Company: KMRK
Filing Date: 2025-06-25
Form Type: F-1/A
Source: 0001213900-25-057444
Chunk: 58

Company: K-TECH SOLUTIONS CO LTD
Filing Date: 2025-06-25
Form: F-1/A
Chunk 58
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 to successfully establish and operate manufacturing operations. We have developed a nimble and low -fixedcost business model whereby our products are mostly manufactured and supplied by Fully Starise Limited (“ Fully Starise”) which represents approximately 85% of our cost of revenue. Fully Starise is an independent third party supplier that operates a factory in the PRC. We consider Fully Starise a reliable partner and strong back up of production capability to us whereby we have entered into long term supply agreement with Fully Starise and will expiry on December31, 2028 to secure stable and quality supply of toy products. Due to the reliance on 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 -partysupplier 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. 29 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 -partycontract manufacturers. Our products are mostly manufactured and supplied by Fully Starise which represents approximately 85% 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 -partycontract manufacturers increases the risk of supply disruption. If we experience significant