ZERO ONE - Interim / Quarterly Report 2022

Code ： 3029

ZERO ONE TECHNOLOGY CO., LTD.

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS FOR THE

NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021 AND INDEPENDENT AUDITORS’ REVIEW REPORT

ADDRESS: 10F, NO.8, LN. 360, SEC. 1, NEIHU RD., TAIPEI CITY. TELEPHONE: +886 2 2656 5656

§TABLE OF CONTENTS§

Contents 1`、`Cover 2`、`Table of Contents 3`、`Independent Auditors’ Review Report 4`、`Consolidated Balance Sheets 5`、`Consolidated Statements of Comprehensive Income 6`、`Consolidated Statements of Changes in Equity 7`、`Consolidated Statements of Cash Flows 8`、`Notes to Consolidated Financial Statements (1) General (2) The date and procedures of authorization of financial statements (3) Application of new, amended and revised standards and interpretations (4) Summary of significant accounting policies (5) Critical accounting judgements and key sources of estimation and uncertainty (6) Explanation of significant accounts (7) Transactions with related parties (8) Assets pledged as collateral (9) Significant contingent liabilities and unrecognized commitments (10) Significant disaster loss (11) Significant events after reporting period (12) Significant assets and liabilities denominated in foreign currencies (13) Separately disclosed items A. Information on significant transactions B. Information on investees C. Information on investment in mainland China D. Information of major shareholders (14) Segment information	Page No. 1 2 3`～`4 5 6 7 8`～`9 10 10 10`～`11 11`～`12 12 12`～`30 31 31 31 - - 32 33`、` 35`～`40 33`、`41 33`、`42 33 33`～`34	Financial Report’s Note No. - - - - - - - 1 2 3 4 5 6`～`27 28 29 30 - - 31 32 32 32 32 33

INDEPENDENT AUDITORS’ REVIEW REPORT

The Board of Directors and Shareholders Zero One Technology Co., Ltd.

Introduction

We have reviewed the accompanying consolidated balance sheets of Zero One Technology Co., Ltd and its subsidiaries (the “Group” ） as of September 30, 2022 and 2021 and the related consolidated statements of comprehensive income for the three months ended September 30, 2022 and 2021 and for the nine months ended September 30, 2022 and 2021, the consolidated statements of changes in equity and cash flows for the nine months then ended September 30, 2022 and 2021, and the notes to the consolidated financial statements, including a summary of significant accounting policies. 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 International Accounting Standard 34, “Interim Financial Reporting,” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

We conducted our reviews in accordance with Statement of Auditing Standards No. 65 “Review of Financial Information Performed by the Independent Auditor of the Entity”. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our reviews, nothing has come to our attention that caused us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as of September 30, 2022 and 2021, its consolidated financial performance for the three months ended September 30, 2022 and 2021, and its consolidated financial performance and its consolidated cash flows for the nine months ended September 30, 2022 and 2021, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

The engagement partners on the reviews resulting in this independent auditors' review report are Chien-Liang Liu and Pei-De Chen.

Deloitte & Touche

Taipei, Taiwan Republic of China

October 26, 2022

Notice to Readers

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

For the convenience of readers, the independent auditors' review 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' review report and consolidated financial statements shall prevail.

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 6) Financial assets at fair value through profit or loss (Note 7) Financial assets at fair value through other comprehensive income (Note 8) Financial assets at amortized cost (Note 9) Notes receivable (Note 11) Trade receivables (Note 11) Current tax assets Inventories (Note 12) Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss (Note 7) Financial assets at fair value through other comprehensive income (Note 8) Financial assets at amortized cost (Notes 9, 10 and 29) Investment accounted for using equity method (Note 14) Property, plant and equipment (Notes 15 and 29) Right-of-use assets (Note 16) Other intangible assets Deferred tax assets Refundable deposits Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 17) Trade payables Other payables (Note 18) Current tax liabilities Lease liabilities (Note 16) Other current liabilities (Note 21) Total current liabilities NON-CURRENT LIABILITIES Deferred tax liabilities Lease liabilities (Note 16) Net defined benefit liabilities (Note 19) Refundable deposits Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 20) Ordinary shares Capital surplus Retained earnings Legal reserve Unappropriated earnings Total retained earnings Other equity Total equity attributable to owners of the Company NON-CONTROLLING INTERESTS Total equity TOTAL	September 30, 2022 (Reviewed) Amount % $ 674,605 9 57,345 1 2,620 - 986,618 13 518,850 7 3,133,643 40 - - 1,387,767 18 42,239 - 6,803,687 88 35,677 1 323,165 4 102,348 1 33,027 1 312,782 4 28,595 - 2,308 - 51,520 1 7,828 - 897,250 12 $ 7,700,937 100 $ 250,000 3 2,969,325 39 192,681 3 62,165 1 14,550 - 332,082 4 3,820,803 50 1,029 - 14,379 - 17,651 - 800 - 33,859 - 3,854,662 50 1,528,997 20 1,238,820 16 322,518 4 688,687 9 1,011,205 13 30,709 - 3,809,731 49 36,544 1 3,846,275 50 $ 7,700,937 100	September 30, 2022 (Reviewed) Amount % $ 674,605 9 57,345 1 2,620 - 986,618 13 518,850 7 3,133,643 40 - - 1,387,767 18 42,239 - 6,803,687 88 35,677 1 323,165 4 102,348 1 33,027 1 312,782 4 28,595 - 2,308 - 51,520 1 7,828 - 897,250 12 $ 7,700,937 100 $ 250,000 3 2,969,325 39 192,681 3 62,165 1 14,550 - 332,082 4 3,820,803 50 1,029 - 14,379 - 17,651 - 800 - 33,859 - 3,854,662 50 1,528,997 20 1,238,820 16 322,518 4 688,687 9 1,011,205 13 30,709 - 3,809,731 49 36,544 1 3,846,275 50 $ 7,700,937 100	September 30, 2022 (Reviewed) Amount % $ 674,605 9 57,345 1 2,620 - 986,618 13 518,850 7 3,133,643 40 - - 1,387,767 18 42,239 - 6,803,687 88 35,677 1 323,165 4 102,348 1 33,027 1 312,782 4 28,595 - 2,308 - 51,520 1 7,828 - 897,250 12 $ 7,700,937 100 $ 250,000 3 2,969,325 39 192,681 3 62,165 1 14,550 - 332,082 4 3,820,803 50 1,029 - 14,379 - 17,651 - 800 - 33,859 - 3,854,662 50 1,528,997 20 1,238,820 16 322,518 4 688,687 9 1,011,205 13 30,709 - 3,809,731 49 36,544 1 3,846,275 50 $ 7,700,937 100		December 31, 2021 (Audited) Amount %	September 30, 2021 (Reviewed)	September 30, 2021 (Reviewed)	September 30, 2021 (Reviewed)
		Amount $ 674,605 57,345 2,620 986,618 518,850 3,133,643 - 1,387,767 42,239 6,803,687 35,677 323,165 102,348 33,027 312,782 28,595 2,308 51,520 7,828 897,250 $ 7,700,937 $ 250,000 2,969,325 192,681 62,165 14,550 332,082 3,820,803 1,029 14,379 17,651 800 33,859 3,854,662 1,528,997 1,238,820 322,518 688,687 1,011,205 30,709 3,809,731 36,544 3,846,275 $ 7,700,937					Amount $ 936,120 23,937 - 234,206 570,911 2,669,091 831 1,630,222 16,148 6,081,466 36,533 348,371 51,112 13,627 310,081 13,585 2,331 44,611 8,711 828,962 $ 6,910,428 $ 450,000 3,029,985 337,179 65,592 7,925 243,224 4,133,905 410 6,055 19,663 800 26,928 4,160,833 1,268,742 485,485 263,963 690,845 954,808 29,645 2,738,680 10,915 2,749,595 $ 6,910,428	%
			9 1 - 13 7 40 - 18 - 88 1 4 1 1 4 - - 1 - 12 100 3 39 3 1 - 4 50 - - - - - 50 20 16 4 9 13 - 49 1 50 100		$ 1,016,070 13 346,392 5 - - 895,930 12 288,710 4 2,595,990 34 831 - 1,647,322 21 31,218 - 6,822,463 89 37,846 - 364,727 5 50,565 1 11,541 - 317,114 4 15,146 - 2,008 - 44,484 1 10,418 - 853,849 11 $ 7,676,312 100 $ - - 3,008,135 39 270,077 4 98,067 1 7,486 - 320,003 4 3,703,768 48 488 - 8,046 - 19,224 1 800 - 28,558 1 3,732,326 49 1,519,707 20 1,234,325 16 263,963 3 831,516 11 1,095,479 14 58,682 1 3,908,193 51 35,793 - 3,943,986 51 $ 7,676,312 100			14 - - 3 8 39 - 24 - 88 1 5 1 - 4 - - 1 - 12 100 6 44 5 1 - 4 60 - - - - - 60 18 7 4 10 14 1 40 - 40 100

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

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share) (Reviewed, Not Audited)

	For the Three Months Ended September 30 2022 2021 Amount `％` Amount `％` $ 3,755,382 100 $ 4,272,343 100 3,374,081 90 3,912,151 91 381,301 10 360,192 9 151,939 4 113,762 3 38,332 1 38,429 1 3,643 - 3,656 - 10,658) - 1,269 - 183,256 5 157,116 4 198,045 5 203,076 5 6,933 - 988 - 11,727 1 13,092 - 10,968 - 3,154 - - - 2,692 - 648 ) - ( 775 ) - 1,378) - ( 770) - 27,602 1 18,381 - 225,647 6 221,457 5 35,841 1 42,253 1 189,806 5 179,204 4 19,028 ) - 1,114 - 143 - ( 15) - 18,885) - 1,099 - $ 170,921 5 $ 180,303 4 $ 190,435 5 $ 179,571 4 629) - ( 367) - $ 189,806 5 $ 179,204 4 $ 171,596 5 $ 180,706 4 675) - ( 403) - $ 170,921 5 $ 180,303 4 $ 1.25 $ 1.42 $ 1.23 $ 1.39	For the Three Months Ended September 30 2022 2021 Amount `％` Amount `％` $ 3,755,382 100 $ 4,272,343 100 3,374,081 90 3,912,151 91 381,301 10 360,192 9 151,939 4 113,762 3 38,332 1 38,429 1 3,643 - 3,656 - 10,658) - 1,269 - 183,256 5 157,116 4 198,045 5 203,076 5 6,933 - 988 - 11,727 1 13,092 - 10,968 - 3,154 - - - 2,692 - 648 ) - ( 775 ) - 1,378) - ( 770) - 27,602 1 18,381 - 225,647 6 221,457 5 35,841 1 42,253 1 189,806 5 179,204 4 19,028 ) - 1,114 - 143 - ( 15) - 18,885) - 1,099 - $ 170,921 5 $ 180,303 4 $ 190,435 5 $ 179,571 4 629) - ( 367) - $ 189,806 5 $ 179,204 4 $ 171,596 5 $ 180,706 4 675) - ( 403) - $ 170,921 5 $ 180,303 4 $ 1.25 $ 1.42 $ 1.23 $ 1.39	For the Three Months Ended September 30 2022 2021 Amount `％` Amount `％` $ 3,755,382 100 $ 4,272,343 100 3,374,081 90 3,912,151 91 381,301 10 360,192 9 151,939 4 113,762 3 38,332 1 38,429 1 3,643 - 3,656 - 10,658) - 1,269 - 183,256 5 157,116 4 198,045 5 203,076 5 6,933 - 988 - 11,727 1 13,092 - 10,968 - 3,154 - - - 2,692 - 648 ) - ( 775 ) - 1,378) - ( 770) - 27,602 1 18,381 - 225,647 6 221,457 5 35,841 1 42,253 1 189,806 5 179,204 4 19,028 ) - 1,114 - 143 - ( 15) - 18,885) - 1,099 - $ 170,921 5 $ 180,303 4 $ 190,435 5 $ 179,571 4 629) - ( 367) - $ 189,806 5 $ 179,204 4 $ 171,596 5 $ 180,706 4 675) - ( 403) - $ 170,921 5 $ 180,303 4 $ 1.25 $ 1.42 $ 1.23 $ 1.39	For the Three Months Ended September 30 2022 2021 Amount `％` Amount `％` $ 3,755,382 100 $ 4,272,343 100 3,374,081 90 3,912,151 91 381,301 10 360,192 9 151,939 4 113,762 3 38,332 1 38,429 1 3,643 - 3,656 - 10,658) - 1,269 - 183,256 5 157,116 4 198,045 5 203,076 5 6,933 - 988 - 11,727 1 13,092 - 10,968 - 3,154 - - - 2,692 - 648 ) - ( 775 ) - 1,378) - ( 770) - 27,602 1 18,381 - 225,647 6 221,457 5 35,841 1 42,253 1 189,806 5 179,204 4 19,028 ) - 1,114 - 143 - ( 15) - 18,885) - 1,099 - $ 170,921 5 $ 180,303 4 $ 190,435 5 $ 179,571 4 629) - ( 367) - $ 189,806 5 $ 179,204 4 $ 171,596 5 $ 180,706 4 675) - ( 403) - $ 170,921 5 $ 180,303 4 $ 1.25 $ 1.42 $ 1.23 $ 1.39		For the Nine Months	For the Nine Months	Ended September	Ended September	30
	2022	`％` 100 90 10 4 1 - - 5 5 - 1 - - - - 1 6 1 5 - - - 5 5 - 5 5 - 5		2021		2022	`％` 100 89 11 4 1 - - 5 6 - - - - - - - 6 1 5 ( 1 ) - ( 1) 4 5 - 5 4 - 4		2021
	Amount $ 3,755,382 3,374,081 381,301 151,939 38,332 3,643 10,658) 183,256 198,045 6,933 11,727 10,968 - 648 ) 1,378) 27,602 225,647 35,841 189,806 19,028 ) 143 18,885) $ 170,921 $ 190,435 629) $ 189,806 $ 171,596 675) $ 170,921 $ 1.25 $ 1.23			Amount $ 4,272,343 3,912,151 360,192 113,762 38,429 3,656 1,269 157,116 203,076 988 13,092 3,154 2,692 775 ) 770) 18,381 221,457 42,253 179,204 1,114 15) 1,099 $ 180,303 $ 179,571 367) $ 179,204 $ 180,706 403) $ 180,303 $ 1.42 $ 1.39		Amount $ 9,796,325 8,695,910 1,100,415 417,971 114,153 9,908 11,576 553,608 546,807 11,955 14,872 18,308 - 846 ) 5,179) 39,110 585,917 108,301 477,616 42,843 ) 510 42,333) $ 435,283 $ 477,376 240 $ 477,616 $ 434,971 312 $ 435,283 $ 3.14 $ 3.09			Amount $ 9,840,049 8,915,505 924,544 336,854 113,893 6,851 1,820) 455,778 468,766 3,597 16,204 26,745 2,692 889 ) 1,873) 46,476 515,242 104,181 411,061 25,263 229) 25,034 $ 436,095 $ 412,200 1,139) $ 411,061 $ 437,322 1,227) $ 436,095 $ 3.28 $ 3.19	`％`
( ( ( ( ( ( (			( ( ( ( (		( ( ( (			( ( ( ( ( (		100 90 10 4 1 - - 5 5 - - - - - - - 5 1 4 - - - 4 4 - 4 4 - 4

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

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For the nine months ended September 30, 2022 and 2021 (Reviewed, Not Audited)

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(Reviewed, Not Audited) (In Thousands of New Taiwan Dollars, Unless Specified Otherwise)
Equity Attributable to Owners of the Company
Other Equity
Exchange
Share Capital Retained Earnings Differences on
Translating the Unrealized
Financial Valuation Gain
Statements of (Loss) on
Shares Unappropriated Foreign Financial Assets Unearned Non-controlling
(In Thousand) Ordinary shares Capital Surplus Legal Reserve Earnings Total Operations at FVTOCI employee benefits Total Total Interests Total Equity
BALANCE, JANUARY 1, 2021 125,640 $ 1,256,402 $ 478,757 $ 219,863 $ 667,898 $ 887,761 $ 74 $ 39,577 ( $ 5,301 ) $ 34,350 $ 2,657,270 $ 12,142 $ 2,669,412
Appropriation of the 2020 earnings
Legal reserve - - - 44,100 ( 44,100 ) - - - - - - - -
Cash dividends - $3 per share - - - - ( 377,836 ) ( 377,836 ) - - - - ( 377,836 ) - ( 377,836 )
Net profit (loss) for the nine months ended September 30,
2021 - - - - 412,200 412,200 - - - - 412,200 ( 1,139 ) 411,061
Other comprehensive income (loss) for the nine months ended
September 30, 2021, net of income tax - - - - - - ( 161 ) 25,283 - 25,122 25,122 ( 88 ) 25,034
Total comprehensive income (loss) for the nine months ended
September 30, 2021, net of income tax - - - - 412,200 412,200 ( 161 ) 25,283 - 25,122 437,322 ( 1,227 ) 436,095
Share based payment transaction - employee restricted shares - - - - - - - - 2,856 2,856 2,856 - 2,856
Share based payment transaction - employee stock options - - 683 - - - - - - - 683 - 683
Cancellation of employee restricted shares ( 15 ) ( 150 ) 150 - - - - - - - - - -
Issuance of ordinary shares under employee stock options 1,249 12,490 5,895 - - - - - - - 18,385 - 18,385
Disposals of investments in equity instruments at fair value
through other comprehensive income - - - - 32,683 32,683 - ( 32,683 ) - ( 32,683 ) - - -
BALANCE, SEPTEMBER 30, 2021 126,874 $ 1,268,742 $ 485,485 $ 263,963 $ 690,845 $ 954,808 ( $ 87 ) $ 32,177 ( $ 2,445 ) $ 29,645 $ 2,738,680 $ 10,915 $ 2,749,595
BALANCE, JANUARY 1, 2022 151,971 $ 1,519,707 $ 1,234,325 $ 263,963 $ 831,516 $ 1,095,479 $ 6 $ 60,747 ( $ 2,071 ) $ 58,682 $ 3,908,193 $ 35,793 $ 3,943,986
Appropriation of the 2021 earnings
Legal reserve - - - 58,555 ( 58,555 ) - - - - - - - -
Cash dividends - $3.6 per share - - - - ( 547,962 ) ( 547,962 ) - - - - ( 547,962 ) - ( 547,962 )
Net profit (loss) for the nine months ended September 30,
2022 - - - - 477,376 477,376 - - - - 477,376 240 477,616
Other comprehensive income (loss) for the nine months ended
September 30, 2022, net of income tax - - - - - - 357 ( 42,762 ) - ( 42,405 ) ( 42,405 ) 72 ( 42,333 )
Total comprehensive income (loss) for the nine months ended
September 30, 2022, net of income tax - - - - 477,376 477,376 357 ( 42,762 ) - ( 42,405 ) 434,971 312 435,283
Changes in percentage of ownership interests in subsidiaries - - - - ( 439 ) ( 439 ) - - - - ( 439 ) 439 -
Share based payment transaction - employee restricted shares - - - - - - - - 1,183 1,183 1,183 - 1,183
Share based payment transaction - employee stock options - - 617 - - - - - - - 617 - 617
Issuance of ordinary shares under employee stock options 929 9,290 3,878 - - - - - - - 13,168 - 13,168
Disposals of investments in equity instruments at fair value
through other comprehensive income - - - - ( 13,249 ) ( 13,249 ) - 13,249 - 13,249 - - -
BALANCE, SEPTEMBER 30, 2022 152,900 $ 1,528,997 $ 1,238,820 $ 322,518 $ 688,687 $ 1,011,205 $ 363 $ 31,234 ( $ 888 ) $ 30,709 $ 3,809,731 $ 36,544 $ 3,846,275
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The accompanying notes are an integral part of the consolidated financial statements.

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Reviewed, Not Audited)

(In Thousands of New Taiwan Dollars)

CONSOLIDATED STATEMENTS OF CASH FLOWS (Reviewed, Not Audited) (In Thousands of New Taiwan Dollars)
CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit loss recognized (reversed) on trade receivables Net gain on fair value change of financial assets and liabilities at fair value through profit or loss Finance costs Net gain on derecognition of financial assets at amortized cost Interest income Dividend income Costs of share-based payment Share of loss of associates accounted for using equity method Write-downs of inventories Net loss (gains) on foreign currency exchange Gain on lease modification Changes in operating assets and liabilities Financial assets mandatorily classified as at fair value through profit or loss Notes receivable Trade receivables Inventories Other current assets Trade payables Other payables Other current liabilities Net defined benefit liabilities Cash generated from operations Income tax paid Net cash generated from operating activities	For the Nine Months Ended September 30
		2022 $ 585,917 23,890 900 11,576 1,265 846 - 11,955 ) 12,367 ) 1,800 5,179 35,488 9,578 ) 91 ) 289,951 230,140 ) 543,065 ) 219,778 5,392 ) 73,070 ) 86,501 ) 12,079 1,573) 214,937 149,867) 65,070		2021
	( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( (	$ 515,242 17,987 901 1,820 ) 5,470 ) 889 2,692 ) 3,597 ) 11,700 ) 3,539 1,873 41,907 6,763 - 341,264 340,421 ) 754,020 ) 440,128 ) 14,463 780,695 91,608 27,360 1,319) 283,324 104,877) 178,447

(Continued)

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Reviewed, Not Audited)

(In Thousands of New Taiwan Dollars)

CONSOLIDATED STATEMENTS OF CASH FLOWS (Reviewed, Not Audited) (In Thousands of New Taiwan Dollars)
CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income Proceeds from sale of financial assets at fair value through other comprehensive income Purchase of financial assets at amortized cost Proceeds from sale of financial assets at amortized cost Acquisition of investments accounted for using equity method Payments for property, plant and equipment Increase in refundable deposits Decrease in refundable deposits Payment for intangible assets Interest received Dividends received Net cash (used in) generated from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Repayment of the principal portion of lease liabilities Dividends paid to owners of the Company Exercise of employee share options Interest paid Net cash (used in) generated from financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS HELD IN FOREIGN CURRENCIES NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	For the Nine Months Ended September 30
		2022 $ 47,047 ) 28,681 1,222,261 ) 1,088,206 12,200 ) 4,545 ) - 2,590 1,200 ) 6,270 12,367 149,139) 250,000 10,536 ) 547,962 ) 13,168 837) 296,167) 38,771 341,465 ) 1,016,070 $ 674,605	2021
	( ( ( ( ( ( ( ( ( ( (		( $ 30,392 ) 56,799 ( 285,637 ) 309,670 ( 15,500 ) ( 3,391 ) ( 771 ) - ( 980 ) 4,916 8,400 43,114 450,000 ( 6,864 ) ( 377,836 ) 18,385 ( 816) 82,869 ( 6,200) 298,230 637,890 $ 936,120

(Concluded)

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

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 and 2021

(Reviewed, Not Audited)

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

1. GENERAL

Zero One Technology Company Limited (the “Company” or “ZOTC”) was incorporated as a company limited by shares under the provisions of the Group Law of the Republic of China in June 27, 1980. On January 21, 2000, ZOTC’s Shares were listed on Taipei Exchange (TPEX). On August 26, 2002, ZOTC’s shares were listed on the Taiwan Stock Exchange (TWSE). ZOTC is a dedicated foundry in the technology industry which engages mainly in the design, manufacturing, packaging, selling, consulting and services of electronic information, computer software, hardware, accessories, components and Chinese data processing, etc.

The consolidated financial statements are expressed by the functional currency (New Taiwan Dollars) of the Company.

2. THE DATE AND PROCEDURES OF AUTHORIZATION OF FINANCIAL STATEMENTS

The accompanying consolidated financial statements were approved by the board of directors on October 26, 2022.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS 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 “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC).

Except for the following, the initial application of the IFRSs endorsed and issued into effect by the FSC did not have material impact on the Group’s accounting policies:

(2) Amendments to IFRSs endorsed by the FSC for application starting from January 1, 2023

New / Revised / Amended Standards and Interpretations Amendments to IAS 1 “Disclosure of Accounting Policies” Amendments to IAS 8 “Definition of Accounting Estimates” Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”	Effective Date Announced by the IASB
	January 1, 2023 (Note 1) January 1, 2023 (Note 2) January 1, 2023 (Note 3)

Note 1: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.
Note 2: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.
Note 3: Except that deferred taxes will be recognized for temporary differences associated with lease and decommissioning obligations on January1, 2022, the amendments will be applied prospectively to transactions that occur on or after January 1, 2022.

As of the date the consolidated financial statements were authorized for issue, the Group continuously evaluates the possible impact that the application of above standards and interpretations will have on the Group’s financial position and financial performance, and will disclose the relevant impact when the evaluation is completed.

(3) New IFRSs in issue by the IASB but not yet endorsed and issued into effect by the FSC

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Effective Date
New / Revised / Amended Standards and Interpretations Announced by the IASB (Note 1)
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New / Revised / Amended Standards and Interpretations	Effective Date Announced by the IASB (Note 1)
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets	To be determined by IASB
between an Investor and its Associate or Joint Venture”
Amendments to IFRS 16 “Lease Liability in a Sale and Leaseback”	January 1, 2024 (Note 2)
IFRS 17 “Insurance Contracts”	January 1, 2023

(Continued)

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Effective Date New / Revised / Amended Standards and Interpretations Announced by the IASB (Note 1) Amendments to IFRS 17 January 1, 2023 Amendments to IFRS 17 "Initial Application of IFRS 17 and IFRS 9 - January 1, 2023 Comparative Information" Amendments to IAS 1 “Classification of Liabilities as Current or NonJanuary 1, 2023 current”

(Concluded)

Note 1: Unless stated otherwise, the above new, revised or amended standards and interpretations are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2: A seller-lessee shall apply the Amendments to IFRS 16 retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS 16.

As of the date the consolidated financial statements were authorized for issue, the Group continuously evaluates the possible impact that the application of above standards and interpretations will have on the Group’s financial position and financial performance and will disclose the relevant impact when the evaluation is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Statement of compliance

These interim consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 “Interim Financial Reporting”as endorsed and issued into effect by the FSC. Disclosure information included in these consolidated financial statements is less than the disclosure information required in a complete set of annual consolidated financial statements.

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

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

The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (i.e., its subsidiaries, including structured entities). When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Company. All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

See Note 13, Table 5 and Table 6 for detailed information on the subsidiaries, including the percentages of ownership and main businesses.

(4) Other Significant Accounting Policies

Except for the following, please refer to the consolidated financial statements for the year ended December 31, 2021.

11 -

A. Defined retirement benefits

Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant plan amendments, settlements, or other significant one-off events.

B. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax. Interim period income taxes are assessed on an annual basis and calculated by applying to an interim period's pre-tax income the tax rate that would be applicable to expected total annual earnings.

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

Please refer to the consolidated financial statements for the year ended December 31, 2021 for main sources of critical accounting judgments, estimates and uncertainty assumptions explanations.

6. CASH AND CASH EQUIVALENTS

ASH AND CASH EQUIVALENTS
Cash on hand Checking accounts and demand deposits Cash equivalents Time deposits Repurchase agreements collateralized by bonds		September 30, 2022 $ 135 376,576 170,070 127,824 $ 674,605		December 31, 2021 $ 164 877,506 - 138,400 $ 1,016,070		September 30, 2021
						$ 287 880,133 - 55,700 $ 936,120

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets`－`current Mandatorily measured at FVTPL Domestic convertible bond Domestic listed ordinary shares Fund beneficiary certification Financial assets`－`non-current Mandatorily measured at FVTPL Domestic listed preference shares Fund beneficiary certification	September 30, 2022 $ 38,852 3,256 15,237 $ 57,345 $ 13,826 21,851 $ 35,677	December 31, 2021 $ 30,045 1,163 315,184 $ 346,392 $ 14,681 23,165 $ 37,846	September 30, 2021	September 30, 2021
				$ 7,736 - 16,201 $ 23,937 $ 14,445 22,088 $ 36,533

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Investments in equity instruments

nvestments in equity instruments
Current Domestic investment Listed ordinary shares Non-current Domestic investment Listed and emerging market ordinary shares Listed preference shares Unlisted shares	September 30, 2022 $ 2,620 $ 120,870 162,384 39,911 $ 323,165	December 31, 2021 $ - $ 141,197 154,877 68,653 $ 364,727	September 30, 2021
				$ - $ 118,890 183,268 46,213 $ 348,371

12 -

The investments in those ordinary and preferred shares are in line with the Group’s medium- to long-term strategies and the investment profits are expected to be gained in the long run. The management of the Group management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the Group’s strategy of holding these investments for long-term purposes.

9. FINANCIAL ASSETS AT AMORTIZED COST

Current Domestic investment Time deposits with original maturities of more than three months (1) Repurchase agreements collateralized by bonds (2) Non-current Domestic investment Pledged time deposit (3) Foreign investment Perusahaan Listrik Negara corporate bond (USD) (4) Southern California Edison corporate bond (USD) (5) British Telecommunications plc corporate bond (USD) (6)	September 30, 2022 $ 391,350 595,268 $ 986,618 $ 35,299 33,703 17,237 16,109 $ 102,348	December 31, 2021 $ 148,570 747,360 $ 895,930 $ 35,124 15,441 - - $ 50,565	September 30, 2021	September 30, 2021
				$ 150,570 83,636 $ 234,206 $ 35,561 15,551 - - $ 51,112

(1) As of September 30, 2022, December 31 and September 30, 2021, the market interest rate intervals of time deposit with original maturities of more than three months were 0.76%~3.00%, 0.76%~0.815% and 0.63%~0.815%, respectively.
(2) As of September 30, 2022, December 31 and September 30, 2021, the market interest rate intervals of repurchase agreements collateralized by bonds with original maturities more than three months were 2.55%~2.95%, 0.30%~0.40%, and 0.4%, respectively.
(3) Please refer to Note 29 for more details on financial assets at amortized cost under pledge.
(4) The Group purchased Perusahaan Listrik Negara corporate bond (USD) by USD 505 thousand with a coupon rate of 4.875% and USD 559 thousand with a coupon rate of 5.25%, in January 2022 and May 2021, respectively.
(5) The Group purchased Southern California Edison corporate bond (USD) by USD 544 thousand with a coupon rate of 4% in January 2022.
(6) The Group purchased British Telecommunications plc corporate bond (USD) by USD 508 thousand with a coupon rate of 4.25% in February 2022.
(7) Please refer to Note 10 for relevant credit risk management and impairment assessment information for financial assets at amortized cost.

10. CREDIT RISK MANAGEMENT FOR INVESTMENTS IN DEBT INSTRUCTMENTS

The investments in debt instruments of the Group are mainly financial assets at amortized cost.

The strategy that the Group adopts is to invest in debt instruments that are rated as investment grade or higher and have low credit risk for the purpose of impairment assessment. The credit rating information is provided by external independent agencies. The Group consistently monitors changes in the credit risks of the invested debt instruments by tracking ratings and relevant information, and reviews the yield curve of bonds, material information of the bond-issuers, etc., so as to evaluate if there is a significant increase in the debt instruments since initial recognition.

13 -

The Group assesses the information of investment risk provided by external rating agencies and evaluates the 12-month expected credit loss or lifetime expected credit loss. The bonds that the Group invested are all of investment grade, and the credit risk of the bond-issuers is low and is capable to settle the contractual cash flows. The Group does not anticipate that the corporate bonds invested will have any material expected credit loss resulted from default within the 12 months after the date of the financial statements, and thus did not recognize allowance for loss as of September 30, 2022, December 31 and September 30, 2021.

11. NOTES, TRADE RECEIVABLE AND OVERDUE RECEIVABLES

Measured at amortized cost Notes receivable Trade receivable Overdue receivables Deduct: Allowance for impairment loss		September 30, 2022 $ 518,850 3,148,661 1,309 16,327) $ 3,652,493		December 31, 2021 $ 288,710 2,600,741 - 4,751) $ 2,884,700		September 30, 2021
	(		(		(	$ 570,911 2,678,703 - 9,612) $ 3,240,002

The average credit period of sales of goods of the Group was 60-90 days, and no interest was charged on trade receivable.

In order to minimize credit risk, the Group’s management has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue receivables. In addition, the Group reviews the recoverable amount of each individual trade receivable at the end of the reporting period to ensure that adequate allowance is made for possible irrecoverable amounts. In this regard, the Group’s management believes the Group’s credit risk was significantly reduced.

The Group measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivable are estimated using a provision matrix by reference to past default experience of the customer, the customer’s current financial position, and economic conditions of the industry, as well as forecasts of GDP and prospects of the industry. As the Group’s historical data of credit loss indicates that there is no significant difference in terms of the types of loss resulted from different customer groups, therefore, the segregation of customers was not further differentiated in the matrix, and the number of days of trade receivables overdue was used to determine the ratio of the expected credit loss.

The Group writes off an account receivable when there is information indicating that the respective debtor is experiencing severe financial difficulty and there is no realistic prospect of recovery of the receivable. For accounts receivable that have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivables which are due. Where recoveries are made, these are recognized in profits or losses.

The following table details the loss allowance of trade receivable:

September 30, 2022

September 30, 2022
Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost December 31, 2021 Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost		Not Past Due		1-30 Days Past Due		31-60 Days Past Due		61-90 Days Past Due	More Than 90 Days Past Due			Total
	(	$3,639,598 2,661) $3,636,937 Not Past Due	(	$ 6,779 539) $ 6,240 1-30 Days Past Due	(	$ 10,340 1,024) $ 9,316 31-60 Days Past Due		$ - - $ - 61-90 Days Past Due	$ 12,103 ( 12,103) $ - More Than 90 Days Past Due		(	$3,668,820 16,327) $3,652,493 Total
	(	$2,850,119 435) $2,849,684	(	$ 20,301 776) $ 19,525	(	$ 12,883 1,625) $ 11,258	(	$ 5,297 1,064) $ 4,233	(	$ 851 851) $ -	(	$2,889,451 4,751) $2,884,700

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September 30, 2021

September 30, 2021
Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost		Not Past Due		1-30 Days Past Due		31-60 Days Past Due		61-90 Days Past Due	More Than 90 Days Past Due			Total
	(	$3,224,073 4,385) $3,219,688	(	$ 21,191 4,158) $ 17,033	(	$ 4,350 1,069) $ 3,281		$ - - $ -		$ - - $ -	(	$3,249,614 9,612) $3,240,002

The movements of the loss allowance of trade receivable were as follows:

Balance at January 1 Add: Net remeasurement of loss allowance Less: Reversal of loss allowance Amounts written of Balance at September 30	For the Nine Months Ended September 30, 2022 $ 4,751 11,576 - - $ 16,327	For the Nine Months Ended September 30, 2021	For the Nine Months Ended September 30, 2021
		( (	$ 12,906 - 1,820 ) 1,474) $ 9,612

12. INVENTORIES

INVENTORIES	INVENTORIES
September 30, 2022 December 31, 2021 Raw materials $ 3,089 $ 2,914 Work in process 4,054 2,777 Finished goods 214 513 Commodities 1,380,410 1,641,118 Inventory in transit - - $ 1,387,767 $ 1,647,322 The nature of the cost of goods sold is as follows: For the Three Months Ended September 30, 2022 For the Three Months Ended September 30, 2021 For the Nine Months Ended September 30, 2022 Cost of inventories sold $ 3,347,897 $ 3,892,128 $ 8,660,422 Write-down of inventories 26,184 20,023 35,488 $ 3,374,081 $ 3,912,151 $ 8,695,910		September 30, 2021
			$ 9,860 5,674 270 1,614,232 186 $ 1,630,222 For the Nine Months Ended September 30, 2021
	$ 8,660,422 35,488 $ 8,695,910			$ 8,873,598 41,907 $ 8,915,505

13. SUBSIDIARIES

(1) Subsidiaries included in the consolidated financial statements

The consolidated entities were as follows:

Investor	Investee	Nature of Activities	Proportion of Ownership (%)	Proportion of Ownership (%)	Proportion of Ownership (%)	Remark
			September 30, 2022 85.37% 100.00% 100.00%	December 31, 2021	September 30, 2021 85.37% 100.00% 100.00%
The Company	Zotech Co., Ltd. Zerone Win Investment Co., Ltd. Asiaone Holdings Ltd.	Manufacturing for computer equipment Investment Holding company		85.37% 100.00% 100.00%		- - -

(Continued)

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Proportion of Ownership (%)

==> picture [407 x 42] intentionally omitted <==

----- Start of picture text -----

September December September
Nature of 30, 31, 30,
Investor Investee Activities 2022 2021 2021 Remark
Zerone Win WingWill Services of cloud 99.99% 87.93% 87.93% A
----- End of picture text -----

Zerone Win	WingWill	Services of cloud	99.99%	87.93%	87.93%	A
Investment	International	information
Co., Ltd.	Co., Ltd.	software
	Petacom	Services of	100.00%	100.00%	100.00%	-
	Technology	distribution of
	Co., Ltd	information
		product
	DigiCosmos	Services of	50.00%	50.00%	100.00%	B
	Tech. Co.,	information
	Ltd.	security
		consulting
Asiaone	Techone	Technical service	70.00%	70.00%	70.00%	-
Holdings	(Shanghai)Co.,	for network
Ltd.	Ltd.	technology

(Concluded)

A. In July 2022, the capital reduction was carried out to cover the loss and cash capital increase, resulting in the shareholding ratio of the consolidated company increasing from 87.93% to 99.99%, and the difference ($439 thousand) caused by the adjustment of the shareholding ratio was recognized in the retained earnings.
B. It was established in May 2021, the Group transferred part of its shares in December 2021, resulting in a decrease in the shareholding ratio from 100% to 50%, but the Group still holds the majority of directors. The transaction as mentioned above did not change the degree of control from the Group to this subsidiary, and was considered as equity transaction, and the consideration received was $25,000 thousand and the carrying amount of the subsidiary’s net assets $24,932 thousand was calculated based on changes in relative equity. The difference between the actual acquisition or disposal of the equity share price of the subsidiary company and the book value was recognized as capital reserve at $68 thousand.

The above subsidiaries are not significant subsidiaries. The financial statements have not been reviewed by CPAs. The management of the Group holds the view that there is not any material impact given the fact that the financial statements of the above subsidiaries have not been reviewed by CPAs.

(2) Subsidiaries excluded from the consolidated financial statements：None.

14. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

September 30, 2022 December 31, 2021 September 30, 2021 $ 2,112 $ 1,397 $ 2,127 8,047 10,144 11,500 22,868 - - $ 33,027 $ 11,541 $ 13,627 Percentage of Equity Holding and Voting Rights	September 30, 2022 December 31, 2021 September 30, 2021 $ 2,112 $ 1,397 $ 2,127 8,047 10,144 11,500 22,868 - - $ 33,027 $ 11,541 $ 13,627 Percentage of Equity Holding and Voting Rights	September 30, 2021

September 30, 2022 32% 37.5% 24.33%	December 31, 2021 32% 37.5% -	September 30, 2021
		32% 37.5% -

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The Group invested in TrustONE Security Inc. in February 2021 with the investment amount of $4,000 thousand and share-holding ratio of 32%. The Group subscribed for additional new shares of $3,200 pro rata in January 2022. TrustONE Security Inc. engages mainly in the R&D, sale and service of information software.

The Group invested in Leukocyte-Lab Co. Ltd. in September 2021, which engages mainly in information security management and consulting service, with the investment amount of $11,500 thousand, and share-holding ratio of 37.5%.

The Group acquire the shares of InfinitiesSoft Solutions Inc. for $9,000 thousand in June, 2022, and the shareholding ratio increased from 15% to 24.33%. Since the Group has significant influence over InfinitiesSoft Solutions Inc., it has been transferred from financial assets at fair value through other comprehensive profit or loss to investments using the equity method. InfinitiesSoft Solutions Inc. engages mainly in software research & development, and services of information and computer software.

The investment was accounted for using the equity method and the share of profit or loss and other comprehensive income of the invested company was calculated on the basis of the financial statements that have not been reviewed by CPAs. The management of the Group holds the view that the calculations of the financial statements that were not reviewed by the CPAs have not resulted in any material impact.

15. PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT
Land Buildings Machinery equipment Office equipment Delivery equipment Other equipment	September 30, 2022 $ 234,892 51,524 91 10,223 123 15,929 $ 312,782	December 31, 2021 $ 234,892 52,887 143 10,135 490 18,567 $ 317,114	September 30, 2021
				$ 234,892 53,340 - 8,549 614 12,686 $ 310,081

Except for depreciation recognized, the Group did not have significant addition, disposal, or impairment of property, plant and equipment during the nine months ended September 30, 2022 and 2021.

Depreciation expenses were depreciated on a straight-line basis over the estimated useful lives as follows:

Buildings	7-50 Years
Machinery equipment	3 Years
Office equipment	3-5 Years
Delivery equipment	5 Years
Other equipment	2-3 Years

Property, plant and equipment used by the Group and pledged as collateral for bank borrowings are set out in Note 29.

16. LEASE ARRANGEMENTS

(1) Right-of-use assets

ight-of-use assets
Carrying amounts of right-of-use assets Buildings Office equipment	September 30, 2022 $ 28,595 - $ 28,595	December 31, 2021 $ 15,003 143 $ 15,146	September 30, 2021
				$ 13,392 193 $ 13,585

17 -

Additions to right-of-use assets Depreciation charge for right- of-use assets Buildings Office equipment	For the Three Months Ended September 30, 2022 $ 3,706 - $ 3,706	For the Three Months Ended September 30, 2021 $ 2,434 50 $ 2,484	For the Nine Months Ended September 30, 2022 $ 25,399 $ 10,635 73 $ 10,708	For the Nine Months Ended September 30, 2021 $ 7,781 $ 7,045 151 $ 7,196

Depreciation charge for right- of-use assets Buildings $ 3,706 $ 2,434 $ 10,635 Office equipment - 50 73 $ 3,706 $ 2,484 $ 10,708	$ 7,045 151 $ 7,196	$ 7,045 151 $ 7,196
(2) Lease liabilities September 30, 2022 December 31, 2021 Carrying amounts of lease liabilities Current $ 14,550 $ 7,486 Non-current $ 14,379 $ 8,046 Range of discount rate for lease liabilities was as follows: September 30, 2022 December 31, 2021 Buildings 0.75%~4.75% 0.75%~4.75% Office equipment - 1.20% (3) Other lease information For the Three Months Ended September 30, 2022 For the Three Months Ended September 30, 2021 For the Nine Months Ended September 30, 2022 Expenses relating to short- term leases $ 131 $ 201 $ 475 Expenses relating to low- value asset leases $ 58 $ 13 $ 111 Total cash (outflow) for leases ( $ 11,399 ) SHORT-TERM BORROWINGS September 30, 2022 December 31, 2021 Unsecured borrowings `－`Line of credit borrowings $ 250,000 $ -	September 30, 2021
	$ 7,925 $ 6,055 September 30, 2021
	0.85%~4.75% 1.20% For the Nine Months Ended September 30, 2021 $ 662 $ 38 ( $ 7,721 ) September 30, 2021

		$ 450,000

17. SHORT-TERM BORROWINGS

Interest rate of bank revolving loans was 1.375% and 0.75%~0.78% on September 30, 2022 and 2021.

18. OTHER PAYABLES

THER PAYABLES
Salaries and bonuses payable Compensation of employees and directors payable Sales tax payable Others	September 30, 2022 $ 83,439 27,740 26,963 54,539 $ 192,681	December 31, 2021 $ 135,443 43,071 32,224 59,339 $ 270,077	September 30, 2021
				$ 71,611 32,957 32,677 199,934 $ 337,179

18 -

19. RETIREMENT BENEFIT PLANS

For the three and nine months ended September 30, 2022 and 2021, the Group’s pension costs under the defined benefit plan were made payment $29 thousand, $66 thousand, $86 thousand and $197 thousand, respectively, decided by actuarial pension costs rate on December 31, 2021 and 2020.

20. EQUITY

(1) Ordinary Shares

Shares authorized (in thousands of shares) Authorized capital Shares issued and fully paid (in thousands of shares) Issued capital		September 30, 2022 200,000 $ 2,000,000 152,900 $ 1,528,997		December 31, 2021 200,000 $ 2,000,000 151,971 $ 1,519,707		September 30, 2021 200,000 $ 2,000,000 126,874 $ 1,268,742

The change in share capital is mainly due to the issuance of new shares from cash capital increase, the exercise of employee share options, and the cancellation of employee restricted stock.

As per the resolution of the board of directors’ meeting held on October 13, 2021, the Company issued 25,000 thousand new shares with a par value of $10 per share at an issue price of $40, with December 21, 2021 as the base date for the capital increase.

(2) Capital Surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (Note) Premium on shares issued above par value Treasury stock transactions From exercised and invalid employees share options The difference between the consideration received or paid and the carrying amount of the subsidiaries’ net assets during actual disposal or acquisition Vested employees restricted shares May not be used for any purpose Employees restricted stock Employees stock options		September 30, 2022 $ 1,163,713 25,343 27,574 68 6,712 1,714 13,696 $ 1,238,820		December 31, 2021 $ 1,159,835 25,343 21,459 68 4,621 3,805 19,194 $ 1,234,325		September 30, 2021
						$ 411,846 25,343 20,817 - 4,621 3,805 19,053 $ 485,485

Note: Such capital surplus may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital limited to a certain percentage of the Company’s capital surplus and once a year.

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(3) Retained earnings and dividend policy

Under the dividends policy as set forth in the Articles of Incorporation, where ZOTC earns profits in a fiscal year, such profit shall first be set aside to pay applicable taxes, offset losses of previous years, then set aside 10% for legal reserve, and also set aside or reverse a special reserve in accordance with the laws and regulations. Should there be any remaining profits, those profits, plus the accumulated undistributed retained earnings from the previous year shall be used first by ZOTC’s board of directors as the basis for proposing a distribution plan of dividends for preferred shares for the same year, any further remaining unappropriated earnings after the distribution of dividends of preferred shares shall be distributed in accordance with the proposal submitted by the board of directors, for approval at the shareholders’ meeting. The distributable dividends and bonuses may be paid in cash after a supermajority resolution of the board of directors, which shall be submitted to the shareholders’ meeting. For the policies on the distribution of compensation of employees and remuneration of directors and supervisors, refer to compensation of employees and remuneration of directors in Note 22 (4).

ZOTC adopts a dividend distribution policy whereby only surplus profits of ZOTC shall be distributed to shareholders. Based on ZOTC’s future capital budget planning and the needs for working capital requirements, as well as taking account into the impact to the extent of the diluted earnings per share and return on equity, no less than 30% of the remaining balance is to be allocated to shareholders and the ratio for cash dividends shall not be lower than 10% of the total shareholders’ dividends distributed for the same year.

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

The appropriations of earnings for 2021 and 2020 are as follows:

Legal reserve Cash dividends Cash dividends per share (NT$)		For Fiscal Year 2021 $ 58,555 $ 547,962 $ 3.6		For Fiscal Year 2020
				$ 44,100 $ 377,836 $ 3

The above cash dividends were distributed by the board of directors resolutions on February 23, 2022 and February 24, 2021, respectively, and the remaining surplus distribution items were also resolved by the shareholders' regular meetings on May 26, 2022 and August 4, 2021.

21. REVENUE

(1) Income from contracts with clients

For the Three Months Ended September 30, 2022 For the Three Months Ended September 30, 2021 For the Nine Months Ended September 30, 2022 Sales revenue $ 3,722,849 $ 4,255,421 $ 9,719,421 Service revenue 32,533 16,922 76,904 $ 3,755,382 $ 4,272,343 $ 9,796,325 Remaining balance of the contracts September 30, 2022 December 31, 2021 Notes receivable (Note 11) $ 518,850 $ 288,710 Trade receivable (Note 11) $ 3,133,643 $ 2,595,990 Contract liability (Other current liabilities) $ 52,410 $ 52,817	For the Three Months Ended September 30, 2021	For the Nine Months Ended September 30, 2022	For the Nine Months Ended September 30, 2021 $ 9,787,613 52,436 $ 9,840,049 September 30, 2021 $ 570,911 $ 2,669,091 $ 32,103

(2) Remaining balance of the contracts
20 -

22. NET PROFIT

(1) Other gains and losses

(1) Other gains and losses
Net foreign exchange profit Net gain (loss) arising on financial assets measured at FVTPL Gain on lease modification Others (2) Depreciation & amortization Property, plant and equipment Right-of-use assets Intangible assets An analysis of depreciation by function Operating expenses An analysis of amortization by function Operating expenses (3) Employee benefits expense Post-employment benefits Defined contribution plans Defined benefit plans `（`Note 19`）` Share-Based Payment Equity-settled (Note 25) Other employee benefits Total employee benefits expense	For the Three Months Ended September 30, 2022 $ 12,500 ( 1,532 ) - - $ 10,968 For the Three Months Ended September 30, 2022 $ 4,420 3,706 350 $ 8,476 $ 8,126 $ 350 For the Three Months Ended September 30, 2022 $ 3,717 29 3,746 600 121,801 $ 126,147	For the Three Months Ended September 30, 2021 $ 2,926 228 - - $ 3,154 For the Three Months Ended September 30, 2021 $ 3,603 2,484 323 $ 6,410 $ 6,087 $ 323 For the Three Months Ended September 30, 2021 $ 3,160 66 3,226 1,153 112,058 $ 116,437	For the Nine Months Ended September 30, 2022 $ 19,596 ( 1,265 ) 91 ( 114) $ 18,308 For the Nine Months Ended September 30, 2022 $ 13,182 10,708 900 $ 24,790 $ 23,890 $ 900 For the Nine Months Ended September 30, 2022 $ 10,507 86 10,593 1,800 354,077 $ 366,470	For the Nine Months Ended September 30, 2021
				$ 21,275 5,470 - - $ 26,745 For the Nine Months Ended September 30, 2021
				$ 10,791 7,196 901 $ 18,888 $ 17,987 $ 901 For the Nine Months Ended September 30, 2021
					$ 9,064 197 9,261 3,539 317,478 $ 330,278

(Continued)

21 -

Analysis by function Operating costs Operating expenses	For the Three Months Ended September 30, 2022	For the Three Months Ended September 30, 2022	For the Three Months Ended September 30, 2021 $ 825 115,612 $ 116,437	For the Nine Months Ended September 30, 2022 $ 542 365,928 $ 366,470	For the Nine Months Ended September 30, 2021	For the Nine Months Ended September 30, 2021
		$ 204 125,943 $ 126,147				$ 2,599 327,679 $ 330,278

(Concluded)

(4) Compensation of employees and directors

The Group shall allocate compensation to the employees and directors of the Group not less than 1%~15% and not more than 3% of annual profits during the period, respectively, and the estimate of employees’ compensation and directors for the three and nine months ended September 30, 2022 and 2021 were as follows:

Estimate Rate

Estimate Rate
Compensation of employees Compensation of directors Amount Compensation of employees Remuneration of directors	For the Three Months Ended September 30, 2022	For the Nine Months Ended September 30, 2022 For the Nine Months Ended September 30, 2021 3% 4% 1.5% 2% For the Three Months Ended September 30, 2021 For the Nine Months Ended September 30, 2022 For the Nine Months Ended September 30, 2021 $ 9,500 $ 18,271 $ 21,971 4,750 9,135 10,986	For the Nine Months Ended September 30, 2021
		3% 1.5% For the Three Months Ended September 30, 2021 $ 9,500 4,750		4% 2% For the Nine Months Ended September 30, 2021
	$ 7,077 3,538			$ 21,971 10,986

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

The compensation of employees and directors for the years ended December 31, 2021 and 2020, which were approved by the Company’s board of directors on February 23, 2022 and February 24, 2021, respectively, are as follows:

as follows:
Compensation of employees Remuneration of directors	2021 Cash $ 28,714 14,357	2020
		Cash
		$ 23,613 11,807

There was no difference between the actual amounts of the compensation of employees and directors paid and the amounts recognized in the consolidated financial statements for the years ended December 31, 2021 and 2020.

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

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23. INCOME TAXES

(1) Income tax recognized in profit or loss

Major components of income tax expense are as follows:

Major components of income	tax expense are as	tax expense are as	follows:	follows:
Current tax In respect of the current period Income tax on unappropriated earnings Adjustments for prior year Deferred tax In respect of the current period Income tax expense recognized in profit or loss	For the Three Months Ended September 30, 2022		For the Three Months Ended September 30, 2021		For the Nine Months Ended September 30, 2022		For the Nine Months Ended September 30, 2021
	( (	$ 49,296 24 8,295 ) 5,184) $ 35,841	(	$ 43,270 953 - 1,970) $ 42,253	( (	$ 122,914 24 8,142 ) 6,495) $ 108,301	( (	$ 110,319 953 464 ) 6,627) $ 104,181

(2) Income tax assessment

The Company and subsidiaries’ income tax returns have been assessed by the tax authority as follows:

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Company Year of Assessment
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Company	Year of Assessment
The Company	2020
Zotech Co., Ltd.	2020
Zerone Win Investment Co., Ltd.	2020
WingWill International Co., Ltd.	2020
Petacom Technology Co., Ltd.	2020
DigiCosmos Tech. Co., Ltd.	Note

Note: It was established in May 2021.

24. EARNINGS PER SHARE

The earnings and weighted average number of ordinary shares outstanding used in the computation of earnings per share were as follows:

Net Profit for the Period

Earnings used in the computation of basic/diluted earnings per share	For the Three Months Ended September 30, 2022 $ 190,435	For the Three Months Ended September 30, 2021 $ 179,571	For the Nine Months Ended September 30, 2022 $ 477,376	For the Nine Months Ended September 30, 2021 $ 412,200

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Shares
Weighted average number of ordinary shares used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares: Compensation of employees Employee share options Employees restricted stock Weighted average number of ordinary shares used in the computation of diluted earnings per share	For the Three Months Ended September 30, 2022 152,525 469 1,456 145 154,595	For the Three Months Ended September 30, 2021 126,185 472 2,214 280 129,151	For the Nine Months Ended September 30, 2022 152,160 596 1,676 248 154,680	For the Nine Months Ended September 30, 2021
					125,820 588 2,372 385 129,165

If the Group offered to settle the compensation paid to employees in shares or cash, the Group assumed that the entire amount of the compensation will be settled in shares, and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

25. SHARE-BASED PAYMENT ARRANGEMENTS

(1) Employee Share Option Plan

Qualified employees of the Company and its subsidiaries were granted 1,000, 1,860, 2000 and 2,000 options in August 2015, September 2016, January 2018 and September 2018. Each option entitles the holder with the right to subscribe for one thousand ordinary shares of the Company. The options granted are valid for 6 years and exercisable at certain percentages after the second anniversary from the grant date. The options were granted at an exercise price equal to the closing price of the Company’s ordinary shares at the grant date. For any subsequent changes in the Company’s ordinary shares, the exercise price is adjusted accordingly.

Information on employee share options is as follows:

Employee share option Balance at January 1 Options exercised Options forfeited Outstanding options, at September 30 Options exercisable, at September 30	For the Nine Months Ended September 30, 2022 Number of Options (In Thousands of Units) Weighted Average Exercise Price (NT$) 3,034 $ 15.93 ( 929 ) 14.17 - - 2,105 15.10 2,105	For the Nine Months Ended September 30, 2021	For the Nine Months Ended September 30, 2021
	Number of Options (In Thousands of Units) 3,034 ( 929 ) - 2,105 2,105	Number of Options (In Thousands of Units) 4,468 ( 1,249 ) ( 88) 3,131 1,691	Weighted Average Exercise Price (NT$)
	(	( (	$ 16.70 14.72 16.65 16.18

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Information on outstanding options at the end of reporting period is as follows:

September 30, 2022	September 30, 2022	December 2021	31, Weighted- Over-Age Remaining Contractual Life (Years) 0.68 2.01 2.67	September 30, 2021	September 30, 2021
Range of Exercise Price (NT$)	Weighted- Over-Age Remaining Contractual Life (Years)	Range of Exercise Price (NT$)		Range of Exercise Price (NT$)	Weighted- Over-Age Remaining Contractual Life (Years)
$ - 14.20`（`Note`）` 15.50`（`Note`）`	- 1.26 1.92	$ 12.50`（`Note`）` 15.40`（`Note`）` 16.90`（`Note`）`		$ 12.50`（`Note`）` 15.70`（`Note`）` 17.20`（`Note`）`	0.93 2.26 2.92

Note: The issued price will be adjusted by methods of issuance.

The Company adopted binomial option pricing model and Black-Scholes price model to evaluate inputs of stock options in September, 2018, January, 2018 and September, 2016 as follows:

Securities price of the vested date Exercised price Foreseeable volatility rate Duration Foreseeable dividend rate No risk rates	September 2018 20.65 Dollars 20.65 Dollars 32.96% 6 Years 0% 0.72%	January 2018 19.85 Dollars 19.85 Dollars 33.81% 6 Years 0% 0.74%	September 2016
			16.95 Dollars 16.95 Dollars 38.26% 6 Years 0% 0.56%

The compensation cost recognized were $206 thousand, $777 thousand, $617 thousand and $683 thousand for the three and nine months ended September 30, 2022 and 2021, respectively.

(2) Employees restricted stock

The shareholders meeting of the Company, on June 11, 2018, resolved to issue employees restricted stock amounting to $7,000 thousand, consisting of 700 thousand shares, respectively, par value in $10, the subscription price is $0 (The issue price is $0), and authorized the Board to decide the issue price at the issuance date. The Board resolved to issue $7,000 thousand, with total share number of 700 thousand shares, on April 30, 2019 and the record date of issuance is June 13, 2019.

An employee who remains employed at the company after the period as follows has elapsed from the time of employee restricted stocks and who personal performance have met with the criteria listing, will be eligible for vesting of an installment of the shares.

A. An employee who remains employed at the company after 1 year has elapsed from the time of employee restricted stocks, and who personal performance have met with the criteria listing of 75 scores and above, will be eligible for vesting of an installment of 25% of the shares.
B. An employee who remains employed at the company after 2 years has elapsed from the time of employee restricted stocks, and who personal performance have met with the criteria listing of 75 scores and above, will be eligible for vesting of an installment of 25% of the shares.
C. An employee who remains employed at the company after 3 years has elapsed from the time of employee restricted stocks, and who personal performance have met with the criteria listing of 75 scores and above, will be eligible for vesting of an installment of 25% of the shares.
D. An employee who remains employed at the company after 4 years has elapsed from the time of employee restricted stocks, and who personal performance have met with the criteria listing of 75 scores and above, will be eligible for vesting of an installment of 25% of the shares.
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After employees received the vested shares from the Company, it will redeem and cancel the issued employee restricted stock as employees breach the labor contract and working regulations, for the employee restricted stocks that don't meet the vesting conditions.

When employees fail to meet the vesting conditions of employee restricted stocks as redeemed by the Company without charge will be cancelled, based on the relevant regulations.

Compensation costs by issuance of employee restricted stocks recognized were $394 thousand, $376 thousand, $1,183 thousand and $2,856 thousand for the three and nine months ended September 30, 2022 and 2021. As of September 30, 2022 and 2021, the unearned employee benefit totaled $888 thousand and $2,445 thousand, accounted for as the decrease in other equity.

(3) Reserve of cash capital increase for employee stock options

The Company reserved the cash capital increase for employee stock options in November 2021, this was calculated based on Black-Scholes price model and the parameters used are as follows:

Securities price of the vested date	$37.65
Exercised price	$40.00
Foreseeable volatility rate	20.07%
Foreseeable duration	0.0658 year
Risk-free interest rate	0.2352%

26. CAPITAL RISK MANAGEMENT

The Group engages as a distributor of software and hardware equipment, without any plans of imposed capital requirements at present or in the future. The Group manages its capital to ensure requirements of operating funds and dividend expenses, based on growth and development of scale of enterprise and prospective of the industry. The Group periodically reviews the policy of capital risk management, for the purpose of seeking a steady and conservative policy.

The capital structure of the Group consists of net debt and equity (comprising share capital, capital reserves, retained earnings and other equity).

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

27. FINANCIAL INSTRUMENTS

(1) Information about fair value of financial instruments that are not measured at fair value

Except as detailed in the following table, the management believes the carrying amounts of financial assets and liabilities not measured at fair value recognized in the consolidated financial statements approximate or cannot be measured their fair values:

Financial Assets Financial assets at amortized cost `－`Foreign corporate bonds	September 30, 2022	September 30, 2022	December 31, 2021	December 31, 2021	September 30, 2021	September 30, 2021
	Carrying Amount	Fair Value	Carrying Amount	Fair Value	Carrying Amount	Fair Value
	$ 67,049	$ 48,451	$ 15,441	$ 15,585	$ 15,551	$ 15,597

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(2) Information about fair value of financial assets measured at fair value on a recurring basis.

A. Fair value hierarchy

September 30, 2022

September 30, 2022
Financial assets measured at FVTPL Convertible bonds Domestic listed shares Fund beneficiary certification Total Financial assets measured at FVTOCI Equity investments `－`Domestic listed shares and emerging market shares `－`Domestic unlisted shares Total December 31, 2021 Financial assets measured at FVTPL Convertible bonds Domestic listed shares Fund beneficiary certification Total Financial assets measured at FVTOCI Equity investments `－`Domestic listed shares and emerging market shares `－`Domestic unlisted shares Total September 30, 2021 Financial assets measured at FVTPL Convertible bonds Domestic listed shares Fund beneficiary certification Total Financial assets measured at FVTOCI Equity investments `－`Domestic listed shares and emerging market shares `－`Domestic unlisted shares Total	Level 1 $ 38,852 17,082 27,852 $ 83,786 $ 285,874 - $ 285,874 Level 1 $ 30,045 15,844 328,782 $ 374,671 $ 296,074 - $ 296,074 Level 1 $ 7,736 14,445 29,355 $ 51,536 $ 290,066 - $ 290,066	Level 2 $ - - - $ - $ - - $ - Level 2 $ - - - $ - $ - - $ - Level 2 $ - - - $ - $ - - $ -	Level 3 $ - - 9,236 $ 9,236 $ - 39,911 $ 39,911 Level 3 $ - - 9,567 $ 9,567 $ - 68,653 $ 68,653 Level 3 $ - - 8,934 $ 8,934 $ 12,092 46,213 $ 58,305	Total
				$ 38,852 17,082 37,088 $ 93,022 $ 285,874 39,911 $ 325,785 Total
				$ 30,045 15,844 338,349 $ 384,238 $ 296,074 68,653 $ 364,727 Total
				$ 7,736 14,445 38,289 $ 60,470 $ 302,158 46,213 $ 348,371

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There were no transfers between Level 1 and Level 2 for nine months ended September 30, 2022 and 2021, respectively.

B. Valuation techniques and inputs applied for Level 3 fair value Measurement

Fund beneficiary certificates are based on the asset method, and the reach of the fair value of individual assets and individual liabilities covered by the subject is assessed and evaluated.

Domestic unlisted stocks are based on the market method, which is mainly calculated by referring to the relevant information of listed companies or those with similar industrial nature, and taking into account of their liquidity discounts.

(3) Categories of financial instruments

ategories of financial instruments
Financial assets Measured at FVTPL Mandatorily measured at FVTPL Financial assets measured at amortized cost (Note 1) Financial assets measured at FVTOCI`－`Investments in equity instruments Financial liabilities Measured at amortized cost (Note 2)	September 30, 2022 $ 93,022 5,423,892 325,785 3,412,806	December 31, 2021 $ 384,238 4,882,817 364,727 3,279,012	September 30, 2021
			$ 60,470 4,475,988 348,371 3,817,964

Note;1: The balances included financial assets measured at amortized cost, which comprise cash and cash equivalents, investments in debt instruments, notes receivable, trade receivable and refundable deposits.
Note 2: The balances included financial liabilities measured at amortized cost, which comprise short-term loans, trade payable, other payable, and deposits received.
(4) Financial risk management objectives and policies

The Group’s principal financial risk management objective is to manage the market risk, credit risk and liquidity risk relating to the operations, based on related protocols and internal control procedures. The Group’s financial department measures the aforementioned risks based on the Group’s risk appetite, and reports to the board of directors for carrying out relevant policies.

A. Market risk

The financial risk which the Group needs to manage as a result of operating activities is changes in foreign currency exchange rates.

a. Foreign currency risk

The Group’s purchases are denominated in foreign currencies, thus the Group is exposed to foreign currency risks. Exchange rate exposures are managed within approved policy parameters utilizing foreign financial instruments.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities of non-functional currency calculated (including those eliminated on consolidation) at the end of the reporting period are set out in Note 31.

Sensitivity analysis

The Group’s exchange rate exposure was in the exchange rate of U.S. dollars.

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The sensitivity analysis included only outstanding foreign currency denominated monetary items and adjusts their translation at the end of the reporting period for a 5% change in foreign currency rates. If the New Taiwan dollar appreciates 5% against the relevant currency, the Group’s net profit for the nine months ended September 30, 2022 and 2021 would decrease by $15,216 thousand and increase by $18,258 thousand, respectively.

b. Interest rate risk

The Group assesses the interest rate of the bank loan regularly, observes influences on profits or losses from fluctuation range of the interest rate, and keeps contact with the bank based on the actual requirement to acquire favorable interest rate of the loan.

The carrying amount of the Group’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows:

Interest rate risks at fair value `－`Financial assets `－`Financial liabilities Interest rate risks at cash flows `－`Financial assets	September 30, 2022 $ 1,246,592 278,929 516,844	December 31, 2021 $ 944,802 15,532 1,017,599	September 30, 2021
			$ 200,980 463,980 1,020,171

Sensitivity analysis

The sensitivity analyses below were determined based on the Group’s exposure to interest rates for non-derivative instruments at the end of the reporting period.

If interest rates had been 50 basis points higher and all other variables were held constant, the Group’s pre-tax profit for the nine months ended September 30, 2022 and 2021 would increase by $1,938 thousand and $3,826 thousand, respectively.

c. Other price risk

The Group is exposed to price risks arising from investments of shares, bonds and fund beneficiary certificates. Investments should be approved by the management, for controlling risks by holding different investment portfolios.

Sensitivity analysis

The following sensitivity analysis is based on risk exposure of prices at the end of the reporting period.

If prices had been 5% higher, pre-tax profit for the nine months ended September 30, 2022 and 2021 would have increased by $4,651 thousand and $3,024 thousand, respectively, as a result of the changes in fair value of financial assets at FVTPL, and the other comprehensive income for the nine months ended September 30, 2022 and 2021 would have increased by $16,289 thousand and $17,419 thousand, respectively, as a result of the changes in fair value of financial assets at FVTOCI.

B. Credit risk

A Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. As at the end of the reporting period, the Group’s maximum exposure to credit risk which will cause a financial loss to the Group due to failure to discharge an obligation by the counterparties provided by the Group is arising from the carrying amount of the respective recognized financial assets as stated in the consolidated balance sheets.

The Group adopted a policy of only dealing with creditworthy counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the financial department regularly.

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To decrease a credit risk, the key management personnel of the Group is responsible for decision of rating criteria, credit limits approval, and other censor procedure, etc., in order to collect delinquent trade receivable. Otherwise, the Group reviews each trade receivable to assure allowance of impairment losses of uncollectable bad debts, hence the key management personnel considers credit risk of trade receivable is insignificant.

The credit risk of the current fund is insignificant, since the Group only transacts with financial institutions with good rating.

Trade receivable consisted of many customers. Ongoing credit evaluation is performed on the financial condition of certain customer’s trade receivable. If necessary, purchasing insurance for credit enhancing procedures is a must.

The Group’s concentration of credit risk was mainly in the Group’s five largest customers, which accounted for 42%, 33% and 49% of trade receivable, respectively, as of September 30, 2022, December 31, 2021 and September 30, 2021.

C. Liquidity risk

The Group manages and maintains sufficient cash and cash equivalents so as to cope with its operations and mitigate the effects of fluctuations in cash flows. The Group’s management supervises financing line of the banking facilities and ensures compliance with the terms of loan agreements.

Liquidity & interest rate risk table

The table below summarizes the due analysis of the maturity profile of the Group’s non-derivative financial liabilities, enacted by contractual undiscounted payments of cash flow of financial liabilities, according to remaining contracts on the earliest date on which the Group may be required to pay, including interest and principal of cash flows.

The other non-derivative financial liabilities are listed at their contract repayment dates.

September 30, 2022

September 30, 2022
Non-derivative financial liabilities No interest-bearing liabilities Lease liabilities Fixed interest rate liabilities December 31, 2021 Non-derivative financial liabilities No interest-bearing liabilities Lease liabilities September 30, 2021 Non-derivative financial liabilities No interest-bearing liabilities Lease liabilities Fixed interest rate liabilities	Less than 1 Year $ 3,161,997 14,811 250,301 $ 3,427,109 Less than 1 Year $ 3,278,212 7,618 $ 3,285,830 Less than 1 Year $ 3,367,091 8,054 450,750 $ 3,825,895	1-5 Years
		$ - 14,593 - $ 14,593 1-5 Years
		$ - 8,130 $ 8,130 1-5 Years

		$ - 6,115 - $ 6,115

As of September 30, 2022, December 31, 2021 and September 30, 2021, the Group’s unused shortterm credit of limit of the bank were $1,350,000 thousand, $1,600,000 thousand and $800,000 thousand, respectively.

30 -

28. TRANSACTIONS WITH RELATED PARTIES

Transactions and balances apply for the profits and losses, revenues and expenses between the Group and its subsidiaries, which were related parties of the Group, had been eliminated on consolidation and are not disclosed in this note. Besides information disclosed elsewhere in the other notes, details of transactions between the Group and other related parties are disclosed as follows.

(1) Names of Related Parties and the relationship with the Company

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Names of Related Party Relationship with the Company
TrustONE Security Inc. Associate
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Names of Related Party TrustONE Security Inc.	Relationship with the Company Associate
Leukocyte-Lab. Co., Ltd.	Associate
InfinitiesSoft Solutions Inc.	Associate
K Way Information Corporation	Other related party

(2) Purchase

For the Three Months Ended September 30, 2022 Related parties $ 7,752 ompensation of key management personnel For the Three Months Ended September 30, 2022 Short-term employee benefits $ 4,969	For the Three Months Ended September 30, 2021 $ 193 For the Three Months Ended September 30, 2021 $ 7,857	For the Nine Months Ended September 30, 2022 $ 8,002 For the Nine Months Ended September 30, 2022 $ 46,125	For the Nine Months Ended September 30, 2021 $ 639 For the Nine Months Ended September 30, 2021 $ 43,380

(3) Compensation of key management personnel

The compensation of directors and other key management personnel are decided by personal performance and economic market trend through the renumeration committee.

29. ASSETS PLEDGED AS COLLATERAL

The following assets were provided as collateral for bank borrowings, tariff guarantee for imported commodities:

mmodities:
Property, plant and equipment, Net Pledged time deposits (Financial assets at amortized cost`－`non-current)	September 30, 2022 $ 205,190 35,299 $ 240,489	December 31, 2021 $ 206,231 35,124 $ 241,355	September 30, 2021
				$ 206,579 35,561 $ 242,140

30. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

(1) As of September 30, 2022, the Group opens NT$ 87,000 thousand of cashier order for payment guaranteed for Microsoft Taiwan Corporation.
(2) As of September 30, 2022, the Group opens NT$ 50,000 thousand of cashier order for payment guaranteed for Microsoft Regional Sales Corporation.
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31. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

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

September 30, 2022

September 30, 2022
Financial assets Monetary items USD Financial liabilities Monetary items USD December 31, 2021 Financial assets Monetary items USD Financial liabilities Monetary items USD September 30, 2021 Financial assets Monetary items USD Financial liabilities Monetary items USD	Foreign Currencies $ 43,479 33,894 Foreign Currencies $ 46,298 45,913 Foreign Currencies $ 48,493 61,605	Exchange Rate 31.75 (USD:NTD) 31.75 (USD:NTD) Exchange Rate 27.68 (USD:NTD) 27.68 (USD:NTD) Exchange Rate 27.85 (USD:NTD) 27.85 (USD:NTD)	Carrying Amount
			$ 1,380,458 $ 1,076,135 Carrying Amount
			$ 1,281,529 $ 1,270,872 Carrying Amount
			$ 1,350,530 $ 1,715,699

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

Foreign currencies USD Foreign currencies USD	For the Nine Months Ended September 30, 2022 Exchange Rate Net Foreign exchange gain (loss) 29.285 (USD:NTD) $ 19,596 For the Three Months Ended September 30, 2022 Exchange Rate Net Foreign exchange gain (loss) 30.404 (USD:NTD) $ 12,500	For the Nine Months Ended September 30, 2021	For the Nine Months Ended September 30, 2021	For the Nine Months Ended September 30, 2021
		Exchange Rate Net Foreign exchange gain (loss) 28.067 (USD:NTD) $ 21,275 For the Three Months Ended September 30, 2021
	Exchange Rate 30.404 (USD:NTD)	Exchange Rate 27.858 (USD:NTD)		Net Foreign exchange gain (loss) $ 2,926

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32. SEPARATELY DISCLOSED ITEMS

(1) Information about significant transactions:
A. Financing provided to others: Table 1.
B. Endorsements/guarantees provided: None.
C. Marketable securities held (excluding investments in subsidiaries, associates and joint ventures): Table 2.
D. Marketable securities acquired or disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital: Table 3.
E. Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital: None.
F. Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: None.
G. Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paidin capital: None.
H. Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: None.
I. Trading in derivative instruments: None.
J. Other: Intercompany relationships and significant intercompany transactions: Table 4.
(2) Information on investees: Table 5.
(3) Information on investment in mainland China:
A. Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area: Table 6.
B. Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses: None.
- a. The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period.
- b. The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period.
- c. The amount of property transactions and the amount of the resultant gains or losses.
- d. The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes.
- e. The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds.
- f. Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receiving of services.
(4) Information of major shareholder: List of all shareholders with ownership of 5 percent or greater showing the name, the number of shares and percentage of ownership held by each shareholder: None.

33. SEGMENT INFORMATION

The management monitors the operating results focusing on the types of products and services acquired or provided of its business units separately for the purpose of making decisions about resource allocation and performance assessment. The department of the Group’s business division of brands distribution and others shall be reported.

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(1) Segments revenue & operating results

The following was an analysis of the Group’s revenue and results from continuing operations by reportable segments:

portable segments:
For the nine months ended September 30, 2022 Revenues from external customers Inter-segment revenues Segment revenues Segment profit (loss) General administration division costs and compensation of directors Non-operating income and expenses Net income before tax For the nine months ended September 30, 2021 Revenues from external customers Inter-segment revenues Segment revenues Segment profit (loss) General administration division costs and compensation of directors Non-operating income and expenses Net income before tax		The business division of brands distribution $ 9,542,963 - $ 9,542,963 $ 601,437 $ 9,672,710 - $ 9,672,710 $ 596,363		Other $ 253,362 91,434 $ 344,796 $ 59,523 $ 167,339 38,004 $ 205,343 $ 13,704)		Eliminations $ - 91,434) $ 91,434) $ - $ - 38,004) $ 38,004) $ -		Total
			(		( ( ( (		$ 9,796,325 - $ 9,796,325 $ 660,960 ( 114,153) 39,110 $ 585,917 $ 9,840,049 - $ 9,840,049 $ 582,659 ( 113,893) 46,476 $ 515,242

Segment profit represents the profit before tax earned by each segment without allocation of central administration costs and compensation of directors and non-operating income and expenses. This was the measure reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance.

(2) Total segment assets and liabilities

The assets and liabilities of the Group haven’t been provided to the operating decision maker, hence valuation number of assets and liabilities shall not be disclosed.

(3) Revenue from major products and services

The following is an analysis of the Group’s revenue from continuing operations from its major products and services:

d services:
IT Infrastructure Network & Information Security Cloud Platform & Application Big Data & Application Other	For the Nine Months Ended September 30, 2022 $ 2,910,076 4,295,174 2,050,342 536,481 4,252 $ 9,796,325	For the Nine Months Ended September 30, 2021
			$ 4,125,362 3,651,634 1,645,925 413,903 3,225 $ 9,840,049

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ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 Table 1

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(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)
Financing Limit
Maximum Nature for Reasons for Allowance Collateral Aggregate
No. Financial Statement Related Amount Interest Transaction for Each
Lender Borrower Balance for the Ending Balance Financing Short-term for Bad Financing Limit Note
(Note 1) Account Party Actually Drawn Rate Amount Borrower
Period (Note 2) (Note 3) Financing Debt (Note 5)
Item Value (Note 4)
0 ZOTC Zerone Win Other receivables from Yes $ 50,000 $ - $ - 3% 2 $ - Operating $ - － $ - $ 380,973 $ 761,946
Investment related parties Capital
Co., Ltd.
0 ZOTC WingWill Other receivables from Yes 20,000 20,000 - 3% 2 - Operating - － $ - 380,973 761,946
International related parties Capital
Co., Ltd.
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Note 1：The number column is organized as follows：
(1) Number 0 represents the issuer.
(2) The investee companies are numbered from 1 in order.
Note 2：Maximum balance of financing provided to others for the period.
Note 3：Reference for the nature for financing provided to others.
(1) 1:The borrower has business contact with the creditor.
(2) 2:The borrower has short-term financing necessities.

Note 4：For short-term financing necessities, the financing limit for each borrower shall not exceed 10% of the lender’s net worth as stated in its latest financial statement audited or reviewed by CPAs.

Note 5：Aggregate financing limit shall not exceed 20% of the lender’s net worth as stated in its latest financial statement audited or reviewed by CPAs.

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ZERO ONE TECHNOLOGY CO., LTD.AND SUBSIDIARIES

MARKETABLE SECURITIES HELD SEPTEMBER 30, 2022 Table 2

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(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)
September 30, 2022
Relationship with
Holding Type and Name of Marketable Securities the Holding Financial Statement Account Percentage of Note
Company Name (Note 1) Number of Shares Carrying Amount Ownership Fair Value
Company
(%)
ZOTC Beneficiary certificates
KGI Kaefer Fund － Financial assets at FVTPL － non- 170,199 $ 3,630 - $ 3,630
current
KGI Taiwan Multi-Asset Income Fund － Financial assets at FVTPL － non- 1,198,020 12,615 - 12,615
current
KGI Taiwan Select-Asset Income Fund － Financial assets at FVTPL － non- 500,325 5,606 - 5,606
current
Corporate bond
M.J. International Co. Ltd. － 1 [st] － Financial assets at FVTPL － 20 （ Units ） 1,970 - 1,970
convertible bonds current
Chailease Holding Company Limited - 1 [st] － Financial assets at FVTPL － 180 （ Units ） 17,640 - 17,640
convertible corporate bonds current
Taishin Financial Holding Co., Ltd. - 1 [st] － Financial assets at FVTPL － 60 （ Units ） 6,084 - 6,084
exchangeable bonds current
Group Up Industrial Co., Ltd. - 1 [st] － Financial assets at FVTPL － 29 （ Units ） 3,103 - 3,103
convertible corporate bonds current
Giant Manufacturing Co., Ltd. - 1st － Financial assets at FVTPL － 100 （ Units ） 10,055 - 10,055
convertible corporate bonds current
Perusahaan Listrik Negara corporate bond － Financial assets at amortized cost 10 （ Units ） 33,703 - 25,087
－
(USD) non-current
Southern California Edison corporate － Financial assets at amortized cost 5 （ Units ） 17,237 - 11,658
－
Bond (USD) non-current
British Telecommunications plc corporate － Financial assets at amortized cost 5 （ Units ） 16,109 - 11,706
－
bond (USD) non-current
Stock
Fubon Financial Holding Co., Ltd. － Financial assets at FVTPL － 65,248 3,256 - 3,256
current
Cathay Financial Holdings Preferred － Financial assets at FVTPL － non- 166,000 9,778 - 9,778
Shares A current
Union Bank of Taiwan Preferred Shares A － Financial assets at FVTPL － non- 80,000 4,048 - 4,048
current
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(Continued)

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September 30, 2022
Relationship with
Holding Type and Name of Marketable Securities the Holding Financial Statement Account Percentage of Note
Company Name (Note 1) Number of Shares Carrying Amount Ownership Fair Value
Company
(%)
ZOTC Sino-American Silicon Products Inc. － Financial assets at FVTOCI － 20,000 2,620 - 2,620
current
－
K Way Information Corporation Director of Financial assets at FVTOCI non- 655,000 19,454 2.14 19,454
ZOTC current
－－
China Electric Mfg. Corp. Financial assets at FVTOCI non- 2,689,200 40,607 0.83 40,607
current
－－
Unex Technology Corp. Financial assets at FVTOCI non- 175,000 2,404 1.68 2,404
current
－
Da-Chang Start-Up Investment Co. Ltd. Financial assets at FVTOCI non- 3,000,000 29,949 2.73 29,949
current
Cathay Financial Holding Co., Ltd. － Financial assets at FVTOCI － 134,000 7,893 - 7,893
Preferred Shares A non-current
－
Union Bank of Taiwan Preferred Shares A Financial assets at FVTOCI － 70,000 3,542 - 3,542
non-current
Fubon Financial Holding Co., Ltd. － Financial assets at FVTOCI － 400,000 23,560 - 23,560
Preferred Shares B non-current
Taishin Financial Holding Co., Ltd. － Financial assets at FVTOCI － 240,000 12,048 - 12,048
Preferred Shares E non-current
CTBC Financial Holding Co., Ltd. － Financial assets at FVTOCI － 90,000 5,445 - 5,445
Preferred Shares B non-current
Cathay Financial Holding Co., Ltd. － Financial assets at FVTOCI － 230,000 13,478 - 13,478
Preferred Shares B non-current
WPG Holdings Limited Preferred Shares A － Financial assets at FVTOCI － 700,000 33,740 - 33,740
non-current
United Orthopedic Corporation Preferred Financial assets at FVTOCI － 200,000 9,100 - 9,100
Shares A － non-current
QST International Corporation Preferred － Financial assets at FVTOCI － 45,000 2,040 - 2,040
Shares A non-current
Taishin Financial Holding Co., Ltd. － Financial assets at FVTOCI － 1,350,000 22,680 - 22,680
Exchangeable Preferred Shares F non-current
Miiicasa Holdings (Cayman) Inc. － Financial assets at FVTOCI － 2,500,000 - 3.45 -
non-current
Duofu Co., Ltd. － Financial assets at FVTOCI － 10,000 - 0.22 -
non-current
Jotangi Technology Co., Ltd. － Financial assets at FVTOCI － 796,250 - 9.32 -
non-current
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(Continued)

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September 30, 2021
Holding Relationship with
Company Type and Name of Marketable Securities the Holding Financial Statement Account Percentage of Note
Name (Note 1) Company Number of Shares Carrying Amount Ownership Fair Value
(%)
Zerone Win Stock
Investment WPG Holdings Limited Preferred Shares A － Financial assets at FVTOCI － non- 240,000 $ 11,568 - $ 11,568
Co., Ltd. current
Shin Kong Financial Holding Co., Ltd. － Financial assets at FVTOCI － non- 50,000 1,938 - 1,938
Preferred Shares A current
－－
Tatung System Technologies Inc. Financial assets at FVTOCI non- 1,500,000 56,475 1.69 56,475
current
－－
LEO Systems, Inc. Financial assets at FVTOCI non- 20,000 498 0.02 498
current
－－
GrandTech C.G. Systems Inc. Financial assets at FVTOCI non- 70,000 3,836 0.12 3,836
current
－－
FiduciaEdge Technologies Co., Ltd. Financial assets at FVTOCI non- 500,000 7,500 4.09 7,500
current
GrandTech Cloud Services Inc. － Financial assets at FVTOCI － non- 727 58 - 58
current
Petacom Beneficiary certificates
Technology Taishin 1699 Money Market Fund － Financial assets at FVTPL － 1,110,000 15,237 - 15,237
Co., Ltd. current
Zotech Co., Ltd. Stock
WPG Holdings Limited Preferred Shares A － Financial assets at FVTOCI － non- 200,000 9,640 - 9,640
current
Taishin Financial Holding Co., Ltd. － Financial assets at FVTOCI － non- 340,000 5,712 - 5,712
Exchangeable Preferred Shares F current
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(Concluded)

Note 1 ： Securities, indicated by the above table, are derivative from stock, bonds, beneficiary certificates, and the above items, based on IFRS 9 ‘Financial Instruments.’

Note 2 ： Relevant information about Investments in equity of subsidiaries and associates, please refer to Table 5 & 6.

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ZERO ONE TECHNOLOGY CO., LTD.AND SUBSIDIARIES

MARKETABLE SECURITIES ACQUIRED OR DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022

Table 3

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(In Thousands of New Taiwan Dollars)
Type and Beginning Balance Acquisition Disposal Ending Balance
Financial
Company Name of
Statement Counterparty Relationship Amount Gain (Loss) on Amount
Name Marketable Number of Shares Number of Shares Amount Number of Shares Amount Carrying Amount Number of Shares
Account (Note) Disposal (Note)
Securities
ZOTC Beneficiary
certificates
FSITC Financial assets －－ 6,463,581 $ 100,000 25,835,709 $ 400,000 32,299,290 $ 500,323 $ 500,000 $ 323 - $ -
－
Taiwan at FVTPL
Money current
Market
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Note: The beginning balance included adjustments of unrealized gains or loss on financial assets.

39 -

ZERO ONE TECHNOLOGY CO., LTD.AND SUBSIDIARIES

INFORMATION ON INVESTEES

FOR NINE MONTHS ENDED SEPTEMBER 30, 2022 Table4

(In Thousands of New Taiwan Dollars)

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Transaction Details
No. Relationship
Investee Company Counterparty Amount Payment % of Total Sales
(Note 1) (Note 2) Financial Statement Accounts
(Note 4) Terms or Assets (Note 3)
0 ZOTC WingWill International Co., Ltd. 1 Sales revenue $ 39,860 Note 5 -
Trade receivables 13,250 Note 5 -
0 ZOTC Petacom Technology Co., Ltd. 1 Sales revenue 7,286 Note 5 -
Cost of goods sold 7,135 Note 5 -
0 ZOTC Techone (Shanghai) Co., Ltd. 1 Sales revenue 15,038 Note 5 -
Cost of goods sold 9,026 Note 5 -
1 Petacom Technology Co., Ltd. Techone (Shanghai) Co., Ltd. 3 Sales revenue 8,663 Note 5 -
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Note 1：Business between the parent and subsidiaries is numbered as follows:

Parent:0.
Subsidiaries are numbered from 1 in order.

Note 2：Three types of relationship between parties are numbered as follows:

Parent to subsidiary.
Subsidiary to parent.
Between subsidiaries.

Note 3：Percentage of transaction amounts to consolidated operating revenues or consolidated total assets: If the account is a balance sheet account, it shall be calculated by dividing the ending balance into consolidated total assets; if the account is an income statement account, it shall be calculated by dividing the cumulative balance into consolidated operating revenues.

Note 4：Only the related parties’ transactions over 5,000 thousand are disclosed. Note 5：The terms of transactions with intercompany partners are similar to non-related parties.

40 -

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR NINE MONTHS ENDED SEPTEMBER 30, 2022 Table 5

(In Thousands of New Taiwan Dollars)

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Original Investment Amount As of September 30, 2022 Net Income
Share of Profit
Investor Investee Location Main Businesses September 30, December 31, Number of (Loss) of the Note
2022 2021 Shares % Carrying Amount Investee (Loss)
ZOTC Zotech Co., Ltd. Taiwan Manufacturing for $ 35,000 $ 35,000 3,500,000 85.37 $ 44,774 $ 9,258 $ 7,903 Subsidiary
computer
equipment
ZeroneWin Taiwan Investment 300,000 300,000 30,000,000 100.00 316,004 2,608 2,608 Subsidiary
Investment
Co., Ltd.
Asiaone Republic of Holding company 10,063 10,063 320,000 100.00 13,896 1,843 1,843 Subsidiary
Holdings Ltd. Seychelles
ZeroneWin WingWill Taiwan Services of cloud 54,499 25,500 28,999,000 99.99 25,763 ( 141 ) ( 75 ) Sub-
Investment International information subsidiary
Co., Ltd. Co., Ltd. software
Petacom Taiwan Services of distribution 50,000 50,000 50,000,000 100.00 56,971 6,217 6,217 Sub-
Technology of information subsidiary
Co., Ltd. product
DigiCosmos Taiwan Services of 25,000 25,000 2,500,000 50.00 23,044 ( 3,677 ) ( 1,838 ) Sub-
Tech. Co., information subsidiary
Ltd. security consulting
TrustONE Taiwan R&D, sale and service 7,200 4,000 7,200,000 32.00 2,112 ( 7,763 ) ( 2,484 ) Associate
Security Inc. of information
software
Leukocyte-Lab Taiwan Information security 11,500 11,500 240,000 37.50 8,047 ( 5,591 ) ( 2,097 ) Associate
Co. Ltd. management and
consulting service
InfinitiesSoft Taiwan Software development, 37,800 28,800 2,780,889 24.33 22,868 ( 12,716 ) ( 598 ) Associate
Solutions Inc. and services of
information and
computer software
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Note: Please refer to Table 6 for information on investment in mainland China.

41 -

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR NINE MONTHS ENDED SEPTEMBER 30, 2022 Table 6

(In Thousands of New Taiwan Dollars/Foreign Currency)

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Remittance of Funds
Accumulated
Accumulated Accumulated
Outward Net % Carrying
Outward Repatriation of
Main Remittance for Income Ownership Investment Amount as
Investee Method of Remittance for Investment
Businesses Paid-in Capital Investment (Loss) of of Direct or Gain (Loss) of Note
Company Investment Investment from Outward Inward Income as of
and Products from Taiwan as the Indirect (Note 2) September
Taiwan as of September 30,
of September Investee Investment 30, 2022
January 1, 2022 2022
30, 2022
Techone Technical $ 13,419 (Note 1) $ 9,118 $ - $ - $ 9,118 $ 2,630 70% $ 1,841 $ 13,589 $ - －
(Shanghai) service for ( RMB 3,000 )
Co., Ltd. network
technology
Upper Limit on the Amount of
Accumulated Outward Remittance for
Investment Amount Authorized by Investments Stipulated by the
Investments in Mainland China as of
the Investment Commission, MOEA Investment Commission, MOEA
September 30, 2022
(Note 3)
$ 9,118 $ 9,118 $ 2,285,839
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Note 1 ： The Company directly holds 100% of a subsidiary - Asiaone Holdings Ltd., which reinvests the company in mainland China.

Note 2 ： Amount was recognized based on the financial statements which were not reviewed by CPAs on September 30, 2022.

Note 3 ： Determined by sixty percent (60%) of the Company’s net worth, reviewed by CPAs on September 30, 2022 (3,809,731×60% ＝ 2,285,839).

Note 4 ： For foreign currency conversion, gain (loss) are converted by the average exchange rate in 2022 Q3. Other amounts are converted into New Taiwan Dollars by the exchange rate on September 30, 2022.

42 -

AI assistant

ZERO ONE — Interim / Quarterly Report 2022

52262_rns_2022-10-27_9cc7d29d-0998-4d8b-a425-06e85d8a0d2b.pdf

AND SUBSIDIARIES

§TABLE OF CONTENTS§

INDEPENDENT AUDITORS’ REVIEW REPORT

Introduction

Scope of Review

Conclusion

Notice to Readers

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For the nine months ended September 30, 2022 and 2021 (Reviewed, Not Audited)

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Reviewed, Not Audited)

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Reviewed, Not Audited)

1. GENERAL

2. THE DATE AND PROCEDURES OF AUTHORIZATION OF FINANCIAL STATEMENTS

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Defined retirement benefits

B. Taxation

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

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

9. FINANCIAL ASSETS AT AMORTIZED COST

10. CREDIT RISK MANAGEMENT FOR INVESTMENTS IN DEBT INSTRUCTMENTS

11. NOTES, TRADE RECEIVABLE AND OVERDUE RECEIVABLES

September 30, 2021

12. INVENTORIES

13. SUBSIDIARIES

14. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

15. PROPERTY, PLANT AND EQUIPMENT

16. LEASE ARRANGEMENTS

17. SHORT-TERM BORROWINGS

18. OTHER PAYABLES

19. RETIREMENT BENEFIT PLANS

20. EQUITY

(3) Retained earnings and dividend policy

21. REVENUE

22. NET PROFIT

(4) Compensation of employees and directors

Estimate Rate

23. INCOME TAXES

(1) Income tax recognized in profit or loss

24. EARNINGS PER SHARE

Net Profit for the Period

Shares

25. SHARE-BASED PAYMENT ARRANGEMENTS

(1) Employee Share Option Plan

(2) Employees restricted stock

26. CAPITAL RISK MANAGEMENT

27. FINANCIAL INSTRUMENTS

September 30, 2022

Sensitivity analysis

b. Interest rate risk

Sensitivity analysis

c. Other price risk

Sensitivity analysis

B. Credit risk

C. Liquidity risk

Liquidity & interest rate risk table

September 30, 2022

28. TRANSACTIONS WITH RELATED PARTIES

29. ASSETS PLEDGED AS COLLATERAL

30. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

31. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

September 30, 2022

32. SEPARATELY DISCLOSED ITEMS

33. SEGMENT INFORMATION

(1) Segments revenue & operating results

(2) Total segment assets and liabilities

(3) Revenue from major products and services

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

ZERO ONE TECHNOLOGY CO., LTD.AND SUBSIDIARIES

ZERO ONE Interim / Quarterly Report 2022