66,214	$ 27,211

1) For the years ended December 31, 2025 and 2024, the cost of goods sold related to inventories amounted to $273,411 thousand and $264,641 thousand, respectively.

The cost of goods sold for the years ended December 31, 2025 and 2024 included inventory write-downs and obsolescence losses of $13,506 thousand and $16,254 thousand, respectively.

2) As of December 31, 2025 and 2024, none of the Group’s inventories were pledged as collateral.

6.6 PREPAYMENTS

	Dec. 31, 2025	Dec. 31, 2024
Prepayment for purchases	$ 1,360	$ 2,577
Prepaid expenses	2,415	10,191
Overpaid VAT	16,825	7,205
Others	546	1,815
Total	$ 21,146	$ 21,788

6.7 PROPERTY, PLANT AND EQUIPEMNT

For the year ended December 31, 2025

Items	Balance at January 1, 2025	Additions	Disposals	Reclassification	Balance at December 31, 2025
Cost
Land	$ 122,429	$ —	$ —	$ —	$ 122,429
Buildings	45,647	—	—	—	45,647
Transportation equipment	4,500	—	(3,162)	(104)	1,234
Office equipment	2,535	3,644	—	5	6,184
Leasehold improvements	4,669	369	—	23	5,061
Other equipment	11,104	554	—	—	11,658
Subtotal	190,884	4,567	(3,162)	(76)	192,213
Accumulated depreciation
Buildings	761	913	—	—	1,674
Transportation equipment	4,426	72	(3,162)	(102)	1,234
Office equipment	1,206	821	—	7	2,034
Leasehold improvements	2,600	1,027	—	19	3,646
Other equipment	12	1,206	—	—	1,218
Subtotal	9,005	4,039	(3,162)	(76)	9,806
Net value	$ 181,879	$ 528	$ —	$ —	$ 182,407

For the year ended December 31, 2024

Items	Balance at January 1, 2024	Additions	Disposals	Reclassification	Balance at December 31, 2024
Cost
Land	$ —	$ 122,429	$ —	$ —	$ 122,429
Buildings	—	45,647	—	—	45,647
Transportation equipment	4,348	—	—	152	4,500
Office equipment	1,409	947	—	179	2,535
Leasehold improvements	3,598	1,027	—	44	4,669
Other equipment	—	11,104	—	—	11,104
Subtotal	9,355	181,154	—	375	190,884
Accumulated depreciation
Buildings	—	761	—	—	761
Transportation equipment	4,181	99	—	146	4,426
Office equipment	1,098	85	—	23	1,206
Leasehold improvements	1,022	1,562	—	16	2,600
Other equipment	—	12	—	—	12
Subtotal	6,301	2,519	—	185	9,005
Net value	$ 3,054	$ 178,635	$ —	$ 190	$ 181,879

1) The Company of property, plant and equipment are depreciated on a straight-line basis over the estimated useful lives as follows:

Items	Useful lives
Buildings	50 years
Transportation equipment	4~5 years
Office equipment	5 years
Leasehold improvements	2~5 years
Other equipment	2~10 years

2) For details of the Group's property, plant and equipment pledged as collateral for short-term and long-term borrowings, please refer to Note 8.

6.8 LEASE ARRANGMENTS

1) Right-of-use assets

	Dec. 31, 2025	Dec. 31, 2024
Carrying amounts
Transportation equipment	$ 4,595	$ 8,818
	2025	2024
Additions to right-of-use assets	$ 5,589	$ 2,355
Lease modification (Lease termination)	$ 5,084	$ 3,008
The depreciation charge for right-of-use assets
Transportation equipment	$ 4,696	$ 5,569

2) Lease liability

	Dec. 31, 2025	Dec. 31, 2024
Carrying amounts
Current	$ 2,398	$ 3,619
Non-current	$ 2,345	$ 4,936

Range of discount rate for lease liabilities were as follows:

	Dec. 31, 2025	Dec. 31, 2024
Buildings	4.75%	3.51%~4.75%

3) Material lease-in activities and terms

The Group leases buildings for the use of plants and offices with lease terms of 2 to 5 years. The Group does not have purchase options to acquire the leasehold buildings at the end of the lease terms.

4) Other lease information

	2025	2024
Expenses relating to short-term leases	$ 631	$ 1,365
Variable lease payments	$ 2,620	$ —
Expenses relating to low-value asset leases	$ 67	$ 1,737
Interest expense on lease liabilities	$ 384	$ 622
Total cash outflow for leases	$ 7,866	$ 8,678

The Group leases certain building which qualifies as short-term leases and office equipment which qualifies low-value assets leases. The Group has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

6.9 OTHER NON-CURRENT ASSETS

	Dec. 31, 2025	Dec. 31, 2024
Refundable deposit	$ 1,075	$ 4,716
Restricted assets	1,354	—
Total	$ 2,429	$ 4,716

Restricted assets represent bank deposits for which the Group's right to use has been restricted due to a labor dispute between the Group and a former employee. In the current year, the former employee filed a petition with the court for a provisional attachment on the bank deposits. The Group has received an execution order from the court, and the right to use the relevant bank deposits is currently restricted.

6.10 SHORT-TERM BORROWINGS

	Dec. 31, 2025	Dec. 31, 2024
Secured loans
Short-term borrowings	$ 4,003	$ —
Range of interest rates	3.00%	—

The borrowings were secured by time deposits; please refer to Note 8.

6.11 OTHER PAYABLES

	Dec. 31, 2025	Dec. 31, 2024
Accrued salary and bonus	$ 4,752	$ 6,691
Payable for professional service fee	4,099	5,335
Payable for social security insurance	2,627	443
Payable for commission expense	850	3,805
Others	6,390	7,212
Totals	$ 18,718	$ 23,486

6.12 LONG-TERM BORROWINGS

	Dec. 31, 2025	Dec. 31, 2024
Secured loans	$ 118,210	$ 118,210
Less: current portion	(5,473)	—
Long-term borrowings	$ 112,737	$ 118,210
Range of interest rates	2.06%	2.06%
Term to maturity	115~133 years	115~133 years

1) All of the above long-term borrowings are repayable in installments, with repayments commencing in March 2026

2) The secured borrowings are collateralsized by property, plant and equipment. Please refer to Note 8 for details.

6.13 PROVISIONS

	Dec. 31, 2025	Dec. 31, 2024
Non-current provisions subject to legal proceedings	$ 94,076	$ 94,076

1) Provisions are recognized when the Group has a present obligation as a result of a past event, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

2) On July 23, 2024, the Group received a letter from a lawyer representing a European customer, claiming that the Group should return the payments received from the customer in prior years. As of the date of this report, the Group has not yet appointed a legal counsel to respond to the matter, and the related obligations and responsibilities are still pending clarification. However, after evaluating the potential obligations, the Group recognized a provision of $94,076 thousand as of December 31, 2024, which was recorded under "Other losses."

6.14 PLAN FOR RETIREMENT BENEFITS

Defined contribution plans

1) The Company, Yong Yi British Virgin Islands, and Vitafoss Investment Holding (HK) Co, Limited of the Group don't have retirement plans for employees. The employee pension plan under the Labor Pension Act of the R.O.C. (the Act) is a defined contribution plan. Pursuant to the plan, Yong Yi British Virgin Islands Taiwan Branch and Kayee Corp. Ltd. make monthly contributions of 6% of each individual employee's salary or wage to employees' pension accounts.

2) As for subsidiaries such as Vitafoss International Trading Co., Ltd., and Vitafoss Trading Co., Ltd., the retirement plans are according to the regulations of the Shenzhen Municipal Government and the Ningbo Municipal Government of the People's Republic of China. They are also a defined contribution plan. The certain amount is contributed as pension based on employee's basic wages.

6.15 EQUITY

1) Ordinary Share

	Dec. 31, 2025	Dec. 31, 2024
Authorized shares (in thousands)	100,000	100,000
Authorized share capital	$ 1,000,000	$ 1,000,000
Number of shares issued (in thousands)	45,549	45,549
Share capital issued	$ 455,487	$ 455,487

A holder of issued ordinary shares with par value of $10 per share is entitled to vote and to receive dividends.

As of December 31, 2025 and 2024, the paid-in capital is 455,487 thousand, consisting of 45,549 thousand shares with par value of $10 dollars per share, which is of ordinary share.

2) Capital Surplus

	Dec. 31, 2025	Dec. 31, 2024
Additional paid-in capital	$ 328,315	$ 328,315
Employee options	5,891	5,255
Total	$ 334,206	$ 333,570

The capital surplus arising from the issuance of shares in excess of par value may be used to offset accumulated deficits. It may also be distributed as cash dividends or transferred to capital stock for the issuance of stock dividends when the Company has no accumulated deficit. However, the amount transferred to capital stock each year is subject to a certain percentage of the Company's paid-in capital.

The capital surplus arising from employee stock option compensation may not be used for any purpose.

3) Retained Earnings and Dividend Policy

Under the Company's Articles of Incorporation, the Board of Directors can use capital surplus to offset accumulated losses and distribute earnings. Before the Board of Directors distribute dividends, a certain amount of earnings or profits from the Company can be distributed as reserve fund. It's not necessary to have this reserve fund appropriated. It can be reserved without allocation.

According to earnings distribution policy of the original Company's Articles of Incorporation, the Company is at the stage of growth and the Board of Directors consider all the factors, including but not limited to earnings in each fiscal year of the Company, overall development, financial plan, capital requirements, industry prospect and vision for the future to proposes appropriation of shareholders' dividends, which would be resolved by the shareholders.

During the period when the Company's shares are registered in the Emerging Market or officially listed in Republic of China, in distributing earning, the Board of Directors in each fiscal year shall fist

Distribute income tax liabilities
Offset its losses in previous years
Legal capital reserve at 10% of the remaining earnings, until the accumulated legal capital reserve equals the Company's paid-in capital
Special capital reserve in accordance with relevant laws or regulations or as requested by the authorities of the Republic of China in charge.

If there's any balance left over, it can be combined with all or part of the accumulated unappropriated earnings over the past years. According to Cayman Islands Company Law and requirements of the public offering company in R.O.C., after considering factors of finance, business and operation, no lower than 10% of the earnings after tax for the period shall be distributed as dividends for the shareholders based on their shareholding ratio. Dividends for the shareholders are allocated in the ways of stock dividends, cash dividends or both, which however cash dividends can't be lower than 10%.

The appropriation for legal capital reserve shall be made until the reserve equals the Company's paid-in capital. The reserve may be used to offset a deficit, or be distributed as dividends in cash or stocks for the portion in excess of 25% of the paid-in capital if the Company incurs no loss.

The Company held its Annual General Meetings on June 11, 2025 and June 6, 2024, during which the shareholders approved the proposals for deficit offset for the years ended December 31, 2024 and 2023 respectively, as follows:

Items	Proposal for Deficit Offse
	2024	2023
Utilized legal reserve to offset accumulated deficits	$ —	$ 80,004

On August 23, 2024, the Board resolved not to distribute dividends for the first half of 2024.

On March 14, 2025, the Board resolved not to distribute dividends for the second half of 2024.

On August 29, 2025, the Board resolved not to distribute dividends for the first half of 2025.

On March 12, 2026, the Board resolved not to distribute dividends for the first half of 2025.

For information regarding the resolutions of the Board of Directors and shareholders' meetings on earnings distribution, please refer to the Market Observation Post System (MOPS) of the Taiwan Stock Exchange.

6.16 OTHER EQUITY

Exchange differences on translation of foreign financial statements

	2025	2024
Balance, beginning of period	$ (5,466)	$ (8,342)
Exchange differences on translation of foreign net assets	(296)	2,876
Balance, end of year	$ (5,762)	$ (5,466)

The exchange differences resulting from converting foreign operation assets from their functional currency to the Company's reporting currency are directly recorded in other comprehensive income and added to the translation reserve for foreign operations in the financial statements of foreign operations. Previously accumulated translation differences in the financial statements of foreign operations are reclassified to profit or loss upon disposal of the foreign operations.

6.17 OPERATING REVENUE

1) Contract balances

	Dec. 31, 2025	Dec. 31, 2024
Accounts receivable	$ 45,406	$ 43,673
Contract liabilities
Revenue from sale of goods	$ 2,038	$ 1,656

The changes in the contract liability balances primarily result from the timing difference between the satisfaction of performance obligation and the customer's payment.

2) The amount of revenue recognized in the current period that was included in the contract liabilities at the beginning of the year and was recognized as a result of satisfying performance obligations is as follows:

	2025	2024
From the beginning balance of contract liability Sale of goods	$ 1,656	$ 4,397

3) Disaggregation of Revenue from Contracts with Customers:

	2025
	Americas	Europe	Asia	Others	Total
Major products
/Service line
Department store trade	$ 8,396	$ 43,062	$ 236,159	$ 11,827	$ 299,444
Revenue Recognition
Performance obligation satisfied	$ 8,396	$ 43,062	$ 236,159	$ 11,827	$ 299,444
	2024
	Americas	Europe	Asia	Others	Total
Major products
/Service line
Department store trade	$ 70,653	$ 94,759	$ 127,316	$ 9,195	$ 301,923
Revenue Recognition
Performance obligation satisfied	$ 70,653	$ 94,759	$ 127,316	$ 9,195	$ 301,923

6.18 INCOME FORM CONTINUING OPERATION

Income from continuing operation including:

1) Depreciation and amortization

	2025	2024
Depreciation expenses summarized by function
Operating expenses	$ 8,735	$ 8,088
Amortization expenses summarized by function
Operating expenses	$ 123	$ 156

2) Net other income and expenses

	2025	2024
Foreign exchange (losses) gains, net	$ (15,685)	$ 50,440
Loss on disposal of assets	638	—
Other losses	—	(94,076)
Gain on lease modification	136	223
Others	(3,566)	(35)
	$ (18,477)	$ (43,448)

3) Employee benefits expenses

	2025	2024
Short-term employee benefits	$ 63,598	$ 68,837
Termination benefits	3,280	1,395
Other employee benefits	8,069	4,439
Total employee benefits expenses	$ 74,947	$ 74,671
Aggregated by functions
Operating expense	$ 74,947	$ 74,671

4) Compensation of Employees and Directors

Upon the final settlement of the Company's accounts, if there is surplus profit, the Company shall set aside no less than 1% as compensation to employees and no more than 3% as remuneration for the Directors. However, if the Company has accumulated losses, the Company shall reserve an amount thereof for making up the losses. The employees' compensation referred to in the preceding paragraph may be distributed in the form of shares or in the form of cash, and may be distributed to employees of the Company and its Subsidiaries, whose qualification shall be determined by the Board.

The remuneration of employees and directors and supervisors were not estimated because the net loss before tax in 2025 and 2024.

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

Information regarding the appropriations of the Company's profit-sharing bonuses to employees and compensation to directors is available on the Market Observation Post System (MOPS) website.

5) Other Income

	2025	2024
Compensation income	$ —	$ 431
Sales of scrap	1,181	—
Others	198	218
	$ 1,379	$ 649

6) Financial costs

	2025	2024
Interest on lease liabilities	$ 384	$ 622
Interest on bank borrowings	2,461	2,044
	$ 2,845	$ 2,666

6.19 INCOME TAX FROM CONTINUING OPERATIONS

1) Income tax expense recognized in profit or loss is mainly as follows:

	2025	2024
Current tax
Current tax expense recognized	$ 2,109	$ —
Adjustments in prior years	(9)	47
Deferred income tax
Current tax expense recognized	2,220	8,143
Income tax expense recognized in profit or loss	$ 4,320	$ 8,190

Are conciliation of accounting profit and income tax expenses as follows:

	2025	2024
Loss before tax from continuing operations	$ (163,472)	$ (126,813)
Loss tax expense for income before tax at statuary rate	$ (33,529)	$ (38,319)
Tax effect of adjusting items:
Non-deductible expenses for tax purposes	697	6
Adjustment to prior years’ current income tax expense recognized in the current year	(9)	47
Adjustment to prior years’ deferred income tax recognized in the current year	2,220	8,143
Unrecognized temporary differences	1,833	20,594
Unrecognized loss carryforwards	33,108	17,719
Income tax expense recognized in profit or loss	$ 4,320	$ 8,190

Yong Yi Corp. Ltd. and Yong Yi International Holding Co., Ltd., Taiwan Branch applied entities subject to the R.O.C. Income Tax Law rate was 20%.

The tax rate in China applicable to VitafoSS International Trading Co.. Ltd. VitafoSS International Trading Co.. Ltd. is 25%.

Starting from 2019, VitafoSS Trading Co.,Ltd. qualified as a small low-profit enterprise in Mainland China, and the applicable income tax rate was reduced from 25% to 5%.

The tax rate in Hong Kong applicable to VitafoSS Investment Holding (HK) Co, Limited. is 16.5%.

The Company and Yong Yi British Virgin Island (excluding the Taiwan Branch) are exempt from income tax according to the law.

2) Current Income Tax Assets and Liabilities

Items	Dec. 31, 2025	Dec. 31, 2024
Current income tax assets	$ 236	$ 532
Current income tax Liabilities
Income tax liabilities—Current	$ 2,419	$ 6,113
Income tax liabilities—Non-Current	—	2,392
	$ 2,419	$ 8,505

3) Deferred Tax Assets and Liabilities

	2025
	Balance in the beginning of year	Recognized in profit or loss	Recognized in other comprehensive income	Exchange differences	Balance in the end of year
Deferred tax assets
Temporary differences
Allowance for doubtful accounts overrun	$ 669	$ (699)	$ —	$ —	$ —
Inventory valuation losses	27	(27)	—	—	—
Unrealized exchange losses	6	(6)	—	—	—
Others	184	(70)	—	1	115
	$ 886	$ (772)	$ —	$ 1	$ 115
Deferred income tax liabilities
Temporary differences
Unrealized exchange profit	$ (329)	$ (1,448)	$ —	$ —	$ (1,777)
	$ (329)	$ (1,448)	$ —	$ —	$ (1,777)
	2024
	Balance in the beginning of year	Recognized in profit or loss	Recognized in other comprehensive income	Exchange differences	Balance in the end of year
Deferred tax assets
Temporary differences
Allowance for doubtful accounts overrun	$ 634	$ 35	$ —	$ —	$ 669
Inventory valuation losses	2,156	(2,129)	—	—	27
Unrealized exchange losses	59	(53)	—	—	6
Others	181	(1)	—	4	184
Loss carryforward	5,800	(5,800)	—	—	—
	$ 8,830	$ (7,948)	$ —	$ 4	$ 886
Deferred income tax liabilities
Temporary differences
Unrealized exchange profit	$ (134)	$ (195)	$ —	$ —	$ (329)
	$ (134)	$ (195)	$ —	$ —	$ (329)

4) Unused loss carryforwards and deductible temporary differences for which no deferred tax assets have been recognized in the consolidated balance sheets

	Dec. 31, 2025	Dec. 31, 2024
Loss carryforward
Maturity in 2026	$ 7,199	$ 7,170
Maturity in 2027	5,835	5,812
Maturity in 2028	7,861	7,221
Maturity in 2029	1,261	1,261
Maturity in 2030	16,369	16,369
Maturity in 2031	26,466	26,466
Maturity in 2032	15,345	15,345
Maturity in 2033	98,697	98,697
Maturity in 2034	88,099	88,099
Maturity in 2035	26,423	—
	$ 293,555	$ 266,440
Deductible temporary differences
Unrealized loss on inventories	1,264	23,124
Allowance for doubtful accounts	—	93,062
Total	$ 1,264	$ 116,186

5) Unused loss carryforward

As of December 31, 2024, the information related to the tax-deductible amount for losses is as follows:

Year of maturity	Unused loss carryforward
2026	$ 1,800
2027	1,459
2028	1,965
2029	315
2030	4,092
2031	5,293
2032	3,069
2033	19,739
2034	17,620
2035	5,285
	$ 60,637

6) Income Tax Payment by Installments

Due to the impact of the Covid-19 pandemic, Kayee Corp. applied to the National Taxation Bureau for the payment of its income tax for the year 2019 and 2020 in 36 equal installments on a monthly basis in accordance with Rule No.1095079902 and No. 1100546752 issued by the Ministry of Finance (MOF) of the Republic of China.

Yong Yi British Virgin Islands Taiwan Branch applied to the National Taxation Bureau for the payment of its income tax for the year 2019, 2020, 2021 and 2022 in 36 equal installments on a monthly basis in accordance with Rule No.1095079904, No. 1100546754, No. 111508353 and No. 1125081508 issued by the Ministry of Finance (MOF) of the Republic of China.

According to the current and non-current distinction criteria as follow:

Items	Dec. 31, 2025	Dec. 31, 2024
Current income tax liabilities	$ 2,392	$ 6,113
Non-Current income tax liabilities	—	2,392
	$ 2,392	$ 8,505

7) Income Tax examination

The income tax returns of Kayee British Virgin Islands Taiwan Branch and Kayee Corp. have examined through 2023 by tax authority.

6.20 LOSS PER SHARE

The earnings and weighted average number of common stock outstanding in the computation of earnings per share were as follows:

Items	Dec. 31, 2025	Dec. 31, 2024
Basic loss per share	$ (3.68)	$ (2.96)
Diluted loss per share	$ (3.68)	$ (2.96)
Net loss for the period
	2025	2024
Net loss used in the computation of basic earnings per share	$ (167,792)	$ (135,003)

Weighted-Average Number of Common Stock Outstanding (In Thousands of Shares)

	2025	2024
Weighted-average number of common stock in computation of basic earnings per share	$ 45,549	$ 45,549
Effect of potential dilutive common stock
Employee’s compensation	—	—
Weighted-average number of common stock in computation of diluted	$ 45,549	$ 45,549

For the years ended December 31, 2025 and 2024, the Company incurred net losses after tax. As the inclusion of potential ordinary shares would result in anti-dilution, diluted loss per share was not calculated.

6.21 SHARE-BASED PAYMENT

1) Employee stock options plan

In June 2023, The Company granted 1,500 stock options to employees, with each unit entitling the holder to subscribe for 1,000 shares of common stock. The grant was extended to employees of both the Company and its subsidiaries who met specific criteria. The stock options have a vesting period of 5 years, and the certificate holders are entitled to exercise a certain proportion of the granted options starting from the second anniversary of the issuance. The exercise price of the stock options is set at the closing price of the Company's common stock on the date of issuance. Should there be any changes in the Company's common stock shares, the exercise price of the stock options will be adjusted according to a prescribed formula.

The relevant information regarding the employee stock options is as follows:

2025

Employee stock options	Granted in June 2023
	Unit	Weighted average exercise price (in dollars)
Shares outstanding, January 1	720	$ 33.10
Forfeited during the year	(171)	33.10
Shares outstanding, December 31	549	33.10
Shares exercisable, December 31	549
Weighted average fair value of options granted	$ 10.24

2024

Employee stock options	Granted in June 2023
	Unit	Weighted average exercise price (in dollars)
Shares outstanding, January 1	966	$ 33.10
Forfeited during the year	(246)	33.10
Shares outstanding, December 31	720	33.10
Shares exercisable, December 31	—
Weighted average fair value of options granted	$ 10.24

The relevant information regarding outstanding employee stock options is as follows:

Items	Dec. 31, 2025	Dec. 31, 2024
The range of exercisable price (in dollars)	$ 33.10	$ 33.10
Weighted average remaining contractual term	2.42years	3.42years

2) Measurement parameters of the fair value at grant date

The fair value of share-based payment at grant date was measured using the BlackScholes option-pricing model. Relevant information is as follows:

	Granted in June 2023
Weighted average price at grant date (in dollars)	33.10 €
Exercisable price (in dollars)	33.10 €
Expected volatility	40.66%
Subscription period	3.5 years
Expected dividend yield (%)	—%
Risk-free interest rate	1.05%

The expected volatility is assumed to be the average annualized standard deviation of daily returns from August 25, 2021, to the grant date, obtained from the Company's stock. The remuneration expenses recognized for the years ended December 31, 2025 and 2024 were $636 thousand and $2,657 thousand, respectively.

6.22 CASH FLOW INFORMATION

1) Non-Cash Transactions

The Group conducted the investment and financing activities partly by cash in Jan. 1 to Dec. 31,2025 and 2024:

	2025	2024
Partly cash for purchase of property, plant and equipment
Purchase of property, plant and equipment	$ 4,567	$ 181,154
Net changes in prepayment for equipment and plant	—	(51,740)
Equipment payable	—	499
Payment in cash	$ 4,567	$ 129,913

2) Reconciliation of liabilities arising from financing activities

Items	2025
	Jan. 1, 2025	Financing Cash Flow	Non-cash changes			Dec. 31,2025
			Leases Increase	Leases Decrease	Foreign Exchange Movement
Short-term borrowings	$ —	$ 4,003	$ —	$ —	$ —	$ 4,003
Lease liabilities	8,555	(4,164)	5,589	(5,168)	(69)	4,743
	$ 8,555	$ (269)	$ 5,589	$ (5,168)	$ (69)	$ 8,746

Items	2024
	Jan. 1, 2024	Financing Cash Flow	Non-cash changes			Dec. 31,2024
			Leases Increase	Leases Decrease	Foreign Exchange Movement
Long-term borrowings (including current portion of long-term borrowings)	$ —	$ 118,210	$ —	$ —	$ —	$ 118,210
Lease liabilities	14,349	(4,954)	2,355	(3,554)	359	8,555
Refundable deposits	—	610	—	—	—	610
	$ 14,349	$ 113,866	$ 2,355	$ (3,554)	$ 359	$ 127,375

6.23 CAPITAL MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance.

Key management personnel of the Group review the capital structure irregularly. As part of this review, the key management personnel consider the economic environment and business conditions associated with each class of capital. In order to balance the overall capital structure, the Group may adjust the amount of dividends paid to shareholders, the number of new shares issued and the amount of new debt issued.

6.24 FINANCIAL INSTRUMENTS

1) Information on fair value-Financial instruments not measured at fair value

The management of the Group thinks that the carrying amount of financial assets and financial liabilities not measured at fair value is close to their fair values.

2) Information on fair value- Financial instruments measured at fair value on a recurring basis

	Dec. 31, 2025
	Level 1	Level 2	Level 3	Total
Financial instruments measured at fair value through profit or loss
Accounts receivable	$ —	$ —	$ —	$ —
	Dec. 31, 2024
	Level 1	Level 2	Level 3	Total
Financial instruments measured at fair value through profit or loss
Accounts receivable	$ —	$ —	$ 1,579	$ 1,579

3) Categories of financial instrument

	Dec. 31, 2025	Dec. 31, 2024
Financial assets
Financial assets at fair value through profit or loss	$ —	$ 1,579
Amortized cost (Note 1)	$ 538,643	$ 749,039
Financial liabilities
Amortized cost (Note 2)	138,834	143,445

Note1: The balance includes cash, financial assets measured at amortized cost, accounts receivable, other receivables (excluding tax refund receivables), refundable deposits, and certain other non-current assets, all of which are classified as financial assets measured at amortized cost.

Note2: The balance includes short-term borrowings, accounts payable (including related parties), other payables, long-term borrowings due within one year, long-term borrowings, and guarantee deposits received, all of which are classified as financial liabilities measured at amortized cost.

4) Financial Risk Management and Policy

The main financial instruments of the Group include accounts receivable, accounts payable and lease liability. The Group’s Corporate Treasury function provides services to the business, coordinates access to financial markets, monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyze exposures by degree and magnitude of risks. The risks include market risks (including exchange rate risk and interest rate risk), credit risk and liquidity risk.

(1) Market risk

The operating activities of the Group make the Group assume major financial risks, which are foreign currency exchange rate risk and interest rate risk.

The Group doesn’t change the way of managing and measuring the risk exposure related to its market risk of financial instruments.

A. Foreign exchange risk

At the balance sheet date, the carrying amounts of the Group’s monetary assets and monetary liabilities denominated in currencies other than the functional currency (including those denominated in non-functional currencies that were offset in the consolidated financial statements) were disclosed.

Sensitivity Analysis

The following information is presented on an aggregated basis for foreign currencies other than the respective functional currencies of the entities within the Group. The exchange rates disclosed refer to the rates at which these foreign currencies are translated into the respective functional currencies. Significant foreign currency - denominated assets and liabilities are as follows:

(In Thousands of New Taiwan Dollars and Foreign Currency)

Dec. 31, 2025

	Foreign currencies	Exchange Rate	Carrying Amount
Financial assets
Monetary items
USD	$ 16,037	31.4300	$ 504,040
RMB	17,241	4.4960	77,513
Financial liabilities
Monetary items
USD	$ 156	31.4300	$ 4,896
RMB	86	4.4960	386

(In Thousands of New Taiwan Dollars and Foreign Currency)

Dec. 31, 2024

	Foreign currencies	Exchange Rate	Carrying Amount
Financial assets
Monetary items
USD	$ 18,932	32.785	$ 620,695
RMB	6,289	4.478	28,162
Financial liabilities
Monetary items
USD	$ 251	32.785	$ 8,223
RMB	178	4.478	796

The Group is primarily exposed to fluctuations in the USD exchange rate. A sensitivity rate of $1\%$ increase or decrease in the exchange rate of the New Taiwan dollar against relevant foreign currencies is used by the Group for reporting foreign exchange risk internally to key management personnel.

The sensitivity analysis includes only the Group's outstanding foreign currency-denominated monetary items and adjusts their translation at the end of the reporting period for a $1\%$ change in exchange rates, with all other variables held constant.

If the exchange rate had increased or decreased by $1\%$ , the Group's profit before tax for the years ended December 31, 2025 and 2024 would have increased or decreased by 5,762 thousand and 6,398 thousand, respectively.

The Group recognized realized and unrealized foreign exchange (loss) gains of (15,685) thousand and 50,440 thousand for the years ended December 31, 2025 and 2024, respectively. These exchange gains and losses primarily arose from transactions denominated in USD.

B. Interest rate risk

Carrying amount of financial assets of the Group subject to interest rate exposure on balance sheets date:

	Dec. 31, 2025	Dec. 31, 2024
Fair value interest rate risk
— financial assets	$ 305,089	$ 515,265
— financial liabilities	8,746	8,555
Cash flow interest rate risk
— financial assets	185,097	172,778
— financial liabilities	118,210	118,210

Sensitivity Analysis

The following sensitivity analysis is determined based on the interest rate exposure of derivative and non-derivative instruments as of December 31, 2025 and 2024. The Group used a change of $\pm 25$ basis points, which reflects management's assessment of a reasonably possible change in interest rates.

If interest rates had increased or decreased by 25 basis points, with all other variables held constant, the Group's profit before tax for the years ended December 31, 2025 and 2024 would have increased or decreased by 167 thousand and 136 thousand, respectively. The change is mainly attributable to the Group's exposure to interest rate risk on demand deposits.

(2) Credit Risk

Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial losses to the Company. Credit risk is managed separately for business related and financial related exposures. As of the date of balance sheet, the Company's maximum credit risk exposure is equal to the carrying amount of financial assets.

The Group uses financial information available and transaction records to assess the major clients and continues supervising credit exposure and credit ratings of the counterparties.

The credit risk of the Group mainly lies on its accounts receivable from the top 2 clients. As of Dec. 31, 2025, and 2024, the top 2 clients account for $69\%$ and $76\%$ approximately of the balance of accounts receivable.

(3) Liquidity Risk

The Group manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Group’s operations and mitigate the effects of fluctuations in cash flows.

The table below is the analysis of non-derivative financial liabilities in remaining contractual maturity during the agreed repayment period of the Group. This is prepared in accordance with the earliest date on which the Group may be required to repay the loan, and based on the undiscounted cash flow of the financial liabilities.

Dec. 31, 2025

	Within 1 year	1-5 years	Over 5 years	Contract cash flows	Carrying amounts
Non-derivative financial liabilities
Short-term borrowings	$ 4,063	$ —	$ —	$ 4,063	$ 4,003
Accounts payable (including related parties)	4,672	—	—	4,672	4,672
Other payables (including related parties)	11,339	—	—	11,339	11,339
Lease liability	2,570	2,406	—	4,976	4,743
Long-term borrowings (including current portion)	8,001	35,057	99,067	142,125	118,210
Guarantee deposits received	—	610	—	610	610
Total	$ 30,645	$ 38,073	$ 99,067	$ 167,785	$ 143,577

Dec. 31, 2024

	Within 1 year	1-5 years	Over 5 years	Contract cash flows	Carrying amounts
Non-derivative financial liabilities
Accounts payable (including related parties)	$ 8,273	$ —	$ —	$ 8,273	$ 8,273
Other payables	16,352	—	—	16,352	16,352
Lease liability	3,782	5,762	—	9,544	8,555
Long-term borrowings (including current portion)	2,435	34,510	107,615	144,560	118,210
Guarantee deposits received	—	610	—	610	610
Total	$ 30,842	$ 40,882	$ 107,615	$ 179,339	$ 152,000

5) Transfer of financial assets

(1) Transferred Financial Assets That Were Entirely Derecognized

The Group entered into accounts receivable factoring agreements with financial institutions. According to the terms of the agreements, the Group issued factoring confirmation letters, specifying that the transactions were non-recourse in nature. Upon the effective date of the transfer, the credit risk associated with the factored receivables is borne by the financial institutions.

The Group remains responsible for losses arising from commercial disputes and for credit risks specified in the agreement to be borne by the Group after the transfer. However, as the Group has no continuing involvement with the transferred receivables, such receivables are derecognized.

The following table summarizes the outstanding balances of such transferred but not yet matured receivables:

Transaction Bank	Dec. 31, 2025
	Amount Transferred	Amount Reclassified to Other Receivables	Amount Reclassified to Other Receivables	Amount Already Advanced	Interest Rate on Advanced Amount (%)
Cathay Bank	$ —	$ —	$ —	$ —	—
Transaction Bank	Dec. 31, 2024
	Amount Transferred	Amount Reclassified to Other Receivables	Amount Reclassified to Other Receivables	Amount Already Advanced	Interest Rate on Advanced Amount (%)
Cathay Bank	$ 11,024	$ 11,024	$ —	$ —	—

The above facility is revolving in nature, and the Group has not provided any promissory notes to the bank as collateral.

RELATED PARTY TRANSACTIONS

(1) Name and relation of the related party

Name of the related party	Relation with the Group
SUMMER MAO International Co., Ltd.(SUMMER MAO)	De facto related party
HOCITO CO., LTD(HOCITO)	The responsible person of the company is a major shareholder of the Company
APOLLO IPL INC.(APOLLO)	The responsible person of the company is a major shareholder of the Company
JC Textile Corporation(JC)	The person in charge of the company is a first-degree relative of one of the Company’s major shareholders.

(2) Significant transactions between related parties

1) Sales

Category/Name of Related Party	2025	2024
HOCITO	$ —	$ 81

The selling prices for transactions with related parties were mutually agreed upon by both parties. The payment terms were based on collection after invoice issuance.

2) Purchases

Category/Name of Related Party	2025	2024
APOLLO	$ 2,609	$ —
JC	32,446	—
HOCITO	91	—
SUMMER MAO	200,049	129,631
	$ 235,195	$ 129,631

Purchases from related parties were made at prices negotiated by both parties. The payment terms were a 30% down payment, with the remaining 70% payable upon receipt of copies of the shipping documents.

3) Prepayments for purchases

Category/Name of Related Party	2025	2024
SUMMER MAO	$ —	$ 303

4) Accounts payable

Category/Name of Related Party	2025	2024
SUMMER MAO	$ 345	$ —

5) Key management remuneration

Items	2025	2024
Short-term employee benefits	$ 18,745	$ 15,016
Post- employment benefits	226	145
Share-based payments	230	553
	$ 19,201	$ 15,714

ASSETS PLEDGED AS COLLATERAL

The following assets have been pledged as collateral for short-term and long-term borrowings:

	Dec. 31, 2025	Dec. 31, 2024
Property, plant and equipment	$ 166,402	$ 167,315
Time deposits (recorded as current financial assets at amortized cost)	5,400	—
	$ 171,802	$ 167,315

SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS:

On August 23, 2020, Kayee Corp., a subsidiary of the Company, entered into the “Tripartite Equity Agreement for Russian Oil Products Trading” with intermediary firms Huazhan Petroleum Co., Ltd. and Yan Yu-Yan Development Co., Ltd.

On August 27, 2020, a purchase agreement was signed with OJSC NOVKUIBYSHEVSK REFINERY (NK Company) for light recycle oil, valued at USD 480 million. Subsequently, due to sanctions, Kayee Corp. entered into a replacement contract with CASPIAN OIL & GAS FZE (CASPIAN) on September 16, 2020, for an amount of EUR 475 million. In the event of a contract breach, a penalty amounting to 2% of the total contract value might be applicable.

On September 4, 2020, a purchase agreement was signed with Zhongchuang Gangfeng Energy Co., Ltd. (Zhongchuang Gangfeng) for light recycle oil, valued at EUR 500 million. In the event of a contract breach, a penalty amounting to 2% of the total contract value might be applicable.

On September 8, 2020, a purchase agreement was signed with Fujian Taixing Investment Co., Ltd. (Fujian Taixing) for light recycle oil, valued at EUR 531 million. In the event of a contract breach, a penalty amounting to 2% of the total contract value might be applicable. Subsequently, due to Kayee Corp. concerns about the trading partners, all the aforementioned purchase and sales contracts were terminated. Failure to fulfill these contracts may necessitate compensation for the aforementioned breach penalties, as well as losses incurred from the price difference between the market value and the original contract price, and additional costs resulting from the change of trading partners due to the breach. Therefore, Kayee Corp. has commissioned lawyers to initiate legal proceedings to invalidate the aforementioned contracts.

The lawyer representing Kayee Corp. received a response from NK Company, which denies having signed the contract mentioned above. Based on legal analysis, the contract appears to be forged, and no valid contractual relationship exists. Consequently, it lacks legal binding force on Kayee Corp., and there is no legal risk of compensation. Additionally, according to a British lawyer's opinion cited by our appointed lawyer, the contract between Kayee Corp. and CASPIAN Company has not yet become effective.

The contract signed with Zhongchuang Gangfeng was successfully mediated in a civil settlement by the appointed attorney and the company at the local People's Court of the People's Republic of China on August 12, 2022. Both parties have mutually agreed to rescind the light recycle oil purchase agreement.

The contract signed with Fujian Taixing was officially mediated on December 17, 2021, by the appointed lawyer and the company at the local People's Court of the People's Republic of China. Both parties acknowledged that the aforementioned contract had not taken legal effect from the beginning.

Up until the board's approval of these consolidated financial statements, Kayee Corp. has gathered evidence that the intermediary company deliberately committed fraud, as evidenced by false entries in the aforementioned contracts and forged or altered related transaction documents. The company's appointed attorney has filed a fraud complaint with the District Prosecutor's Office of the Republic of China against intermediaries Liu Menghe and Yan Yuyan.

However, on August 4, 2022, the appointed attorney received a decision of non-prosecution from the prosecutor, citing a lack of substantial evidence. Consequently, Kayee Industrial Co. authorized the attorney to request a reconsideration on August 12, 2022. Upon review by the District Prosecutor's Office of the Republic of China, it was determined that the investigation was incomplete and should continue. The investigation mentioned above is still in progress.

As related case is still in litigation, although the Tainan High Branch Prosecutor's Office continues to investigate the defendants involved, the determination of the facts of the case remains to be clarified by the prosecutorial and judicial authorities regarding the contract dispute with NK Company. Until a definitive judgment is obtained from the court, the final outcome of the decision cannot be confirmed. However, the Group and the appointed attorney have assessed and believe that there is no obligation to pay the penalty for breach of contract related to the agreement, and the risk of compensation for breach is very low.

10. SIGNIFICANT DISASTERS: NONE.

11. SIGNIFICANT SUBSEQUENT EVENTS: NONE.

12. OTHERS

1) In April 2020, the Group received an order for KN95 masks from a European client and proceeded to purchase from five China manufacturers. However, due to discrepancies in product specification testing, production of subsequent orders was temporarily halted. In the second quarter of 2020, the Group recognized an impairment loss on prepayments of $102,458 thousand and an inventory write-down of $78,582 thousand. Of this, $145 thousand was reclassified as operating expenses in the fourth quarter following a China court's requirement for inspection. Subsequent negotiations with the European client resulted in their agreement to assume the payment for the shipped masks, leading to a refund of $87,005 thousand in the fourth quarter of 2020. Consequently, the impairment loss on inventory was reversed by $78,437 thousand and the impairment loss on prepayments by $8,568 thousand. The unrecoverable amount of $93,890 thousand has been fully provided for as an impairment loss on prepayments.

The Group has initiated urgent legal preservation actions for the funds that the China manufacturing suppliers have decided not to return and are expected to be uncollectible.

During the year 2020, the Group progressively filed lawsuits according to the law, demanding the return of payments and breach of contract penalties from the China suppliers. As of the date the board approved these consolidated financial statements, some judgments have been finalized, with either execution settlements reached by both parties and compulsory enforcement applied for by the Group. In March 2022, March 2023, and June 2023, recoveries of $9,651 thousand, $5,367 thousand, and $14,356 thousand (recorded as other income) were obtained from the suppliers, respectively. The remaining cases are still in the process of legal proceedings. Furthermore, certain suppliers, upon halting the production of subsequent orders, committed to returning the previously advanced mask payments in installments, totaling $94,082 thousand (equivalent to USD 3,124 thousand). As of December 31, 2022, an amount of $75,144 thousand (USD 2,498 thousand) has been recovered. However, due to operational funding shortages exacerbated by the pandemic in 2022, the supplier failed to make the scheduled repayments to the Group. Despite repeated requests for settlement by the Group, no satisfactory resolution was provided. Consequently, the Group has deemed the likelihood of recovering the remaining funds to be low and has thus fully provisioned for an expected credit loss of $18,938 thousand for the outstanding supplier repayments in 2022.

Since 2020, the Group has been involved in payment disputes with Chinese suppliers regarding KN95 mask specifications and has initiated legal proceedings to recover outstanding payments and liquidated damages. Although a portion of the payments was recovered through judicial enforcement and negotiations between 2022 and 2024, the remaining suppliers were adversely affected by the pandemic, resulting in bankruptcy or insolvency. Following management's assessment, it was determined that the debtors lack the practical ability to settle the remaining obligations and the costs of further legal proceedings would be excessive. Consequently, the Group decided to cease collection efforts for the remaining balance and close the case in the current period.

On July 23, 2024, the Group received a letter from a European customer issued through a foreign attorney, claiming that the Group is obligated to refund amounts previously received in prior years.

The Group has not yet appointed legal counsel to respond to the matter, and the related obligations and responsibilities remain to be clarified.

However, based on the Group's assessment, a provision for the potential liability has been recognized.

Please refer to Note 6(13) for further details.

13. SUPPLEMENTARY DISCLOSURES

13.1 Significant transactions information (before inter-company eliminations):

1) Financings provided to others : Please see Table 1 attached;
2) Endorsement and guarantee provided to others : Please see Table 2 attached;
3) Marketable securities held (excluding investments in subsidiaries, associates and joint ventures at the end of the period) : None;
4) Total purchases from or sales to related parties of at least $100 million or 20% of the paid-in capital : Please see Table 3 attached; «
5) Receivables from related parties amounting to at least $100 million or 20% of the paid-in capital : None;
6) The business relationship between the parent and the subsidiaries and significant transaction between them : Please see Table 4 attached; «

13.2 Information on investees (before inter-company eliminations) : Please see Table 5 attached;
13.3 Information on investment in Mainland China (before inter-company eliminations):

1) The name of the investee in Mainland China, the main businesses and products, its issued capital, method of investment, information on inflow or outflow of capital, percentage of ownership, income (losses) of the investee, ending balance, amount received as dividends from the investee, and the limitation on investee: : Please see Table 6 attached;
2) Significant direct or indirect transactions with the investee, its prices and terms of payment, unrealized gain or loss, and other related information which is helpful to understand the impact of investment in Mainland China on financial report : Please see Table 4 attached;

14. SEGMENT INFORMATION

The Group primarily engages in import and export trading, with its reporting segment being a single operating segment. The revenue, profit or loss, and assets reported by the operating segment are consistent with the consolidated financial statements. Please refer to the consolidated balance sheet and the consolidated statement of comprehensive income for details.

14.1 Non-current assets :

	Dec. 31, 2025	Dec. 31, 2024
Taiwan	$ 180,769	$ 181,257
China	6,407	9,737
Total	$ 187,176	$ 190,994

Non-current assets include property, plant and equipment, right-of-use assets, investment property, intangible assets, and other assets, but exclude financial instruments and deferred tax assets classified as non-current assets.

14.2 Major customer information

Revenue from a single customer accounting for more than 10% of the Group’s total consolidated revenue is as follows:

	2025	2024
Group A	$ 197,248	$ 91,961
Group B	5,406	58,431
Group C	—	30,935
	$ 197,248	$ 181,327

Table 1
YONG YI INTERNATIONAL GROUP CO., LTD. AND SUBSIDIARIES
LOANS TO OTHER PASTIES
FOR THE YEAR ENDED DECEMBER 31, 2025
Amounts in Thousands of New Taiwan Dollars

Number	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period (Note 5)	Ending balance (Note 5)	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower	Transaction amount for business between two parties	Reasons for short-term financing	Loss allowance	Collateral		Individual funding loan limits (Note 3)	Maximum limit of fund Financing (Note 3)
													Item	Value
1	Yong Yi International Holding Co., Ltd	Kayee Corp. Ltd.	Other accounts receivable	Y	$ 40,000	$ 19,000	$ 19,000	3.244%	Short-term financing	$	Operating turnover	$ -	None	-	$ 108,521	$ 217,042
2	Vitafoss Trading Co.,Ltd.	Vitafoss International Trading Co.. Ltd.	Other accounts receivable	Y	$ 10,790 (CNY2,400)	$ 10,790 (CNY2,400)	$ 10,790 (CNY2,400)	3 %	Short-term financing	$	Operating turnover	$ -	None	-	$ 10,847	$ 21,748

Note 1: A code of "0" in the numbering column refers to the issuer. Investee companies are numbered sequentially starting from "1" in Arabic numerals.
Note 2 : The Company's lending limits are as follows:
(1)The total lending amount shall not exceed $40\%$ of the net worth as per the most recent financial statements.
(2)For parties with business transactions, the individual lending amount shall not exceed the transaction amount between the parties (defined as the higher of purchases or sales). For those with a short-term financing need, the individual lending amount shall not exceed $20\%$ of the net worth.
Note 3 : Subsidiaries' lending limits are as follows:
(1)The total lending amount shall not exceed $40\%$ of the net worth as per the subsidiary's most recent CPA-audited financial statements.
(2)For companies with short-term financing needs, the individual lending amount shall not exceed $20\%$ of the net worth.
Note 4 : Nature of the loan:
(1) Enter "1" for business transactions.
(2)Enter "2" for short-term financing needs.
Note 5: Refers to the loan limit approved by the Board of Directors.

Table 2

YONG YI INTERNATIONAL GROUP CO., LTD. AND SUBSIDIARIES

ENDORSEMENTS AND GUARANTEES PROVIDED TO OTHERS

FOR THE YEAR ENDED DECEMBER 31, 2025

Amounts in Thousands of New Taiwan Dollars

Number	Endorser/ guarantor	Party being endorsed/guaranteed		Limit on endorsement/ Guarantees provided for a single party	Maximum balance for the period	Ending balance	Amount actually drawn	Amount of endorsement/ guarantees collateralized by properties	Ratio of accumulated endorsement/ guarantee to net equity per latest financial statement	Maximum endorsement/ guarantee allowable	Guarantee provided by parent company to Subsidiary	Guarantee provided by a subsidiary to parent company	Guarantee provided to subsidiaries in Mainland China
		Company name	Relationship with the endorser/ guarantor
0	Yong Yi International Group Co., Ltd	Yong Yi International Holding Co., Ltd	2	$ 281,309	$ 140,000	$ 140,000	$ 118,210	$ -	24.88%	$ 281,309	Y	N	N
1	Yong Yi International Holding Co., Ltd	Kayee Corp. Ltd.	2	271,301	100,000	-	-	-	-	281,309	Y	N	N
2	Vitafoss Trading Co.,Ltd.	Vitafoss International Trading Co.. Ltd.	2	271,185	26,976 (CNY 6,000)	26,976 (CNY 6,000)	4,046 (CNY 900)	-	4.79%	281,309	N	N	Y

Note 1 : The Company fills in 0. .
Note 2 : The Company fills in 2 for directly invested subsidiaries
Note 3 : The ceiling for endorsements/guarantees to a single entity is 50% of the equity attributable to owners of the parent.
Note 4 : The maximum total endorsement/guarantee limit is 50% of the equity attributable to owners of the parent.
Note 5 : The term "balance" or "amount" in the above table, except for the column "Amount Actually Used," refers to the amount of endorsements/guarantees outstanding as of the occurrence date (i.e., the earlier of the board resolution date, contract signing date, payment date, or other date that confirms the counterparty and transaction amount).

YONG YI INTERNATIONAL GROUP CO., LTD. AND SUBSIDIARIES
RECEIVABLES FROM RELATED PARTIES REACHING $100 MILLION OR 20% OF PAID-IN CAPITAL OR MORE
FOR THE YEAR ENDED DECEMBER 31, 2025

Table 3
Amounts in Thousands of New Taiwan Dollars

Creditor	Counterparty	Relationship with the counterparty	Nature of Transactions				Differences from arm’s length terms and reasons (Note 1)		Notes and Accounts Receivable (Payable)		Remarks (Note 2)
			Purchases and Sales	Amounts	Turnover rate (Note 4)	Credit period	Unit Price	Credit Period	Balance	Percentage of Total Notes and Accounts Receivable (Payable) (Note 4)
Yong Yi International Group Co., Ltd	SUMMER MAO International Co., Ltd.	Related party in substance	Purchases	$200,048	69.50%	A 30% down payment is required, with the remaining 70% payable upon receipt of copies of shipping documents	Transaction prices were negotiated based on market prices.	Comparable	345	—	—
	Vitafoss International Trading Co., Ltd.	Directly-owned sub-subsidiary	Sales	199,230	71.88%	Payment upon receipt of a complete set of shipping document copies.	Comparable	Comparable	—	—	—

Note 1: If the terms of related party transactions differ from those of arm’s length transactions, the differences and reasons shall be specified in the “Unit Price” and “Credit Period” columns.
Note 2: If there are any advances received or paid, the “Remarks” column shall disclose the reasons, contractual terms, amounts, and differences from normal transaction practices.
Note 3: Paid-in capital refers to the paid-in capital of the parent company. For issuers whose shares have no par value or a par value other than $10 per share, the 20% transaction threshold based on paid-in capital shall be calculated using 10% of the equity attributable to owners of the parent in the balance sheet.
Note 4: Represents the percentage of total sales or total purchases before intercompany eliminations

Table 4
YONG YI INTERNATIONAL GROUP CO., LTD. AND SUBSIDIARIES
INTERCOMPANY RELATIONSHIP AND SIGNIFICANT INTERCOMPANY TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31,2025
Amounts in Thousands of New Taiwan Dollars

Number	Company name	Counterparty	Relationship	Transaction
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or
1	Vitafoss Trading Co., Ltd.	Yong Yi International Holding Co., Ltd	3	Services revenue	$ 35,245	Note 3	12
	”	”	3	Accounts receivable – related party	12,845	Note 3	2
	”	Vitafoss International Trading Co.. Ltd.	3	Services revenue	7	Note 3	—
	”	”	3	Short-term borrowings	10,790	Note 3	1
	”	”	3	Interest income	250	Note 3	—
2	Yong Yi International Holding Co., Ltd	Kayee Corp. Ltd.	3	Other receivables – related parties	19,081	Note 3	2
	”	”	3	Cost of goods sold	18,483	Note 3	6
	”	”	3	Interest income	990	Note 3	—
	”	”	3	Other income	19	Note 3	—
	”	Vitafoss International Trading Co.. Ltd.	3	Accounts receivable – related party	118,190	Note 3	15
	”	”	3	Accounts payables – related party	1,267	Note 3	—
	”	”	3	Sales revenue	210,209	Note 3	70
	”	”	3	Cost of goods sold	5,530	Note 3	2

(Continued on next page)

(Continued from previous page)

Number	Company name	Counterparty	Relationship	Transaction
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or
3	Kayee Corp. Ltd.	Vitafoss International Trading Co.. Ltd.	3	Sales revenue	726	Note 3	—
	”	Yong Yi International Holding Co., Ltd	3	Accounts receivable – related party	449	Note 3	—
	”	”	3	Other receivables – related parties	906	Note 3	—

Note 1: The parent company and subsidiaries are coded as follows:
(1) Parent company is "0".
(2) The subsidiaries are numbered in order starting from "1".

Note 2: Relationships between transaction companies and counterparties are classified into the following three categories as listed below:
(1) represents parent company to subsidiary.
(2) represents subsidiary to parent company.
(3) represents subsidiary to subsidiary.

Note 3: Sale price with related parties were determined and negotiated referring to related market price.

Note 4: All the transactions had been eliminated when preparing the consolidated financial statements.

Table 5
YONG YI INTERNATIONAL GROUP CO., LTD. AND SUBSIDIARIES
NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES OVER WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE
DECEMBER 31, 2025
Amounts in Thousands of New Taiwan Dollars

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount		Balance as of December 31, 2025			Net Income (Losses) of the Investee	Share of Profits/Losses of Investee
				December 31, 2024	December 31, 2023	Shares	Percentage of Ownership	Carrying Value
Yong Yi International Group Co.	Yong Yi International Holding Co., Ltd	Tortola, British Virgin Islands	Reinvestment in holding company and runs international trade business	$ 297,182	$ 297,182	50	100	$ 542,603	$ (164,356)	$ (164,356)
Yong Yi International Holding Co., Ltd	Kayee Corp. Ltd.	Taiwan	Retail and wholesale business in Taiwan	21,121	21,121	1,000	100	(11,927)	7,813	7,807
Yong Yi International Holding Co., Ltd	Vitafoss Investment Holding (HK) Co, Limited.	Hong Kong	Reinvestment in holding business	236,459	236,459	50	100	70,405	(16,633)	(17,273)

Note 1 : All the transactions had been eliminated when preparing the consolidated financial statements.
Note 2 : Please refer to Table 6 for information of investees in Mainland China.

Table 6

Yong Yi International Group Co., Ltd. And Subsidiaries

INFORMATION ON INVESTMENT IN MAINLAND CHINA

FOR THE YEAR ENDED DECEMBER 31,2025

Amounts in Thousands of NTD/USD

Investee Company	Main Businesses and Products	Total Amount of Paid-in Capital	Method of Investment	Accumulated Outflow of Investment from Taiwan as of January 1, 2024	Investment Flows		Accumulated Outflow of Investment from Taiwan as of December 31,2024	Net Income (Losses) of the Investee Company	Percentage of Ownership	Shares of Profits/ Losses	Carrying Amount as of December 31, 2024	Accumulated Inward Remittance of Earnings as of December 31, 2024
					Outflow	Inflow
Vitafoss International Trading Co., Ltd.	Retail and wholesale business in Mainland China	$ 122,944 (USD 3,750)	Note 1	$ -	$ -	$ -	$ -	$ (15,751)	100.00%	$ (15,751)	$ 8,875	$ -
Vitafoss Trading Co.,Ltd.	Provides international business with labor service	34,096 (USD 1,040)	Note 1	-	-	-	-	(571)	100.00%	(571)	54,396	-
Accumulated Investment in Mainland China as of December 31, 2025	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment
---	---	---
NA	NA	NA

Note 1 : It is reinvested in Mainland China through Kayee Investment Holding (HK) Co., Limited
Note 2 : It is recognized according to the financial statements audited by Taiwan accountants for the same period
Note 3 : All the transactions had been eliminated when preparing the consolidated financial statements.

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Vitafoss-KY — Audit Report / Information 2025

52237_rns_2026-05-21_43644f77-92d7-4308-b5ef-eb197acd5245.pdf

Existence of Revenue from Major Customers

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

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

1. HISTORY AND ORGANIZATION

2. AUTHORIZATION OF THE CONSOLIDATED FINANCIAL STATEMENTS

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Statement of compliance

(2) Basis of preparation

2)Subsidiaries included in consolidated financial statements

(5) Foreign Currencies

(9) Impairment of Tangible and Intangible Assets

(10) Financial Instruments

Financial Assets

a. Measurement categor

Equity instruments

Financial Liabilities

5. CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND KEY SOURCES OF ESTIMATION UNCERTAINTY

6.3 ACCOUNTS RECEIVABLE, NET

6.4 OTHER RECEIVEABLES

6.5 INVENTORIES AND COST OF SALES

6.6 PREPAYMENTS

6.7 PROPERTY, PLANT AND EQUIPEMNT

6.8 LEASE ARRANGMENTS

6.12 LONG-TERM BORROWINGS

6.13 PROVISIONS

6.14 PLAN FOR RETIREMENT BENEFITS

Defined contribution plans

6.15 EQUITY

1) Ordinary Share

2) Capital Surplus

3) Retained Earnings and Dividend Policy

6.16 OTHER EQUITY

6.17 OPERATING REVENUE

6.18 INCOME FORM CONTINUING OPERATION

6.19 INCOME TAX FROM CONTINUING OPERATIONS

6.21 SHARE-BASED PAYMENT

1) Employee stock options plan

6.23 CAPITAL MANAGEMENT

6.24 FINANCIAL INSTRUMENTS

Sensitivity Analysis

B. Interest rate risk

Sensitivity Analysis

(2) Credit Risk

10. SIGNIFICANT DISASTERS: NONE.

11. SIGNIFICANT SUBSEQUENT EVENTS: NONE.

12. OTHERS

13. SUPPLEMENTARY DISCLOSURES

14. SEGMENT INFORMATION

14.2 Major customer information

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