Interim report
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Arizon RFID Technology (Cayman) Co., Ltd. and Subsidiaries Consolidated Financial Statements for the Nine Months Ended September 30, 2025 and 2024 and Independent Auditors’ Review Report
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- 1 - INDEPENDENT AUDITORS’ REVIEW REPORT The Board of Directors and Shareholders Arizon RFID Technology (Cayman) Co., Ltd. Introduction We have reviewed the accompanying consolidated balance sheets of Arizon RFID Technology (Cayman) Co., Ltd. (the “Company”) and its subsidiaries (collectively, the “Group”) as of September 30, 2025 and 2024, the related consolidated statements of comprehensive income for the three months ended September 30, 2025 and 2024, and for the nine months ended September 30, 2025 and 2024, the consolidated statements of changes in equity and cash flows for the nine months then ended, and the related notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the “consolidated financial statements”). Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews. Scope of Review We conducted our reviews in accordance with the Standards on Review Engagements of the Republic of China 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our reviews, nothing has come to our attention that caused us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as of September 30, 2025 and 2024, its consolidated financial performance for the three months ended September 30, 2025 and 2024, and its consolidated financial performance and its consolidated cash flows for the nine months ended September 30, 2025 and 2024 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.
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- 2 - The engagement partners on the reviews resulting in this independent auditors’ review report are Shu-Wan Lin and Chih-Ming Shao. Deloitte & Touche Taipei, Taiwan Republic of China November 11, 2025 Notice to Readers The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to review such consolidated financial statements are those generally applied in the Republic of China. For the convenience of readers, the independent auditors’ review report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ review report and consolidated financial statements shall prevail.
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- 3 - ARIZON RFID TECHNOLOGY (CAYMAN) CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands of New Taiwan Dollars) September 30, 2025 December 31, 2024 September 30, 2024 ASSETS Amount % Amount % Amount % CURRENT ASSETS Cash and cash equivalents (Note 6) $ 1,690,399 20 $ 2,384,419 26 $ 1,585,658 21 Financial assets at amortized cost - current (Note 8) 1,167,033 14 1,619,091 18 1,009,937 13 Notes and accounts receivable (Notes 9 and 18) 768,990 9 1,455,977 16 1,110,188 15 Accounts receivable from related parties (Notes 18 and 25) 600 - 24 - 864 - Inventories (Note 10) 1,166,644 13 1,057,094 12 1,167,888 15 Other current assets (Note 25) 168,393 2 208,131 2 177,379 2 Total current assets 4,962,059 58 6,724,736 74 5,051,914 66 NON-CURRENT ASSETS Financial assets at fair value through profit or loss - non-current (Notes 7 and 24) 100 - 1,300 - - - Financial assets at amortized cost - non-current (Note 8) 1,071,177 13 228,041 3 632,332 8 Property, plant and equipment (Note 12) 1,769,067 21 1,771,584 19 1,580,989 21 Right-of-use assets (Note 13) 275,678 3 249,090 3 251,623 4 Deferred tax assets 10,593 - 21,152 - 22,356 - Other non-current assets 428,368 5 131,662 1 96,237 1 Total non-current assets 3,554,983 42 2,402,829 26 2,583,537 34 TOTAL $ 8,517,042 100 $ 9,127,565 100 $ 7,635,451 100 LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 14) $ 857,841 10 $ 800,000 9 $ 690,000 9 Contract liabilities - current (Note 18) 34,015 - 26,467 - 24,352 - Notes and accounts payable 557,795 7 581,553 6 645,099 9 Accounts payable to related parties (Note 25) 2,552 - 767 - 837 - Other payables 216,580 3 322,892 4 317,590 4 Other payables to related parties (Note 25) 202 - 396 - 233 - Current tax liabilities 14,480 - 30,176 - 27,469 1 Lease liabilities - current (Note 13) 22,293 - 12,361 - 11,689 - Other current liabilities (Note 25) 12,149 - 7,462 - 4,535 - Total current liabilities 1,717,907 20 1,782,074 19 1,721,804 23 NON-CURRENT LIABILITIES Bonds payable (Note 15) 953,898 11 937,491 10 - - Deferred tax liabilities 19,121 - 41,599 1 29,246 - Lease liabilities - non-current (Note 13) 71,324 1 28,796 - 30,584 - Other non-current liabilities 43,361 1 46,191 1 50,089 1 Total non-current liabilities 1,087,704 13 1,054,077 12 109,919 1 Total liabilities 2,805,611 33 2,836,151 31 1,831,723 24 EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 17) Share capital Ordinary shares 748,880 9 748,880 8 748,880 10 Capital surplus 4,273,440 50 4,272,805 47 4,096,537 54 Retained earnings Legal reserve 159,682 2 75,001 1 75,001 1 Special reserve - - 202,897 2 202,897 2 Unappropriated earnings 876,306 10 948,828 10 687,790 9 Total retained earnings 1,035,988 12 1,226,726 13 965,688 12 Other equity (347,892) (4) 41,927 1 (8,394) - Total equity attributable to owners of the Company 5,710,416 67 6,290,338 69 5,802,711 76 NON-CONTROLLING INTERESTS 1,015 - 1,076 - 1,017 - Total equity 5,711,431 67 6,291,414 69 5,803,728 76 TOTAL $ 8,517,042 100 $ 9,127,565 100 $ 7,635,451 100 The accompanying notes are an integral part of the consolidated financial statements.
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- 4 - ARIZON RFID TECHNOLOGY (CAYMAN) CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Amount % Amount % Amount % Amount % NET SALES (Notes 18 and 25) $ 821,160 100 $ 1,149,941 100 $ 2,889,158 100 $ 3,221,074 100 COST OF GOODS SOLD (Notes 10, 19 and 25) (649,158 ) (79 ) (783,058 ) (68 ) (2,116,774 ) (73 ) (2,127,787 ) (66 ) GROSS PROFIT 172,002 21 366,883 32 772,384 27 1,093,287 34 OPERATING EXPENSES (Notes 19 and 25) Selling and marketing (28,316 ) (4 ) (54,036 ) (5 ) (88,468 ) (3 ) (89,510 ) (3 ) General and administrative (70,719 ) (9 ) (67,721 ) (6 ) (205,701 ) (7 ) (236,054 ) (7 ) Research and development (28,031 ) (3 ) (53,400 ) (4 ) (112,378 ) (4 ) (132,066 ) (4 ) Total operating expenses (127,066 ) (16 ) (175,157 ) (15 ) (406,547 ) (14 ) (457,630 ) (14 ) PROFIT FROM OPERATIONS 44,936 5 191,726 17 365,837 13 635,657 20 NON-OPERATING INCOME AND EXPENSES Finance costs (10,294 ) (1 ) (2,969 ) - (30,258 ) (1 ) (6,294 ) - Interest income 21,506 3 24,663 2 82,971 3 78,361 2 Other income (1,578 ) - 761 - 21,867 - 9,178 - Gain (loss) on disposal of property, plant and equipment 161 - (2,202 ) - 126 - (5,983 ) - Loss on financial assets at FVTPL (5,704 ) (1 ) - - (6,804 ) - - - Other expenses (847 ) - (191 ) - (3,397 ) - (714 ) - Foreign exchange gain (loss) (Note 26) 35,989 4 513 - (112,638 ) (4 ) (375 ) - Total non-operating income and expenses 39,233 5 20,575 2 (48,133 ) (2 ) 74,173 2 PROFIT BEFORE INCOME TAX 84,169 10 212,301 19 317,704 11 709,830 22 INCOME TAX EXPENSE (Notes 4 and 20) (19,486 ) (2 ) (41,187 ) (4 ) (96,480 ) (3 ) (123,938 ) (4 ) NET PROFIT FOR THE PERIOD 64,683 8 171,114 15 221,224 8 585,892 18 OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Exchange differences arising on translation to the presentation currency - - (46,324 ) (4 ) - - 222,008 7 (Continued)
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- 5 - ARIZON RFID TECHNOLOGY (CAYMAN) CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Amount % Amount % Amount % Amount % Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of the financial statements of foreign operations $ 232,625 28 $ (9,079 ) (1 ) $ (389,883 ) (14 ) $ (27,472 ) (1 ) Other comprehensive income (loss) for the period, net of income tax 232,625 28 (55,403 ) (5 ) (389,883 ) (14 ) 194,536 6 TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD $ 297,308 36 $ 115,711 10 $ (168,659 ) (6 ) $ 780,428 24 NET PROFIT ATTRIBUTABLE TO: Owners of the Company $ 64,667 8 $ 171,088 15 $ 221,146 8 $ 585,775 18 Non-controlling interests 16 - 26 - 78 - 117 - $ 64,683 8 $ 171,114 15 $ 221,224 8 $ 585,892 18 TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO: Owners of the Company $ 297,252 36 $ 115,693 10 $ (168,673 ) (6 ) $ 780,278 24 Non-controlling interests 56 - 18 - 14 - 150 - $ 297,308 36 $ 115,711 10 $ (168,659 ) (6 ) $ 780,428 24 EARNINGS PER SHARE (Note 21) Basic $ 0.86 $ 2.29 $ 2.95 $ 7.87 Diluted $ 0.86 $ 2.29 $ 2.95 $ 7.83 The accompanying notes are an integral part of the consolidated financial statements. (Concluded)
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- 6 - ARIZON RFID TECHNOLOGY (CAYMAN) CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars) Equity Attribute to Owners of the Company (Note 17) Other Equity Exchange Differences on Translating the Financial Share Capital Retained Earnings Statements of Shares (In Thousands) Amount Capital Surplus Legal Reserve Special Reserve Unappropriated Earnings Total Foreign Operations Total Non-controlling Interest Total Equity BALANCE ON JANUARY 1, 2024 74,318 $ 743,180 $ 4,068,511 $ 30,208 $ 124,319 $ 448,340 $ 602,867 $ (202,897) $ 5,211,661 $ 866 $ 5,212,527 Appropriation of 2023 earnings Legal reserve - - - 44,793 - (44,793) - - - - - Special reserve - - - - 78,578 (78,578) - - - - - Cash dividends distributed by the Company - - - - - (222,954) (222,954) - (222,954) - (222,954) Net profit for the nine months ended September 30, 2024 - - - - - 585,775 585,775 - 585,775 117 585,892 Other comprehensive income for the nine months ended September 30, 2024 - - - - - - - 194,503 194,503 33 194,536 Total comprehensive income for the nine months ended September 30, 2024 - - - - - 585,775 585,775 194,503 780,278 150 780,428 Exercise of employee share options 570 5,700 24,179 - - - - - 29,879 - 29,879 Share-based compensation expenses (Note 22) - - 3,847 - - - - - 3,847 1 3,848 BALANCE ON SEPTEMBER 30, 2024 74,888 $ 748,880 $ 4,096,537 $ 75,001 $ 202,897 $ 687,790 $ 965,688 $ (8,394) $ 5,802,711 $ 1,017 $ 5,803,728 BALANCE ON JANUARY 1, 2025 74,888 $ 748,880 $ 4,272,805 $ 75,001 $ 202,897 $ 948,828 $ 1,226,726 $ 41,927 $ 6,290,338 $ 1,076 $ 6,291,414 Appropriation of 2024 earnings Legal reserve - - - 84,681 - (84,681) - - - - - Special reserve - - - - (202,897) 202,897 - - - - - Cash dividends distributed by the Company - - - - - (411,884) (411,884) - (411,884) - (411,884) Net profit for the nine months ended September 30, 2025 - - - - - 221,146 221,146 - 221,146 78 221,224 Other comprehensive loss for the nine months ended September 30, 2025 - - - - - - - (389,819) (389,819) (64) (389,883) Total comprehensive income (loss) for the nine months ended September 30, 2025 - - - - - 221,146 221,146 (389,819) (168,673) 14 (168,659) Share-based compensation expenses (Note 22) - - 635 - - - - - 635 - 635 Cash dividends distributed by subsidiaries - - - - - - - - - (75) (75) BALANCE ON SEPTEMBER 30, 2025 74,888 $ 748,880 $ 4,273,440 $ 159,682 $ - $ 876,306 $ 1,035,988 $ (347,892) $ 5,710,416 $ 1,015 $ 5,711,431 The accompanying notes are an integral part of the consolidated financial statements.
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- 7 - ARIZON RFID TECHNOLOGY (CAYMAN) CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) For the Nine Months Ended September 30 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES Profit before income tax $ 317,704 $ 709,830 Adjustments for: Depreciation expenses 218,650 167,092 Amortization expenses 1,161 1,355 Net loss on fair value changes of financial assets and liabilities at FVTPL 6,804 - Finance costs 30,258 6,294 Share-based compensation expenses 635 3,848 Interest income (82,971) (78,361) (Gain) loss on disposal of property, plant and equipment (126) 5,983 Write-downs of (reversed of) inventories recognized 1,765 (8,830) Unrealized gain on foreign currency exchange (121) (2,705) Changes in operating assets and liabilities Financial assets at fair value through profit or loss (5,604) - Notes and accounts receivable 603,261 (391,136) Accounts receivable from related parties (576) (862) Inventories (182,499) (540,750) Other current assets (28,331) (19,233) Contract liabilities 9,083 (5,499) Notes and accounts payable 12,823 253,439 Accounts payable to related parties 1,785 64 Other payables (80,018) 83,284 Other payables to related parties (194) - Other current liabilities 6,073 (450) Cash generated from operations 829,562 183,363 Interest received 139,103 61,461 Interest paid (13,626) (5,709) Income tax paid (121,420) (88,683) Net cash generated from operating activities 833,619 150,432 CASH FLOWS FROM INVESTING ACTIVITIES Increase in financial assets at amortized cost (1,076,650) (39,143) Decrease in financial assets at amortized cost 565,220 477,161 Payments for property, plant and equipment (313,834) (616,527) Proceeds from disposal of property, plant and equipment 9,891 - Payments for right-of-use assets - (189,983) (Increase) decrease in other non-current assets (322,981) 149,909 Net cash used in investing activities (1,138,354) (218,583) (Continued)
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- 8 - ARIZON RFID TECHNOLOGY (CAYMAN) CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) For the Nine Months Ended September 30 2025 2024 CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings $ 157,841 $ 390,000 Decrease in short-term borrowings (100,000) - Repayment of the principal portion of lease liabilities (9,131) (8,688) (Decrease) increase in other non-current liabilities (34) 2,202 Cash dividends released (411,884) (222,954) Exercise of employee share options - 29,879 Dividends paid to non-controlling interests (75) - Net cash (used in) generated from financing activities (363,283) 190,439 EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS HELD IN FOREIGN CURRENCIES (26,002) 31,299 NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (694,020) 153,587 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 2,384,419 1,432,071 CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD $ 1,690,399 $ 1,585,658 The accompanying notes are an integral part of the consolidated financial statements. (Concluded)
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- 9 - ARIZON RFID TECHNOLOGY (CAYMAN) CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) 1. GENERAL INFORMATION Arizon RFID Technology (Cayman) Co., Ltd. (the “Company”), was established on October 21, 2021 in the Cayman Islands under reorganization mainly for the purpose of applying for listing on Taiwan Stock Exchange (“TWSE”). The Company and its subsidiaries’ (collectively referred to as the “Group”) are mainly engaged in the design, development, manufacture and trading of radio-frequency identification (RFID) system. The Company’s ultimate parent company is YFY Inc., and the Company’s parent company is YFY Global Investment B.V., which held 61.02% and 61.01% of the Company’s shares as of September 30, 2025 and 2024, respectively. The Company’s shares have been listed on the Taiwan Stock Exchange (TWSE) since March 21, 2023. The Company has shifted its financing activities to primarily use New Taiwan dollars (NTD). In consideration of improving the efficiency of financing management and in response to changes in economic conditions, the board of directors resolved on November 8, 2024 to change the Company’s functional currency from Renminbi (RMB) to New Taiwan dollars (NTD). In accordance with International Accounting Standard (IAS) 21, this change has been applied prospectively starting from October 1, 2024. The consolidated financial statements are presented in New Taiwan dollars. 2. APPROVAL OF FINANCIAL STATEMENTS The consolidated financial statements were approved by the Company’s board of directors on November 11, 2025. 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 issued into effect by the Financial Supervisory Commission (FSC) The initial application of the amendments to the IFRS Accounting Standards endorsed and issued into effect by the FSC did not have material impact on the Group’s accounting policies.
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- 10 - b. The IFRS Accounting Standards endorsed by the FSC for application starting from 2026 New IFRS Accounting Standards Effective Date Announced by IASB Amendments to IFRS 9 and IFRS 7 “Amendments to the Classification and Measurement of Financial Instruments” January 1, 2026 Amendments to IFRS 9 and IFRS 7 “Contracts Referencing Nature-dependent Electricity” January 1, 2026 Annual Improvements to IFRS Accounting Standards - Volume 11 January 1, 2026 IFRS 17 “Insurance Contracts” (including the 2020 and 2021 amendments to IFRS 17) January 1, 2023 c. The IFRS Accounting Standards in issue by IASB but not yet endorsed and issued into effect by the FSC New, Amended and Revised Standards and Interpretations Effective Date Announced by IASB (Note 1) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” To be determined by IASB IFRS 18 “Presentation and Disclosure in Financial Statements” January 1, 2027 (Note 2) IFRS 19 “Subsidiaries without Public Accountability: Disclosures” (including the 2025 amendments to IFRS 19) January 1, 2027 Note 1: Unless stated otherwise, the above IFRS Accounting Standards are effective for annual reporting periods beginning on or after their respective effective dates. Note 2: On September 25, 2025, the FSC announced that IFRS 18 will take effect starting from January 1, 2028. Domestic entities could elect to apply IFRS 18 for an earlier period after the endorsement of IFRS 18 by the FSC. IFRS 18 “Presentation and Disclosure in Financial Statements” IFRS 18 will supersede IAS 1 “Presentation of Financial Statements”. The main changes comprise: Items of income and expenses included in the statement of profit or loss shall be classified into the operating, investing, financing, income taxes and discontinued operations categories. The statement of profit or loss shall present totals and subtotals for operating profit or loss, profit or loss before financing and income taxes and profit or loss. Provides guidance to enhance the requirements of aggregation and disaggregation: The Group shall identify the assets, liabilities, equity, income, expenses and cash flows that arise from individual transactions or other events and shall classify and aggregate them into groups based on shared characteristics, so as to result in the presentation in the primary financial statements of line items that have at least one similar characteristic. The 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.
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- 11 - Disclosures on Management-defined Performance Measures (MPMs): When in public communications outside financial statements and communicating to users of financial statements management’s view of an aspect of the financial performance of the 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. Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing other impact of the application 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 a. Statement of compliance These interim consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 “Interim Financial Reporting” as endorsed and issued into effect by the FSC. Disclosure information included in these interim consolidated financial statements is less than the disclosure information required in a complete set of annual consolidated financial statements. b. Basis of preparation The consolidated financial statements have been prepared on the historical cost basis. c. Classification of current and non-current assets and liabilities Current assets include: 1) Assets held primarily for the purpose of trading; 2) Assets expected to be realized within 12 months after the reporting period; and 3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. Current liabilities include: 1) Liabilities held primarily for the purpose of trading; 2) Liabilities due to be settled within 12 months after the reporting period; and 3) Liabilities for which the Group does not have an unconditional right to defer settlement for at least 12 months after the reporting period. Assets and liabilities that are not classified as current are classified as non-current.
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- 12 - d. Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (i.e. its subsidiaries). When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Company. All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. 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 interests of the Group 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 Company. See Note 11, Tables 7 and 8 for the detailed information of subsidiaries (including the percentages of ownership and main businesses). e. Other material accounting policies Except for other accounting policies listed below, refer to the consolidated financial statements for the year ended December 31, 2024. 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. 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, estimations, and assumptions on the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates. When developing material accounting estimates, the Group considers the possible impact of US reciprocal tariffs on the cash flow projection, growth rates, discount rates, profitability and other relevant material estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Based on the assessment of the Group’s management, the accounting policies, estimates, and assumptions adopted by the Group have not been subject to material accounting judgments, estimates and assumptions uncertainty.
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- 13 - 6. CASH AND CASH EQUIVALENTS September 30, 2025 December 31, 2024 September 30, 2024 Cash on hand $ 85 $ 106 $ 157 Checking accounts and demand deposits 1,159,129 1,042,906 1,358,731 Cash equivalents (time deposits with original maturities of three months or less) 531,185 1,341,407 226,770 $ 1,690,399 $ 2,384,419 $ 1,585,658 The market rate intervals of cash equivalents at the end of the reporting period were as follows: September 30, 2025 December 31, 2024 September 30, 2024 Cash equivalents 0.29%-4.00% 3.90%-4.68% 1.60%-3.60% 7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS September 30, 2025 December 31, 2024 September 30, 2024 Financial assets at FVTPL - non-current Financial assets mandatorily classified as at FVTPL Derivative financial assets (not under hedge accounting) Redemption option on convertible bonds (Note 15) $ 100 $ 1,300 $ - 8. FINANCIAL ASSETS AT AMORTIZED COST - NON-CURRENT September 30, 2025 December 31, 2024 September 30, 2024 Current Time deposits with original maturities between 3 months and a year $ 481,479 $ - $ 38,856 Time deposits with original maturities of more than 1 year 685,554 1,619,091 971,081 $ 1,167,033 $ 1,619,091 $ 1,009,937 Non-current Time deposits with original maturities of more than 1 year $ 1,071,177 $ 228,041 $ 632,332
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- 14 - As of September 30, 2025 and 2024, the interest rates for time deposits with original maturity between three months and a year were 1.55%-4.39% and 2.55%-5.24%, respectively. As of September 30, 2025, December 31, 2024 and September 30, 2024, the interest rates for time deposits with original maturity of more than a year were 1.75%-3.25%, 2.15%-3.55% and 3.10%-3.55%, respectively. 9. NOTES RECEIVABLE AND ACCOUNTS RECEIVABLE September 30, 2025 December 31, 2024 September 30, 2024 Notes receivable $ 4,238 $ 19,249 $ 10,071 Accounts receivable 764,764 1,436,740 1,100,129 Less: Allowance for impairment loss (12) (12) (12) $ 768,990 $ 1,455,977 $ 1,110,188 The average credit period of sales of goods was 30-90 days The Group established department to manage receivables and related regulations for credit checking and quota management in order to ensure the Company’s benefits. The Group applies the simplified approach for expected credit losses prescribed by IFRS 9, which permits the use of lifetime expected loss provision for all trade receivables. The expected credit losses on trade receivables are estimated using a provision matrix prepared by reference to the past default experience of the customer, the customer’s current financial position, economic condition of the industry in which the customer operates, as well as the GDP forecasts and industry outlook. As the Group’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Group’s different customer base. The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For trade receivables that have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss. The following table details the loss allowance of trade receivables based on the Group’s provision matrix. September 30, 2025 Not Past Due Up to 90 Days Up to 91-180 Days Up to 181 Days Total Expected credit loss rate 0.002% Gross carrying amount $ 705,630 $ 52,041 $ 10,738 $ 593 $ 769,002 Loss allowance (Lifetime ECLs) (12) - - - (12) Amortized cost $ 705,618 $ 52,041 $ 10,738 $ 593 $ 768,990
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- 15 - December 31, 2024 Not Past Due Up to 90 Days Total Expected credit loss rate 0.001% - Gross carrying amount $ 1,402,899 $ 53,090 $ 1,455,989 Loss allowance (Lifetime ECLs) (12) - (12) Amortized cost $ 1,402,887 $ 53,090 $ 1,455,977 September 30, 2024 Not Past Due Up to 90 Days Total Expected credit loss rate 0.001% - Gross carrying amount $ 1,087,800 $ 22,400 $ 1,110,200 Loss allowance (Lifetime ECLs) (12) - (12) Amortized cost $ 1,087,788 $ 22,400 $ 1,110,188 The movements of the loss allowance of trade receivables were as follows: For the Nine Months Ended September 30 2025 2024 Balance on January 1 and September 30 $ 12 $ 12 10. INVENTORIES September 30, 2025 December 31, 2024 September 30, 2024 Finished and purchased goods $ 771,534 $ 579,935 $ 741,936 Work in process 142,508 65,771 123,877 Materials 252,602 411,388 302,075 $ 1,166,644 $ 1,057,094 $ 1,167,888 The cost of goods sold for the three months ended September 30, 2025 and 2024 included inventory write-downs of $2,902 thousand and $3,351 thousand, respectively. The cost of goods sold for the nine months ended September 30, 2025 and 2024 included inventory write-downs of $1,765 thousand and reversal of inventory write-downs of $8,830 thousand, respectively, reversal of inventory write-downs was due to the disposal of inventory previously written down.
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- 16 - 11. SUBSIDIARIES Subsidiaries included in the consolidated financial statements: % of Ownership Investor Investee Main Business September 30, 2025 December 31, 2024 September 30, 2024 Remark The Company YFY RFID Co., Limited Investment and holding. 100.00 100.00 100.00 ARIZON CORPORATION Product distribution and technical consulting services 100.00 100.00 100.00 ARIZON TECHNOLOGY (VIETNAM) Product distribution and R&D services 100.00 100.00 100.00 a. YFY RFID Co., Limited Arizon RFID Technology Co., Ltd. Design, development, manufacture, sale and packaging of RFID (radio frequency identification) products 99.98 99.98 99.98 Arizon RFID Technology Co., Ltd. Yeon Technologies (Yangzhou) Co., Ltd. Design and agent of RFID module, system and antenna. - - - b. Arizon RFID Technologies (Hong Kong) Co., Ltd. Product distribution and R&D services 100.00 100.00 100.00 Arizon JAPAN Co., Ltd. Product distribution and technical consulting services 100.00 100.00 100.00 Remarks: a. In order to expand the Vietnam market, the Company established ARIZON TECHNOLOGY (VIETNAM) in February 2024 and completed capital injection in the third quarter of 2024. b. In response to organizational business adjustments, Yeon Technologies (Yangzhou) Co., Ltd. was liquidated in August 2024. c. The financial statements of subsidiaries included in the consolidated financial statements are based on the reviewed amounts. 12. PROPERTY, PLANT AND EQUIPMENT Buildings Machinery Transportation Equipment Miscellaneous Equipment Property in Construction Total Cost Balance on January 1, 2024 $ 603,170 $ 1,836,866 $ 3,388 $ 70,554 $ 44,901 $ 2,558,879 Additions 298 309,581 3,529 84,622 259,783 657,813 Disposals - (105,890 ) - (1,139 ) - (107,029 ) Effect of foreign currency exchange differences 25,245 61,189 150 984 1,980 89,548 Reclassifications - 218,177 - (1,490 ) (216,687 ) - Balance on September 30, 2024 $ 628,713 $ 2,319,923 $ 7,067 $ 153,531 $ 89,977 $ 3,199,211 Accumulated depreciation Balance on January 1, 2024 $ 168,514 $ 1,306,037 $ 1,840 $ 32,004 $ - $ 1,508,395 Depreciation expenses 22,411 121,001 630 12,954 - 156,996 Disposals - (100,042 ) - (1,004 ) - (101,046 ) Effect of foreign currency exchange differences 7,103 46,164 78 532 - 53,877 Reclassifications - 821 - (821 ) - - Balance on September 30, 2024 $ 198,028 $ 1,373,981 $ 2,548 $ 43,665 $ - $ 1,618,222 Carrying amount on September 30, 2024 $ 430,685 $ 945,942 $ 4,519 $ 109,866 $ 89,977 $ 1,580,989 (Continued)
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- 17 - Buildings Machinery Transportation Equipment Miscellaneous Equipment Property in Construction Total Cost Balance on January 1, 2025 $ 654,090 $ 2,390,856 $ 7,136 $ 181,427 $ 206,333 $ 3,439,842 Additions 1,743 31,269 61 16,938 253,967 303,978 Disposals - (18,201 ) - (601 ) - (18,802 ) Effect of foreign currency exchange differences (39,627 ) (120,659 ) (435 ) (3,877 ) (20,387 ) (184,985 ) Reclassifications - 215,181 - - (215,181 ) - Balance on September 30, 2025 $ 616,206 $ 2,498,446 $ 6,762 $ 193,887 $ 224,732 $ 3,540,033 Accumulated depreciation Balance on January 1, 2025 $ 207,526 $ 1,407,491 $ 2,817 $ 50,424 $ - $ 1,668,258 Depreciation expenses 23,382 164,213 700 16,765 - 205,060 Disposals - (8,479 ) - (558 ) - (9,037 ) Effect of foreign currency exchange differences (12,953 ) (79,218 ) (183 ) (961 ) - (93,315 ) Balance on September 30, 2025 $ 217,955 $ 1,484,007 $ 3,334 $ 65,670 $ - $ 1,770,966 Carrying amount on January 1, 2025 $ 446,564 $ 983,365 $ 4,319 $ 131,003 $ 206,333 $ 1,771,584 Carrying amount on September 30, 2025 $ 398,251 $ 1,014,439 $ 3,428 $ 128,217 $ 224,732 $ 1,769,067 (Concluded) The above items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives as follows: Buildings 20 years Machinery 5-10 years Transportation equipment 5 years Miscellaneous equipment 3-6 years 13. LEASE AGREEMENTS a. Right-of-use assets September 30, 2025 December 31, 2024 September 30, 2024 Carrying amount Land $ 185,006 $ 211,450 $ 210,913 Buildings 90,451 37,351 40,304 Others 221 289 406 $ 275,678 $ 249,090 $ 251,623
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- 18 - For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Additions to right-of-use assets $ 63,263 $ 190,564 $ 63,343 $ 190,660 Depreciation charge for right-of-use assets Land $ 1,002 $ 467 $ 3,212 $ 726 Buildings 4,079 2,918 10,233 8,740 Others 26 183 145 630 $ 5,107 $ 3,568 $ 13,590 $ 10,096 b. Lease liabilities September 30, 2025 December 31, 2024 September 30, 2024 Carrying amount Current $ 22,293 $ 12,361 $ 11,689 Non-current $ 71,324 $ 28,796 $ 30,584 Range of discount rates for lease liabilities was as follows: September 30, 2025 December 31, 2024 September 30, 2024 Buildings 1.45%-2.28% 1.45%-2.28% 1.45%-2.28% Others 1.52%-4.60% 1.52%-4.60% 1.52%-4.60% c. Material lease-in activities and terms The Group leases certain equipment and buildings for the use of operating activities with lease terms of 2 to 5 years. These arrangements do not contain renewal or purchase options at the end of the lease terms. The lease contract for land and buildings located in mainland China and Vietnam specifies that land and buildings are mainly used as plants, and lease payments will be made at the beginning of the contract with lease terms of 50 and 47 years. The Group does not have bargain purchase options to acquire the leasehold land and buildings at the end of the lease terms. d. Other lease information For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Expenses relating to short-term leases and low-value asset leases $ 5,185 $ 3,907 $ 13,231 $ 7,076 Total cash outflow for leases $ 8,446 $ 197,021 $ 23,128 $ 206,534
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- 19 - 14. SHORT-TERM BORROWINGS September 30, 2025 December 31, 2024 September 30, 2024 Bank credit loans $ 857,841 $ 800,000 $ 690,000 As of September 30, 2025, December 31, 2024 and September 30, 2024, the interest rate of short-term borrowings were 2.15%-4.80%, 2.08%-2.27% and 2.08%-2.27% per annum, respectively. 15. BONDS PAYABLE September 30, 2025 December 31, 2024 September 30, 2024 Unsecured domestic convertible bonds $ 953,898 $ 937,491 $ - On August 7, 2024, the Company’s board of directors resolved to issue domestic unsecured convertible bonds for the first time, which were subsequently issued on October 15, 2024, the issuance period is 3 years, with total issued amount $1,000,000 thousand, with a 0% coupon rate, the total amount for subscription was $1,114,566 thousand. Each bond entitles the holder to convert it into ordinary shares of the Company at a conversion price of $305.5. In case of ex-right or ex-dividend, the price should be adjusted according to the conversion price adjustment formula. The bonds will be held on the next day after the expiration of 3 months (January 16, 2025) until the maturity date (October 15, 2027), holders may convert their bonds into the Company’s ordinary shares. If the convertible bonds are not converted between January 16, 2025 and September 5, 2027, and the closing price of ordinary shares has exceeded 30% of the current conversion price for 30 consecutive trading days, the Company may send a copy of “Debt Rebate Notice” with expiration of one month by registered mail within the next 30 trading days. The aforementioned period is calculated from the delivery of mail, and the expiration date of the period is determined as the base date for recovery of bonds. The Company have to redeem the bonds at their par value in cash within 5 trading days following the base date. The convertible bonds contain both liability and equity components. The equity component was presented in equity under the heading of capital surplus - share options. The effective interest rate of the liability component was 2.32% per annum on initial recognition. Proceeds from issuance (less transaction costs of $7,307 thousand) $ 1,107,259 Equity component (less transaction costs allocated to the equity component of $1,161 thousand) (176,205) Liability component at the date of issue (bonds payable of $932,954 thousand and financial assets at fair value through profit or loss - non-current of $1,900 thousand) $ 931,054 Liability component on January 1, 2025 (bonds payable of $937,491 thousand and financial assets at fair value through profit or loss - non-current of $1,300 thousand) $ 936,191 Interest charged at an effective interest rate of 2.32% 16,407 Net loss of financial assets at fair value through profit or loss 1,200 Liability component on September 30, 2025 (bonds payable of $953,898 thousand and financial assets at fair value through profit or loss - non-current of $100 thousand) $ 953,798
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- 20 - 16. RETIREMENT BENEFIT PLANS Defined Contribution Plans Arizon RFID Technology (Hong Kong) Co., Ltd., Taiwan Branch adopted a pension plan under the Labor Pension Act (LPA), which is a government-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages. The employees of Arizon RFID Technology Co., Ltd., Yeon Technologies (Yangzhou) Co., Ltd., Arizon JAPAN Co., Ltd. and ARIZON TECHNOLOGY (VIETNAM) of the Group are members of a government-managed retirement benefit plan operated by their local governments. The subsidiary is required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the Group with respect to the retirement benefit plan is to make the specified contributions. 17. EQUITY a. Ordinary shares September 30, 2025 December 31, 2024 September 30, 2024 Number of shares authorized (in thousands) 100,000 100,000 100,000 Shares authorized ($10 per share) $ 1,000,000 $ 1,000,000 $ 1,000,000 Number of shares issued (in thousands) 74,888 74,888 74,888 Shares issued $ 748,880 $ 748,880 $ 748,880 In the third quarter of 2024, employees of the company exercised stock options to convert 570 thousand shares into common stock. The conversion date was August 20, 2024, and the paid-in capital after the capital increase amounted to $748,880 thousand. b. Capital surplus The reconciliation of capital surplus for September 30, 2025, December 31, 2024 and September, 2024 were as follows: September 30, 2025 December 31, 2024 September 30, 2024 Share premium $ 4,096,537 $ 4,096,537 $ 4,096,537 Share options 176,205 176,205 - Proceeds from claim for the disgorgement of profit 63 63 - Employee share options 635 - - $ 4,273,440 $ 4,272,805 $ 4,096,537
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- 21 - c. Retained earnings and dividends policy Under the dividends policy as set forth in the Articles, where the Company made profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for distribution of dividends and bonuses to shareholders. As the Company is in the growing stage, the distribution of dividend may be in cash or in shares to shareholders, as well as the Company shall take the Company’s capital expenditures, future expansion plans, and financial structure, funds requirement and other plans for sustainable development into consideration on the dividend the Company wish to distribute based on the Company’s dividends policy. Every year, no less than 30% of the available profit shall be distributed as shareholder dividends. The distribution of dividends may be in cash or in shares, of which the cash dividends should be no less than 20%. For the policies on the distribution of compensation of employees and remuneration of directors, refer to compensation of employees and remuneration of directors in Note 19(c). The legal reserve may be used to offset deficit. If the Company has no deficit, all or a portion of its legal reserve, or the capital surplus which arises out of the share premium or donations to the Company may be transferred to capital, issue new shares or distribute to the Members in cash, by a resolution adopted by a majority of the shareholders who represent two-thirds or more of the total number of shareholders in a shareholders’ meeting. Items referred to under Rule No. 1010047490, Rule No. 1030006415 and Rule No. 1090150022 issued by the FSC and in the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs”, should be appropriated to or reversed from a special reserve by the Company. When the deduction balance of other shareholders’ equity is reversed, the surplus may be distributed thereafter. The appropriation of earnings for 2024 and 2023, were as follows: For the Year Ended December 31 2024 2023 Legal reserve $ 84,681 $ 44,793 Special reserve $ (202,897) $ 78,578 Cash dividends $ 411,884 $ 222,954 Cash dividends per share (NT$) $ 5.5 $ 3.0 The appropriation of earnings for 2024 and 2023 was resolved in the shareholders’ meeting on May 27, 2025 and June 27, 2024, respectively. Information about the appropriations of earnings is available at the Market Observation Post System website of the Taiwan Stock Exchange.
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- 22 - d. Non-controlling interests For the Nine Months Ended September 30 2025 2024 Balance on January 1 $ 1,076 $ 866 Attributable to non-controlling interests: Share-based payment - 1 Changes in non-controlling interests (subsidiary cash dividends) (75) - Share of profit for the period 78 117 Other comprehensive (loss) income during the year (64) 33 Balance on September 30 $ 1,015 $ 1,017 18. REVENUE For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Revenue from contracts with customers - sale of goods $ 817,851 $ 1,148,202 $ 2,876,251 $ 3,192,788 Other income 3,309 1,739 12,907 28,286 $ 821,160 $ 1,149,941 $ 2,889,158 $ 3,221,074 Contract Balances September 30, 2025 December 31, 2024 September 30, 2024 Notes receivable and accounts receivable $ 768,990 $ 1,455,977 $ 1,110,188 Receivables from related parties 600 24 864 $ 769,590 $ 1,456,001 $ 1,111,052 Contract liabilities - current $ 34,015 $ 26,467 $ 24,352 The amount of contract liabilities from the beginning of the year recognized as income in the current period is as follows: For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Revenue from contracts with customers - sale of goods $ 1,349 $ 131 $ 7,045 $ 12,450
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- 23 - For information about notes receivable and accounts receivable, refer to Note 9. The changes in the balance of contract liabilities primarily result from the timing difference between the Group’s satisfaction of performance obligations and the respective customer’s payment. 19. NET PROFIT a. Depreciation and amortization For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Property, plant and equipment $ 69,111 $ 61,570 $ 205,060 $ 156,996 Right-of-use assets 5,107 3,568 13,590 10,096 Intangible asset (under other non-current assets) 216 463 1,161 1,355 $ 74,434 $ 65,601 $ 219,811 $ 168,447 An analysis of depreciation by function Operating costs $ 64,348 $ 44,374 $ 182,906 $ 112,727 Operating expenses 9,870 20,764 35,744 54,365 $ 74,218 $ 65,138 $ 218,650 $ 167,092 An analysis of amortization by function Operating costs $ 100 $ - $ 312 $ - Operating expenses 116 463 849 1,355 $ 216 $ 463 $ 1,161 $ 1,355 b. Employee benefit expense For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Short-term employee benefits $ 130,013 $ 168,967 $ 419,341 $ 489,361 Share-based payment 635 756 635 3,848 Post-employment benefits Defined contribution plans 9,082 7,049 29,318 20,519 Total employee benefit expense $ 139,730 $ 176,772 $ 449,294 $ 513,728 An analysis of employee benefit expense by function Operating costs $ 83,894 $ 102,715 $ 260,588 $ 270,481 Operating expenses 55,836 74,057 188,706 243,247 $ 139,730 $ 176,772 $ 449,294 $ 513,728
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- 24 - As of September 30, 2025 and 2024, the Group had 892 and 928 employees with 4 directors that were not adjunct employees, respectively. The calculation basis is consistent with the employee benefits. c. Compensation of employees and remuneration of directors The Company accrued compensation of employees and remuneration of directors at rates of no less than 1% and no higher than 2%, respectively, of net profit before income tax, compensation of employees, and remuneration of directors. The compensation of employees and remuneration of directors were as follows: For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Amount Compensation of employees $ 617 $ 1,729 $ 2,224 $ 5,981 Remuneration of directors 49 (242) 1,445 5,974 If there is a change in the amounts after the annual consolidated financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate in the following year. The compensation of employees and remuneration of directors for the years ended December 31, 2024 and 2023 were approved by the Company’s board of directors on March 11, 2025 and March 12, 2024, respectively were as follows: For the Year Ended December 31 2024 2023 Cash Cash Compensation of employees $ 8,695 $ 4,630 Remuneration of directors 13,500 7,000 If there is a change in the amounts after the annual consolidated financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate in the following year. Which was approved by the Company’s board of directors on March 11, 2025 and March 12, 2024, there was no difference between the actual amounts of employees’ compensation and remuneration of directors paid and the amounts recognized in the consolidated financial statements for the years ended 2024 and 2023. Information on the compensation of employees and remuneration of directors resolved by the Company’s board of directors is available at the Market Observation Post System website of the Taiwan Stock Exchange.
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- 25 - 20. INCOME TAXES a. Income tax recognized in profit or loss The major components of tax expense were as follows: For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Current tax $ 14,405 $ 33,112 $ 68,127 $ 83,100 Deferred tax 5,081 8,075 28,353 40,838 Income tax expense recognized in profit or loss $ 19,486 $ 41,187 $ 96,480 $ 123,938 The applicable tax rate of 15% for designated high and new technology enterprises is used by Arizon RFID Technology Co., Ltd., the Group’s subsidiary in China. Tax rates used by other entities operating in other jurisdictions are based on the tax laws in those jurisdictions. b. Income tax assessments The tax filings of Arizon RFID Technology (Hong Kong) Co., Ltd., Taiwan Branch through 2022 have been approved by the tax authorities. c. Pillar Two income tax legislation The government of Hong Kong, where Arizon RFID Technology (Hong Kong) Co., Ltd. is incorporated, enacted the Pillar Two income tax legislation effective from January 1, 2025. The government of Vietnam, where ARIZON TECHNOLOGY (VIETNAM) is incorporated, enacted the Pillar Two income tax legislation effective from January 1, 2024. As of September 30, 2025, the above situation has no significant impact on the Group’s current income tax. The Group is continuing to assess the impact of the Pillar Two income tax legislation on its future financial performance. 21. EARNINGS PER SHARE For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Basic earnings per share (NT$) $ 0.86 $ 2.29 $ 2.95 $ 7.87 Diluted earnings per share (NT$) $ 0.86 $ 2.29 $ 2.95 $ 7.83
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- 26 - The earnings and weighted average number of ordinary shares outstanding used in the computation of earnings per share from continuing operations were as follows: Net profit for the period: For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Profit for the period attributable to owners of the Company $ 64,667 $ 171,088 $ 221,146 $ 585,775 Weighted average number of ordinary shares outstanding (in thousands of shares): For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Weighted average number of ordinary shares used in the computation of basic earnings per share 74,888 74,572 74,888 74,403 Effect of potentially dilutive ordinary shares: Employee share options 140 231 140 355 Compensation of employees 16 7 25 32 Weighted average number of ordinary shares used in the computation of diluted earnings per share 75,044 74,810 75,053 74,790 The Company may settle compensation or bonuses paid to employees in cash or shares; therefore, the Group assumes that the entire amount of the compensation or bonuses will be settled in shares, and the resulting potential shares will be included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year. If the outstanding convertible bonds issued by the Company are converted to ordinary shares, they are anti-dilutive and excluded from the computation of diluted earnings per share. 22. SHARE-BASED PAYMENT ARRANGEMENTS a. The board of directors resolved to issue 595 employee share options on July 12, 2022. The Company granted the right to subscribe for 1 thousand ordinary shares to specific employees on August 16, 2022 (the date of the number of shares for employees to subscribe is confirmed). The exercise price per share of ordinary shares for employee stock subscription is $57.4. Pursuant to the Company’s “Regulations Governing Issuance and Exercising of Employee Share Options,” the options granted are valid for 3 years and exercisable at the following vesting conditions after the second anniversary of the grant date. For any subsequent changes in the Company’s capital structure, the exercise price is adjusted according to the terms.
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- 27 - Information on employee share options issued and weighted average exercise price is as follows: For the Nine Months Ended September 30, 2024 Employee Share Option Number of Units (In Thousands) Weighted Average Exercise Price (NT$) Balance on January 1 595 $ 57.40 Options exercised (570) 52.42 Options expired (25) - Balance on December 31 - Options exercisable, end of period - Weighted-average fair value of options granted in December 31 (NT$) $ 21.2 The Company measured employee share options by using the Black-Scholes-Merton Option Pricing Model, and the inputs to the models were as follows: August 16, 2022 Per share price at the grant date $65.64 Exercise price per share $57.40 Expected share price volatility (%) 42.47 Expected lives (years) 2.5 Risk free interest rate (%) 0.92 The Company has an exercise price adjustment formula for the changes in ordinary shares, and the exercise price per share was adjusted from $57.4 to $52.42, effective August 2024. The compensation of employees recognized on the consolidated statement of comprehensive income was $3,848 thousand for the nine months ended September 30, 2024. b. The board of directors resolved to issue 690 employee share options on April 14, 2025. The Company granted the right to subscribe for 1 thousand ordinary shares to specific employees on September 12, 2025 (the date of the number of shares for employees to subscribe is confirmed). The price per share of ordinary shares for employee stock subscription is $145. Pursuant to the Company’s “Regulations Governing Issuance and Exercising of Employee Share Options,” the options granted are valid for 6 years and exercisable at certain percentages after the second anniversary from the grant date. For any subsequent changes in the Company’s capital structure, the exercise price is adjusted according to the terms.
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- 28 - Information on employee share options issued and weighted average exercise price is as follows: For the Nine Months Ended September 30, 2025 Employee Share Option Number of Units (In Thousands) Weighted Average Exercise Price (NT$) Balance on January 1 - $ - Options granted 690 145 Balance on December 31 690 145 Options exercisable, end of period - Weighted-average fair value of options granted in December 31 (NT$) $ 62.59 The Company measured employee share options by using the Black-Scholes-Merton Option Pricing Model, and the inputs to the models were as follows: September 12, 2025 Per share price at the grant date $145.00 Exercise price per share $145.00 Expected share price volatility (%) 51.87 Expected lives (years) 4-5 Risk free interest rate (%) 1.25-1.28 The compensation of employees recognized on the consolidated statement of comprehensive income was $635 thousand for the nine months ended September 30, 2025. 23. CAPITAL MANAGEMENT The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns through consideration of the future operational plan, profitability, capital expenditure, operating income and debt repayment when assessing various costs and risks. In order to balance the overall capital and financial structure, the Group may pay dividends, issue new shares, etc. 24. FINANCIAL INSTRUMENTS a. Fair value of financial instruments not measured at fair value The management of the Group considers that the carrying amounts of financial assets and financial liabilities recognized in the consolidated financial statements to approximate their fair values.
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- 29 - b. Fair value of financial instruments measured at fair value on a recurring basis 1) Fair value hierarchy September 30, 2025 Level 1 Level 2 Level 3 Total Financial assets at FVTPL - non-current Redemption option on convertible bonds $ - $ 100 $ - $ 100 December 31, 2024 Level 1 Level 2 Level 3 Total Financial assets at FVTPL - non-current Redemption option on convertible bonds $ - $ 1,300 $ - $ 1,300 There were no transfers between Levels 1 and 2 in the current year. 2) Valuation techniques and inputs applied for Level 2 fair value measurement Financial Instrument Valuation Technique and Inputs Redemption option on convertible bonds Under the assumption that corporate bond will be redeemed on September 5, 2027, discount rate adopted is calculated via interpolation method using government bond yield rates from public offer 2-year and 5-year period. c. Categories of financial instruments September 30, 2025 December 31, 2024 September 30, 2024 Financial assets Financial assets at amortized cost (1) $ 4,794,363 $ 5,825,711 $ 4,475,844 Financial assets at FVTPL 100 1,300 - Financial liabilities Financial liabilities at amortized cost (2) 2,589,072 2,643,405 1,663,097 1) The balances include financial assets measured at amortized cost, which comprise cash and cash equivalents, notes and accounts receivable, accounts receivable from related parties, other receivables (accounted as other current assets), current financial assets at amortized cost, non-current financial assets at amortized cost, and refundable deposits (accounted as other current assets and other non-current assets).
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- 30 - 2) The balances include financial liabilities measured at amortized cost, which comprise short-term borrowings, notes and accounts payable, accounts payable to related parties, other payables, other payables to related parties, bonds payable and deposits received (accounted as other current liabilities and other non-current liabilities). d. Financial risk management objectives and policies The Group’s main objective of financial risk management is to manage the market risk related to operating activity including foreign currency risk, interest rate risk, credit risk and liquidity risk. To reduce the potential and detrimental influence of market fluctuations on the Group’s financial performance, the Group endeavors to identify, estimate and hedge the uncertainties of the market. The Group’s significant financial activity is reviewed and approved by the board of directors in compliance with related regulations and internal control policy, and the authority and responsibility are delegated according to the operating procedures. The Group did not enter into or trade financial instruments for speculative purposes. 1) Market risk a) Foreign currency risk The Group had foreign currency sales and purchases, which exposed the Group to foreign currency risk. The Group follows the movement of foreign exchange rates and adjust the exposure position respond to it to minimize the effect of these risks. Sensitivity analysis The Group is mainly exposed to the USD, EUR and JPY. The following table details the Group’s sensitivity to a 5% increase and decrease in the functional currency against the relevant foreign currencies. 5% represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis included only outstanding foreign currency denominated monetary items and adjusts their translation at the end of the reporting period for a 5% change in foreign currency rates. For a 5% weakening of the New Taiwan dollars against the relevant currency, there would be an equal and opposite impact on pre-tax profit. For the Nine Months Ended September 30 2025 2024 Profit or loss at 5% variance USD $ 16,748 $ 20,925 EUR 9,806 (35) JPY 14,777 -
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- 31 - b) Interest rate risk The carrying amounts of the Group’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows: September 30, 2025 December 31, 2024 September 30, 2024 Fair value interest rate risk Financial assets $ 2,769,495 $ 3,188,539 $ 1,869,039 Financial liabilities $ 1,405,356 $ 978,648 $ 42,273 Cash flow interest rate risk Financial assets $ 1,159,129 $ 1,042,906 $ 1,358,731 Financial liabilities $ 500,000 $ 800,000 $ 690,000 For the Group’s floating interest rate financial assets and liabilities, if interest rates had been 0.1% higher/lower and all other variables were held constant, the Group’s pre-tax profit for the nine months ended September 30, 2025 and 2024 would have increased/decreased as follows: For the Nine Months Ended September 30 2025 2024 Increase/decrease $ 494 $ 502 2) Credit risk Credit risk refers to the risk that 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 the failure of the counterparty to discharge its obligation is at the level of the carrying amounts of the respective recognized financial assets which comprise receivables from operating activities as stated in the consolidated balance sheets. To maintain the quality of the accounts receivable, the Group has developed a credit risk management procedure to reduce the credit risk from specific customer. The credit evaluation of individual customer includes considering factors that will affect its payment ability such as financial condition, past transaction records and current economic conditions. Credit risk of bank deposits, fixed-income investments and other financial instruments with banks is evaluated and monitored by the Group’s finance department. Since the counterparties are creditworthy banks and financial institutions with good credit rating, there was no significant credit risk. 3) Liquidity risk The objective of liquidity risk management is to maintain adequate cash and cash equivalents with high liquidity and to ensure the Group has sufficient financial flexibility. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants. September 30, 2025, December 31, 2024 and September 30, 2024, the Group had available unutilized bank loan facilities of $681,095 thousand, $230,000 thousand and $340,000 thousand, respectively.
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- 32 - The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods by financial institutions. 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. The tables included both interest and principal cash flows. Specifically, loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the financial institutes choosing to exercise their rights. To the extent that interest cash flows paid at floating rate, the undiscounted amount was derived from the interest rate curve at the end of the reporting period. September 30, 2025 On Demand or Less than 1 Month 1-5 Years Variable interest rate liabilities $ 500,186 $ - Fixed interest rate liabilities 360,970 1,000,000 Lease liabilities 24,112 73,979 $ 885,268 $ 1,073,979 December 31, 2024 On Demand or Less than 1 Month 1-5 Years Variable interest rate liabilities $ 800,304 $ - Fixed interest rate liabilities - 1,000,000 Lease liabilities 13,193 29,531 $ 813,497 $ 1,029,531 September 30, 2024 On Demand or Less than 1 Month 1-5 Years Variable interest rate liabilities $ 591,872 $ - Fixed interest rate liabilities 100,045 - Lease liabilities 13,360 30,160 $ 705,277 $ 30,160
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- 33 - 25. TRANSACTIONS WITH RELATED PARTIES Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below. a. Related party name and category Related Party Name Related Party Category YFY Packaging Inc. Fellow subsidiary Fidelis IT Solutions Co., Ltd. Fellow subsidiary YFY Corporate Advisory & Services Co., Ltd. Fellow subsidiary YFY Paper Enterprise (Nanjing) Co., Ltd. Fellow subsidiary Pek Crown Paper Co., Ltd. Fellow subsidiary Chung Hwa Pulp Corporation Fellow subsidiary China Color Printing Co., Ltd. Fellow subsidiary Yuen Foong Yu Paper Enterprise (Vietnam) Co., Ltd. Fellow subsidiary YFY Packaging (Ha Nam) Co., Ltd. Fellow subsidiary Hsin-Yi Enterprise Co., Ltd. Substantive related party Yuen Foong Paper Co., Ltd. Substantive related party SinoPac Securities Corporation Substantive related party Bank SinoPac Co., Ltd. Substantive related party b. Sales of goods For the Three Months Ended September 30 For the Nine Months Ended September 30 Related Party Category 2025 2024 2025 2024 Fellow subsidiaries $ 572 $ 978 $ 2,364 $ 2,256 Substantive related parties 1 - 1 - $ 573 $ 978 $ 2,365 $ 2,256 For sales of goods to related parties, the prices and terms of receivables approximate those with non-related parties. c. Purchases of goods For the Three Months Ended September 30 For the Nine Months Ended September 30 Related Party Category 2025 2024 2025 2024 Fellow subsidiaries $ 667 $ 1,384 $ 2,016 $ 3,626 Substantive related parties 1,985 9 4,202 9 $ 2,652 $ 1,393 $ 6,218 $ 3,635 For purchases of goods from related parties, the prices and terms of payables approximate those with non-related parties.
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- 34 - d. Accounts receivable from related parties Related Party Category September 30, 2025 December 31, 2024 September 30, 2024 Fellow subsidiaries $ 600 $ 24 $ 864 The outstanding accounts receivable from related parties are unsecured. e. Accounts payable to related parties Related Party Category September 30, 2025 December 31, 2024 September 30, 2024 Fellow subsidiaries $ 593 $ 767 $ 837 Substantive related parties 1,959 - - $ 2,552 $ 767 $ 837 The outstanding accounts payable to related parties are unsecured. f. Other payables to related parties Related Party Category September 30, 2025 December 31, 2024 September 30, 2024 Substantive related parties $ 202 $ 227 $ 233 Fellow subsidiaries - 169 - $ 202 $ 396 $ 233 g. Lease arrangements For the Three Months Ended September 30 For the Nine Months Ended September 30 Lease Paid 2025 2024 2025 2024 Substantive related parties $ 732 $ 494 $ 1,648 $ 1,536 The lease period, rent and the payment condition for related parties approximate those with non-related parties.
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- 35 - h. Other transactions with related parties Miscellaneous Expenses (Accounted as Operating Costs) For the Three Months Ended September 30 For the Nine Months Ended September 30 Related Party Category 2025 2024 2025 2024 Fellow subsidiaries $ 298 $ 389 $ 965 $ 1,194 Operating Expenses For the Three Months Ended September 30 For the Nine Months Ended September 30 Related Party Category 2025 2024 2025 2024 Substantive related parties $ 523 $ 291 $ 1,379 $ 941 Fellow subsidiaries 142 94 356 307 $ 665 $ 385 $ 1,735 $ 1,248 Prepaid Expenses (Accounted As Other Current Assets) Related Party Category September 30, 2025 December 31, 2024 September 30, 2024 Fellow subsidiaries $ 139 $ - $ 61 Advance Received (Accounted for As Other Current Liabilities) Related Party Category September 30, 2025 December 31, 2024 September 30, 2024 Fellow subsidiaries $ 496 $ - $ - i. Remuneration of key management personnel For the Three Months Ended September 30 For the Nine Months Ended September 30 2025 2024 2025 2024 Short‑term employee benefits $ 11,436 $ 15,171 $ 45,829 $ 44,634 Post‑employment benefits 233 106 717 591 Share-based payments 635 411 635 2,054 $ 12,304 $ 15,688 $ 47,181 $ 47,279 The remuneration of directors and key executives as determined by the remuneration committee, was based on the performance of individuals and market trends.
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- 36 - 26. EXCHANGE RATE OF FINANCIAL ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES The following information on the foreign currencies other than the functional currencies of the entities in the Group and the related exchange rates between the foreign currencies and respective functional currencies. The significant assets and liabilities denominated in foreign currencies were as follows: September 30, 2025 Foreign Currency Exchange Rate New Taiwan Dollars Financial assets Monetary items USD $ 24,387 30.445 (USD:NTD) $ 742,462 EUR 5,503 35.77 (EUR:NTD) 196,842 JPY 1,436,089 0.2058 (JPY:NTD) 295,547 Financial liabilities Monetary items USD 13,385 30.445 (USD:NTD) 407,506 EUR 20 35.77 (EUR:NTD) 715 December 31, 2024 Foreign Currency Exchange Rate New Taiwan Dollars Financial assets Monetary items USD $ 58,653 32.785 (USD:NTD) $ 1,922,939 Financial liabilities Monetary items USD 12,875 32.785 (USD:NTD) 422,107 EUR 4 7.4855 (EUR:RMB) 137 September 30, 2024 Foreign Currency Exchange Rate New Taiwan Dollars Financial assets Monetary items USD $ 27,142 7.0074 (USD:RMB) $ 859,044 NTD 45,421 0.22 (NTD:RMB) 45,421 EUR 6 7.6232 (EUR:RMB) 208 Financial liabilities Monetary items USD 13,919 7.0074 (USD:RMB) 440,536 EUR 31 7.6232 (EUR:RMB) 1,076
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- 37 - The significant realized and unrealized foreign exchange gains (losses) were as follows: For the Nine Months Ended September 30 2025 2024 Foreign Currency Exchange Rate (Foreign Currency: Functional Currency) Net Foreign Exchange Gains (Losses) Exchange Rate (Foreign Currency: Functional Currency) Net Foreign Exchange Gains (Losses) USD 7.1055 (USD:RMB) $ (8,580) 7.0074 (USD:RMB) $ (18,592) USD 30.445 (USD:NTD) (51,562) 31.65 (USD:NTD) 12,498 USD 26,424 (USD:VND) (15,021) 24,568 (USD:VND) 11,547 JPY 0.2058 (JPY:NTD) (30,569) - - EUR 35.77 (EUR:NTD) (6,100) - - NTD 0.2334 (NTD:RMB) - 0.2214 (NTD:RMB) (6,395) $ (111,832) $ (942) 27. 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 (Table 3) 4) Total purchases from or sales to related parties 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) Intercompany relationships and significant intercompany transactions (Table 6) 7) Information on investees (Table 7) b. Information on investments in mainland China: 1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area. (Table 8) 2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses: (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.
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- 38 - c) The amount of property transactions and the amount of the resultant gains or losses. d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes. e) The highest balance, the ending balance, the interest rate range, and total current period interest with respect to financing of funds. f) Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receipt of services. 28. SEGMENT INFORMATION a. Segment revenue and results are as follows: Information reported to the chief operating decision maker (CODM) for the purpose of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided. According to the operating result of resource allocation and assessment of segment performance reviewed by CODM, the parent company and its subsidiaries, which mainly are engaging in the design, development, manufacture and trading of radio-frequency identification (RFID) system, have been aggregated into a single operating segment. The measurement of the segment’s income, assets, and liabilities is the same as the standard of financial statement preparation. b. Revenue from major products and services Please refer to Note 18 for the analysis of the Group’s revenue from continuing operations from its major products and services.
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- 39 - TABLE 1 ARIZON RFID TECHNOLOGY (CAYMAN) CO., LTD. AND SUBSIDIARIES FINANCING PROVIDED TO OTHERS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) No. (Note 1) Lender Borrower Financial Statement Account Related Party Highest Balance for the Period (Note 2) Ending Balance Actual Amount Borrowed Interest Rate (%) Nature of Financing Business Transaction Amount Reasons for Short-term Financing Allowance for Impairment Loss Collateral Financing Limit for Each Borrower (Note 3) Aggregate Financing Limit (Note 3) Note Item Value 0 The Company ARIZON CORPORATION Other receivables - related parties Yes $ 199,320 $ - $ - - Short-term financing $ - Operating capital $ - None $ - $ 541,252 $ 2,165,011 Arizon Technolgy (Vietam) Co., Ltd. Other receivables - related parties Yes 332,050 304,450 304,450 2.8 Short-term financing - Operating capital - None - 2,165,011 2,165,011 Note 1: Column is numbered as follows: a. Parent: 0. b. Subsidiaries are numbered starting from “1”. Note 2: The maximum balance of financings provided in the current year. Note 3: Reasons for short-term financing were due to purchasing materials or operational turnover requirements, the total amount of loans shall not exceed 40% of the Company’s net equity value based on its latest financial statements which were reviewed and attested by certified public accountants; the total amount of each borrower loans shall not exceed 40% of the Company’s net equity value based on its latest financial statements which were reviewed and attested by certified public accountants. Reasons for short-term financing were due to the need of business, the amount loaned to a company from the Company or subsidiaries shall not exceed 10% of the entity’s net worth.
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- 40 - TABLE 2 ARIZON RFID TECHNOLOGY (CAYMAN) CO., LTD. AND SUBSIDIARIES ENDORSEMENTS/GUARANTEES PROVIDED FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) No. (Note 1) Endorser/ Guarantor Endorser/Guarantor Limits on Endorsement/ Guarantee Given on Behalf of Each Party (Note 3) Maximum Amount Endorsed/ Guaranteed During the Period (Note 4) Outstanding Endorsement/ Guarantee at the End of the Period (Note 5) Actual Borrowing Amount (Note 6) Amount Endorsed/ Guaranteed by Collaterals 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 (Note 7) Endorsement/ Guarantee Given by Subsidiaries on Behalf of Parent (Note 7) Endorsement/ Guarantee Given on Behalf of Companies in Mainland China (Note 7) Name Relationship (Note 2) 0 The Company Arizon RFID Technology (Hong Kong) Co., Ltd. b. $ 8,118,793 $ 1,461,000 $ 1,461,000 $ 800,000 $ - 26.99 $ 10,825,058 Y N N Arizon Corporation b. 8,118,793 86,165 85,757 - - 1.58 10,825,058 Y N N Arizon Technology (Vietnam) Co., Ltd. b. 8,118,793 917,700 913,350 57,805 - 16.87 10,825,058 Y N N Note 1: The description of the number column is as follows: a. 0 for the issuer. b. Investees are numbered starting from “1”. Note 2: Relationship between the endorser/guarantor and the endorsee/guarantee is classified as follows: a. Having a business relationship. b. The endorser/guarantor directly or indirectly owns more than 50% of the ordinary shares of the endorsee/guarantee. c. The endorsee/guarantee directly or indirectly owns more than 50% of the ordinary shares of the endorser/guarantor. d. Company in which the public company directly or indirectly holds 90% or more of the voting shares may make endorsements/guarantees for each other. e. Where a public company fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or joint builders for purposes of undertaking a construction project. f. Due to joint venture, all shareholders provide endorsements/guarantees to the endorsee/guarantee in proportion to its ownership. g. Where companies in the same industry provide among themselves joint and several securities for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other. Note 3: The limit of the company’s endorsement guarantee for a single enterprise is 150% of the net equity value of the latest financial statement issued by an accountant; the maximum limit of the endorsement guarantee is 200% of the net equity value of the latest financial statement issued by an accountant. Note 4: The maximum balance of endorsement guarantee for others in the current year. Note 5: The amount approved by the board of directors should be entered. However, if the board of directors authorizes the chairman of the board of directors to make a decision in accordance with Article 12, Paragraph 8 of the Guidelines for Handling Fund Loans and Endorsement Guarantees of Publicly Offered Companies, it refers to the amount decided by the chairman of the board. Note 6: This represents the actual expenditure amount of the endorsed guarantee company within the scope of the balance of the endorsement guarantee. Note 7: Only those who are endorsed and guaranteed by the parent company to the subsidiary, those who are endorsed and guaranteed by the subsidiary to the parent company, and those who are endorsed and guaranteed by the mainland must fill in Y.
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- 41 - TABLE 3 ARIZON RFID TECHNOLOGY (CAYMAN) CO., LTD. AND SUBSIDIARIES SIGNIFICANT MARKETABLE SECURITIES HELD SEPTEMBER 30, 2025 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) Holding Company Name Type and Name of Marketable Securities (Note) Relationship with the Holding Company Financial Statement Account September 30, 2025 Note Number of Shares Carrying Amount Percentage of Ownership (%) Fair Value Arizon RFID Technology Co., Ltd. Negotiable certificates of deposit Agricultural Bank of China RMB Large-denomination Certificate of Deposit for Corporate Clients No. 046 in 2022 - Financial assets at amortized cost - current - $ 257,083 (RMB 60,000 thousand) - $ 257,083 (RMB 60,000 thousand) Bank of Communications RMB Large-denomination Certificate of Deposit for Corporate Clients No. 131 in 2022 - 〃 - 128,541 (RMB 30,000 thousand) - 128,541 (RMB 30,000 thousand) Bank of Communications RMB Large-denomination Certificate of Deposit for Corporate Clients in 2023 - 〃 - 85,694 (RMB 20,000 thousand) - 85,694 (RMB 20,000 thousand) Merchants Bank Co., Ltd. RMB Large-denomination Certificate of Deposit for Corporate Clients No. 1147 in 2025 - 〃 - 85,694 (RMB 20,000 thousand) - 85,694 (RMB 20,000 thousand) Bank of Communications RMB Large-denomination Certificate of Deposit for Corporate Clients in 2023 - Financial assets at amortized cost - non-current - 42,847 (RMB 10,000 thousand) - 42,847 (RMB 10,000 thousand) Merchants Bank Co., Ltd. RMB Large-denomination Certificate of Deposit for Corporate Clients No. 396 in 2024 - 〃 - 128,541 (RMB 30,000 thousand) - 128,541 (RMB 30,000 thousand) Merchants Bank Co., Ltd. RMB Large-denomination Certificate of Deposit for Corporate Clients No. 2579 in 2024 - 〃 - 85,694 (RMB 20,000 thousand) - 42,847 (RMB 20,000 thousand) Merchants Bank Co., Ltd. RMB Large-denomination Certificate of Deposit for Corporate Clients No. 1689 in 2025 - 〃 - 85,694 (RMB 20,000 thousand) - 85,694 (RMB 20,000 thousand) Merchants Bank Co., Ltd. RMB Large-denomination Certificate of Deposit for Corporate Clients No. 1825 in 2025 - 〃 - 42,847 (RMB 10,000 thousand) - 42,847 (RMB 10,000 thousand) Bank of Communications RMB Large-denomination Certificate of Deposit for Corporate Clients in 2025 - 〃 - 214,235 (RMB 50,000 thousand) - 214,235 (RMB 50,000 thousand) Merchants Bank Co., Ltd. RMB Large-denomination Certificate of Deposit for Corporate Clients No. 2761 in 2025 - 〃 - 128,541 (RMB 30,000 thousand) - 128,541 (RMB 30,000 thousand) Merchants Bank Co., Ltd. RMB Large-denomination Certificate of Deposit for Corporate Clients No. 2762 in 2025 - 〃 - 128,541 (RMB 30,000 thousand) - 128,541 (RMB 30,000 thousand) Merchants Bank Co., Ltd. RMB Large-denomination Certificate of Deposit for Corporate Clients No. 3210 in 2025 - 〃 - 214,235 (RMB 50,000 thousand) - 214,235 (RMB 50,000 thousand) Note: The securities mentioned in the table above are those classified as financial instruments under IFRS 9, including shares, bonds, beneficiary certificates, and all other securities derived from those items.
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- 42 - TABLE 4 ARIZON RFID TECHNOLOGY (CAYMAN) CO., LTD. AND SUBSIDIARIES TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) Buyer Related Party Relationship Transaction Details Abnormal Transaction (Note 1) Notes/Accounts Receivable (Payable) Note Purchase/ Sale Amount % of Total Payment Terms Unit Price Payment Terms Ending Balance % of Total Arizon RFID Technologies (Hong Kong) Co., Ltd. ARIZON CORPORATION b. Sale $ (1,140,632) 80 As agreed in contract $ - - $ 610,257 80 Note 2 ARIZON CORPORATION Arizon RFID Technologies (Hong Kong) Co., Ltd. b. Purchase 1,140,632 100 As agreed in contract - - (610,257) 97 Note 2 Arizon RFID Technology Co., Ltd. Arizon RFID Technologies (Hong Kong) Co., Ltd. a. Sale (519,847) 22 As agreed in contract - - 208,500 37 Note 2 Arizon RFID Technologies (Hong Kong) Co., Ltd. Arizon RFID Technology Co., Ltd. a. Purchase 519,847 48 As agreed in contract - - (208,500) 59 Note 2 Note 1: a. Parent and subsidiary. b. Fellow subsidiary. c. Substantive related part. Note 2: In preparing the consolidated financial statements, the transaction has been eliminated.
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- 43 - TABLE 5 ARIZON RFID TECHNOLOGY (CAYMAN) CO., LTD. AND SUBSIDIARIES RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL SEPTEMBER 30, 2025 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) Company Name Related Party Relationship Ending Balance Turnover Rate Overdue Amount Received in Subsequent Period Allowance for Impairment Loss Amount Actions Taken Arizon RFID Technologies (Hong Kong) Co., Ltd. ARIZON CORPORATION Fellow subsidiary $ 610,257 2.67 $ - - $ 123,145 $ - Arizon RFID Technology Co., Ltd. Arizon RFID Technologies (Hong Kong) Co., Ltd. Subsidiary 208,500 2.31 - - 18,585 - Note: In preparing the consolidated financial statements, the transaction has been eliminated.
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- 44 - TABLE 6 ARIZON RFID TECHNOLOGY (CAYMAN) CO., LTD. AND SUBSIDIARIES INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 (In Thousands of New Taiwan Dollars) No. Investee Company Counterparty Relationship Transaction Details Financial Statement Account Amount Payment Terms % of Total Sales or Assets 1 Arizon RFID Technology Co., Ltd. Arizon RFID Technologies (Hong Kong) Co., Ltd. Subsidiary Sales $ 519,847 By market price 18 Accounts receivable 208,500 By market price 2 2 Arizon RFID Technologies (Hong Kong) Co., Ltd. ARIZON CORPORATION Fellow subsidiary Sales 1,140,632 By market price 39 Accounts receivable 610,257 By market price 7 Note: In preparing the consolidated financial statements, the transaction has been eliminated.
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- 45 - TABLE 7 ARIZON RFID TECHNOLOGY (CAYMAN) CO., LTD. AND SUBSIDIARIES INFORMATION ON INVESTEES FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) Investor Company Investee Company Location Main Businesses and Products Investment Amount As of September 30, 2025 Net Income (Loss) of the Investee Share of Profits (Loss) Note (Note 2) September 30, 2025 December 31, 2024 Number of Shares % Carrying Amount The Company YFY RFID Co., Ltd. 13/F Amber Commercial Building, 70 Morrison Hill Road, Wanchai, Hong Kong Investment and holding $ 3,884,783 (US$ 127,603 thousand) $ 3,884,783 (US$ 127,603 thousand) 29,584,886 100 $ 5,092,953 $ 368,571 $ 368,571 Subsidiary ARIZON CORPORATION 919 N. Market Street #950, Wilmington, Delaware 19801 Product distribution and technical consulting services 312,061 (US$ 10,250 thousand) 7,611 (US$ 250 thousand) 1,025 100 331,267 (3,935) (3,935) Subsidiary ARIZON TECHNOLOGY (VIETNAM) Plot CN 01.9 and 01.10, Industrial Park No.05, An Thi District, Hung Yen Province Product distribution and R&D services 426,230 (US$ 14,000 thousand) 426,230 (US$ 14,000 thousand) - 100 365,004 (42,014) (42,014) Subsidiary Arizon RFID Technology Co., Ltd. Arizon RFID Technologies (Hong Kong) Co., Ltd. Room 2702-03 CC Wu Building, 302-8 Hennessy Road, Wan Chai, Hong Kong Product distribution and R&D services 669,790 (US$ 22,000 thousand) 669,790 (US$ 22,000 thousand) 22,000,000 100 432,079 (1,120) (21,308) Subsidiary Arizon JAPAN Co., Ltd. 11-2-3-chome, Nishishinjuku, Shinjuku-ku, Tokyo, Japan Product distribution and technical consulting services 10,290 (JPY 50,000 thousand) 10,290 (JPY 50,000 thousand) 1,000 100 8,548 750 623 Subsidiary Note 1: Except for investment gain or loss which were translated at exchange rates of RMB1=NT$4.357363, the rest were translated at exchange rates of US$1=NT$30.445, RMB1=NT$4.284709 or JPY1=NT$0.2058 as of September 30, 2025. Note 2: In preparing the consolidated financial statements, the transaction has been eliminated. Note 3: Refer to Table 8 for information on investments in mainland China.
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- 46 - TABLE 8 ARIZON RFID TECHNOLOGY (CAYMAN) CO., LTD. AND SUBSIDIARIES INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) Investee Company Main Businesses and Products Paid-in Capital (In Thousands of Foreign Currencies) (Note 1) Method of Investment (Note 2) Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2025 (In Thousands of Foreign Currencies) (Note 1) Remittance of Funds Accumulated Outward Remittance for Investment from Taiwan as of September 30, 2025 (In Thousands of Foreign Currencies) (Note 1) Net Income of the Investee % Ownership of Direct or Indirect Investment Investment Gain Carrying Amount as of September 30, 2025 Accumulated Repatriation of Investment Income as of September 30, 2025 Note Outward Inward Arizon RFID Technology Co., Ltd. Design, development, manufacture, sale and packaging of RFID (radio frequency identification) products $ 832,476 (RMB 194,290 thousand ) (b) $ 773,059 (US$ 25,392 thousand ) $ - $ - $ 773,059 (US$ 25,392 thousand ) $ 387,675 99.98 $ 387,597 (Note 4, b.) $ 5,072,816 (Note 4, b.) $ 392,163 3 Accumulated Investment in Mainland China as of September 30, 2025 Investment Amounts Authorized by Investment Commission, MOEA Upper Limit on Investment $773,059 $773,059 N/A Note 1: Except for investment gain or loss which were translated at exchange rates of RMB1=NT$$4.357363, the rest were translated at exchange rates of US$1=NT$30.445 or RMB1=NT$4.284709 as of September 30, 2025. Note 2: Methods of investment and the related investors are as follows: a. Direct investment in mainland China and the investors. b. Investment in mainland China through companies set up in another company, the investor is YFY RFID Co., Ltd. c. Investment in mainland China through companies set up in another company, the investor is Arizon RFID Technology Co., Ltd. Note 3: In preparing the consolidated financial statements, the transaction has been eliminated. Note 4: The recognition basis for investment gain (loss) is as follows: a. Financial statements reviewed by an international CPA firm with the cooperation of the ROC CPA firm. b. Financial statements reviewed by the ROC CPA firm. c. Others.