Company: KMRK
Filing Date: 2025-08-15
Form Type: 20-F
Source: 0001213900-25-077494
Chunk: 9

Company: K-TECH SOLUTIONS CO LTD
Filing Date: 2025-08-15
Form: 20-F
Item: Item 3
Chunk 9
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 our business relationship with Fully Starise, any interruption of its operations, any failure
of Fully Starise to accommodate our growing business demands, any termination or suspension of our cooperation terms, or any deterioration
of cooperative relationships with Fully Starise may materially and adversely affect our operation. Failure by Fully Starise to provide
us satisfactory products and/or services in a timely manner is likely to have material adverse effect on our business, financial condition
and results of operations. There is a risk in relying on third-party supplier in that we are dependent on the supplier’s ability
to produce a product which meets our quality standards and delivery requirements as well as being dependent upon the supplier’s
production priorities. We do not presently have any plans to engage another supplier since Fully Starise is familiar with our products,
and we are devoting our efforts to establishing our own production facilities with no assurance that we can successfully establish manufacturing
facilities.

Additionally, we rely on the
ability and efficiency of Fully Starise to supply products to us. As we have no ownership or managerial control over Fully Starise, we
cannot assure you that Fully Starise will constantly provide us products with desired quality and in sufficient quantities as required
in a timely manner or at all time strictly adhere to the terms and conditions under the Service Agreement.

We rely on a limited number of third-party
suppliers to manufacture our toy products, and we have limited control over them and may not be able to obtain quality products on a timely
basis or in sufficient quantity.

We do not manufacture our products
and rely instead on third-party contract manufacturers. Our products are mostly manufactured and supplied by Fully Starise which represents
approximately 85.34% of our cost of revenue. Despite that we have entered into long term supply agreement with Fully Starise to secure stable
supply of quality products and provide product warranty to our customers, our reliance on a limited number of third-party contract manufacturers
increases the risk of supply disruption. If we experience significant increased demand, or need to replace an existing manufacturer, there
can be no assurance that additional manufacturing capacity will be available when required on terms that are acceptable to us, or at all,
or that any supplier or manufacturer would allocate sufficient capacity to us in order to meet our requirements or fill our orders in
a timely manner. We allocate production orders among our suppliers based on the manufacturers’ capability, capacity and cost, but
there is no assurance that we will be able to utilize capable manufacturers that have capacity at reasonable costs. Even if we