Interim report
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HTC Corporation and Subsidiaries Consolidated Financial Statements for the Nine Months Ended September 30, 2026 and 2025 and Independent Auditors’Review Report
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- 2 - The engagement partners on the reviews resulting in this independent auditors’ review report are Pan-Fa Wang and Kuo-Tyan Hong. Deloitte & Touche Taipei, Taiwan Republic of China November 2, 2026 Notice to Readers The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to review such consolidated financial statements are those generally applied in the Republic of China. For the conven ience 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.
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- 3 - HTC CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands of New Taiwan Dollars) September 30, 2026 December 31, 2025 September 30, 2025 ASSETS Amount % Amount % Amount % CURRENT ASSETS Cash and cash equivalents (Note 6) $ 2,090,301 5 $ 2,909,535 8 $ 3,947,776 10 Financial assets at fair value through profit or loss - current (Notes 7 and 30) 17,787,945 42 12,826,683 33 14,002,514 37 Financial assets at fair value through other comprehensive income - current (Notes 8 and 30) 2,781 - 206,397 1 260,113 1 Notes and trade receivables (Notes 10 and 24) 498,934 1 506,730 1 461,451 1 Other receivables (Note 10) 336,839 1 2,604,460 7 9,055 - Current tax assets 163,344 - 191,124 - 186,281 1 Inventories (Note 11) 777,486 2 450,243 1 551,679 1 Prepayments (Note 12) 170,530 - 193,044 1 259,807 1 Other current financial assets (Notes 9 and 32) 197,774 1 113,036 - 489,588 1 Other current assets 36,232 - 30,371 - 22,358 - Total current assets 22,062,166 52 20,031,623 52 20,190,622 53 NON-CURRENT ASSETS Financial assets at fair value through profit or loss - non-current (Notes 7 and 30) 4,099,438 10 2,216,058 6 1,701,815 4 Financial assets at fair value through other comprehensive income - non-current (Notes 8 and 30) 5,333,788 13 4,731,637 12 4,981,235 13 Investments accounted for using equity method (Note 14) 861,540 2 862,292 2 860,490 2 Property, plant and equipment (Notes 15 and 32) 6,265,598 15 6,326,356 17 6,340,102 17 Right-of-use assets (Note 16) 30,484 - 38,545 - 42,286 - Investment properties, net (Notes 17 and 32) 1,498,363 4 1,539,993 4 1,537,887 4 Intangible assets (Note 18) 72,399 - 414,134 1 416,860 1 Deferred tax assets 1,060,711 2 1,067,262 3 1,039,227 3 Refundable deposits (Note 33) 350,053 1 345,162 1 341,681 1 Net defined benefit assets - non-current 645,823 1 640,113 2 565,637 2 Other non-current financial assets (Notes 9 and 32) 76,108 - 121,338 - 143,177 - Other non-current assets (Note 12) 1,572 - 1,659 - 1,890 - Total non-current assets 20,295,877 48 18,304,549 48 17,972,287 47 TOTAL $ 42,358,043 100 $ 38,336,172 100 $ 38,162,909 100 LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 19) $ 1,400,000 3 $ 1,000,000 3 $ - - Financial liabilities at fair value through profit or loss - current (Notes 7 and 30) 47,480 - 9,441 - 10,544 - Notes and trade payables (Notes 20 and 31) 4,907,520 12 4,783,207 13 4,747,629 13 Other payables (Notes 21 and 31) 2,361,141 6 2,716,734 7 2,768,964 7 Current tax liabilities 68,890 - 54,240 - 54,843 - Provisions - current (Note 22) 239,380 - 285,207 1 300,440 1 Lease liabilities - current (Notes 16 and 31) 18,130 - 15,930 - 17,076 - Other current liabilities (Notes 21 and 24) 444,667 1 480,261 1 481,104 1 Total current liabilities 9,487,208 22 9,345,020 25 8,380,600 22 NON-CURRENT LIABILITIES Financial liabilities at fair value through profit or loss - non-current (Notes 7 and 30) 24,236 - - - - - Long-term borrowings (Notes 19 and 32) 5,981,605 14 2,200,000 6 2,900,000 8 Deferred tax liabilities 99,463 1 104,435 - 56,765 - Lease liabilities - non-current (Notes 16 and 31) 15,680 - 26,000 - 28,513 - Guarantee deposits received 66,211 - 64,026 - 64,476 - Total non-current liabilities 6,187,195 15 2,394,461 6 3,049,754 8 Total liabilities 15,674,403 37 11,739,481 31 11,430,354 30 EQUITY (Note 23) Share capital - ordinary shares 8,370,323 20 8,360,211 22 8,359,621 22 Capital surplus 16,366,144 38 16,340,444 43 16,339,033 43 Retained earnings Legal reserve 1,012,760 2 815,365 2 815,365 2 Special reserve 3,283,907 8 2,390,621 6 2,390,621 6 Unappropriated earnings 225,474 1 1,973,957 5 2,488,164 7 Total retained earnings 4,522,141 11 5,179,943 13 5,694,150 15 Other equity (2,574,968) (6) (3,283,907) (9) (3,660,249) (10) Total equity 26,683,640 63 26,596,691 69 26,732,555 70 TOTAL $ 42,358,043 100 $ 38,336,172 100 $ 38,162,909 100 The accompanying notes are an integral part of the consolidated financial statements.
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- 4 - HTC CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings (Loss) Per Share) For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 Amount % Amount % Amount % Amount % OPERATING REVENUE (Notes 24 and 31) $ 763,627 100 $ 716,371 100 $ 2,030,455 100 $ 2,119,695 100 OPERATING COSTS (Notes 11, 25 and 31) 457,747 60 464,176 65 1,190,554 59 1,347,711 64 GROSS PROFIT 305,880 40 252,195 35 839,901 41 771,984 36 OPERATING EXPENSES (Notes 25 and 31) Selling and marketing 352,945 47 367,882 51 1,043,224 51 1,295,394 61 General and administrative 237,223 31 302,049 42 746,525 37 908,039 43 Research and development 222,314 29 436,218 61 692,177 34 1,402,480 66 Total operating expenses 812,482 107 1,106,149 154 2,481,926 122 3,605,913 170 OPERATING LOSS (506,602) (67) (853,954) (119) (1,642,025) (81) (2,833,929) (134) NON-OPERATING INCOME AND EXPENSES Interest income (Note 25) 5,295 1 46,446 7 27,774 1 427,869 20 Other income (Notes 25 and 31) 147,137 19 159,625 22 560,946 28 666,911 31 Other gains and losses (Note 25) 633,611 83 4,208,216 588 916,847 45 11,075,440 523 Finance costs (Notes 25 and 31) (41,030) (5) (19,478) (3) (84,049) (4) (189,124) (9) Share of profit or loss of associates and joint ventures (Note 14) 2,274 - (69,333) (10) (27,352) (1) (221,584) (10) Total non-operating income and expenses 747,287 98 4,325,476 604 1,394,166 69 11,759,512 555 INCOME (LOSS) BEFORE INCOME TAX 240,685 31 3,471,522 485 (247,859) (12) 8,925,583 421 INCOME TAX EXPENSE (Note 26) (22,467) (3) (228,248) (32) (55,060) (3) (2,343,358) (111) INCOME (LOSS) FOR THE PERIOD 218,218 28 3,243,274 453 (302,919) (15) 6,582,225 310 (Continued)
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- 5 - HTC CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings (Loss) Per Share) For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 Amount % Amount % Amount % Amount % OTHER COMPREHENSIVE INCOME AND LOSS, NET OF INCOME TAX Items that will not be reclassified subsequently to profit or loss: Unrealized gain (loss) on investments in equity instruments designated as at fair value through other comprehensive income $ 178,357 24 $ 63,373 9 $ 458,735 23 $ (107,475) (5) Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations 40,401 5 988,475 138 313,354 15 (1,256,213) (59) Other comprehensive income (loss) for the period, net of income tax 218,758 29 1,051,848 147 772,089 38 (1,363,688) (64) TOTAL COMPREHENSIVE INCOME AND LOSS FOR THE PERIOD $ 436,976 57 $ 4,295,122 600 $ 469,170 23 $ 5,218,537 246 EARNINGS (LOSS) PER SHARE (Note 27) Basic $ 0.26 $ 3.88 $ (0.36) $ 7.88 Diluted $ 0.26 $ 3.85 $ (0.36) $ 7.81 The accompanying notes are an integral part of the consolidated financial statements. (Concluded)
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- 6 - HTC CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars) Other Equity Retained Earnings Exchange Unrealized Losses on Financial Assets (Accumulated Differences on at Fair Value Share Capital Deficits) Translating through Other Ordinary Unappropriated Foreign Comprehensive Shares Capital Surplus Legal Reserve Special Reserve Earnings Operations Income Total Equity BALANCE, JANUARY 1, 2025 $ 8,335,340 $ 16,277,565 $ 2,490,682 $ 3,080,480 $ (6,365,177) $ (920,620) $ (1,470,001) $ 21,428,269 Legal reserve in covering accumulated deficits - - (1,675,317) - 1,675,317 - - - Reversal of special reserve - - - (689,859) 689,859 - - - Net income for the nine months ended September 30, 2025 - - - - 6,582,225 - - 6,582,225 Other comprehensive income and loss for the nine months ended September 30, 2025 - - - - - (1,256,213) (107,475) (1,363,688) Total comprehensive income and loss for the nine months ended September 30, 2025 - - - - 6,582,225 (1,256,213) (107,475) 5,218,537 Issuance of shares due to exercise of employee share options 24,281 61,468 - - - - - 85,749 Disposal of investments in equity instruments at fair value through other comprehensive income - - - - (94,060) - 94,060 - BALANCE, SEPTEMBER 30, 2025 $ 8,359,621 $ 16,339,033 $ 815,365 $ 2,390,621 $ 2,488,164 $ (2,176,833) $ (1,483,416) $ 26,732,555 BALANCE, JANUARY 1, 2026 $ 8,360,211 $ 16,340,444 $ 815,365 $ 2,390,621 $ 1,973,957 $ (1,271,223) $ (2,012,684) $ 26,596,691 Legal reserve - - 197,395 - (197,395) - - - Special reserve - - - 893,286 (893,286) - - - Cash dividends - - - - (418,033) - - (418,033) Net loss for the nine months ended September 30, 2026 - - - - (302,919) - - (302,919) Other comprehensive income and loss for the nine months ended September 30, 2026 - - - - - 313,354 458,735 772,089 Total comprehensive income and loss for the nine months ended September 30, 2026 - - - - (302,919) 313,354 458,735 469,170 Issuance of shares due to exercise of employee share options 10,112 25,700 - - - - - 35,812 Disposal of investments in equity instruments at fair value through other comprehensive income - - - - 63,150 - (63,150) - BALANCE, SEPTEMBER 30, 2026 $ 8,370,323 $ 16,366,144 $ 1,012,760 $ 3,283,907 $ 225,474 $ (957,869) $ (1,617,099) $ 26,683,640 The accompanying notes are an integral part of the consolidated financial statements.
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- 7 - HTC CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) For the Nine Months Ended September 30 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES (Loss) income before income tax $ (247,859) $ 8,925,583 Adjustments for: Depreciation expense 136,560 160,884 Amortization expense 13,327 12,930 Expected credit loss (reversed) recognized on trade receivables (1,326) 908 Gain on financial assets at fair value through profit or loss (749,338) (11,850) Finance costs 84,049 189,124 Interest income (27,774) (427,869) Dividend income (280,134) (21,676) Share of the loss of associates and joint ventures accounted for using the equity method 27,352 221,584 Net gain on disposal of property, plant and equipment and investment properties (1,283) (4,161,290) Net gain on disposal of intangible assets (212,851) - Net gain on disposal of assets and licensing income (Note 25) - (8,045,926) Impairment loss on non-financial assets 27,300 543,611 Gain from lease modifications (7) (53) Changes in operating assets and liabilities Decrease (increase) in financial assets mandatorily classified as at fair value through profit or loss 17,730 (47,924) Decrease in notes and trade receivables 9,122 34,649 Decrease in other receivables 10,157 10,741 (Increase) decrease in inventories (348,341) 18,717 Decrease in prepayments 22,514 146,061 (Increase) decrease in other current assets (5,861) 7,550 Increase in other non-current assets (5,623) (6,223) Increase (decrease) in notes and trade payables 195,011 (520,450) Decrease in other payables (364,446) (293,780) Decrease in provisions (45,827) (83,485) (Decrease) increase in other current liabilities (269) 30,913 Cash used in operations (1,747,817) (3,317,271) Interest received 28,916 523,690 Interest paid (77,124) (209,471) Income tax paid (80,955) (679,477) Net cash used in operating activities (1,876,980) (3,682,529) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income (117,141) (888,538) Proceeds from disposal of financial assets at fair value through other comprehensive income 214,124 4,728 (Continued)
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- 8 - HTC CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) For the Nine Months Ended September 30 2026 2025 Purchase of financial assets at fair value through profit or loss $ (16,525,877) $ (28,564,588) Proceeds from disposal of financial assets at fair value through profit or loss 10,633,722 13,242,711 Acquisition of investments accounted for using equity method (9,299) (134,658) Payments for property, plant and equipment (11,646) (293,118) Proceeds from disposal of property, plant and equipment and investment properties 4,322 5,525,608 Increase in refundable deposits (4,891) - Decrease in refundable deposits - 23,944 Decrease in other receivables from disposal of investments 2,288,393 - Payments for intangible assets - (135,118) Proceeds from disposal of intangible assets 534,150 - Payments for investment properties (405) (833) Increase in other financial assets (39,508) - Decrease in other financial assets - 9,757,032 Dividends received 256,250 21,676 Proceeds from disposal of assets and licensing income (Note 25) - 8,045,926 Net cash (used in) generated from investing activities (2,777,806) 6,604,772 CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings 400,000 - Decrease in short-term borrowings - (3,400,000) Increase in long-term borrowings 3,781,605 - Repayments of long-term borrowings - (8,900,000) Increase in guarantee deposits received 2,185 - Decrease in guarantee deposits received - (87,642) Repayments of the principal portion of lease liabilities (17,137) (18,864) Payments for cash dividends (418,033) - Employee share options executed 35,812 85,749 Net cash generated from (used in) financing activities 3,784,432 (12,320,757) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 51,120 (892,919) NET DECREASE IN CASH AND CASH EQUIVALENTS (819,234) (10,291,433) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 2,909,535 14,239,209 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,090,301 $ 3,947,776 The accompanying notes are an integral part of the consolidated financial statements. (Concluded)
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- 9 - HTC CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2026 AND 2025 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) 1. GENERAL INFORMATION HTC Corporation (HTC) was incorporated on May 15, 1997 under the Group Law of Taiwan, the Republic of China. HTC and its subsidiaries (collectively referred to as the “Group”) are engaged in designing, manufacturing, assembling, processing, and selling virtual reality devices and smart mobile devices and after-sales services. In March 2002, HTC had its stock listed on the Taiwan Stock Exchange. On November 19, 2003, HTC listed some of its shares of stock on the Luxembourg Stock Exchange in the form of global depositary receipts. The functional currency of HTC is the New Taiwan dollars. The consolidated financial statements are presented in the New Taiwan dollars since HTC is the ultimate parent of the Group. 2. APPROVAL OF FINANCIAL STATEMENTS The consolidated financial statements were approved by HTC’s board of directors and authorized for issue on November 2, 2026. 3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS a. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the “IFRS Accounting Standards”) endorsed and i ssued into effect by the Financial Supervisory Commission (FSC) The application of the IFRS Accounting Standards endorsed and issued into effect by the FSC did not have a material impact on the Group’s accounting policies. b. The IFRS Accounting Standards endorsed by the FSC for application starting from 2027 New, Amended and Revised Standards and Interpretations Effective Date Announced by IASB IFRS 18 “Presentation and Disclosure in Financial Statements” January 1, 2027 (Note 1) IFRS 19 “Subsidiaries without Public Accountability: Disclosures” (including the 2025 amendments to IFRS 19) January 1, 2027 Amendments to IAS 21 “Translation to a Hyperinflationary Presentation Currency” January 1, 2027 Amendments to IAS 28 “Amendments to the Fair Value Option for Investments in Associates and Joint Ventures” January 1, 2027 (Note 2) Note 1: IFRS 18 will take effect starting from January 1, 2028 for domestic entities. Earlier application is permitted. Note 2: An entity shall apply the amendments when it applies IFRS 18.
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- 10 - IFRS 18 “Presentation and Disclosure in Financial Statements” and consequential amendments and Amendments to IAS 28 “Amendments to the Fair Value Option for Investments in Associates and Joint Ventures” IFRS 18 will supersede IAS 1 “Presentation of Financial Statements”. The main changes comprise: To classify items of income and expenses presented in the statement of profit or loss into the operating, investing, financing, income taxes and discontinued operations catego ries, the Group shall assess whether it has specified main business activities of investing in particular types of assets and providing financing to customers. The statement of profit or loss shall present totals and subtotals for operating profit or loss, profit or loss before financing and income taxes and profit or loss. Provides guidance to enhance the requirements of aggregation and disaggregation: The Group shall identify the assets, liabilities, equity, income, expenses and cash flows that ari se from individual transactions or other events and shall classify and aggregate them into groups based on shared characteristics, so as to result in the presentation in the primary financial statements of line items that have at least one similar characteristic. The Group shall disaggregate items with dissimilar characteristics in the primary financial statements and in the notes. The Group labels items as “other” only if it cannot find a more informative label. Disclosures on Management -defined Perform ance Measures (MPMs): When in public communications outside financial statements and communicating to users of financial statements management’s view of an aspect of the financial performance of the Group as a whole, the Group shall disclose related information about its MPMs in a single note to the financial statements, including the description of such measures, calculations, reconciliations to the subtotal or total specified by IFRS Accounting Standards and the income tax and non -controlling interests effects of related reconciliation items. At the date of initial application of IFRS 18, an entity that is a venture capital organization, mutual fund, unit trust or similar entity is permitted to change its election from measuring an investment in an associate or joint venture from the equity method to fair value through profit or loss. The amendments to IAS 28 clarify that aforementioned “similar entity” includes the entity that performs the assessments in accordance with the requirements of IFRS 18 and con cludes that it has a main business activity of investing in particular types of assets. If eligible, the Group may apply the transition upon initial application. In addition, the following consequential amendments have been made to IAS 7 “Statement of Cash Flows”: The Group shall use operating profit or loss as the starting point when presenting cash flows from operating activities under the indirect method. Interest and dividends received by the Group shall be classified as investing activities, while interest and dividends paid shall be classified as financing activities. However, if, after assessment, the Group has a specific main operating activity, it shall determine how to classify dividends received, interest received and interest paid in the statement of cash flows by referring to how it classifies dividend income, interest income and interest expense in the statement of profit or loss. The total of each of these cash flows shall be classified in a single category in the statement of cash flows. The Group has decided not to early apply IFRS 18 and consequential amendments.
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- 11 - Except for the above -mentioned impacts, as of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the other impacts of the above amended standards and interpretations on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed. c. The IFRS Accounting Standards in issue but not yet endorsed and issued into effect by the FSC New, Amended and Revised Standards and Interpretations Effective Date Announced by IASB (Note) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” To be determined by IASB IFRS 20 “Regulatory Assets and Regulatory Liabilities” January 1, 2029 Note: Unless stated otherwise, the above -mentioned IFRS Accounting Standards are effective for annual reporting periods beginning on or after their respective effective dates. As of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the other impacts of the above amended standards and interpretations on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed. 4. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION Statement of Compliance These interim consolidated financial statements have been prepared in accordance with the Regulat ions Governing the Preparation of Financial Reports by Securities Issuers, or other regulations and IAS 34 “Interim Financial Reporting” as endorsed and issued into effect by the FSC. Disclosure information included in these interim consolidated financial statements is less than the disclosure information required in a complete set of annual consolidated financial statements. 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 assets which are measured at the fair value of plan assets less the present value of the defined benefit obligation. 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 the 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 the asset or liability.
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- 12 - Basis of Consolidation The consolidated financial statements incorporate the financial statements of HTC and the entities controlled by HTC (i.e., its subsidiaries). Income and expenses of sub sidiaries acquired or disposed of during the period are included in the consolidated statement of profit or loss and other comprehensive income from the effective date of acquisition up to the effective date of disposal, as appropriate. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group. All intra -group transactions, balances, income and expenses are eliminated in full upon consolidation. Total comprehens ive income of subsidiaries is attributed to the owners of the Group and to the non-controlling interests even if this results in the non -controlling interests having a deficit balance. Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non -controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Group. When the Group loses control of a subsidiary, a gain or loss is recognized in profit or loss and is calculated as the difference between (i) the aggregate of the fair value of the consideration received and any investment retained in the former subsidiary at its fair value at the da te when control is lost and (ii) the assets (including any goodwill) and liabilities and any non -controlling interests of the former subsidiary at their carrying amounts at the date when control is lost. The Group accounts for all amounts recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required had the Group directly disposed of the related assets or liabilities. See Note 13 to the consolidated financial statements for the detailed information on subsidiaries and Tables 6 and 7 (including the percentage of ownership and main businesses). Other Significant Accounting Policies Except for the following, refer to the consolidated financial statements for the year ended December 31, 2025. a. 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 p lan amendments, settlements, or other significant one-off events. b. Other long-term employee benefits Other long-term employee benefits are accounted for in the same way as the accounting required for defined benefit plans except that remeasurement is recognized in profit or loss. c. Income tax expense 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.
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- 13 - 5. MATERIAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY In the application of the Group’s accounting policies, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates. When developing material accounting estimates, the Group considers the possible impact of inflation, interest rate fluctuations, and U.S. reciprocal tariff measures on the cash flow projection, growth rates, discount rates, profitabilities and other relevant material estimates. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future p eriods if the revisions affect both current and future periods. The same material accounting judgments and key sources of estimation and uncertainty have been followed in these consolidated financial statements as were applied in the preparation of the consolidated financial statements for the year ended December 31, 2025. 6. CASH AND CASH EQUIVALENTS September 30, 2026 December 31, 2025 September 30, 2025 Cash on hand $ 1,116 $ 1,211 $ 1,163 Checking accounts and demand deposits 1,472,146 1,455,657 2,072,206 Time deposits (with original maturities less than three months) 617,039 1,452,667 1,874,407 $ 2,090,301 $ 2,909,535 $ 3,947,776 7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS September 30, 2026 December 31, 2025 September 30, 2025 Financial assets Financial assets held for trading Derivative financial assets (not under hedge accounting) Foreign exchange forward contracts $ 52,486 $ 40,729 $ 14,864 Financial assets mandatorily classified as at FVTPL Derivative financial assets (not under hedge accounting) Convertible bonds 86,158 60,460 77,625 Warrants 18,149 17,914 17,361 Non-derivative financial assets Foreign unlisted equity investments 103,482 94,287 91,373 Funds 21,627,108 14,829,351 15,503,106 $ 21,887,383 $ 15,042,741 $ 15,704,329 (Continued)
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- 14 - September 30, 2026 December 31, 2025 September 30, 2025 Current $ 17,787,945 $ 12,826,683 $ 14,002,514 Non-current 4,099,438 2,216,058 1,701,815 $ 21,887,383 $ 15,042,741 $ 15,704,329 Financial liabilities Financial liabilities held for trading Derivative financial liabilities (not under hedge accounting) Foreign exchange forward contracts $ 38,928 $ 9,441 $ 10,544 Non-derivative financial liabilities 32,788 - - $ 71,716 $ 9,441 $ 10,544 Current $ 47,480 $ 9,441 $ 10,544 Non-current 24,236 - - $ 71,716 $ 9,441 $ 10,544 (Concluded) As of September 30, 2026, the Group had committed but not yet paid for investments amounting to NT$9,585,219 thousand. The Group engaged in forward exchange contracts to manage its exposure to exchange rate fluctuations of foreign currency denominated assets and liabilities. At the end of the reporting period, outstand ing forward exchange contracts not under hedge accounting are as follows: Foreign Exchange Forward Contracts Buy/Sell Currency Maturity Date Notional Amount (In Thousands) September 30, 2026 Foreign exchange contracts Sell USD/NTD 2027.05.12 USD 52,000 Foreign exchange contracts Sell RMB/USD 2026.10.21 RMB 6,883 Foreign exchange contracts Sell EUR/USD 2026.10.07-2026.10.14 EUR 8,000 Foreign exchange contracts Sell JPY/USD 2026.10.07-2026.10.21 JPY 812,390 Foreign exchange contracts Sell USD/HKD 2026.10.21 HKD 26,000 Foreign exchange contracts Buy AUD/USD 2026.10.07 AUD 5,000 Foreign exchange contracts Buy RMB/USD 2026.10.14 RMB 16,000 Foreign exchange contracts Buy EUR/USD 2026.10.07 EUR 14,020 Foreign exchange contracts Buy GBP/USD 2026.10.07 GBP 663 Foreign exchange contracts Buy USD/NTD 2026.10.14-2027.05.12 USD 93,000 Foreign exchange contracts Buy SGD/USD 2026.10.07 SGD 2,000 Foreign exchange contracts Buy HKD/USD 2026.10.07 HKD 55,478 (Continued)
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- 15 - Buy/Sell Currency Maturity Date Notional Amount (In Thousands) December 31, 2025 Foreign exchange contracts Sell EUR/USD 2026.01.14 EUR 1,000 Foreign exchange contracts Sell JPY/USD 2026.01.14 JPY 347,390 Foreign exchange contracts Buy RMB/USD 2026.01.14 RMB 5,000 Foreign exchange contracts Buy USD/NTD 2026.01.21-2026.01.28 USD 155,000 Foreign exchange contracts Buy EUR/USD 2026.01.14 EUR 29,320 Foreign exchange contracts Buy GBP/USD 2026.01.14 GBP 5,663 Foreign exchange contracts Buy AUD/USD 2026.01.14 AUD 5,000 Foreign exchange contracts Buy SGD/USD 2026.01.14 SGD 2,000 Foreign exchange contracts Buy HKD/USD 2026.01.14 HKD 55,478 September 30, 2025 Foreign exchange contracts Sell EUR/USD 2025.10.15-2025.10.22 EUR 3,000 Foreign exchange contracts Sell JPY/USD 2025.10.22 JPY 247,390 Foreign exchange contracts Buy USD/NTD 2025.10.08-2025.10.22 USD 167,000 Foreign exchange contracts Buy EUR/USD 2025.10.15-2025.10.22 EUR 30,500 Foreign exchange contracts Buy AUD/USD 2025.10.22 AUD 5,000 Foreign exchange contracts Buy GBP/USD 2025.10.15 GBP 6,500 Foreign exchange contracts Buy SGD/USD 2025.10.15 SGD 2,000 Foreign exchange contracts Buy HKD/USD 2025.10.15-2025.10.22 HKD 60,826 (Concluded) 8. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME Investments in Equity Instruments at FVTOCI September 30, 2026 December 31, 2025 September 30, 2025 Domestic investments Listed shares $ 145,286 $ 92,188 $ 84,568 Unlisted equity investments 33,802 39,933 58,075 179,088 132,121 142,643 Foreign investments Listed shares 104,693 353,916 404,233 Unlisted equity investments 5,052,788 4,451,997 4,694,472 5,157,481 4,805,913 5,098,705 $ 5,336,569 $ 4,938,034 $ 5,241,348 Current $ 2,781 $ 206,397 $ 260,113 Non-current 5,333,788 4,731,637 4,981,235 $ 5,336,569 $ 4,938,034 $ 5,241,348 As of September 30, 2026, the Group had committed but not yet paid for investment amounting to NT$160,724 thousand.
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- 16 - These investments in equity instruments are not held for trading. Instead, they are held for the purpose of promoting the development of the Metaverse sector and making profit from long -term investments. Management decided to designate these investments in equity instruments as at FVTOCI as they have determined 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. According to the Q&A issued by the FSC, investments in limited partnership held before June 30, 2023 where the contract stipulates a limited duration is subject to the passing of the resolution of the partne rs’ meeting for duration extensions. The Group elected not to retrospectively apply the Q&A “Classification of Investments in a Limited Partnership” issued by the Accounting Research and Development Foundation (ARDF), therefore the abovementioned investments remain classified as investments in equity instruments at FVTOCI. 9. OTHER FINANCIAL ASSETS September 30, 2026 December 31, 2025 September 30, 2025 Time deposits with original maturities of more than three months $ 148,296 $ 112,394 $ 487,989 Restricted time deposits 125,088 121,338 143,177 Restricted demand deposits 498 642 1,599 $ 273,882 $ 234,374 $ 632,765 Current $ 197,774 $ 113,036 $ 489,588 Non-current 76,108 121,338 143,177 $ 273,882 $ 234,374 $ 632,765 For details of pledged other financial assets, please refer to Note 32 to the consolidated financial statements. 10. NOTES, TRADE RECEIVABLES AND OTHER RECEIVABLES September 30, 2026 December 31, 2025 September 30, 2025 Notes, trade and overdue receivables At amortized cost Notes receivable $ 29 $ 22 $ 20 Trade receivables 520,736 528,904 486,366 Trade receivables - related parties 5,210 9,844 9,009 Overdue receivables 32,301 28,060 25,656 Less: Allowances for impairment loss (27,041) (32,040) (33,944) Less: Allowances for impairment loss - overdue receivables (32,301) (28,060) (25,656) $ 498,934 $ 506,730 $ 461,451 (Continued)
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- 17 - September 30, 2026 December 31, 2025 September 30, 2025 Current $ 498,934 $ 506,730 $ 461,451 Non-current - - - $ 498,934 $ 506,730 $ 461,451 Other receivables Interest receivables $ 1,371 $ 2,513 $ 8,322 VAT refund receivables 4,580 1,555 - Receivables from disposal of investments 254,724 2,560,969 - Dividends receivable 20,296 - - Others 55,868 39,423 733 $ 336,839 $ 2,604,460 $ 9,055 Current $ 336,839 $ 2,604,460 $ 9,055 Non-current - - - $ 336,839 $ 2,604,460 $ 9,055 (Concluded) a. Trade receivables at amortized cost The average credit period of the sales of goods was 30 -75 days. No interest was charged on trade receivables for the first 75 days from the date of the invoice. Thereafter, interest was charge d at the annual interest rate specified in the contract on the outstanding balance. The Group basically adopted a policy of dealing with entities that are rated the equivalent of investment grade or higher and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. Credit rating information is obtained from independent rating agencies where available or, if not available, the Group uses other publicly available financial information or its own t rading records to rate its major customers. The Group’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved annually. In order to minimize credit risk, management has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow -up actions are 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, management considers the Group’s credit risk to have significantly reduced. The Group uses the expected credit loss during the duration to recognize the allowance for losses of accounts receivable. The expected credit loss during the duration is mainly based on the customer’s past default record, current financial situation and industrial economic situation.
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- 18 - The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty without realistic prospect of recovery. For trade receivables that have been written off, the Group continues to engage in enforcement activities to recover the receivables due. Where recoveries are made, these amounts are recognized in profit or loss. The following table details the loss allowance of notes and trade receivables: September 30, 2026 Not Yet Due 1-90 Days 91-180 Days Over 180 Days Total Gross carrying amount $ 452,261 $ 54,152 $ 12,030 $ 7,532 $ 525,975 Loss allowance (Lifetime ECL) (10,495) (4,703) (4,311) (7,532) (27,041) Amortized cost $ 441,766 $ 49,449 $ 7,719 $ - $ 498,934 December 31, 2025 Not Yet Due 1-90 Days 91-180 Days Over 180 Days Total Gross carrying amount $ 407,790 $ 59,887 $ 71,093 $ - $ 538,770 Loss allowance (Lifetime ECL) (18,037) (4,835) (9,168) - (32,040) Amortized cost $ 389,753 $ 55,052 $ 61,925 $ - $ 506,730 September 30, 2025 Not Yet Due 1-90 Days 91-180 Days Over 180 Days Total Gross carrying amount $ 375,507 $ 103,750 $ 16,138 $ - $ 495,395 Loss allowance (Lifetime ECL) (24,238) (5,757) (3,949) - (33,944) Amortized cost $ 351,269 $ 97,993 $ 12,189 $ - $ 461,451 The movements of the loss allowance of trade receivables and overdue receivables were as follows: For the Nine Months Ended September 30 2026 2025 Balance, beginning of the period $ 60,100 $ 59,159 Add: Loss allowance recognized - 908 Less: Loss allowance reversed (1,326) - Foreign exchange gains and losses 568 (467) Balance, end of the period $ 59,342 $ 59,600 b. Other receivables As of December 31, 2025, t he receivable from disposal of investments primarily represents the proceeds arising from the Group’s redemption of a fund, which were fully collected in 2026.
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- 19 - 11. INVENTORIES September 30, 2026 December 31, 2025 September 30, 2025 Finished goods $ 315,077 $ 264,751 $ 296,322 Work-in-process 117,847 - 36,341 Semi-finished goods 65,384 41,759 41,540 Raw materials 279,148 141,374 175,780 Inventory in transit 30 2,359 1,696 $ 777,486 $ 450,243 $ 551,679 The cost of inventories write -down (reversal gain) was NT$58,231 thousand and NT$21,165 thousand for the three months ended and nine months ended September 30, 2026, of which NT$58,231 thousand and NT$88,802 thousand was recognized as operating costs , respectively. The remaining NT$0 thousand and NT$(67,637) thousand was recognized under other gains and losses . The cost of inventories write -down (reversal gain) was NT$(13,995) thousand and NT$299,653 thousand for the three months and nine months ended September 30, 2025, of which NT$(24,995) thousand and NT$137,653 thousand was recognized as operating costs, respectively. The remaining NT$11,000 thousand and NT$162,000 thousand was recognized under other gains and losses. Please refer to Note 25 to the consolidated financial statements for details. 12. PREPAYMENTS September 30, 2026 December 31, 2025 September 30, 2025 Prepaid expenses $ 149,885 $ 176,110 $ 202,397 Prepaid payroll 12,515 10,602 16,964 Net input VAT 7,157 6,481 6,305 Prepaid royalties 1,881 884 1,426 Prepaid equipment 589 589 589 Prepayments to suppliers 75 37 34,016 $ 172,102 $ 194,703 $ 261,697 Current $ 170,530 $ 193,044 $ 259,807 Non-current 1,572 1,659 1,890 $ 172,102 $ 194,703 $ 261,697
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- 20 - 13. SUBSIDIARIES a. Subsidiaries included in the consolidated financial statements The consolidated entities as of September 30, 2026, December 31, 2025 and September 30, 2025 were as follows: % of Ownership Investor Investee Main Businesses September 30, 2026 December 31, 2025 September 30, 2025 Remark HTC Corporation H.T.C. (B.V.I.) Corp. International holding company and general investing activities 100.00 100.00 100.00 - High Tech Computer Asia Pacific Pte. Ltd. International holding company; marketing, repair and after-sales services 100.00 100.00 100.00 - HTC Investment Corporation General investing activities 100.00 100.00 100.00 - HTC Holding B.V. International holding company 0.01 0.01 0.01 - HTC Investment One (BVI) Corporation Holding S3 Graphics Co., Ltd. and general investing activities 100.00 100.00 100.00 - HTC Investment (B.V.I) Corporation General investing activities 100.00 100.00 100.00 - HungXu Holding (BVI) Corp. International holding company 100.00 100.00 100.00 - HTC Corporation HTC VIVE Investment (BVI) Corp. General investing activities 100.00 100.00 100.00 - DeepQ Holding (BVI) Corp. International holding company - 100.00 100.00 (1) HTC VR Content (BVI) Corp. ″ 100.00 100.00 100.00 - HTC Smart phone (BVI) Corp. ″ - 100.00 100.00 (2) HTC Europe CO., LTD. International holding company, marketing, repair and after-sales services 100.00 100.00 100.00 - HungYao Technology CO., LTD. Manufacturing of electronic parts 100.00 100.00 100.00 - High Tech Computer Asia Pacific Pte Ltd. HTC (Australia and New Zealand) PTY. Ltd. Marketing, repair and after-sales services 100.00 100.00 100.00 - HTC Philippines Corporation ″ - - - (3) HTC India Private Ltd. ″ 99.00 99.00 99.00 - HTC Communication Co., Ltd. Sale of virtual reality devices and smart mobile devices and after-sales services 100.00 100.00 100.00 - HTC HK, Limited International holding company; marketing, repair and after-sales services 100.00 100.00 100.00 - HTC Holding B.V. International holding company 99.99 99.99 99.99 - HTC Communication Technologies (SH) Design, research and development of application software 100.00 100.00 100.00 - HTC Investment One (BVI) Corporation S3 Graphics Co., Ltd. Design, research and development of graphics technology 100.00 100.00 100.00 - HTC Communication Technologies (SH) HTC Communication (BJ) Tech Co. Design, research and development of application software 100.00 100.00 100.00 (4) HTC HK, Limited HTC Corporation (Shanghai WGQ) Smart mobile devices examination and after-sale services and technique consultations - - - (5) HTC Electronics (Shanghai) Co., Ltd. Manufacture and sale of virtual reality devices and smart mobile devices 100.00 100.00 100.00 - HTC Holding B.V. HTC Netherlands B.V. International holding company; marketing, repair and after-sales services 100.00 100.00 100.00 - HTC India Private Ltd. Marketing, repair and after-sales services 1.00 1.00 1.00 - HTC Communication Solutions Mexico, S.A DE C.V. ″ 1.00 1.00 1.00 - HTC Servicios DE Operacion Mexico, S.A DE C.V. Human resources management 1.00 1.00 1.00 - HTC Netherlands B.V. HTC Belgium BV Marketing, repair and after-sales services 100.00 100.00 100.00 - HTC NIPPON Corporation Sale of virtual reality devices and smart mobile devices 100.00 100.00 100.00 - HTC FRANCE CORPORATION Marketing, repair and after-sales services 100.00 100.00 100.00 - HTC Nordic ApS. ″ 100.00 100.00 100.00 (6) HTC Italia SRL ″ - - - (7) HTC Germany GmbH ″ 100.00 100.00 100.00 - HTC Iberia, S.L. ″ - - - (8) (Continued)
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- 21 - % of Ownership Investor Investee Main Businesses September 30, 2026 December 31, 2025 September 30, 2025 Remark HTC Poland sp. z.o.o. ″ 100.00 100.00 100.00 - HTC Communication Canada, Ltd. ″ 100.00 100.00 100.00 - HTC Middle East FZ-LLC ″ 100.00 100.00 100.00 - HTC Communication Solutions Mexico, S.A DE C.V. ″ 99.00 99.00 99.00 - HTC Servicios DE Operacion Mexico, S.A DE C.V. Human resources management 99.00 99.00 99.00 - HTC EUROPE HTC America Holding Inc. International holding company 100.00 100.00 100.00 - CO., LTD. DeepQ Holding Corporation ″ 100.00 100.00 100.00 - VIVE Arts Holding Corporation ″ 100.00 100.00 100.00 - REIGN Technology Corporation ″ 100.00 100.00 100.00 - Viverse Holding Corporation ″ 100.00 100.00 100.00 - DeepQ Holding Corporation DeepQ (BVI) Corp. International holding company 100.00 100.00 100.00 - DeepQ (BVI) Corp. DeepQ Technology Corp. Medical technology and health care 100.00 100.00 100.00 - DeepQ Technology (Beijing) Development and marketing of software technology - 100.00 100.00 (9) VIVE Arts Holding VIVE Arts Corporation Digital art 100.00 100.00 100.00 - Corporation VIVE Arts Limited ″ 100.00 100.00 100.00 - REIGN Technology Corporation REIGN Technology Corporation Construction, application and after-sales services of 5G 100.00 100.00 100.00 - Viverse Holding Corporation Viverse Limited (UK) International holding company 100.00 100.00 100.00 - Viverse Limited (UK) Viverse Limited (Ireland) Market development and sale of virtual reality contents 100.00 100.00 100.00 - Viveport Digital Corporation Virtual reality platform software development and promotion services 100.00 100.00 100.00 - HTC America Holding Inc. HTC America Inc. Sale of virtual reality devices and smart mobile devices 100.00 100.00 100.00 - One & Company Design, Inc. Design, research and development of application software 100.00 100.00 100.00 - HTC America Innovation Inc. ″ - 100.00 100.00 (10) HTC America Content Services, Inc. Online/download media services 100.00 100.00 100.00 - Dashwire, Inc. Design and management of cloud synchronization technology 100.00 100.00 100.00 - Inquisitive Minds, Inc. Development and sale of digital education platform - - - (11) HungXu Holding (BVI) Corp. HungXu Technology (BVI) Corp. International holding company 100.00 100.00 100.00 - HungXu Technology (BVI) Corp. HungXu TECH Corp. Research and development of virtual reality devices 100.00 100.00 100.00 (12) HTC Investment (BVI) Corporation HTC VIVE TECH (HK) Limited Research, development and sale of virtual reality devices 100.00 100.00 100.00 (13) HTC VIVE TECH (HK) Limited HTC VIVE TECH (Beijing) Research, development and sale of virtual reality devices - - 100.00 (14) HTC VR Content (BVI) Corp. Uomo Vitruviano Corp. Development of virtual reality contents 100.00 100.00 100.00 - (Concluded) Remark: 1) DeepQ Holding (BVI) Corp. completed the dissolution process on September 16, 2026. 2) HTC Smartphone (BVI) Corp. completed the dissolution process on February 19, 2026. 3) HTC Philippines Corporation has completed the company deregistration process and recognized the related loss and wrote it off in the second quarter of 2025. 4) The dissolution of HTC Communication (BJ) Tech Co. was approved in its shareholders’ meeting held on December 31, 2025, and the liquidation process is still ongoing. 5) The dissolution of HTC Corporation (Shanghai WGQ) was approved in its shareholders’ meeting held on July 31, 2024, and the deregistration was completed on April 7, 2025.
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- 22 - 6) The dissolution of HTC Nordic ApS. was approved by the Board of Directors on June 12, 2026, and the liquidation process is still ongoing. 7) HTC Italia SRL completed the liquidation process on March 13, 2025. 8) HTC Iberia S.L. completed the liquidation process on March 18, 2025. 9) The dissolution of DeepQ Technology (Beijing) was approved in its shareholders’ meeting held on December 31, 2025, and the deregistration was completed on September 21, 2026. 10) The dissolution of HTC America Innovation Inc. was approved at the board of directors held o n August 2026, and the liquidation process is still ongoing. 11) Inquisitive Minds, Inc. completed the liquidation process on February 20, 2025. 12) The dissolution of Hung Xu TECH Corp. was approved in its shareholders ’ meeting held on December 31, 2024, and the liquidation process is still ongoing. 13) The dissolution of HTC VIVE TECH (HK) Limited was approved in its shareholders ’meeting held on May 29, 2026, and the liquidation process is still ongoing. 14) The dissolution of HTC VIVE TECH (Beijing) was approved in its shareholders ’ meeting held on July 1, 2025, and the deregistration was completed on September 25, 2025. b. Subsidiaries excluded from the consolidated financial statements: None. c. Details of subsidiaries that have material non-controlling interests: None. 14. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD September 30, 2026 December 31, 2025 September 30, 2025 Investment in associates $ 748,021 $ 763,493 $ 755,699 Investments in joint ventures 113,519 98,799 104,791 $ 861,540 $ 862,292 $ 860,490 Investments in Associates-Associates That Are Not Individually Material September 30, 2026 December 31, 2025 September 30, 2025 Unlisted equity investments MOR Museum Inc. $ 3,195 $ 3,489 $ 3,482 Temple of Light Limited 5,031 5,695 9,711 Backlight Studio SAS - - 10,729 Lucid Realities SAS 3,217 10,698 27,927 Gui Zhou Wei Ai Technology Group Co., Ltd. 90,941 87,323 83,038 Small Creative SAS 7,304 7,083 18,808 VRChat, Inc. 631,677 624,401 602,004 Architect 6,656 24,804 - $ 748,021 $ 763,493 $ 755,699
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- 23 - In January 2025, the Group subscribed 459 ordinary shares of Backlight Studio SAS through NT$40,884 thousand in cash; and accordingly owned 30.02% shareholdings of Backlight Studio SAS and the Group’s able to exercise significant influence over Backlight Studio SAS. In February 2025, the Group subscribed 20,000 ordinary shares of Lucid Realities SAS through NT$68,472 thousand in cash; and accordingly owned 25% shareholdings of Lucid Realities SAS and the Group’s able to exercise significant influence over Lucid Realities SAS. In October 2025, the Group subscribed 32,746 preference shares of Architect through NT$107,039 thousand in cash; and accordingly owned 22% shareholdings of Architect and the Group’s able to exercise significant influence over Architect. At the end of the reporting period s, the percentage of ownership and voting rights in associates held by the Group were as follows: Name of Associate September 30, 2026 December 31, 2025 September 30, 2025 East West Artists, LLC 30.00% 30.00% 30.00% Steel Wool Games, Inc. 49.00% 49.00% 49.00% Surgical Theater, LLC 16.30% 16.30% 16.30% MOR Museum Inc. 25.00% 25.00% 25.00% Temple of Light Limited 25.00% 25.00% 25.00% Backlight Studio SAS 30.02% 30.02% 30.02% Lucid Realities SAS 25.00% 25.00% 25.00% Gui Zhou Wei Ai Technology Group Co., Ltd. 26.05% 26.05% 26.05% Small Creative SAS 28.01% 28.01% 28.01% VRChat, Inc. 34.02% 34.02% 34.02% Architect 22.00% 22.00% - Aggregate information of associates that are not individually material: For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 The Group’s share of: Income (loss) from continuing operations $ 7,992 $ (50,298) $ (27,537) $ (200,416) Other comprehensive income - - - - Total comprehensive income (loss) for the period $ 7,992 $ (50,298) $ (27,537) $ (200,416) For investments in associates accounted for under the equity method, management has determined that there is no material impact arising from its reliance on the investee’s financial statements (unreviewed) to calculate the Group’s share of profit or loss and other comprehensive income.
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- 24 - Investments in Joint Ventures September 30, 2026 December 31, 2025 September 30, 2025 Unlisted equity investments XI’an Hongwen Digital Technology Co., Ltd. $ 106,277 $ 93,788 $ 96,768 XR Addict 7,242 5,011 8,023 $ 113,519 $ 98,799 $ 104,791 The Group’s invested a joint venture, XR Addict, with other company in June 2025 and obtained 15.96% ownership interest of XR Addict. In July 2026, the Group participated in a capital increase of XR Addict, contributing cash of NT$9,299 thousand , increasing i ts ownership interest from 15.96% to 19.24% . Proportion of the Group’s ownership has not yet reached control. However, according to the mutual agreements among stockholders, the Group has substantive participation in the significant operating decisions of XR Addict. As the Group is not able to unilaterally direct the relevant activities of XR Addict, the investment is subject to joint control with other parties and is therefore accounted for as a joint venture. Aggregate information of investments in joint ventures that are not individually material: For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 The Group’s share of: (Loss) income from continuing operations $ (5,718) $ (19,035) $ 185 $ (21,168) Other comprehensive income - - - - Total comprehensive (loss) income for the period $ (5,718) $ (19,035) $ 185 $ (21,168) For investments in joint ventures accounted for us ing the equity method, management has determined that there is no material impact arising from its reliance on the investee’s financial statements (unreviewed) to calculate the Group’s share of profit or loss and other comprehensive income. 15. PROPERTY, PLANT AND EQUIPMENT September 30, 2026 December 31, 2025 September 30, 2025 Carrying amounts Land $ 4,628,786 $ 4,627,902 $ 4,626,227 Buildings 1,600,751 1,655,104 1,666,373 Machinery and equipment 6,727 11,081 11,771 Other equipment 29,334 32,269 35,731 $ 6,265,598 $ 6,326,356 $ 6,340,102
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- 25 - Movements of property, plant and equipment for the nine months ended September 30, 2026 and 2025 were as follows: For the Nine Months Ended September 30, 2026 Land Buildings Machinery and Equipment Other Equipment Total Cost Balance, beginning of the period $ 4,627,902 $ 3,348,293 $ 2,229,695 $ 632,421 $ 10,838,311 Additions - 3,225 810 9,539 13,574 Disposals - - (131,358) (11,502) (142,860) Reclassification - - (987) 987 - Reclassified to expenses - - (666) - (666) Effect of foreign currency exchange differences 884 2,389 193 4,272 7,738 Balance, end of the period 4,628,786 3,353,907 2,097,687 635,717 10,716,097 Accumulated depreciation Balance, beginning of the period - 1,693,189 2,158,394 595,716 4,447,299 Depreciation expenses - 59,906 3,229 11,367 74,502 Disposals - - (130,680) (9,141) (139,821) Reclassified to expenses - - (599) - (599) Effect of foreign currency exchange differences - 61 396 4,005 4,462 Balance, end of the period - 1,753,156 2,030,740 601,947 4,385,843 Accumulated impairment Balance, beginning of the period - - 60,220 4,436 64,656 Effect of foreign currency exchange differences - - - - - Balance, end of the period - - 60,220 4,436 64,656 Net book value, end of the period $ 4,628,786 $ 1,600,751 $ 6,727 $ 29,334 $ 6,265,598 For the Nine Months Ended September 30, 2025 Land Buildings Machinery and Equipment Other Equipment Total Cost Balance, beginning of the period $ 4,749,513 $ 3,663,939 $ 2,756,807 $ 753,751 $ 11,924,010 Additions 266,129 10,143 2,115 11,116 289,503 Disposals (384,739) (314,113) (528,693) (57,843) (1,285,388) Reclassification - (941) 941 - - Effect of foreign currency exchange differences (4,676) (13,203) (1,039) (5,694) (24,612) Balance, end of the period 4,626,227 3,345,825 2,230,131 701,330 10,903,513 Accumulated depreciation Balance, beginning of the period - 1,862,403 2,642,479 705,804 5,210,686 Depreciation expenses - 61,045 4,046 15,418 80,509 Disposals - (242,070) (487,894) (55,001) (784,965) Effect of foreign currency exchange differences - (1,926) (491) (5,058) (7,475) Balance, end of the period - 1,679,452 2,158,140 661,163 4,498,755 Accumulated impairment Balance, beginning of the period - - 98,892 4,567 103,459 Disposals - - (38,672) (131) (38,803) Effect of foreign currency exchange differences - - - - - Balance, end of the period - - 60,220 4,436 64,656 Net book value, end of the period $ 4,626,227 $ 1,666,373 $ 11,771 $ 35,731 $ 6,340,102
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- 26 - The above-mentioned items of property, plant and equipment are depreciated on a straight-line basis over the estimated useful lives as follows: Buildings 5-50 years Machinery and equipment 3-6 years Other equipment 3-5 years The major component of the buildings held by the Group included plants, electro -powering machinery and engineering systems, etc., which are depreciated over their estimated useful lives of 40 to 50 years, 20 years and 5 to 10 years, respectively. In May 2025, the Group entered into a real estate sales and purchase agreement with non -related party to sell land and buildings located in Taoyuan, which were recognized as property, plant and equipment and investment properties, for a transaction price of NT$5,638,000 thousand. The transaction was completed in the third quarter of 2025. Property pledged as collateral for bank borrowings are set out in Note 32 to the consolidated financial statements. There were no capitalized interests for the nine months ended September 30, 2026 and 2025. 16. LEASE ARRANGEMENTS a. Right-of-use assets September 30, 2026 December 31, 2025 September 30, 2025 Carrying amounts Buildings $ 30,484 $ 38,545 $ 42,286 For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 Additions to right-of-use assets $ 6,975 $ - Depreciation charge for right-of-use assets Buildings $ 5,875 $ 5,510 $ 16,910 $ 19,631 b. Lease liabilities September 30, 2026 December 31, 2025 September 30, 2025 Carrying amounts Current $ 18,130 $ 15,930 $ 17,076 Non-current $ 15,680 $ 26,000 $ 28,513
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- 27 - Range of discount rate for lease liabilities as follows: September 30, 2026 December 31, 2025 September 30, 2025 Buildings 3.00%-6.87% 3.00%-6.87% 3.00%-6.87% c. Material lease-in activities and terms The Group leases certain buildings for the use of plants and offices with original lease terms of 2 to 5 years. The Group does not have bargain purchase options to acquire the buildings at the end of the lease terms. In addition, the Group is prohibited from subleasing or transferring all or any portion of the underlying assets without the lessor’s consent. d. Other lease information Lease arrangements under operating leases for the leasing out of investment properties are set out in Note 17 to the consolidated financial statements. For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 Expenses relating to short-term leases $ 1,807 $ 1,900 $ 6,139 $ 4,963 Total cash outflow for leases $ (24,582) $ (25,641) The Group leases certain office equipment and other equipment which qualify as short -term leases and low-value asset leases. The Group has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases. 17. INVESTMENT PROPERTIES, NET September 30, 2026 December 31, 2025 September 30, 2025 Carrying amounts Land $ 304,871 $ 303,833 $ 297,987 Buildings 1,193,492 1,236,160 1,239,900 $ 1,498,363 $ 1,539,993 $ 1,537,887 Movements of investment properties, net for the nine months ended September 30, 2026 and 2025 were as follows: For the Nine Months Ended September 30, 2026 Land Buildings Total Cost Balance, beginning of the period $ 303,833 $ 2,605,274 $ 2,909,107 Additions - 405 405 Effects of foreign currency exchange differences 1,038 1,887 2,925 Balance, end of the period 304,871 2,607,566 2,912,437 (Continued)
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- 28 - For the Nine Months Ended September 30, 2026 Land Buildings Total Accumulated depreciation Balance, beginning of the period $ - $ 1,160,816 $ 1,160,816 Depreciation expenses - 45,148 45,148 Effects of foreign currency exchange differences - 111 111 Balance, end of the period - 1,206,075 1,206,075 Accumulated impairment Balance, beginning of the period - 208,298 208,298 Effects of foreign currency exchange differences - (299) (299) Balance, end of the period - 207,999 207,999 Net book value, end of the period $ 304,871 $ 1,193,492 $ 1,498,363 (Concluded) For the Nine Months Ended September 30, 2025 Land Buildings Total Cost Balance, beginning of the period $ 304,796 $ 4,191,670 $ 4,496,466 Additions - 833 833 Disposals - (1,591,654) (1,591,654) Effects of foreign currency exchange differences (6,809) (19,013) (25,822) Balance, end of the period 297,987 2,581,836 2,879,823 Accumulated depreciation Balance, beginning of the period - 1,771,188 1,771,188 Depreciation expenses - 60,744 60,744 Disposals - (688,956) (688,956) Effects of foreign currency exchange differences - (2,749) (2,749) Balance, end of the period - 1,140,227 1,140,227 Accumulated impairment Balance, beginning of the period - - - Recognize - 209,331 209,331 Effects of foreign currency exchange differences - (7,622) (7,622) Balance, end of the period - 201,709 201,709 Net book value, end of period $ 297,987 $ 1,239,900 $ 1,537,887 In March 202 5, the consolidated company assessed that the carrying amount of certain buildings was not recoverable and recognized an impairment loss of NT$209,331 thousand, which was recorded under other gains and losses. Please refer to Note 25 to the consolidated financial statements. The above-mentioned investment properties were leased out for 3 to 5 years. The lease contracts contain market review clauses in the event that the lessees exercise their options to extend. The lessees do not have bargain purchase options to acquire the investment properties at the expiry of the lease periods.
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- 29 - The investment properties are depreciated using the straight-line method over their estimated useful lives as follows: Main buildings 26-50 years Electricity distribution system 20 years Air-conditioning 5-10 years Others 3-5 years In May 2025, the Group entered into a real estate sales and purchase agreement with non -related party to sell land and buildings located in Taoyuan. Please refer to Note 15 to the consolidat ed financial statements for details. The fair value for the investment properties as of September 30, 2026, December 31, 2025 and September 30, 2025 were NT$3,804,230 thousand, NT$3,800,976 thousand and NT$3,607,121 thousand, respectively. The fair values of some investment properties were appraised by independent qualified professional appraisers and measured using Level 3 inputs. Additionally, the fair values of some investment properties were evaluated by the management with reference to market evidence of transaction prices for similar properties. The investment properties pledged as collateral for bank borrowings are set out in Note 32 to the consolidated financial statements. 18. INTANGIBLE ASSETS September 30, 2026 December 31, 2025 September 30, 2025 Carrying amounts Patents $ - $ - $ - Goodwill - - - Other intangible assets 72,399 414,134 416,860 $ 72,399 $ 414,134 $ 416,860 Movements of intangible assets for the nine months ended September 30, 2026 and 2025 were as follows: For the Nine Months Ended September 30, 2026 Patents Goodwill Other Intangible Assets Total Cost Balance, beginning of the period $ 9,715,590 $ 497,120 $ 1,063,031 $ 11,275,741 Disposals - - (321,299) (321,299) Effects of foreign currency exchange differences 123,450 6,509 6,952 136,911 Balance, end of the period 9,839,040 503,629 748,684 11,091,353 (Continued)
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- 30 - For the Nine Months Ended September 30, 2026 Patents Goodwill Other Intangible Assets Total Accumulated amortization Balance, beginning of the period $ 9,604,505 $ - $ 421,612 $ 10,026,117 Amortization expenses - - 13,327 13,327 Effects of foreign currency exchange differences 123,450 - 4,281 127,731 Balance, end of the period 9,727,955 - 439,220 10,167,175 Accumulated impairment Balance, beginning of the period 111,085 497,120 227,285 835,490 Impairment losses - - 6,135 6,135 Effects of foreign currency exchange differences - 6,509 3,645 10,154 Balance, end of the period 111,085 503,629 237,065 851,779 Carrying amount, end of the period $ - $ - $ 72,399 $ 72,399 (Concluded) For the Nine Months Ended September 30, 2025 Patents Goodwill Other Intangible Assets Total Cost Balance, beginning of the period $ 10,123,890 $ 518,647 $ 945,839 $ 11,588,376 Additions - - 135,118 135,118 Effects of foreign currency exchange differences (699,750) (36,894) (38,786) (775,430) Balance, end of the period 9,424,140 481,753 1,042,171 10,948,064 Accumulated amortization Balance, beginning of the period 10,012,805 - 417,537 10,430,342 Amortization expenses - - 12,930 12,930 Effects of foreign currency exchange differences (699,750) - (25,098) (724,848) Balance, end of the period 9,313,055 - 405,369 9,718,424 Accumulated impairment Balance, beginning of the period 111,085 518,647 201,908 831,640 Impairment losses - - 34,627 34,627 Effects of foreign currency exchange differences - (36,894) (16,593) (53,487) Balance, end of the period 111,085 481,753 219,942 812,780 Carrying amount, end of the period $ - $ - $ 416,860 $ 416,860
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- 31 - Other intangible assets include some digital assets with non -determined service life, intangible assets with definite service life. Amortization expense is calculated on a straight -line basis on the following durable years: Other intangible assets 3-9 years 19. BORROWINGS a. Short-term borrowings September 30, 2026 December 31, 2025 September 30, 2025 Unsecured borrowings Line of credit borrowings $ 1,400,000 $ 1,000,000 $ - The range of interest rates on line of credit borrowings was 2.51% -2.59% and 2.10% per annum as of September 30, 2026 and December 31, 2025, respectively. b. Long-term borrowings September 30, 2026 December 31, 2025 September 30, 2025 Secured borrowings Bank loans $ 5,981,605 $ 2,200,000 $ 2,900,000 Unsecured borrowings Bank loans - - - Less: Current portion - - - Long-term borrowings $ 5,981,605 $ 2,200,000 $ 2,900,000 To support long -term development, on June 15, 2026, the Group entered into a credit agreement with CTBC Bank. The credit facilities provide secured financing with a total credit line of NT$9.99 billion, to support future operating growth capital needs. The Group is required to maintain certain financial covenants including current ratio, quick ratio, debt ratio a nd minimum shareholders’ equity, during the tenor of the loan. The computations of the financial ratios mentioned above are determined based on the audited consolidated financial statements or quarterly reviewed consolidated financial statements. As of September 30, 2026, the Group has met the financial covenants mentioned above. The Group borrowed at an interest rate of 2.30%-3.95%, 2.30% and 2.30%, per annum at September 30, 2026, December 31, 2025 and September 30, 2025, respectively. The Group pledged land and buildings as collateral for the long -term borrowings (Please refer to Note 32 to the consolidated financial statements).
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- 32 - 20. NOTES AND TRADE PAYABLES September 30, 2026 December 31, 2025 September 30, 2025 Notes payable $ - $ 31 $ 40 Trade payables 4,907,147 4,782,808 4,747,106 Trade payables - related parties 373 368 483 $ 4,907,520 $ 4,783,207 $ 4,747,629 The average term of payment is 2 -4 months. The Group has financial risk management policies in place to ensure that all payables are paid within the pre -agreed credit terms. The Group periodically negotiates with vendors to amend payment obligations. Amendments, based on their nature, are adjusted in operating cost or expense. 21. OTHER LIABILITIES September 30, 2026 December 31, 2025 September 30, 2025 Other payables Accrued expenses $ 2,349,465 $ 2,713,911 $ 2,762,126 Payables for interests 9,695 2,770 1,544 Payables for purchase of equipment 1,981 53 5,294 $ 2,361,141 $ 2,716,734 $ 2,768,964 Other current liabilities Advance receipts $ 316,770 $ 334,770 $ 321,025 Agency receipts 42,005 46,301 56,571 Others 85,892 99,190 103,508 $ 444,667 $ 480,261 $ 481,104 Accrued Expenses September 30, 2026 December 31, 2025 September 30, 2025 Services $ 651,336 $ 596,893 $ 593,544 Salaries, bonuses and compensation 498,650 772,642 870,491 Marketing 498,308 631,564 617,397 Insurance 35,617 30,007 32,299 Materials and molding expenses 33,741 34,425 40,563 Import, export and freight 15,699 22,411 25,381 Repairs, maintenance and sundry purchases 9,737 13,489 15,152 Others 606,377 612,480 567,299 $ 2,349,465 $ 2,713,911 $ 2,762,126
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- 33 - 22. PROVISIONS September 30, 2026 December 31, 2025 September 30, 2025 Warranties $ 235,823 $ 279,983 $ 294,316 Others 3,557 5,224 6,124 $ 239,380 $ 285,207 $ 300,440 Movements of provisions for the nine months ended September 30, 2026 and 2025 were as follows: For the Nine Months Ended September 30, 2026 Warranty Provision Others Total Balance, beginning of period $ 279,983 $ 5,224 $ 285,207 Provisions recognized (reversed) 34,930 (1,667) 33,263 Usage (80,311) - (80,311) Effect of foreign currency exchange differences 1,221 - 1,221 Balance, end of period $ 235,823 $ 3,557 $ 239,380 For the Nine Months Ended September 30, 2025 Warranty Provision Others Total Balance, beginning of period $ 377,539 $ 6,386 $ 383,925 Provisions recognized (reversed) 38,790 (262) 38,528 Usage (120,661) - (120,661) Effect of foreign currency exchange differences (1,352) - (1,352) Balance, end of period $ 294,316 $ 6,124 $ 300,440 The Group provides warranty services to its customers. The warranty period varies by product and is generally one to two years. The warranties are estimated based on an evaluation of the products under warranty, historical warranty trends, and pertinent factors. Onerous contracts are those in which the Group’s unavoidable costs of meeting the contractual obligations exceed the economic benefits expected to be received from the contrac t. The present obligations arising under onerous contracts are recognized and measured as provisions.
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- 34 - 23. EQUITY Share Capital a. Ordinary shares September 30, 2026 December 31, 2025 September 30, 2025 Number of shares authorized (in thousands of shares) 1,000,000 1,000,000 1,000,000 Shares authorized $ 10,000,000 $ 10,000,000 $ 10,000,000 Number of shares issued and fully paid (in thousands of shares) 837,032 836,021 835,962 Shares issued $ 8,370,323 $ 8,360,211 $ 8,359,621 For the nine months ended September 30, 2025, the Group executed 2,428 thousand shares for employee share options, totaling NT$24,281 thousand. As a result, the amount of the Group’s issued and outstanding ordinary shares as of September 30, 2025 increased to NT$8,359,621 thousand, divided into 835,962 thousand ordinary shares at a par value of NT$10. Every ordinary share carries one vote per share and the rights to dividends. For the nine months ended September 30, 2026, the Group executed 1,011 thousand shares for employee share options, totaling NT$10,112 thousand. As a result, the amount of the Group’s issued and outstanding ordinary shares as of September 30, 2026 increased to NT$8,370,323 thousand, divided into 837,032 thousand ordinary shares at a par value of NT$10. Every ordinary share carries one vote per share and the rights to dividends. A total of 80,000 thousand shares of the Group’s ordinary shares authorized were reserved for the issuance of employee share options. b. Global depositary receipts In November 2003, the Group issued 14,400 thousand ordinary shares, corresponding to 3,600 thousand units of Global Depositary Receipts (“GDRs”). For this GDR issuance, the Group’s shareholders, including Via Technologies Inc., also issued 12,878.4 thousand ordinary shares, corresponding to 3,219.6 thousand GDR units. Thus, the entire offering consisted of 6,819.6 thousand GDR units, corresponding to 27,278.4 thousand ordinary shares. Taking into account the effect o f share dividends, the GDRs increased to 8,782.1 thousand units (36,060.5 thousand shares). The holders of these GDRs requested the Group to redeem the GDRs to acquire the Group’s ordinary shares. As of September 30, 2026, there were 8,7 59.3 thousand units of GDRs redeemed, representing 3 5,037.2 thousand ordinary shares, and the outstanding GDRs represented 1,0 23.3 thousand ordinary shares or 0.12% of the Group’s outstanding ordinary shares.
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- 35 - Capital Surplus September 30, 2026 December 31, 2025 September 30, 2025 May be used to offset a deficit, distributed as cash dividends, or transferred to share capital Arising from the issuance of ordinary shares $ 15,469,341 $ 15,434,916 $ 15,432,512 Arising from consolidation excess 23,288 23,288 23,288 May be used to offset a deficit only Changes in equity-method associates and joint ventures capital surplus 33,104 33,104 33,104 Arising from expired share options 779,384 778,325 777,657 May not be used for any purpose Arising from employee share options 61,027 70,811 72,472 $ 16,366,144 $ 16,340,444 $ 16,339,033 The capital surplus arising from shares issued in excess of par (including share premium from the issuance of ordinary shares, treasury share transactions and consolidation excess) and donations may be used to offset a deficit. In addition, when the Group has no deficit, such capital surplus may be distri buted as cash dividends or transferred to share capital (limited to a certain percentage of the Group’s capital surplus and once a year). For details of capital surplus - employee share options, please refer to Note 28 to the consolidated financial statements. Retained Earnings and Dividend Policy Under HTC’s Articles of Incorporation, HTC should make appropriations from its net income in the following order: a. To pay taxes. b. To cover accumulated losses, if any. c. To appropriate 10% as legal reser ve unless the total legal reserve accumulated has already reached the amount of HTC’s authorized capital. d. To recognize or reverse special reserve return earnings. When a special reserve is appropriated for the cumulative net increases in fair value measurement of investment properties from prior period and the cumulative net debit balance reserves from prior period, the special reserve is only appropriated from the prior unappropriated earnings, the sum of net profit for current period and items other than net profit that are included directly in the unappropriated earnings for current period is used if the prior unappropriated earnings is not sufficient. e. The board of directors shall propose allocation ratios for any remainder profit after withholding the amounts under subparagraphs 1 to 4 above plus any unappropriated retained earnings of previous years based on the dividend policy set forth in the Article and propose such allocation ratio at the shareholders’ meeting.
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- 36 - As part of a high -technology i ndustry, the Group takes into consideration its operating environment, industry developments and long-term interests of shareholders when determining share or cash dividends to be paid. Other factors such as whether it can maintain operating efficiency and meet its capital expenditure budget and financial goals are also key considerations. The Group’s dividend policy stipulates that at least 50% of total dividends may be distributed as cash dividends. Appropriation of earnings to a legal reserve shall be made until the legal reserve equals the Group’s capital. Legal reserve may be used to offset its deficit. If the Group has no accumulated deficit and the legal reserve has exceeded 25% of its issued and outstanding ordinary shares, the excess may be transferred to ordinary shares or distributed in cash. The appropriations of earnings for 2025 and accumulated deficits offset for 2024 have been approved in the shareholders’ meeting on June 18, 2026 and June 20, 2025, respectively. The appropriations of earni ngs (accumulated deficits offsetting) and dividends per share were as follows: Appropriation of Earnings (Accumulated Deficits Offsetting) Dividends Per Share (NT$) For 2025 For 2024 For 2025 For 2024 Legal reserve in covering accumulated deficits $ - $ 1,675,317 $ - $ - Legal reserve 197,395 - - - Special reserve 893,286 - - - Cash dividends 418,033 - 0.5 - Information on the appropriations of earnings and offsetting of d eficits resolved by the Group’s board of directors and the Group’s shareholders is available on the Market Observation Post System website of the Taiwan Stock Exchange. Other Equity Items a. Exchange differences on translating foreign operations Exchange differences relating to the translation of the results and net assets of the Group’s foreign operations from their functional currencies to the Group’s presentation currency (the New Taiwan dollar) were recognized directly in other comprehensive income a nd accumulated in the foreign currency translation reserve. Exchange differences previously accumulated in the foreign currency translation reserve were reclassified to profit or loss on the disposal of the foreign operation. b. Unrealized gains or losses on financial assets at FVTOCI Unrealized gains or losses on financial assets at FVTOCI represents the cumulative gains and losses arising from the revaluation of financial assets at FVTOCI that have been recognized in other comprehensive income. The cumu lative unrealized gains or losses will not be reclassified to profit or loss on disposal of the equity investments.
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- 37 - 24. OPERATING REVENUE a. Disaggregation of revenue For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 Sale of goods $ 582,420 $ 548,268 $ 1,565,216 $ 1,799,965 Other operating income 181,207 168,103 465,239 319,730 $ 763,627 $ 716,371 $ 2,030,455 $ 2,119,695 b. Contract balances September 30, 2026 December 31, 2025 September 30, 2025 January 1, 2025 Notes and trade receivables (Note 10) $ 498,934 $ 506,730 $ 461,451 $ 497,008 Contract liabilities (classified under advance receipts) $ 315,763 $ 333,400 $ 317,142 $ 282,316 25. NET GAIN (LOSS) FROM CONTINUING OPERATIONS AND OTHER COMPREHENSIVE INCOME AND LOSS a. Interest income For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 Bank deposits $ 5,295 $ 46,446 $ 27,774 $ 427,869 b. Other income For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 Rental income $ 61,250 $ 101,622 $ 185,843 $ 458,649 Dividends 58,573 17,581 280,134 21,676 Others 27,314 40,422 94,969 186,586 $ 147,137 $ 159,625 $ 560,946 $ 666,911
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- 38 - c. Other gains and losses For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 Net gains on disposals of assets and licensing income $ - $ - $ - $ 8,045,926 Net (loss) gain on the disposal of property, plant and equipment and investment properties (18) 4,164,439 1,283 4,161,290 Net gain on disposal of intangible assets 212,851 - 212,851 - Net foreign exchange gain (loss) 75,173 38,221 3,942 (171,944) Net gain on valuation of financial instruments at fair value through profit or loss 363,268 81,331 765,242 22,070 Impairment reversal (loss on) of non-financial assets (Notes 11, 17 and 18) 22,643 (10,987) 61,502 (405,958) Gain from lease modifications - 52 7 53 Rental asset depreciation and relative expenses (37,043) (57,991) (114,426) (178,287) Other losses (3,263) (6,849) (13,554) (397,710) $ 633,611 $ 4,208,216 $ 916,847 $ 11,075,440 On January 23, 2025, HTC entered into an agreement (the “Agreement”) with Google LLC and its subsidiaries (collectively, “Google”). Pursuant to the Agreement, a part of the Group’s employees were transferred to Google and certain intellectual property rights were granted to Google under a non-exclusive license. The transaction consideration was US$250,000 thousand. After deducting related costs, the Group recognized a total net gain on disposal and licensing income of NT$8,045, 926 thousand. d. Finance costs For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 Interest on bank loans $ 40,356 $ 18,639 $ 82,066 $ 185,846 Interest on lease liabilities 386 513 1,306 1,814 Others 288 326 677 1,464 $ 41,030 $ 19,478 $ 84,049 $ 189,124 e. Expected credit losses (reversed) on financial assets For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 Trade receivables (included in operating expense) $ (1,326) $ - $ (1,326) $ 908
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- 39 - f. Depreciation and amortization For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 Property, plant and equipment $ 24,771 $ 25,872 $ 74,502 $ 80,509 Investment properties 15,077 16,821 45,148 60,744 Intangible assets 4,439 4,367 13,327 12,930 Right-of-use assets 5,875 5,510 16,910 19,631 $ 50,162 $ 52,570 $ 149,887 $ 173,814 An analysis of depreciation - by function Operating costs $ 5,630 $ 5,628 $ 16,962 $ 17,250 Operating expenses 25,016 25,754 74,450 82,890 Other expenses 15,077 16,821 45,148 60,744 $ 45,723 $ 48,203 $ 136,560 $ 160,884 An analysis of amortization - by function Operating costs $ 1,333 $ 1,357 $ 4,001 $ 4,070 Operating expenses 3,106 3,010 9,326 8,860 $ 4,439 $ 4,367 $ 13,327 $ 12,930 g. Employee benefits expense For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 Short-term benefits $ 478,245 $ 783,287 $ 1,507,095 $ 2,515,876 Post-employment benefits Defined contribution plans 20,274 24,347 62,311 86,874 Defined benefit plans (1,904) (1,803) (5,711) (5,409) 18,370 22,544 56,600 81,465 Termination benefits - - - 348,574 Total employee benefits expense $ 496,615 $ 805,831 $ 1,563,695 $ 2,945,915 An analysis of employee benefits expense - by function Operating costs $ 52,169 $ 65,631 $ 157,332 $ 195,617 Operating expenses 444,446 740,200 1,406,363 2,401,724 Other expenses - - - 348,574 $ 496,615 $ 805,831 $ 1,563,695 $ 2,945,915
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- 40 - h. Employees’ compensation and remuneration of directors In compliance with HTC’s Articles of Incorporation, the Group accrues compensation of employees and remuneration of directors at rates of no less than 4% and of no more than 0.25%, respectively, of net profit before income tax, compensation of employees and remuneration of directors. In accordance with the amendments to the Securities and Exchange Act in August 2024, the shareholders of the Group resolved the amendments to the Group’s Articles at their June 2025 regular meeting. The amendments explicitly stipulate the allocation of no less than 4% of the compensation of employees as compensation distributions in the event of annual net profit (including no less than 1% for non -executive employees.) The compensation of employees and remuneration of directors for the nine months ended September 30, 2026 were not estimated as the Company incurred a loss for the period. The compensation of employees for the three months and nine months ended September 30, 2025 are as follows: Accrual rate For the Nine Months Ended September 30, 2025 Employees’ compensation 4% Amount For the Three Months Ended September 30, 2025 For the Nine Months Ended September 30, 2025 Employees’ compensation $ 189,396 $ 189,396 If there is a change in the proposed amounts after the annual consolidated financial statements are authorized for issue, the differences are recorde d as a change in the accounting estimate in the subsequent year. For any further information on the compensation of employees and remuneration of directors approved in the meeting of the board of directors in 2026 and 2025, see disclosures in the Market Observation Post System. i. Impairment loss (reversal of) on non-financial assets For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 Inventories (included in operating costs and other gains and losses) $ 58,231 $ (13,995) $ 21,165 $ 299,653 Investment property (included in other gains and losses) - - - 209,331 Intangible assets (included in other gains and losses) (22,643) (13) 6,135 34,627 $ 35,588 $ (14,008) $ 27,300 $ 543,611
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- 41 - j. Gain or loss on foreign currency exchange For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 Foreign exchange gains $ 395,597 $ (232,141) $ 539,425 $ 2,549,371 Foreign exchange losses (320,424) 270,362 (535,483) (2,721,315) Valuation gain (loss) arising from foreign forward exchange contracts (34,250) (2,895) 13,558 4,320 $ 40,923 $ 35,326 $ 17,500 $ (167,624) 26. INCOME TAXES RELATING TO CONTINUING OPERATIONS a. Income tax expense recognized in profit or loss Major components of income tax expense are as follows: For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 In respect of the current year Current tax $ 24,089 $ 39,122 $ 90,379 $ 535,699 Land value increment tax - 125,089 - 125,089 Deferred tax 750 59,399 2,467 1,706,528 24,839 223,610 92,846 2,367,316 Adjustments for previous years Current tax (2,372) (35,916) (37,786) 55,483 Deferred tax - 40,554 - (79,441) (2,372) 4,638 (37,786) (23,958) Income tax expense recognized in profit or loss $ 22,467 $ 228,248 $ 55,060 $ 2,343,358 b. Income tax assessments The income tax returns of HTC, HTC Investment Corporation, DeepQ Technology Corp., Viveport Digital Corporation, REIGN Technology Corporation, Uomo Vitruviano Corp., VIVE Arts Corporation and HungYao TECH Corp. for the years through 2024 have been assessed by the tax authorities. 27. EARNINGS (LOSS) PER SHARE Unit: NT$ Per Share For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 Basic earnings (loss) per share $ 0.26 $ 3.88 $ (0.36) $ 7.88 Diluted earnings (loss) per share $ 0.26 $ 3.85 $ (0.36) $ 7.81
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- 42 - The income (loss) and weighted average number of ordinary shares outstanding used for the computation of profit (loss) per share are as follows: Net Profit (Loss) for the Period For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 Net profit (loss) for the period attributable to owners of the parent $ 218,218 $ 3,243,274 $ (302,919) $ 6,582,225 Shares Unit: In Thousands of Shares For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 Weighted average number of ordinary shares used in the computation of basic earnings (loss) per share 836,263 835,554 836,121 835,002 Effect of potentially dilutive ordinary shares: Employee share options 3,536 4,725 - 4,725 Employee’s compensation 1,036 3,178 - 3,178 Weighted average number of ordinary shares used in the computation of diluted earnings (loss) per share 840,835 843,457 836,121 842,905 28. SHARE-BASED PAYMENT ARRANGEMENTS Employee Share Option Plan of the Group Qualified employees of HTC were granted 1,000 thousand options in Au gust 2015. Each option entitles the holder to subscribe for one ordinary share of the Group. The options granted are valid for 10 years and exercisable at certain percentages after the second anniversary from the grant date. The option rights expired in August 2025. Qualified employees of HTC were granted 20 thousand options in May 2019. Each option entitles the holder to subscribe for one thousand ordinary shares of the Group. The options granted are valid for 10 years and exercisable at certain percentages after the second anniversary from the grant date. Qualified employees of HTC were granted 10,000 thousand options in November 2019. Each option entitles the holder to subscribe for one ordinary share of the Group. The options granted are valid for 10 years and exercisable at certain percentages after the second anniversary from the grant date. The exercise price equals to the closing price of the Group’s ordinary shares on the grant date. For any subsequent changes in ordinary shares, the exercise price is adjusted accordingly.
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- 43 - Information on employee share options are as follows: For the Nine Months Ended September 30 2026 2025 Number of Shares (In Thousands) Weighted- average Exercise Price (NT$) Number of Shares (In Thousands) Weighted- average Exercise Price (NT$) Balance, beginning of the period 4,616 $ 35.32 8,026 $ 35.52 Options exercised (1,011) 35.41 (2,428) 35.32 Options forfeited (69) (873) Balance, end of the period 3,536 35.29 4,725 35.32 Options exercisable, end of the period 3,536 4,725 Information about outstanding options as of the reporting date are as follows: September 30, 2026 December 31, 2025 September 30, 2025 Range of exercise prices (NT$) $35.05-$35.5 $35.05-$35.5 $35.05-$35.5 Weighted-average remaining contractual life (years) 2.86 years 3.57 years 3.83 years Options granted in November and May 2019 were priced using the Black -Scholes option pricing model. Options granted in August 2015 were priced using the trinomial option pricing model. The inputs to the model are as follows: November 2019 May 2019 August 2015 Grant-date share price (NT$) $35.05 $35.50 $54.50 Exercise price (NT$) $35.05 $35.50 $54.50 Expected volatility 43.64%-44.09% 44.94%-45.01% 39.26% Duration (years) 10 years 10 years 10 years Expected dividend yield - - 4.04% Risk-free interest rate 0.6125%-0.6348% 0.6082%-0.6224% 1.3965% Expected volatility was based on the historical share price volatility over the past 1 -7 years. The Group assumed that employees would exercise their options after the vesting date when the share price was 1.63 times the exercise price. 29. CAPITAL RISK MANAGEMENT The Group manages its capital to ensure its ability to continue as a going concern while maximizing the returns to shareholders. The Group periodically reviews its capital structure by taking into consideration macroeconomic conditions, prevailing interest rate, and adequacy of cash flows generated from operations; as the situation would allow, the Group pays dividends, issues new shares, repurchases shares, borrows loans, and pays loans.
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- 44 - The Group is subject to capital structure requirements for the bank syndicated loan , please refer to Note 19 to the consolidated financial statements. 30. FINANCIAL INSTRUMENTS Fair Value of Financial Instruments That Are Not Measured at Fair Value Financial instruments not measured at fair value held b y the Group include financial assets measured at amortized cost. Management has determined that the carrying amounts of financial assets not measured at fair value approximate their fair values or their fair values cannot be measured reliably. Fair Value of Financial Instruments That Are Measured at Fair Value on A Recurring Basis a. Fair value hierarchy September 30, 2026 Level 1 Level 2 Level 3 Total Financial assets at FVTPL Derivative financial instruments Foreign forward exchange contracts $ - $ 52,486 $ - $ 52,486 Convertible bonds - - 86,158 86,158 Warrants - - 18,149 18,149 Investments in equity instruments Overseas unlisted equity investments - - 103,482 103,482 Funds 3,475,085 - 18,152,023 21,627,108 $ 3,475,085 $ 52,486 $ 18,359,812 $ 21,887,383 Financial assets at FVTOCI Investments in equity instruments Domestic listed shares $ 145,286 $ - $ - $ 145,286 Domestic unlisted equity investments - - 33,802 33,802 Overseas listed shares 104,693 - - 104,693 Overseas unlisted equity investments - - 5,052,788 5,052,788 $ 249,979 $ - $ 5,086,590 $ 5,336,569 Financial liabilities at FVTPL Derivative financial instruments Foreign forward exchange contracts $ - $ 38,928 $ - $ 38,928 Non-derivative financial liabilities - - 32,788 32,788 $ - $ 38,928 $ 32,788 $ 71,716
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- 45 - December 31, 2025 Level 1 Level 2 Level 3 Total Financial assets at FVTPL Derivative financial instruments Foreign forward exchange contracts $ - $ 40,729 $ - $ 40,729 Convertible bonds - - 60,460 60,460 Warrants - - 17,914 17,914 Investments in equity instruments Overseas unlisted equity investments - - 94,287 94,287 Funds 1,419,686 - 13,409,665 14,829,351 $ 1,419,686 $ 40,729 $ 13,582,326 $ 15,042,741 Financial assets at FVTOCI Investments in equity instruments Domestic listed shares $ 92,188 $ - $ - $ 92,188 Domestic unlisted equity investments - - 39,933 39,933 Overseas listed shares 353,916 - - 353,916 Overseas unlisted equity investments - - 4,451,997 4,451,997 $ 446,104 $ - $ 4,491,930 $ 4,938,034 Financial liabilities at FVTPL Derivative financial instruments Foreign forward exchange contracts $ - $ 9,441 $ - $ 9,441 September 30, 2025 Level 1 Level 2 Level 3 Total Financial assets at FVTPL Derivative financial instruments Foreign forward exchange contracts $ - $ 14,864 $ - $ 14,864 Convertible bonds - - 77,625 77,625 Warrants - - 17,361 17,361 Investments in equity instruments Overseas unlisted equity investments - - 91,373 91,373 Funds 1,481,386 - 14,021,720 15,503,106 $ 1,481,386 $ 14,864 $ 14,208,079 $ 15,704,329 Financial assets at FVTOCI Investments in equity instruments Domestic listed shares $ 84,568 $ - $ - $ 84,568 Domestic unlisted equity investments - - 58,075 58,075 Overseas listed shares 404,233 - - 404,233 Overseas unlisted equity investments - - 4,694,472 4,694,472 $ 488,801 $ - $ 4,752,547 $ 5,241,348 Financial liabilities at FVTPL Derivative financial instruments Foreign forward exchange contracts $ - $ 10,544 $ - $ 10,544
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- 46 - There were no transfers between Levels 1 and 2 for the nine months ended September 30, 2026 and 2025. b. Reconciliation of Level 3 fair value measurements of financial instruments For the nine months ended September 30, 2026 Financial Assets at FVTPL Financial Assets at FVTOCI Equity Equity Financial Assets Derivatives Instruments Funds Instruments Total Balance on January 1, 2026 $ 78,374 $ 94,287 $ 13,409,665 $ 4,491,930 $ 18,074,256 Recognized in profit or loss (22,969) - 685,306 - 662,337 Recognized in other comprehensive income - - - 353,170 353,170 Purchases 48,322 8,054 7,174,443 117,141 7,347,960 Disposals - - (3,328,368) - (3,328,368) Effect of foreign currency exchange differences 580 1,141 210,977 124,349 337,047 Balance on September 30, 2026 $ 104,307 $ 103,482 $ 18,152,023 $ 5,086,590 $ 23,446,402 The only financial liability subsequently measured at fair value based on Level 3 fair value measurement is the program investment payable acquired by the Group, the fair value of which is measured based on the profit -sharing terms stipulated in the contract and the estimated future program revenue. Financial Assets at FVTPL Financial Assets at FVTOCI Equity Equity Financial Assets Derivatives Instruments Funds Instruments Total Balance on January 1, 2025 $ 223,081 $ - $ 123,261 $ 4,415,612 $ 4,761,954 Recognized in profit or loss (111,547) - 13,111 - (98,436) Recognized in other comprehensive income - - - (62,442) (62,442) Purchases - 91,495 13,765,231 689,869 14,546,595 Reclassification (5,682) - - 5,682 - Effect of foreign currency exchange differences (10,866) (122) 120,117 (296,174) (187,045) Balance on September 30, 2025 $ 94,986 $ 91,373 $ 14,021,720 $ 4,752,547 $ 18,960,626 c. Valuation techniques and inputs applied to Level 2 financial instruments at fair value Financial Instruments Valuation Techniques and Inputs Derivatives - foreign currency contracts Discounted cash flow: Future cash flows are estimated based on observable forward exchange rates at the end of the reporting period and contract forward rates, discounted at a rate that reflects the credit risk of various counterparties. d. Valuation techniques and inputs applied to Level 3 financial instruments at fair value Fair value measurements categorized within Level 3 of the fair value hierarchy include investments in equity instruments. The lack of quoted prices in an active market places these financial assets in the Level 3 category. The fair values of equity instruments are based on valuation widely used by market participants, the net asset value of the underlying investments, or quoted prices provided by counterparties. Quantitative information has not been disclosed since the relationship between significant unobservable inputs and fair value cannot be fully controlled.
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- 47 - e. Valuation process for Level 3 financial instruments at fair value The investment department will assess the reliability, independence, and consistency of the information sources to confirm whether the valuation is representative of the exercise price. Adjustments are made to ensure the rationality of the valuation presented. f. Sensitivity analysis of Level 3 fair value measurements under replacement assumptions A sensitivity analysis of replacement assumptions for the valuation of Level 3 financial instruments at fair value is not required since the va luation model used by the Group is reasonable and not internally constructed. Categories of Financial Instruments September 30, 2026 December 31, 2025 September 30, 2025 Financial assets Financial assets at FVTPL Held for trading $ 52,486 $ 40,729 $ 14,864 Mandatorily at FVTPL 21,834,897 15,002,012 15,689,465 Amortized cost (Note 1) 3,550,009 6,600,261 5,392,728 Financial assets at FVTOCI Equity instruments 5,336,569 4,938,034 5,241,348 Financial liabilities Financial liabilities at FVTPL Held for trading 71,716 9,441 10,544 Amortized cost (Note 2) 14,758,482 10,810,268 10,537,640 Note 1: The balances include financial assets measured at amortized cost, which comprise of cash and cash equivalents, other financial assets , notes and trade receivables, other receivables and refundable deposits. Note 2: The balances include financial liabilities measured at amorti zed cost, which comprise of short-term borrowings, notes and trade payables, other payables, agency receipts, long -term borrowings and guarantee deposits received. Financial Risk Management Objectives and Policies The Group’s major financial instruments include equity and debt investments, trade receivables, other receivables, borrowings, trade payables and other payables. The Group’s Corporate Treasury function provides services to the business and coordinates access to domestic and international financi al markets. It also monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyze the exposures by degree and magnitude of risks. These risks include market risk, credit risk and liquidity risk. The Group sought to minimize the effects of these risks by using derivative financial instruments and non-derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Group’s policies, which are approved by the board of directors. The policies provide written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies is reviewed by the internal auditors on a continuous basis. The Group has not entered into or traded financial instruments, including derivative financial instruments, for speculative purposes.
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- 48 - The Corporate Treasury function reports quarterly to the Group’s audit committee and board of directors in order to monitor risks and implement policies to mitigate risk exposures. a. Market risk The activities of the Group exposed it to the financial risks of fluctuations in foreign currency exchange rates. The Group has entered into a variety of derivative financial instruments to manage its exposure to foreign currency risk. There was no change to the Group’s exposure to market risks or the manner in which these risks were managed and measured. 1) Foreign currency risk The Group undertook transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arose. Exchange rate exposures were managed within approved policy parameters utilizing forward foreign exchange contracts. The carrying amounts of the Group’s foreign currency denominated monetary assets, monetary liabilities, and derivatives which are exposed to foreign currency risk at the end of the reporting period are set out in Note 34 to the consolidated financial statements. Sensitivity analysis The Group was mainly exposed to currency fluctuations of the United States dollar (USD), Euro (EUR), Renminbi (RMB), Japanese yen (JPY), Great British Pound (GBP), and Hong Kong dollar (HKD). The following table details the Group’s sensitivity to a 1% appreciation and depreciation in the New Taiwan dollars (“NTD”, the functional currency) against relevant foreign currencies. The sensitivity analysis only included outstanding foreign currency denominated monetary items and foreign currency forward contracts designated as cash flow hedges. A positive number indicates an increase in pre -tax profit/loss or equity associated with the NTD strengthens 1% against the relevant currency. For a 1% weakening of the NTD against the relevant currency, there would be an equal and opposite impact on pre-tax profit/loss or equity, and the balances below would be negative. Profit or Loss Equity For the nine months ended September 30, 2026 USD $ 9,527 $ (231,235) EUR 2,389 (3,464) RMB 4,893 (19,696) JPY 1,608 (2,246) GBP 57 (6,540) HKD (2,380) (266) For the nine months ended September 30, 2025 USD 75,709 (213,714) EUR 14,045 (5,615) RMB 6,524 (19,220) JPY 990 (2,276) GBP 2,855 (9,518) HKD 576 (1,692)
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- 49 - 2) Interest rate risk The carrying amounts of the Group’s financial assets and financial liabilities with exposure to interest rates at the end of reporting period were as follows: September 30, 2026 December 31, 2025 September 30, 2025 Fair value interest rate risk Financial assets $ 868,635 $ 1,664,970 $ 2,485,020 Financial liabilities 33,810 41,930 45,589 Cash flow interest rate risk Financial assets 21,978 21,429 20,553 Financial liabilities 7,381,605 3,200,000 2,900,000 Sensitivity analysis The sensitivity analysis below was determined based on t he Group’s exposure to interest rates for non-derivative instruments at the end of the reporting period. For floating rate assets and liabilities, the analysis was prepared assuming the amount of each asset and liability outstanding at the end of the period was outstanding for the whole year. A sensitivity rate of 10 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates. If interest rates had been 10 basis point higher/lower and all other variables were held constant, the Group’s pre-tax profit/loss for the nine months ended September 30, 2026 and 2025 would have decreased/increased by NT$5,520 thousand and NT$2,160 thousand, respectively. 3) Other price risk The Group was exposed to equity price risk through its investments in convertible bonds, warrants, domestic listed shares, domestic unlisted equity investments, overseas listed shares, fund s and overseas unlisted equity investments. If equity prices had been 1% higher/lower, pre -tax profit for the nine months ended September 30, 2026 and 2025 would have increased/decreased by NT$218,349 thousand and NT$1 56,895 thousand, respectively, as a result of the changes in fair value of financial assets at FVTPL, and the pre-tax other comprehensive income for the nine months ended September 30, 2026 and 2025 would have increased/decreased by NT$53,366 thousand and NT$52,413 thousand, respectively, as a result of the changes in fair value of financial assets at FVTOCI. b. Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a 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 of counterparty to discharge an obligation and financial guarantees provided by the Group could arise from the carrying amount of the respective recognized financial assets as stated in the consolidated balance sheets. The Group does not issue any financial guarantee involving credit risk. The Group basically adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The credit risk information of trade receivables is disclosed in Note 10 to the consolidated financial statements.
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- 50 - c. Liquidity risk The Group manages liquidity ri sk to ensure that the Group possesses sufficient financial flexibility by maintaining adequate reserves of cash and cash equivalents and reserving financing facilities, and also monitors liquidity risk of shortage of funds by the maturity date of financial instruments and financial assets. 1) Liquidity risk tables for non-derivative financial liabilities The following table details the Group’s remaining contractual maturities for its non -derivative financial liabilities with agreed repayment periods. The tables had been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Group can be required to pay. September 30, 2026 Less Than 3 Months 3 Months to 1 Year Over 1 Year Short-term borrowings $ 800,000 $ 600,000 $ - Notes and trade payables 547,662 4,359,858 - Other payables 1,755,660 605,481 - Lease liabilities 6,560 12,619 16,020 Agency receipts 42,005 - - Long-term borrowings - - 5,981,605 Guarantee deposits received - - 66,211 $ 3,151,887 $ 5,577,958 $ 6,063,836 December 31, 2025 Less Than 3 Months 3 Months to 1 Year Over 1 Year Short-term borrowings $ 1,000,000 $ - $ - Notes and trade payables 615,362 4,167,845 - Other payables 1,991,054 725,680 - Lease liabilities 4,488 12,953 27,001 Agency receipts 46,301 - - Long-term borrowings - - 2,200,000 Guarantee deposits received - - 64,026 $ 3,657,205 $ 4,906,478 $ 2,291,027 September 30, 2025 Less Than 3 Months 3 Months to 1 Year Over 1 Year Notes and trade payables $ 945,180 $ 4,252,449 $ - Other payables 2,220,432 548,532 - Lease liabilities 6,172 12,513 29,760 Agency receipts 56,571 - - Long-term borrowings - - 2,900,000 Guarantee deposits received - - 64,476 $ 3,228,355 $ 4,813,494 $ 2,994,236
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- 51 - 2) Liquidity risk tables for derivative financial instruments The following table details the Group’s liquidity analysis for its derivative financial instruments. The table was based on the undiscounted contractual net cash inflows and outflows on derivative instruments that settle on a net basis, and the undiscounted gross inflows and outflows on those derivatives that require gross settlement. September 30, 2026 Less Than 3 Months 3 Months to 1 Year Over 1 Year Net settled Foreign forward exchange contracts $ (20,440) $ 41,840 $ - Gross settled Foreign forward exchange contracts Inflows $ 1,598,131 $ - $ - Outflows (1,607,118) - - $ (8,987) $ - $ - December 31, 2025 Less Than 3 Months 3 Months to 1 Year Over 1 Year Net settled Foreign forward exchange contracts $ 9,546 $ - $ - Gross settled Foreign forward exchange contracts Inflows $ 1,828,489 $ - $ - Outflows (1,822,100) - - $ 6,389 $ - $ - September 30, 2025 Less Than 3 Months 3 Months to 1 Year Over 1 Year Net settled Foreign forward exchange contracts $ 11,659 $ - $ - Gross settled Foreign forward exchange contracts Inflows $ 1,901,377 $ - $ - Outflows (1,905,909) - - $ (4,532) $ - $ -
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- 52 - 3) Bank credit limit September 30, 2026 December 31, 2025 September 30, 2025 Unsecured bank general credit limit Amount used $ 1,545,529 $ 1,132,842 $ 108,337 Amount unused 5,060,914 7,738,623 8,570,551 $ 6,606,443 $ 8,871,465 $ 8,678,888 Secured bank overdraft facilities Amount used $ 5,981,605 $ 2,200,000 $ 2,900,000 Amount unused 4,008,395 7,500,000 6,800,000 $ 9,990,000 $ 9,700,000 $ 9,700,000 Of the aforementioned credit facilities, as of September 30, 2026, the Group had committed credit facilities totaling NT$1,200,000 thousand that remained unavailable for drawdown due to unmet utilization conditions. Amount used included short-term borrowings, long-term borrowings, guarantees for customs duties and patent litigation. 31. TRANSACTIONS WITH RELATED PARTIES Balances, transactions, revenue and expenses between HTC and its subsidiaries, which are related parties of HTC, have been eliminated o n consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below. Names and Relationships of Related-parties Related-parties Relationship with the Group VIA Technologies Inc. Its chairman is HTC’s director VIA Labs, Inc. Its chairman is HTC’s director HTC Education Foundation Its chairman is HTC’s director Nan Ya Plastics Corporation Its director and HTC’s chairwoman are relatives Employees’ Welfare Committee Employees’ Welfare Committee of HTC VIA Technologies (China) Co., Ltd. The chairman of its parent group is HTC’s director Premier Investment & Consultant (Shanghai) Co., Ltd. Its chairwoman is HTC’s chairwoman CW & ET Link Inc Its director is HTC’s chairwoman Kun Chang Investment Co., Ltd. Its director is HTC’s chairwoman ASIAPLAY TAIWAN DIGITAL ENTERTAINMENT LTD. Its director is HTC’s chairwoman Shanghai Property Management (Shanghai) Co., Ltd. Related party in substance TVBS Media Inc. Its director is HTC’s chairwoman Chinese Christian Faith and Love Foundation Its director is HTC’s chairwoman Beijing Weisheng Yonghong Property Co., Ltd. The chairman of its ultimate parent group is HTC’s director (Continued)
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- 53 - Related-parties Relationship with the Group Chang Gung Memorial Medical Foundation Its director and HTC’s chairwoman are relatives Chang Gung Memorial University Its director and HTC’s chairwoman are relatives XI’an Hongwun Digital Technology Co., Ltd. Investments in joint ventures Xi ‘an Hongwen commercial operation Management Co., Ltd. Subsidiary of investments in joint ventures Temple Of Light Culture Technology Co., Ltd. Subsidiary of associates Lucid Realities SAS Associates Small Creative SAS Associates (Concluded) Operating Sales For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 Other related parties $ 5,691 $ 69,541 $ 18,876 $ 76,614 The following balances of trade receivables from related parties were outstanding at the end of the reporting period: September 30, 2026 December 31, 2025 September 30, 2025 Other related parties $ 5,210 $ 9,844 $ 9,009 For sales other than those that are made solely to related parties, the terms and prices offered to related parties are more favorable than those to third parties. The outstanding receivables from related parties are unsecured and no impairment losses have been recognized. Purchase For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 Other related parties $ 224 $ 280 $ 519 $ 722 The following balances of trade payables from related parties were outstanding at the end of the reporting period: September 30, 2026 December 31, 2025 September 30, 2025 Other related parties $ 373 $ 368 $ 429 Purchase prices for related parties and third parties were similar. The outstanding balance of trade payables to related parties are unsecured and will be settled in cash.
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- 54 - Advance Receipts September 30, 2026 December 31, 2025 September 30, 2025 Other related parties $ 82 $ 82 $ 82 Compensation of Key Management Personnel For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 Short-term benefits $ 11,170 $ 16,263 $ 65,288 $ 150,827 Post-employment benefits 5,374 162 5,658 486 $ 16,544 $ 16,425 $ 70,946 $ 151,313 The remuneration of directors and key executives was determined by the remuneration committee based on the performance of individuals and market trends. Acquisition of Right-of-use Assets For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 Beijing Weisheng Yonghong Property Co., Ltd. $ - $ - $ 6,975 $ - Lease Liabilities September 30, 2026 December 31, 2025 September 30, 2025 Premier Investment & Consultant (Shanghai) Co., Ltd. $ 31,131 $ 39,959 $ 41,266 Beijing Weisheng Yonghong Property Co., Ltd. 2,034 - 1,830 $ 33,165 $ 39,959 $ 43,096 Finance Costs For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 Premier Investment & Consultant (Shanghai) Co., Ltd. $ 361 $ 456 $ 1,178 $ 1,515 Beijing Weisheng Yonghong Property Co., Ltd. 15 15 71 147 $ 376 $ 471 $ 1,249 $ 1,662
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- 55 - Lease Expense For the Three Months Ended September 30 For the Nine Months Ended September 30 2026 2025 2026 2025 VIA Technologies Inc. $ 251 $ 253 $ 679 $ 577 Beijing Weisheng Yonghong Property Co., Ltd. - - 777 - VIA Technologies (China) Co., Ltd. 61 106 178 330 Other related parties 17 29 40 80 $ 329 $ 388 $ 1,674 $ 987 The Group leased right -of-use of office from Beijing Weisheng Yonghong Property Co., Ltd. in January 2026. The rental is based on similar asset’s market rental rates and fixed lease payments are paid quarterly. The Group leased offices, meeting rooms, staff dormitory and equipment rooms owned by related party under an operating lease agreement, respectively. The rental payment is determined at the prevailing rates in the surrounding area. Other Related-party Transactions Other related parties provide property management, digital p hotography, consultancy service and technical support service. The cost and fees were NT$1,314 thousand, NT$1,159 thousand, NT$3,865 thousand and NT$7,373 thousand for the three months and nine months ended September 30, 2026 and 2025, respectively. As of September 30, 2026, December 31, 2025 and September 30, 2025, the outstanding balances of other payables to related parties were NT$5,054 thousand, NT$2,899 thousand and NT$5,253 thousand, respectively. The Group collects property management fees and uti lity fees from other related companies. Other income was NT$3,837 thousand, NT$3,860 thousand, NT$8,899 thousand and NT$8,936 thousand for the three months and nine months ended September 30, 2026 and 2025, respectively. 32. PLEDGED ASSETS As of September 30, 2026, December 31, 2025 and September 30, 2025, time deposits and demand deposits classified as other financial assets totaled NT$ 125,586 thousand, NT$121,980 thousand and NT$144,776 thousand, respectively. These deposits were provided as collateral for rental deposits, customs duties, patent litigation, supplier contract, foreign forward exchange contracts and performance bonds. The following assets were pledged as collateral for bank borrowings: September 30, 2026 December 31, 2025 September 30, 2025 Property, plant and equipment Land $ 3,337,100 $ 3,337,100 $ 3,603,229 Buildings 743,649 771,859 670,803 Investment properties 667,385 692,694 809,663 $ 4,748,134 $ 4,801,653 $ 5,083,695
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- 56 - 33. COMMITMENTS, CONTINGENCIES AND SIGNIFICANT CONTRACTS a. On January 30, 2017, 3G Licensing S.A. (“3GL”), Orange S.A. (“Orange”), and Koninklijke KPN N.V. filed a lawsuit against HTC and a subsidiary of the Group, HTC America Inc. (“HTC America”), in U.S. District Court in Delaware alleging, inter alia, infringement of three of 3GL’s patents. The plaintiffs dismissed HTC America from the case, and a jury trial was held involving only 3GL, Orange, HTC and two of 3GL’s patents. The trial comme nced on October 10, 2023, and on October 16, 2023, the jury found infringement of the patents and awarded damages against HTC. The Group has deposited a security for the judgment into the Court Registry Investment System. The Group does not believe the patents have been infringed and plans to vigorously appeal the verdict. b. On the basis of its past experience and consultations with its legal counsel, the Group has measured the possible effects of the contingent lawsuits on its business and financial condition. 34. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES The following information includes foreign currencies other than functional currencies of the group entities. Exchange rates between foreign currencies and respective functional currencies are disclosed. The significant assets and liabilities denominated in foreign currencies were as follows: Unit: In Thousands of Each Foreign Currency September 30, 2026 December 31, 2025 September 30, 2025 Foreign Currencies Exchange Rate Foreign Currencies Exchange Rate Foreign Currencies Exchange Rate Financial assets Monetary items USD $ 208,026 31.84 $ 331,725 31.43 $ 473,203 30.46 EUR 24,459 36.13 57,186 36.89 67,011 35.76 JPY 1,759,080 0.2029 1,118,797 0.2007 916,955 0.2057 RMB 130,506 4.75 158,357 4.50 186,250 4.27 GBP 3,073 42.23 8,745 42.29 9,734 40.96 SGD 2,053 24.94 2,256 24.44 13,581 23.61 Non-monetary items USD 415,741 31.84 194,607 31.43 157,848 30.46 RMB 363,492 4.75 314,686 4.50 317,419 4.27 Investments accounted for using the equity method USD 20,864 31.84 21,674 31.43 22,349 30.46 RMB 41,540 4.75 40,285 4.50 42,082 4.27 Financial liabilities Monetary items USD 178,105 31.84 266,002 31.43 224,650 30.46 EUR 17,848 36.13 27,211 36.89 27,734 35.76 JPY 966,798 0.2029 552,568 0.2007 435,839 0.2057 RMB 27,491 4.75 46,701 4.50 33,474 4.27 SGD 2,164 24.94 2,155 24.44 2,167 23.61 HKD 115,018 4.06 53,301 4.04 55,579 3.91 For the three months and nine months ended September 30, 2026 and 2025, realized and unrealized net foreign exchange gain (loss) were NT$ 40,923 thousand, NT$35,326 thousand, NT$ 17,500 thousand and NT$(167,624) thousand, respecti vely. It is impractical to disclose net foreign exchange gains or losses by each significant foreign currency due to the variety of the foreign currency transactions and functional currencies of the Group’s entities.
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- 57 - 35. SIGNIFICANT CONTRACTS The Group specializes in the research, design, manufacture and sale of virtual reality devices and smart mobile devices. To enhance the quality of its products and manufacturing technologies, the Group has patent agreements, as follows: Contract Type Contractor Term Description Restrictive Covenants Patent license Qualcomm Incorporated December 20, 2000 to the following dates: a. If the Group materially breaches any agreement terms and fails to take remedial action within 30 days after Qualcomm’s issuance of a written notice, the Group will be prohibited from using Qualcomm’s property or patents. Authorization to use CDMA technology to manufacture and sell units, royalty payment based on agreement. No b. Any time when the Group’s not using any of Qualcomm’s intellectual property, the Group may terminate this agreement upon 60 days’ prior written notice to Qualcomm. 36. SEPARATELY DISCLOSED ITEMS a. Information about significant transactions and investees: 1) Financing provided to others (Table 1) 2) Endorsements/guarantees provided (Table 2) 3) Significant marketable securities held (excluding investments in subsidiaries, associates and jointly controlled entities) (Table 3) 4) Total purchases from or sales to related part ies amounting to at least NT$100 million or 20% of the paid-in capital (Table 4) 5) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 5) 6) Others: The business relationship between the parent and the subsidiaries and between each subsidiary, and significant transactions between them (Table 8) 7) Information on investees (Table 6)
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- 58 - b. Information on investments in mainland China 1) Information on any investee companies in mainland China, includin g the name, principal business activities, paid -in capital, accounting 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 year, repatriations of investment income, and limit on the amount of investment in mainland China (Table 7) 2) Significant transactions with investee companies in mainland China, either directly or indirectly through a third party, 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 resulting gains or losses d) The balance of negotiable instrument endorsements, guarantees or pledges of collateral at the end of the year and their purposes e) The most significant balance, the ending balance, the interest rate range, and total current period interest with respect to the financing of funds f) Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receipt of services 37. SEGMENT INFORMATION The Group is organized and managed as a single reportable business segment. The Group’s operations are mainly in the research, design, manufacture and sale of virtual reality devices and smart mobile devices. Revenue from these operations is more than 90% of the total revenue. The Group is considered a single segment. The basis of information reported to the chief operating decision maker is the same as the financial statements. Thus, the segment revenue and results for the nine months ended September 30, 2026 and 2025 can be found in the consolidated statements of comprehensive income and the segment assets and liabilities as of September 30, 2026 and 2025 can be found in the consolidated balance sheets.
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- 59 - TABLE 1 HTC CORPORATION AND SUBSIDIARIES FINANCING PROVIDED TO OTHERS SEPTEMBER 30, 2026 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) No. Lender Borrower Financial Statement Account Related Party Highest Balance for the Period Ending Balance Actual Amount Borrowed Interest Rate (%) Nature of Financing (Note 16) Business Transaction Amount Reasons for Short-term Financing Allowance for Impairment Loss Collateral Financing Limit for Each Borrower Aggregate Financing Limit NoteItem Value 1 Viverse Limited (Ireland) H.T.C. (B.V.I.) Corp. Other receivables from related parties YES $ 412,244 (US$ 13,100 thousand) $ 238,804 (US$ 7,500 thousand) $ 238,804 (US$ 7,500 thousand) SOFR Short-term financing $ - Reinvestment capital needs $ - - $ - $ 324,062 Note 1 $ 324,062 Note 1 2 HTC America Inc. H.T.C. (B.V.I.) Corp. Other receivables from related parties YES 290,754 (US$ 9,000 thousand) 286,565 (US$ 9,000 thousand) 286,565 (US$ 9,000 thousand) SOFR Short-term financing - Reinvestment capital needs - - - 505,308 Note 2 505,308 Note 2 3 HTC Investment (BVI) Corporation H.T.C. (B.V.I.) Corp. Other receivables from related parties YES 288,000 (US$ 9,000 thousand) - (US$ - thousand) - (US$ - thousand) SOFR Short-term financing - Reinvestment capital needs - - - 2,971,800 Note 3 2,971,800 Note 3 4 HTC EUROPE CO., LTD. H.T.C. (B.V.I.) Corp. Other receivables from related parties YES 110,002 (US$ 3,500 thousand) - (US$ - thousand) - (US$ - thousand) SOFR Short-term financing - Reinvestment capital needs - - - 2,892,778 Note 4 2,892,778 Note 4 5 Viverse Limited (UK) H.T.C. (B.V.I.) Corp. Other receivables from related parties YES 32,306 (US$ 1,000 thousand) 31,841 (US$ 1,000 thousand) 31,841 (US$ 1,000 thousand) SOFR Short-term financing - Reinvestment capital needs - - - 570,510 Note 5 570,510 Note 5 6 HTC Middle East FZ-LLC H.T.C. (B.V.I.) Corp. Other receivables from related parties YES 29,075 (US$ 900 thousand) 28,656 (US$ 900 thousand) 28,656 (US$ 900 thousand) SOFR Short-term financing - Reinvestment capital needs - - - 66,238 Note 6 66,238 Note 6 7 HTC Belgium BV H.T.C. (B.V.I.) Corp. Other receivables from related parties YES 25,845 (US$ 800 thousand) 25,472 (US$ 800 thousand) 25,472 (US$ 800 thousand) SOFR Short-term financing - Reinvestment capital needs - - - 36,939 Note 7 36,939 Note 7 8 HTC Germany GmbH H.T.C. (B.V.I.) Corp. Other receivables from related parties YES 16,343 (US$ 520 thousand) 10,189 (US$ 320 thousand) 10,189 (US$ 320 thousand) SOFR Short-term financing - Reinvestment capital needs - - - 25,679 Note 8 25,679 Note 8 9 HTC America Innovation Inc H.T.C. (B.V.I.) Corp. Other receivables from related parties YES 12,800 (US$ 400 thousand) - (US$ - thousand) - (US$ - thousand) SOFR Short-term financing - Reinvestment capital needs - - - - Note 9 - Note 9 10 VIVE Arts Limited H.T.C. (B.V.I.) Corp. Other receivables from related parties YES 6,914 (US$ 220 thousand) - (US$ - thousand) - (US$ - thousand) SOFR Short-term financing - Reinvestment capital needs - - - 25,781 Note 10 25,781 Note 10 11 HungXu Holding (BVI) Corp. H.T.C. (B.V.I.) Corp. Other receivables from related parties YES 9,692 (US$ 300 thousand) 9,552 (US$ 300 thousand) 9,552 (US$ 300 thousand) SOFR Short-term financing - Reinvestment capital needs - - - 226,609 Note 11 226,609 Note 11 12 HTC Investment One (BVI) Corporation H.T.C. (B.V.I.) Corp. Other receivables from related parties YES 9,692 (US$ 300 thousand) 9,552 (US$ 300 thousand) 9,552 (US$ 300 thousand) SOFR Short-term financing - Reinvestment capital needs - - - 113,774 Note 12 113,774 Note 12 13 S3 Graphics., Co., Ltd. H.T.C. (B.V.I.) Corp. Other receivables from related parties YES 96,918 (US$ 3,000 thousand) 95,522 (US$ 3,000 thousand) 95,522 (US$ 3,000 thousand) SOFR Short-term financing - Reinvestment capital needs - - - 101,571 Note 13 101,571 Note 13 14 HTC Netherlands B.V. H.T.C. (B.V.I.) Corp. Other receivables from related parties YES 83,572 (US$ 2,600 thousand) 82,368 (US$ 2,587 thousand) 82,368 (US$ 2,587 thousand) SOFR Short-term financing - Reinvestment capital needs - - - 655,732 Note 14 655,732 Note 14 (Continued)
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- 60 - No. Lender Borrower Financial Statement Account Related Party Highest Balance for the Period Ending Balance Actual Amount Borrowed Interest Rate (%) Nature of Financing (Note 16) Business Transaction Amount Reasons for Short-term Financing Allowance for Impairment Loss Collateral Financing Limit for Each Borrower Aggregate Financing Limit NoteItem Value 15 HungXu Technology (BVI) Corp. H.T.C. (B.V.I.) Corp. Other receivables from related parties YES $ 38,767 (US$ 1,200 thousand) $ 38,209 (US$ 1,200 thousand) $ 38,209 (US$ 1,200 thousand) SOFR Short-term financing $ - Reinvestment capital needs $ - - $ - $ 245,369 Note 15 $ 245,369 Note 15 16 HTC America Holding Inc. H.T.C. (B.V.I.) Corp. Other receivables from related parties YES 171,222 (US$ 5,300 thousand) 168,755 (US$ 5,300 thousand) 168,755 (US$ 5,300 thousand) SOFR Short-term financing - Reinvestment capital needs - - - 1,450,207 Note 16 1,450,207 Note 16 Note 1: Where the borrower is the parent company, HTC Corporation, or an enterprise in which HTC Corporation holds 100% of the votingrights, the aggregate amount of funds loaned and the amount of any individual loan shall not exceed 300% of the net worthof Viverse Limited (Ireland). Note 2: Where the borrower is the parent company, HTC Corporation, or an enterprise in which HTC Corporationholds 100% of the voting rights, the aggregate amount of funds loaned and the amount of any individual loan shall not exceed100% of the net worth of HTC America Inc. Note 3: Where the borrower is the parent company, HTC Corporation, or an enterprise in which HTC Corporation holds 100% of the votingrights, the aggregate amount of funds loaned and the amount of any individual loan shall not exceed 100% of the net worthof HTC Investment (BVI) Corporation. Note 4: Where the borrower is the parent company, HTC Corporation, or an enterprise in which HTC Corporation holds 100% of the voting rights, the aggregate amount of funds loaned and the amount of any individual loan shall not exceed 100% of the net worthof HTC EUROPE CO., LTD. Note 5: Where the borrower is the parent company, HTC Corporation, or an enterprise in which HTC Corporation holds 100% of the votingrights, the aggregate amount of funds loaned and the amount of any individual loan shall not exceed 100% of the net worthof Viverse Limited (UK). Note 6: Where the borrower is the parent company, HTC Corporation, or an enterprise in which HTC Corporation holds 100% of the votingrights, the aggregate amount of funds loaned and the amount of any individual loan shall not exceed 100% of the net worth ofHTC Middle East FZ-LLC. Note 7: Where the borrower is the parent company, HTC Corporation, or an enterprise in which HTC Corporation holds 100% of the votingrights, the aggregate amount of funds loaned and the amount of any individual loan shall notexceed 150% of the net worth of HTC Belgium BV. Note 8: Where the borrower is the parent company, HTC Corporation, or an enterprise in which HTC Corporation holds 100% of the votingrights, the aggregate amount of funds loaned and the amount of any individual loan shall not exceed 100% of the net worth ofHTC Germany GmbH. Note 9: Where the borrower is the parent company, HTC Corporation, or an enterprise in which HTC Corporation holds 100% of the votingrights, the aggregate amount of funds loaned and the amount of any individual loan shall not exceed 100% of the net worth of HTC America Innovation Inc. Note 10: Where the borrower is the parent company, HTC Corporation, or an enterprise in which HTC Corporation holds 100% of the votingrights, the aggregate amount of funds loaned and the amount of any individual loan shall not exceed 100% of the net worth ofVIVE Arts Limited. Note 11: Where the borrower is the parent company, HTC Corporation, or an enterprise in which HTC Corporation holds 100% of thevoting rights, the aggregate amount of funds loaned and the amount of any individual loan shall not exceed 100% of the net worth of HungXu Holding (BVI) Corp. Note 12: Where the borrower is the parent company, HTC Corporation, or an enterprise in which HTC Corporation holds 100% of the votingrights, the aggregate amount of funds loaned and the amount of any individual loan shall not exceed 100% of the net worth ofHTC Investment One (BVI) Corporation. Note 13: Where the borrower is the parent company, HTC Corporation, or an enterprise in which HTC Corporation holds 100% of the voting rights, the aggregate amount of funds loaned and the amount of any individual loan shall not exceed 100% of the net worth of S3 Graphics Co., Ltd. Note 14: Where the borrower is the parent company, HTC Corporation, or an enterprise in which HTC Corporation holds 100% of the votingrights, the aggregate amount of funds loaned and the amount of any individual loan shall not exceed 100% of the net worth ofHTC Netherlands B.V. Note 15: Where the borrower is the parent company, HTC Corporation, or an enterprise in which HTC Corporation holds 100% of the votingrights, the aggregate amount of funds loaned and the amount of any individual loan shall not exceed 100% of the net worth ofHungXu Technology (BVI) Corp. Note 16: Where the borrower is the parent company, HTC Corporation, or an enterprise in which HTC Corporation holds 100% of the votingrights, the aggregate amount of funds loaned and the amount of any individual loan shall not exceed 100% of the net worth of HTC America Holding Inc. Note 17: Loans of funds between overseas subsidiaries in which HTC Corporation directly or indirectly holds 100% of the voting rights,or loans of funds made by such overseas subsidiaries to HTC Corporation, are classified as short-term financing activities and, in accordance with applicable regulations, are not subject to the restriction that the financing amount shall not exceed 40% of the lender’s net worth. (Concluded)
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- 61 - TABLE 2 HTC CORPORATION AND SUBSIDIARIES ENDORSEMENTS/GUARANTEES PROVIDED FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2026 (In Thousands of New Taiwan Dollars, Unless Specified Otherwise) No. Endorser/Guarantor Endorsee/Guarantee Limit on Endorsement/ Guarantee Given on Behalf of Each Party (Note 1) Maximum Amount Endorsed/ Guaranteed During the Period (Note 2) Outstanding Endorsement/ Guarantee at the End of the Period (Note 2) Actual Borrowing Amount (In Thousands of Foreign Currencies) Amount Endorsed/ Guaranteed by Collateral Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statements (%) Aggregate Endorsement/ Guarantee Limit (Note 3) Endorsement/ Guarantee Given by Parent on Behalf of Subsidiaries Endorsement/ Guarantee Given by Subsidiaries on Behalf of Parent Endorsement/ Guarantee Given on Behalf of Companies in Mainland China Name Relationship 0 HTC Corporation H.T.C. (B.V.I.) Corp. Subsidiary $ 5,336,728 $ 4,660,000 $ 4,660,000 $ 2,232,186 $ 4,500,000 17.46 $ 13,341,820 Y N N High Tech Computer Asia Pacific Pte. Ltd. Subsidiary 5,336,728 4,660,000 4,660,000 - 4,500,000 17.46 13,341,820 Y N N Note 1: The Company’s maximum amount endorsed are limited to 20% of the net equity in latest audited or reviewed financial statementsof the Company. Note 2: The ending balance is approved by the boards of directors of the Company. Note 3: The Company’s maximum amount endorsed are based on 50% of the net equity in the latest audited or reviewed financial statements of the Company.
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- 62 - TABLE 3 HTC CORPORATION AND SUBSIDIARIES MARKETABLE SECURITIES SIGNIFICANT HELD (EXCLUDING INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINTLY CONTROLLED ENTITIES) SEPTEMBER 30, 2026 (In Thousands of New Taiwan Dollars) Holding Company Marketable Securities Type and Name of Issuer Relationship of Issuer to the Holding Company Financial Statement Account At the End of the Period NoteShares (In Thousand) Carrying Amount Percentage of Ownership (%) Fair Value HTC Corporation Listed shares VIA Technologies, Inc. Its chairman is HTC’s director Financial assets at fair value through other comprehensive income - non-current 8.5 $ 624 - $ 624 Funds Amundi Money Market Fund - Financial assets at fair value through profit or loss - current - 195,506 - 195,506 BlackRock Money Market Fund - ″ - 1,068,985 - 1,068,985 High Tech Computer Asia Pacific Funds Pte. Ltd. AAA Holdings (DC), Inc (Class C) - Financial assets at fair value through profit or loss - current - 330,405 - 330,405 Apollo Aligned Alternatives (Class C) - ″ - 341,794 - 341,794 Apollo Credit Strategies Absolute Return Offshore Fund - ″ - 1,468,454 - 1,468,454 Apollo Debt Solutions BDC iCapital Offshore Access Fund SPC-Accumulation Class I Shares - ″ - 1,258,349 - 1,258,349 Apollo IG Short Duration Replacement (Cayman) - ″ - 662,442 - 662,442 Ares Strategic Income Fund-Accumulation Class I Shares - ″ - 1,505,388 - 1,505,388 Morgan Stanley Money Market Fund - ″ - 219,129 - 219,129 Andreessen Horowitz LSV Fund V - Financial assets at fair value through profit or loss - non-current - 353,430 - 353,430 Apollo Asset-Backed Finance (ABF) - ″ - 670,821 - 670,821 Ares Specialty Healthcare Fund - ″ - 215,248 - 215,248 General Catalyst Customer Value Fund Feeder, LP - ″ - 428,504 - 428,504 HTC Investment Corporation Listed shares VIA Technologies, Inc. Its chairman is HTC’s director Financial assets at fair value through other comprehensive income - non-current 438 31,974 - 31,974 H.T.C. (B.V.I.) Corp. Unlisted equity investments EMISSIVE - Financial assets at fair value through other comprehensive income - non-current 37 139,326 18.03 139,326 KKCompany Technologies Inc. - ″ 12,277 371,915 7.49 371,915 Race capital - ″ - 653,173 - 653,173 TransLink Capital Fund Partners II, L.P. - ″ - 301,200 - 301,200 (Continued)
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- 63 - Holding Company Marketable Securities Type and Name of Issuer Relationship of Issuer to the Holding Company Financial Statement Account At the End of the Period NoteShares (In Thousand) Carrying Amount Percentage of Ownership (%) Fair Value H.T.C. (B.V.I.) Corp. Funds AAA Holdings (DC), Inc (Class C) - Financial assets at fair value through profit or loss - current - $ 417,602 - $ 417,602 Apollo Aligned Alternatives (C), L.P. - ″ - 432,951 - 432,951 Apollo IG Short Duration Replacement (Cayman) - ″ - 1,475,418 - 1,475,418 BlackRock Money Market Fund (Liquidity Fund) - ″ - 1,716,722 - 1,716,722 BlackRock Systematic Total Alpha Fund - ″ - 602,579 - 602,579 EQT Nexus Fund - ″ - 166,247 - 166,247 EQT Nexus Infrastructure Fund - ″ - 621,658 - 621,658 Goldman Sachs West Street Private Credit Fund - ″ - 1,435,598 - 1,435,598 G-Private Equity - ″ - 1,501,590 - 1,501,590 KKR Income Trust I - ″ - 1,445,414 - 1,445,414 KKR Infrastructure Fund - ″ - 583,600 - 583,600 Bain Capital Griffin Aircraft Offshore Feeder Fund - Financial assets at fair value through profit or loss - non-current - 356,739 - 356,739 BlackRock Global Infrastructure Debt Fund II Feeder SCSp - ″ - 908,331 - 908,331 Oaktree Value Opportunities (Cayman) Fund - ″ - 180,907 - 180,907 HTC Investment (BVI) Corp. Unlisted equity investments Ally Bridge Group - Financial assets at fair value through other comprehensive income - non-current - 222,623 - 222,623 Ally Bridge Group-CMRCO - ″ - 302,207 - 302,207 BITKRAFT Ventures - ″ - 107,847 - 107,847 Cherubic Ventures - ″ - 123,251 - 123,251 Presence Capital Fund I, LP - ″ - 215,538 - 215,538 Funds BlackRock Money Market Fund (Liquidity Fund) - Financial assets at fair value through profit or loss - current - 188,811 - 188,811 General Catalyst Group XII, L.P. - Financial assets at fair value through profit or loss - non-current - 130,331 - 130,331 SIF XII-Scale Cayman - ″ - 220,246 - 220,246 HTC Electronics (Shanghai) Unlisted equity investments Co., Ltd. Kunqiao Phase II (Xiamen) Semiconductor Industry Equity Investment Partnership (Limited Partnership) - Financial assets at fair value through other comprehensive income - non-current - 1,422,360 - 1,422,360 Kunqiao Phase II (Suzhou) Emerging Industry Venture Capital Partnership (Limited Partnership) - ″ - 283,859 - 283,859 Note: This table presents the marketable securities that Group has determined should be disclosed based on the materiality principle. (Concluded)
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- 64 - TABLE 4 HTC CORPORATION AND SUBSIDIARIES TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2026 (In Thousands of New Taiwan Dollars) Company Name Related Party Nature of Relationship Transaction Details Abnormal Transaction Notes/Accounts Payable or Receivable NotePurchase/ Sale Amount % of Total Payment Terms Unit Price Payment Terms Ending Balance % of Total HTC Corporation HTC America Inc. Grandson company Sales $ (390,017) (27) 60 days More favorable than unrelated parties Similar to unrelated parties $ 179,394 47 HTC America Inc. HTC Corporation Parent company Purchases 390,017 90 60 days No comparable unrelated parties Similar to unrelated parties (179,394) (90) HTC Corporation HTC NIPPON Corporation Grandson company Sales (123,324) (8) 60 days More favorable than unrelated parties Similar to unrelated parties 37,211 10 HTC NIPPON Corporation HTC Corporation Parent company Purchases 123,324 98 60 days No comparable unrelated parties Similar to unrelated parties (37,211) (97)
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- 65 - TABLE 5 HTC CORPORATION AND SUBSIDIARIES RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL SEPTEMBER 30, 2026 (In Thousands of New Taiwan Dollars) Company Name Related Party Nature of Relationship Ending Balance Turnover Rate Overdue Amounts Received in Subsequent Period Allowance for Bad DebtAmount Action Taken HTC Corporation HTC America Inc. Grandson company $ 179,394 2.57 $ - - $ 79,512 $ - HTC EUROPE CO., LTD. HTC Corporation Parent company 350,275 0.69 - - 60,540 - HTC (Australia and New Zealand) PTY LTD. HTC Corporation Parent company 121,101 0.15 - - - - Viveport Digital Corporation Viverse Limited (Ireland) Same parent company 161,134 0.45 - - - - HTC America Content Services, Inc. Viverse Limited (Ireland) Same parent company 133,872 0.51 - - - -
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- 66 - TABLE 6 HTC CORPORATION AND SUBSIDIARIES INFORMATION, LOCATIONS, AND OTHER INFORMATION OF INVESTEES OVER WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE (EXCLUDING INFORMATION ON INVESTMENTS IN MAINLAND CHINA) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2026 (In Thousands of New Taiwan Dollars) Investor Company Investee Company Location Main Business Activity Original Investment Amount At the End of the Year Net Income (Loss) of the Investee Investment Gain (Loss) NoteEnding Balance Beginning Balance Shares (In Thousands) Percentage of Ownership (%) Carrying Amount HTC Corporation H.T.C. (B.V.I.) Corp. Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola VG1110 International holding company and general investing activities $ 11,179,428 $ 9,914,828 3,676,202 100.00 $ 10,634,739 $ 523,847 $ 523,847 Note 13 High Tech Computer Asia Pacific Pte. Ltd. #13-00 Robinson 77 Singapore 068896 International holding company; marketing, repair and after-sales services 4,947,594 3,999,144 168,783 100.00 12,263,713 289,537 289,537 Notes 1 and 5 HTC Investment Corporation 1F., No. 88, Sec. 3, Zhongxing Rd., Xindian Dist., New Taipei City General investing activities 271,874 271,874 27,187 100.00 80,311 1,715 1,715 HTC Holding B.V. Van Boshuizenstraat 12, (unit 1.25), 1083BA Amsterdam, the Netherlands International holding company 13 13 - 0.01 13 6,929 - HTC Investment One (BVI) Corporation Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola VG1110 Holding S3 Graphics Co., Ltd. and general investing activities 9,688,603 9,688,603 323,133 100.00 113,774 2,427 2,427 HTC Investment (BVI) Corp. Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola VG1110 General investing activities 832,990 832,990 26,000 100.00 2,971,800 80,785 80,785 HungXu Holding (BVI) Corp. Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola VG1110 International holding company 234,324 234,324 7,000 100.00 226,609 1,423 1,423 HTC VIVE Investment (BVI) Corp. Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola VG1110 General investing activities 210,589 210,589 7,000 100.00 232,111 (20,777) (20,777) DeepQ Holding (BVI) Corp. Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola VG1110 International holding company - - - - - - - Note 11 HTC Smartphone (BVI) Corp. Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola VG1110 International holding company - - - - - - - Note 12 HTC VR Content (BVI) Corp. Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola VG1110 International holding company 50,931 52,518 1,710 100.00 17,123 (422) (422) HungYao Technology Co, Ltd. 16F., No. 88, Sec. 3, Zhongxing Rd., Xindian Dist., New Taipei City Manufacturing of electronic parts 100 100 10 100.00 95 - - HTC EUROPE CO., LTD. Salamanca Wellington Street Slough Berkshire England SL1 1YP International holding company; marketing, repair and after-sales services 6,766,175 9,349,409 43,261 100.00 2,338,966 (331,507) (331,507) Notes 2, 3 and 6 H.T.C. (B.V.I.) Corp. East West Artists, LLC 5200 W Century Blvd Suite 701, Los Angeles, CA 90045, US Human resources management 38,386 38,386 1,200 30.00 - - - Steel Wool Games Inc. 95 Linden St Suite 4, Oakland, CA 94607 Development of virtual reality contents 171,870 171,870 10,822 49.00 - - - Surgical Theater, LLC 781 BETA DRIVE MAYFIELD VILLAGE, OHIO 44143 USA Development of virtual reality contents 437,595 437,595 46 16.30 - - - MOR Museum Inc. 1601-1252 Hornby Street, Vancouver, BC V6Z 0A3 Canada Development of virtual reality contents 49,344 49,344 437 25.00 3,195 (924) (231) Temple of Light Limited Unit F, 9/F, West Nanjing Rd. 993, Jingan District, Shanghai Development of virtual reality contents 32,341 32,341 4,760 25.00 5,031 (2,940) (735) Backlight Studio SAS 47 Boulevard Ornano Bat P1 93200 Saint-Denis, Paris, FR Digital art 40,884 40,884 - 30.02 - - - Lucid Realities SAS 108, Avenue Ledru-Rollin, Paris, FR Digital art 68,472 68,472 20 25.00 3,217 (29,025) (7,256) XR Addict 128, rue de la Boétie - 75008, Paris, FR Digital art 34,985 25,686 86 19.24 7,242 (9,746) (6,831) (Continued)
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- 67 - Investor Company Investee Company Location Main Business Activity Original Investment Amount At the End of the Year Net Income (Loss) of the Investee Investment Gain (Loss) NoteEnding Balance Beginning Balance Shares (In Thousands) Percentage of Ownership (%) Carrying Amount High Tech Computer Asia Pacific Pte. Ltd. HTC (Australia and New Zealand) PTY LTD. SUITE 1 LEVEL 7, 460-62 YORK STREET, SYDNEY NSW 2000 Marketing, repair and after-sales services $ 117,871 $ 117,871 400 100.00 $ 112,713 $ 618 $ 618 HTC India Private Limited Seat No. 45, Plot No. 11, Sector 33, Arjun Nagar, Gurgaon, New Colony, Haryana, India, 122001 Marketing, repair and after-sales services 4,094 4,094 495 99.00 122,723 91 90 HTC HK, Limited 31/F, Tower Two, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong International holding company; marketing, repair and after-sales services 53,057 151,634 13,000 100.00 3,176,021 5,460 5,460 Note 8 HTC Holding B.V. Van Boshuizenstraat 12 unit 1.25, 1083 BA Amsterdam, the Netherlands International holding company 6,815,370 6,815,370 105,569 99.99 639,699 6,929 6,929 HTC Investment One (BVI) Corporation S3 Graphics, Co., Ltd. P.O. Box 709 George Town Grand Cayman Design, research and development of graphics technology 9,033,450 9,033,450 308,279 100.00 101,571 2,358 2,358 HTC Holding B.V. HTC Servicios DE Operacion Mexico, S.A DE C.V. Paseo de la Reforma 505 piso 32 Col Cuauhtemoc. Cp 06500 Mexico DF. Human resources management 37 37 1 1.00 58 (37) - HTC Netherlands B.V. Van Boshuizenstraat 12 unit 1.25, 1083 BA Amsterdam, the Netherlands International holding company; marketing, repair and after-sales services 7,050,037 7,050,037 143,882 100.00 655,729 7,733 7,733 HTC India Private Limited Seat No. 45, Plot No. 11, Sector 33, Arjun Nagar, Gurgaon, New Colony, Haryana, India, 122001 Marketing, repair and after-sales services 39 39 5 1.00 1,240 91 1 HTC Communication Solutions Mexico, S.A DE C.V. Paseo de la Reforma 505 piso 32 Col Cuauhtemoc. Cp 06500 Mexico DF. Marketing, repair and after-sales services 25 25 1 1.00 66 (158) (2) HTC Netherlands B.V. HTC Belgium BV Botanic Tower, 6th floor, Boulevard Saint-Lazare, 4-10, 1210 Brussels Marketing, repair and after-sales services 783 783 19 100.00 24,632 118 118 HTC NIPPON Corporation The CORNER Nihonbashi east 7th floor, 1-9-1, Nihonbashi Bakurocho, Chuo-ku, Tokyo Sale of virtual reality devices and smart mobile devices 154,810 154,810 56 100.00 224,691 (1,143) (1,143) HTC FRANCE CORPORATION 83-85 boulevard de Charonne 75011 Paris Marketing, repair and after-sales services 459,161 459,161 11,750 100.00 69,915 895 895 HTC Nordic ApS. c/o Redmark, Sommervej 31 C, Hasle, 8210 Aarhus V Marketing, repair and after-sales services 5,345 5,345 80 100.00 12,034 (11) (11) Note 10 HTC Germany GmbH. Friedrich-Ebert-Anlage 36 60325 Frankfurt am Main Germany Marketing, repair and after-sales services 24,550 24,550 25 100.00 25,679 653 653 HTC Poland sp. z o.o. Jerozolimskie Business Park, Al. Jerozolimskie 146A, 02-305 Warszawa, Poland Marketing, repair and after-sales services 2,301 2,301 5 100.00 6,441 287 287 HTC Communication Canada, Ltd. 2900-550 Burrard Street, Vancouver BC V6C 0A3, Canada Marketing, repair and after-sales services 43,915 43,915 1,500 100.00 79,402 1,279 1,279 HTC Middle East FZ-LLC 006, Second Floor, Dquarters, Dubai Media City Building 5, Dubai, UAE Marketing, repair and after-sales services 28,029 28,029 4 100.00 66,239 1,274 1,274 HTC Communication Solutions Mexico, S.A DE C.V. Paseo de la Reforma 505 piso 32 Col Cuauhtemoc. Cp 06500 Mexico DF. Marketing, repair and after-sales services 2,460 2,460 50 99.00 6,536 (158) (156) HTC Servicios DE Operacion Mexico, S.A DE C.V. Paseo de la Reforma 505 piso 32 Col Cuauhtemoc. Cp 06500 Mexico DF. Human resources management 3,690 3,690 50 99.00 5,697 (37) (37) (Continued)
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- 68 - Investor Company Investee Company Location Main Business Activity Original Investment Amount At the End of the Year Net Income (Loss) of the Investee Investment Gain (Loss) NoteEnding Balance Beginning Balance Shares (In Thousands) Percentage of Ownership (%) Carrying Amount HTC EUROPE CO., LTD. HTC America Holding Inc. 1625 Shattuck Ave, Berkeley, CA 94709 International holding company $ 4,312,259 $ 6,341,332 371,617 100.00 $ 1,418,432 $ (243) $ (243) Notes 2 and 7 DeepQ Holding Corporation 89 Nexus Way, Camana Bay, Grand Cayman, KY1-9009, Cayman Islands International holding company 314,390 314,390 61,700 100.00 138,218 (43,517) (43,517) Note 3 VIVE Arts Holding Corporation 89 Nexus Way, Camana Bay, Grand Cayman, KY1-9009, Cayman Islands International holding company 178,843 178,843 32,000 100.00 115,734 (14,545) (14,545) Viverse Holding Corporation 89 Nexus Way, Camana Bay, Grand Cayman, KY1-9009, Cayman Islands International holding company 1,606,825 1,606,825 23,498 100.00 572,944 (206,081) (206,081) REIGN Technology Corporation 89 Nexus Way, Camana Bay, Grand Cayman, KY1-9009, Cayman Islands International holding company 536,789 536,789 40,900 100.00 318,605 (63,050) (63,050) VIVE Arts Holding Corporation VIVE Arts Corporation 15th Floor, No. 88, Section 3, Zhongxing Road, Xindian District, New Taipei City Digital art 27,500 27,500 2,750 100.00 10,140 (563) (563) VIVE Arts Limited Salamanca, Wellington Street, Slough, Berkshire, United Kingdom SL1 1YP Digital art 137,290 137,290 4,600 100.00 25,781 (13,951) (13,951) DeepQ Holding Corporation DeepQ (BVI) Corp. Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola VG1110 International holding company 313,539 313,539 164,700 100.00 36,857 (43,467) (43,467) Note 3 REIGN Technology Corporation REIGN Technology Corporation 12F., No. 88, Sec. 3, Zhongxing Rd., Xindian Dist., New Taipei City Construction, application and after-sales services of 5G 519,000 459,000 51,900 100.00 157,832 (62,955) (62,955) Note 14 Viverse Holding Corporation Viverse Limited (UK) Salamanca, Wellington Street, Slough Sl1 1YP International holding company 1,602,553 1,602,553 40,336 100.00 570,510 (205,997) (205,997) Viverse Limited (UK) Viverse Limited (Ireland) 10 Earlsfort Terrace, Dublin 2, Republic of Ireland Market development and sale of virtual reality contents 1,219,635 1,219,635 35,325 100.00 108,021 (159,864) (159,864) Viveport Digital Corporation 11F., No. 88, Sec. 3, Zhongxing Rd., Xindian Dist., New Taipei City Virtual reality platform software development and promotion services 350,000 350,000 35,000 100.00 131,399 (47,336) (47,336) HTC America Holding Inc. HTC America Inc. 1625 Shattuck Ave, Berkeley, CA 94709 Sale of virtual reality devices and smart mobile devices 130,973 130,973 1 100.00 473,534 28,985 28,985 Note 2 One & Company Design, Inc. 1625 Shattuck Ave, Berkeley, CA 94709 Design, research and development of application software 191,052 191,052 60 100.00 2,628 - - HTC America Innovation Inc. 1625 Shattuck Ave, Berkeley, CA 94709 Design, research and development of application software - - - - - 65 65 Note 15 Dashwire, Inc. 1625 Shattuck Ave, Berkeley, CA 94709 Design and management of cloud synchronization technology - - 0.1 100.00 1,666 - - HTC America Content Services, Inc. 1625 Shattuck Ave, Berkeley, CA 94709 Online/download media services 2,414,274 2,414,274 31 100.00 48,732 1,963 1,963 HungXu Holding (BVI) Corp. HungXu Technology (BVI) Corp. Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola VG1110 International holding company 203,795 203,795 32,000 100.00 245,369 1,194 1,194 HungXu Technology (BVI) Corp. HungXu TECH Corp. 8F., No. 88, Sec. 3, Zhongxing Rd., Xindian Dist., New Taipei City Research and development of virtual reality devices 157,000 157,000 15,700 100.00 209,436 866 866 Note 4 DeepQ (BVI) Corp. DeepQ Technology Corp. 13F., No. 207-5, Sec. 3, Beixin Rd., Xindian Dist., New Taipei City Medical technology and health care 467,212 467,212 46,721 100.00 31,422 (33,602) (33,602) Note 3 HTC Investment (BVI) Corp. VRChat. Inc. 288 Bryn Mawr Cir, Houston TX 77024, USA Development of virtual reality contents 391,860 391,860 79,257 34.02 631,677 (2,225) (757) HTC VIVE TECH (HK) Limited Unit 1606, 16/F., Citicorp Centre, No. 18 Whitfield Road, Causeway Bay, Hong Kong Research, development and sale of virtual reality devices - - - 100.00 - - - Note 9 Small Creative SAS 62 avenue Parmentier, 75011 Paris, France Digital art 49,927 49,927 - 28.01 7,304 1,227 343 Architect 13 rue de Mont-Louis, 75011 Paris, France Digital art 107,040 107,040 33 22.00 6,656 (34,825) (17,654) HTC VR Content (BVI) Corp. Uomo Vitruviano Corp. 11F., No. 88, Sec. 3, Zhongxing Rd., Xindian Dist., New Taipei City Development of virtual reality contents 50,000 50,000 5,000 100.00 17,123 (289) (289) (Continued)
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- 69 - Note 1: The carrying amount excludes unrealized gain of NT$1,210 thousand at the end of the current period. Note 2: The carrying amount excludes unrealized profit of NT$31,774 thousand at the end of the current period. Note 3: The carrying amount includes adjustment for IFRS 16 of NT$35 thousand at the end of the current period. Note 4: The dissolution of Hung Xu TECH Corp. was approved at the shareholders’ meeting held on December 31, 2024, and the liquidation process is still ongoing. Note 5: On January 15, 2026, High Tech Computer Asia Pacific Pte. Ltd. completed a capital increase of US$30,000 thousand. Following the capital increase, its total outstanding shares amounted to 168,783 thousand shares. Note 6: On January 9, 2026, HTC Europe Co., Ltd. completed a capital reduction of GBP60,800 thousand, during which 60,800 thousand shares were cancelled. Following the capital reduction, the total outstanding shares amounted to 43,261 thousand shares. Note 7: On January 9, 2026, HTC America Holding Inc. completed a capital reduction of US$64,200 thousand. No shares were cancelled as a result of the capital reduction, and the paid-in capital amounted to US$53,160 thousand after the capital reduction. Note 8: On January 28, 2026, HTC HK, Limited completed a capital reduction of HK$24,626 thousand, during which 24,626 thousand shares were cancelled. Following the capital reduction, the total outstanding shares amounted to 13,000 thousand shares. Note 9: The dissolution of HTC VIVE TECH (HK) Limited was approved at the shareholders’ meeting held on May 29, 2026, and the liquidation process is still ongoing. Note 10: The dissolution of HTC Nordic ApS. Limited was approved at the board of directors held on June 12, 2026, and the liquidation process is still ongoing. Note 11: DeepQ Holding (BVI) Corp. completed the dissolution process on September 16, 2026. Note 12: HTC Smartphone (BVI) Corp. completed the dissolution process on February 19, 2026. Note 13: On January 14, 2026, H.T.C. (B.V .I.) Corp. completed a capital increase of US$40,000 thousand. Following the capital increase, its total outstanding shares amounted to 3,676,202 thousand shares. Note 14: On January 8, 2026, REIGN Technology Corporation completed a capital increase of NT$60,000 thousand. Following the capital increase, its total outstanding shares amounted to 51,900 thousand shares. Note 15: The dissolution of HTC America Innovation Inc. was approved at the board of directors held on August 2026, and the liquidation process is still ongoing. (Concluded)
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- 70 - TABLE 7 HTC CORPORATION AND SUBSIDIARIES INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2026 (In Thousands of New Taiwan Dollars) Investee Company Main Business Activity Total Amount of Paid-in Capital Investment Type Accumulated Outflow of Investment from Taiwan as of the Beginning of the Year Investment Flows Accumulated Outflow of Investment from Taiwan as of the End of the Year Net Income (Loss) of the Investee Percentage of Ownership (%) Investment Gain (Loss) Carrying Amount Accumulated Inward Remittance of Earnings Outflow Inflow High Tech Computer Corp. (Suzhou) (Note 4) Manufacture and sale of smart mobile devices US$ - Investment in company located in mainland China indirectly through H.T.C. (B.V.I.) Corp. $ 3,312 (US$ 100) $ - $ - $ 3,312 (US$ 100) $ - - $ - $ - $ - HTC Corporation (Shanghai WGQ) (Note 7) Smart mobile devices examination and after-sale services and technique consultations US$ - Investment in company located in mainland China indirectly through HTC HK, Limited. 49,845 (US$ 1,500) - - 49,845 (US$ 1,500) - - - - - HTC Electronics (Shanghai) Co., Ltd. (Note 5) Manufacture and sale of virtual reality devices and smart mobile devices US$ 2,909 ″ 821,335 (US$ 33,000) - - 821,335 (US$ 33,000) 4,605 100.00 4,605 3,149,504 - HTC Communication Co., Ltd. (Note 6) Sale of virtual reality devices and smart mobile devices and after-sales services US$ 97,500 Investment in company located in mainland China indirectly through High Tech Computer Asia Pacific Pte. Ltd. 4,125,897 (US$ 127,500) - - 4,125,897 (US$ 127,500) (38,311) 100.00 (38,311) 270,812 (Note 3) - HTC Communication Technologies (Shanghai) Limited (Note 11) Design, research and development of application software US$ 500 ″ 120,799 (US$ 4,000) - - 120,799 (US$ 4,000) 2,253 100.00 2,253 73,598 - Ji Jhih Suo Sin Si Technology (Shanghai) Co., Ltd. Design and system integration of computer software and wholesale and retail of peripheral equipment software US$ 51,550 Investment in company located in mainland China indirectly through GSUO Inc. 249,678 (US$ 8,000) - - 249,678 (US$ 8,000) - 10.32 - - - HTC Communication (BJ) Tech Co. (Note 10) Design, research and development of application software RMB 500 Investment in company located in mainland China through the own funds of HTC Communication Technologies (Shanghai) Limited. - - - - (48) 100.00 (48) - - Gui Zhou Wei Ai Technology Group Co., Ltd. Development and sales of virtual reality contents RMB 11,775 Investment in company located in mainland China through the own funds of HTC Communication Co., Ltd. - - - - (4,787) 26.05 (1,247) 90,941 - Beijing Transmission Weiku Technology Co., Ltd. Research and development of virtual reality contents RMB 64 Investment in company located in mainland China through the own funds of HTC Communication Co., Ltd. - - - - - 6.00 - - - Beijing Seven Vision Virtual Technology Co., Ltd. Research and development of virtual reality contents RMB 1,087 ″ - - - - - 8.00 - - - Shenzhen Yichen Virtual Reality Technology Co., Ltd. Research and development of virtual reality contents RMB 5,342 ″ - - - - - 1.32 - - - (Continued)
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- 71 - Investee Company Main Business Activity Total Amount of Paid-in Capital Investment Type Accumulated Outflow of Investment from Taiwan as of the Beginning of the Year Investment Flows Accumulated Outflow of Investment from Taiwan as of the End of the Year Net Income (Loss) of the Investee Percentage of Ownership (%) Investment Gain (Loss) Carrying Amount Accumulated Inward Remittance of Earnings Outflow Inflow Shenzhen Shengda Education Technology Co., Ltd. Research and development of virtual reality contents RMB 950 Investment in company located in mainland China through the own funds of HTC Communication Co., Ltd. $ - $ - $ - $ - $ - 6.88 $ - $ 1,662 $ - Shanghai Duowei Network Technology Co., Ltd. Research and development of virtual reality contents RMB 133 ″ - - - - - 5.00 - - - Shanghai Chaoshi Business Management Partnership (Limited Partnership) Research and development of virtual reality contents RMB 100 ″ - - - - - 20.00 - 1,329 - Beijing WEWOD Entertainment Technology Co., Ltd. Research and development of virtual reality contents RMB 1,812 ″ - - - - - 1.50 - 7,122 - Shanghai Judao Network Technology Co., Ltd. Research and development of virtual reality contents RMB 142 ″ - - - - - 2.00 - 2,386 - Shanghai Lenqiy Information Technology Co., Ltd. Research and development of virtual reality contents RMB 3,000 ″ - - - - - 3.00 - 1,576 - Beijing Yuanji Technology Co., Ltd. Research and development of virtual reality contents RMB - ″ - - - - - 5.00 - - - Qinhuangdao Shiyi Technology Co., Ltd. Research and development of virtual reality contents RMB 685 ″ - - - - - 5.00 - 2,374 - Hefei Yao An Technology Co., Ltd. Research and development of virtual reality contents RMB 12,208 ″ - - - - - 2.00 - 4,748 - Red Landmark (Beijing) Culture Technology Co., Ltd. Production of radio and television programs RMB 12,077 ″ - - - - - 3.00 - - - HTC VIVE TECH (Beijing) (Note 8) Research, development and sale of virtual reality devices US$ - Investment in company located in mainland China indirectly through HTC VIVE TECH (HK) Limited 24,067 (US$ 800) - - 24,067 (US$ 800) - - - - - DeepQ Technology (Beijing) (Note 9) Development and marketing of software technology US$ 500 Investment in company located in mainland China indirectly through DeepQ (BVI) Corp. 89,732 (US$ 3,000) - - 89,732 (US$ 3,000) (85) 100.00 (85) - - XI’an Hongwun Digital Technology Co., Ltd. Digital content development and sales RMB 50,000 Investment in company located in mainland China through the own funds of HTC Electronics (Shanghai) Co., Ltd. - - - - 14,928 47.00 7,016 106,277 - Accumulated Investment in Mainland China for the Years Ended Investment Amounts Authorized by the Investment Commission, MOEA Upper Limit on Investment $ 5,484,665 (US$ 177,900) $ 8,691,003 (US$ 278,600) $ 16,010,184 (Continued)
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- 72 - Note 1: Investment amounts authorized by the Investment Commission, MOEA: The remitted amount is translated at the exchange rate of the original remittance and the unremitted amount is converted at the exchange rate of NT$31.84050 to US$1 at September 30, 2026. Note 2: Investment gains (losses) and the carrying amount as of September 30, 2026 are based on reviewed financial statements. Gains and losses are translated at the average exchange rate of NT$4.65280 to RMB1 from January to September 2026. The carrying a mount is translated at the exchange rate on September 30, 2026 at NT$4.74771 to RMB1. Note 3: The carrying amount excludes unrealized gain of NT$1,210 thousand at the end of the current period. Note 4: High Tech Computer Corp. (Suzhou) has completed the liquidation process on July 5, 2019. As of September 30, 2026, the refunded capital has not been repatriated to Taiwan. Note 5: HTC Electronics (Shanghai) Co., Ltd. reduced its share capital by US$130,000 thousand on September 2019. As of September 30, 2026, the refunded capital US$30,000 thousand has not been repatriated to Taiwan. Note 6: HTC Communication Co., Ltd. was approved by the local competent authority to reduce its share capital by US$30,000 and US$3,500 thousand on March 2025 and January 2026, respectively. As of September 30, 2026, the refunded capital has not been repatriated to Taiwan. Note 7: The dissolution of HTC Corporation (Shanghai WGQ) was approved in its shareholders’ meeting held on July 31, 2024 and the deregistration has been completed on April 7, 2025. As of September 30, 2026, the refunded capital has not been repatriated to Taiwan. Note 8: The dissolution of HTC VIVE TECH (Beijing) was approved in its shareholders’ meeting on July 1, 2025, and the deregistration was completed onSeptember 25, 2025. As of September 30, 2026, the refunded capital has not been repatriated to Taiwan. Note 9: DeepQ Technology (Beijing) completed the dissolution process on September 21, 2026. Note 10: The dissolution of HTC Communication Beijing Tech Co. was approved in its shareholders’ meeting held on December 31, 2025, and the liquidation process is still ongoing. Note 11: HTC Communication Technologies (Shanghai) Limited was approved by the local competent authority to reduce its share capital by US$3,500 thousand in January 2026. As of September 30, 2026, the refunded capital has not been repatriated to Taiwan. (Concluded)
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- 73 - TABLE 8 HTC CORPORATION AND SUBSIDIARIES INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2026 (In Thousands of New Taiwan Dollars) No. (Note 1) Company Counterparty Relationship (Note 2) Transaction Details Financial Statement Accounts Amount (Note 3) Payment Terms (Note 4) % of Total Sales or Assets (Note 5) For the nine months ended September 30, 2026 0 HTC Corporation HTC EUROPE CO., LTD. a Accrued expenses $ 350,275 More favorable than unrelated parties 1 a Commission 165,579 - 8 HTC America Inc. a Sales 390,017 - 19 a Trade receivables 179,394 - - HTC (Australia and New Zealand) Pty. Ltd. a Accrued expenses 121,101 More favorable than unrelated parties - HTC NIPPON Corporation a Sales 123,324 - 6 1 Viveport Digital Corporation Viverse Limited (Ireland) b Trade receivables 161,134 - - 2 HTC America Content Services, Inc. Viverse Limited (Ireland) b Trade receivables 133,872 - - Note 1: Parties to the intercompany transactions are identified and numbered as follows: a. “0” for HTC Corporation. b. Subsidiaries (Numbered consecutively from “1”.) Note 2: Transactions are categorized as follows: a. From a parent company to its subsidiary. b. Between subsidiaries. Note 3: All internal transactions between consolidated companies have been eliminated from the consolidated financial statements. Note 4: Unless otherwise specified, it is the same as the unrelated parties. Note 5: Percentage of consolidated total assets is calculated by dividing the amount of a particular asset or liability account by the consolidated total of assets as of September 30, 2026. Percentage of consolidated total revenues is calculated by dividing the amount of a particular revenue or cost or expense account by the consolidated total operating revenues for the nine months ended September 30, 2026. Note 6: The standard for disclosure of information on business transactions between related parties requires a disclosure of the foll owing financial items if the transaction is at least NT$100 million or 20% of the paid -in-capital: Purchases (expenses), sales and receivables (payments). Financial items other than the above will not be disclosed.