# EDGAR Filing Document

**Accession Number:** 0001105101
**File Stem:** 0001193125-26-243008
**Filing Date:** 2026-5
**Character Count:** 285892
**Document Hash:** 07a803f5dd119d727473707914194ab4
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-26-243008.hdr.sgml**: 20260528

**ACCESSION NUMBER**: 0001193125-26-243008

**CONFORMED SUBMISSION TYPE**: 6-K

**PUBLIC DOCUMENT COUNT**: 6

**CONFORMED PERIOD OF REPORT**: 20260528

**FILED AS OF DATE**: 20260528

**DATE AS OF CHANGE**: 20260528

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** GIGAMEDIA Ltd
- **CENTRAL INDEX KEY:** 0001105101
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 000000000

**FILING VALUES:**
- **FORM TYPE:** 6-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-30540
- **FILM NUMBER:** 261028567

**BUSINESS ADDRESS:**
- **STREET 1:** 8F, NO. 22, LANE 407
- **STREET 2:** SECTION 2 TIDING BLVD.
- **CITY:** TAIPEI
- **STATE:** F5
- **ZIP:** 00000
- **BUSINESS PHONE:** 02886226568000

**MAIL ADDRESS:**
- **STREET 1:** 8F, NO. 22, LANE 407
- **STREET 2:** SECTION 2 TIDING BLVD.
- **CITY:** TAIPEI
- **STATE:** F5
- **ZIP:** 00000

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** GIGAMEDIA LTD
- **DATE OF NAME CHANGE:** 20000203

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15D-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of May, 2026

Commission File Number: 000-30540

GIGAMEDIA LIMITED

8F, No.22, Lane 407, Section 2, Tiding Boulevard

Neihu District

Taipei, Taiwan (R.O.C.)

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

Form 20-F [ x ] Form 40-F [ ]

(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

Yes [ ] No [ x ]

(If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b) :82- .)

GIGAMEDIA LIMITED is submitting under cover of Form 6-K:

1. GigaMedia Notice of Annual General Meeting of Shareholders and Proxy Statement (attached hereto as Exhibit 99.1)

2. GigaMedia Annual General Meeting of Shareholders Proxy Card (attached hereto as Exhibit 99.2)

3. GigaMedia 2025 Financial Statements Prepared in Accordance with U.S. GAAP (attached hereto as Exhibit 99.3)

4. GigaMedia 2025 Financial Statements Prepared in Accordance with Singapore GAAP (attached hereto as Exhibit 99.4)

------

**Signatures**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | |
|:---|:---|
|  | &nbsp;&nbsp;<u>GigaMedia Limited</u> |
|  | &nbsp;&nbsp;(Registrant) |
| &nbsp;&nbsp;Date: <u>May 28, 2026</u>  | &nbsp;&nbsp;By: <u>/s/ HUANG, CHENG-MING</u> |
|  | &nbsp;&nbsp;(Signature) |
|  | &nbsp;&nbsp;Name: HUANG, CHENG-MING |
|  | &nbsp;&nbsp;Title: Chief Executive Officer |

---

------

## Exhibit 99.1

**NOTICE OF THE TWENTY-SEVENTH ANNUAL GENERAL MEETING OF SHAREHOLDERS**

# GigaMedia Limited
Incorporated in the Republic of Singapore

Registration No.: 199905474H

**REGISTERED OFFICE**

**9 Raffles Place, #26-01, Republic Plaza** 

**Singapore 048619**

**NOTICE IS HEREBY GIVEN** that the 27th annual general meeting of the shareholders of GigaMedia Limited (the "**Company**") will be held on **June 25, 2026 at 11 a.m. local time at 8F, No.22, Lane 407, Sec.2, Tiding Blvd., Neihu District, Taipei, Taiwan, R.O.C**, for the following purposes:

**AS ORDINARY AND SPECIAL BUSINESS**

**ORDINARY RESOLUTIONS:** 

To consider and, if thought fit, to pass, with or without modification, the following resolutions which will be proposed as Ordinary Resolutions:

1. Adoption of audited financial statements

RESOLVED that the Statement by the Directors, Auditor's Report and Audited Financial Statements of the Company for the financial year ended December 31, 2025 are received and adopted.

(Resolution 1)

2. Approval of appointment of auditors

RESOLVED that Deloitte & Touche and Deloitte & Touche LLP be and are hereby appointed as the independent external auditors of the Company until the next Annual General Meeting and that the Directors be and are hereby authorized to fix their remuneration for the financial year ended December 31, 2026.

(Resolution 2)

3. Approval of Directors' remuneration

RESOLVED that the remuneration of all of the Directors is hereby approved in an aggregate amount not exceeding US$350,000 in respect of their professional services to the Company until the conclusion of the next Annual General Meeting of the Company.

(Resolution 3)

4. Approval for authority to allot and issue shares

RESOLVED that pursuant to Section 161 of the Companies Act 1967 of Singapore ("**Companies Act**"), authority be and is hereby given to the Directors of the Company to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) (a) issue ordinary shares in the Company ("**Shares**") whether by way of rights, bonus or otherwise; and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) make or grant offers, agreements or options (collectively, "**Instruments**") that might or would require Shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) options, warrants, debentures or other instruments convertible into Shares, at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) notwithstanding that the authority conferred by this Resolution may have ceased to be in force, issue Shares pursuant to any Instrument made or granted by the Directors while this Resolution was in force; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) unless varied or revoked by the Company in general meeting, such authority conferred on the Directors of the Company shall continue in force:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held whichever is earlier; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)in the case of Shares to be issued pursuant to the Instruments that are made or granted pursuant to this Resolution, until the issuance of such Shares in accordance with the terms of the Instruments.

(Resolution 4)

5. Approval for share purchase mandate

RESOLVED that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) for the purposes of Sections 76C and 76E of the Companies Act, the exercise by the Directors of the Company of all the powers of the Company to purchase or otherwise acquire issued Shares not exceeding in aggregate the Maximum Limit (as hereafter defined), at such price or prices as may be determined by the Directors from time to time up to the Maximum Price (as hereafter defined), by way of market purchase(s) on The Nasdaq Stock Market ("**Nasdaq**") or off-market purchase(s) on one or more equal access schemes as may be determined by the Directors as they see fit, which scheme(s) shall satisfy all the conditions of the Companies Act, and otherwise be in accordance with all other laws and regulations and rules of Nasdaq as may be applicable, be and is hereby authorized and approved generally and unconditionally (the "**Share Purchase Mandate**");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) unless varied or revoked by the Company in a general meeting, the authority conferred on the Directors of the Company pursuant to the Share Purchase Mandate may be exercised by the Directors at any time and from time to time during the period commencing from the date of the passing of this Resolution and expiring on the earlier of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the date on which the next Annual General Meeting of the Company is held; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the date by which the next Annual General Meeting of the Company is required by law to be held;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) in this Resolution:

"**Average Closing Price**" means the average of the closing prices of a Share for the five consecutive trading days on which the Shares are traded on Nasdaq immediately preceding the date of market purchase by the Company or the date of making the offer pursuant to an equal access scheme, which price shall be adjusted in accordance with the listing rules of Nasdaq for any corporate action that occurs after the relevant five day period;

"**Maximum Limit**" means that number of issued Shares representing 10% of the total number of issued Shares as at the date of the passing of this Resolution (excluding any Shares that are held as treasury shares as at that date); and

"**Maximum Price**" means the purchase price (excluding brokerage, commission, applicable goods and services tax and other related expenses) that shall not exceed 105% of the Average Closing Price; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)the Directors of the Company and/or any of them be and are hereby authorized to complete and do all such acts and things (including executing such documents as may be required) as they and/or he may consider expedient or necessary to give effect to the transactions contemplated and/or authorized by this Resolution.

(Resolution 5)

6. To transact any other business as may properly be transacted at an Annual General Meeting of the Company.

------

NOTES:

1. Shareholders are cordially invited to attend the Twenty-Seventh Annual General Meeting in person. Whether or not you plan to be at the Twenty-Seventh Annual General Meeting, you are urged to return your proxy. A shareholder entitled to attend and vote is entitled to appoint one or more proxies to attend and to vote instead of him.

2. Shareholders wishing to vote by proxy should complete the attached form.

3. The proxy form of an individual shareholder shall be signed either by the shareholder personally or by his attorney. The proxy form of a corporate shareholder shall be given either under its common seal or signed on its behalf by an attorney or a duly authorized officer of the corporate shareholder.

4. A proxy need not be a shareholder of the Company.

5. The proxy form (and if relevant, the original power of attorney, or other authority under which it is signed or a notarially certified copy of such power or authority) must be deposited at Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717, or the office of the Company, 8F, No. 22, Lane 407, Section 2, Tiding Boulevard, Taipei 114, Taiwan R.O.C., not less than 48 hours before the time for holding the Twenty-Seventh Annual General Meeting, that is by no later than 11 p.m. ET, June 22, 2026 (New York time), or 11 a.m. June 23, 2026 (Taipei time), failing which the proxy shall not be treated as valid.

6. <u>Electronic Delivery of Future Proxy Materials</u>. Shareholders can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the internet. To sign up for electronic delivery, please follow the instructions below relating to "Electronic Delivery of Future Proxy Materials" and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.

7. Vote By internet - www.proxyvote.com. Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:00 p.m. ET on June 23, 2026 (New York time). Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.

8. Only shareholders of record at the close of business on Nasdaq Stock Market (New York), on April 24, 2026 are entitled to notice of and to vote at the Twenty-Seventh Annual General Meeting, or any adjournment or postponement of the Twenty-Seventh Annual General Meeting. If you have sold or transferred the Shares you hold in the Company to another person (the "**Purchaser**" or "**Transferee**") after April 24, 2026 and prior to the Twenty-Seventh Annual General Meeting, you should immediately forward this Notice and the attached proxy statement and proxy card to the Purchaser or Transferee of such Shares, or to the bank, broker, or agent through whom the sale of such Shares was effected, for onward transmission to the Purchaser or Transferee.

9. The Company intends to use internal sources of funds or external borrowings or a combination of both to finance the Company's purchase or acquisition of Shares pursuant to the Share Purchase Mandate. The Directors do not propose to exercise the Share Purchase Mandate to such extent that it would materially and adversely affect the financial position of the Company and its subsidiaries. The amount of financing required for the Company to purchase or acquire its Shares, and the impact on the Company's financial position, cannot be ascertained as at the date of this Notice as this will depend on the number of Shares purchased or acquired, the price at which such Shares were purchased or acquired and whether the Shares purchased or acquired would be held in treasury or cancelled.

BY ORDER OF THE BOARD

/s/ Cheng-Ming Huang

………………………………………..

Cheng-Ming Huang (aka James Huang)

Chairman of the Board and Chief Executive Officer

------

**TABLE OF CONTENTS**

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

PROXY STATEMENT

Questions and Answers about the Annual Meeting and Voting

Proposal 1

Proposal 2

Proposal 3

Proposal 4

Proposal 5

Other Matters

Proxy Solicitation

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Incorporated in the Republic of Singapore

Registration No.: 199905474H

**REGISTERED OFFICE**

**9 Raffles Place, #26-01, Republic Plaza** 

**Singapore 048619**

**PROXY STATEMENT**

**QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING**

**Why Did I Receive This Proxy Statement?**

We sent you this proxy statement and the enclosed proxy card because the Company's Board of Directors is soliciting your proxy to be used at the Company's annual meeting of shareholders on **June 25, 2026 at 8F, No.22, Lane 407, Sec.2, Tiding Blvd., Neihu District, Taipei, Taiwan, R.O.C.**, or at any adjournment or postponement of the meeting.

**Who Can Vote?**

You are entitled to vote if you owned the Shares on the record date ("**Record Date**"), which is the close of business on Nasdaq Stock Market (New York), on April 24, 2026. Each Share that you own entitles you to one vote.

**How Many Shares of Voting Stock Are Outstanding?**

On the Record Date, there were 11,052,235 Shares outstanding. The Shares are our only class of voting stock.

**What May I Vote On?**

1. Adoption of Audited Financial Statements

2. Approval of Appointment of Auditors

3. Approval of Directors' Remuneration

4. Approval for Authority to Allot and Issue Shares

5. Approval for Share Purchase Mandate

Other Business

**How Do I Vote?**

You may vote your Shares in advance of the Twenty-Seventh Annual General Meeting by visiting www.proxyvote.com and following the instructions on the web site. Have your proxy card in hand when you access the web site. Internet voting must be completed by 11 p.m. on June 23, 2026 (New York time) or 11 a.m. on June 24, 2026 (Taipei time).

You may also vote your Shares in person by attending the Twenty-Seventh Annual General Meeting. However, even if you plan on attending in person, we urge you to vote by proxy.

------

To vote by proxy, you should complete, sign and date the enclosed proxy card and return it promptly in the prepaid envelope provided.

**How Do I Request Electronic Delivery of Future Proxy Materials?**

If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the internet. To sign up for electronic delivery, please go to www.proxyvote.com to indicate that you agree to receive or access proxy materials electronically in future years.

**May I Revoke My Proxy?**

Your proxy may be revoked prior to its exercise by appropriate notice to us.

**If I Plan To Attend The Meeting, Should I Still Vote By Proxy?**

Whether you plan to attend the meeting or not, we urge you to vote by proxy. Returning the proxy card will not affect your right to attend the meeting, and your proxy will not be used if you are personally present at the meeting and inform the Secretary in writing prior to the voting that you wish to vote your Shares in person.

**How Will My Proxy Get Voted?**

If you properly fill in your proxy card and send it to us, your proxy holder (the individual named on your proxy card) will vote your Shares as you have directed. If you sign the proxy card but do not make specific choices, the proxy holder will vote your Shares as recommended by the Board of Directors and our management.

**How Will Voting On Any Other Business Be Conducted?**

Although we do not know of any business to be considered at the meeting other than the proposals described in this proxy statement, if any other business is presented at the meeting, your returned proxy gives authority to the proxy holder to vote on these matters in his discretion.

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**Proposal 1. ADOPTION OF AUDITED FINANCIAL STATEMENTS**

The Company seeks shareholders' adoption of the audited financial statements of the Company (the "**Audited Financial Statements**"), which have been prepared under Financial Reporting Standards in Singapore ("**FRSs**"), in respect of the financial year ended December 31, 2025. Along with the Audited Financial Statements, the Company seeks Shareholders' adoption of the Statement by the Directors and Auditor's Report of the Company in respect of the same financial year.

Adoption of this proposal requires the affirmative vote of a majority of the votes cast by shareholders entitled to vote at the Twenty-Seventh Annual General Meeting of the Company (the "**AGM**").

**The Board of Directors of the Company (the "Board of Directors") recommends a vote FOR this proposal.**

**Proposal 2. APPROVAL OF APPOINTMENT OF AUDITORS**

The Company seeks Shareholders' approval for the appointment of Deloitte & Touche and Deloitte & Touche LLP as the independent external auditors of the Company to hold such office until the conclusion of the next Annual General Meeting of the Company. The Board of Directors also seeks shareholders' approval to authorize the Board of Directors to fix the remuneration for Deloitte & Touche and Deloitte & Touche LLP in respect of their services to the Company for the financial year ended December 31, 2026.

Adoption of this proposal requires the affirmative vote of a majority of the votes cast by shareholders entitled to vote at the AGM.

**The Board of Directors recommends a vote FOR this proposal.**

**Proposal 3. APPROVAL OF DIRECTORS' REMUNERATION**

The Company seeks shareholders' approval on the remuneration of all of the Directors in an aggregate amount not exceeding US$350,000 in respect of their professional services to the Company until the conclusion of the next Annual General Meeting of the Company.

Adoption of this proposal requires the affirmative vote of a majority of the votes cast by shareholders entitled to vote at the AGM.

**The Company's management recommends a vote FOR this proposal.**

**Proposal 4. APPROVAL FOR AUTHORITY TO ALLOT AND ISSUE SHARES**

The Company is incorporated in Singapore. Under the Companies Act 1967 of Singapore (the "**Companies Act**"), the Directors may exercise any power of the Company to issue new Shares only with the prior approval of the shareholders of the Company at a general meeting. Such approval, if granted, is effective from the date of the general meeting at which the approval was given until the date on which the next Annual General Meeting of the Company is held or is required by law to be held, whichever is earlier.

Shareholders' approval is sought to give Directors authority to allot and issue new Shares and other instruments convertible into Shares during the period from the Twenty-Seventh Annual General Meeting to the earlier of the next Annual General Meeting or the date by which the next Annual General Meeting of the Company is required by law to be held.

Adoption of this proposal requires the affirmative vote of a majority of the votes cast by shareholders entitled to vote at the AGM.

**The Board of Directors recommends a vote FOR this proposal.**

**Proposal 5. APPROVAL FOR SHARE PURCHASE MANDATE** 

The approval of the Share Purchase Mandate authorizing the Company to purchase or acquire its Shares would give the Company the flexibility to undertake Share purchases or acquisitions at any time, subject to market conditions, during the period when the Share Purchase Mandate is in force.

In managing the business of the Company and its subsidiaries (collectively, the "**Group**"), the Company's management strives to increase shareholders' value by improving, *inter alia*, the return on equity of the Group. A Share purchase by the Company is one of the ways through which the return on equity of the Group may be enhanced.

A Share purchase is also an available option for the Company to return surplus cash that is in excess of the financial and possible investment needs of the Group to its shareholders. In addition, the Share Purchase Mandate will

------

allow the Company to have greater flexibility over, *inter alia*, the Company's share capital structure and its dividend policy.

The Company intends to use internal sources of funds or external borrowings or a combination of both to finance the Company's purchase or acquisition of the Shares pursuant to the Share Purchase Mandate. The Directors do not propose to exercise the Share Purchase Mandate to such extent that it would materially and adversely affect the financial position of the Group.

Share repurchase programmes may also help buffer short-term Share price volatility and off-set the effects of short-term speculators and investors and, in turn, bolster shareholder confidence and employee morale.

Adoption of this proposal requires the affirmative vote of a majority of the votes cast by shareholders entitled to vote at the AGM.

**The Board of Directors recommends a vote FOR this proposal.**

**OTHER MATTERS**

As of the date of this Proxy Statement, the Company does not intend to present and has not been informed that any other person intends to present any business not specified in this Proxy Statement for action at the Twenty-Seventh Annual General Meeting.

Shareholders are urged to sign the enclosed proxy form and to return it promptly in the enclosed envelope. Proxies will be voted in accordance with shareholders' directions. Signing the proxy form does not affect a shareholder's right to vote at the Twenty-Seventh Annual General Meeting, and the proxy may be revoked prior to its exercise by appropriate notice to the undersigned.

**PROXY SOLICITATION**

The Company will pay the cost of preparing and mailing this proxy statement and form of proxy to its shareholders. The Company has retained Mackenzie Partners, Inc. to request banks and brokers to forward copies of these materials to persons for whom they hold Shares and to request authority for execution of the proxies.

GIGAMEDIA LIMITED

/s/ Cheng-Ming Huang

………………………………………..

Cheng-Ming Huang (aka James Huang)

Chairman of the Board and Chief Executive Officer

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## Exhibit 99.3

**GIGAMEDIA LIMITED**

**CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2025 AND 2024** 

**FOR THE YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023**

**(With Report of Independent Registered Public Accounting Firm Thereon)**

------

**GIGAMEDIA LIMITED AND SUBSIDIARIES**

**Index to Consolidated Financial Statements**

---

| | |
|:---|:---|
|  | &nbsp;&nbsp;&nbsp;Page |
| [<u>Report of Independent Registered Public Accounting Firm</u>](#report_of_public_accounting_firm) | F-2 |
| [<u>Consolidated balance sheets as of December 31, 2025 and 2024</u>](#consolidated_balance_sheets) | F-4 |
| [<u>Consolidated statements of operations for the years ended December 31, 2025, 2024 and 2023</u>](#consolidated_statements_operations) | F-6 |
| [<u>Consolidated statements of comprehensive income (loss) for the years ended December 31, 2025, 2024 and 2023</u>](#consolidated_statements_comprehensive_lo) | &nbsp;&nbsp;F-7 |
| [<u>Consolidated statements of changes in shareholders' equity for the years ended December 31, 2025, 2024 and 2023</u>](#consolidated_statements_changes_in_equit) | &nbsp;&nbsp;F-8 |
| [<u>Consolidated statements of cash flows for the years ended December 31, 2025, 2024 and 2023</u>](#consolidated_statements_cash_flows) | &nbsp;&nbsp;F-9 |
| [<u>Notes to consolidated financial statements</u>](#notes_to_consolidated_financial_statemen) | &nbsp;&nbsp;F-11 |

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------

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

****

<br> To the shareholders and the Board of Directors of GigaMedia Limited

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheets of GigaMedia Limited and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive income (loss), changes in shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the result of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

**<br>** 

<br> **Critical Audit Matter**

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

**Fair Value - Level 3 Assets - Refer to Note 4 to the Consolidated Financial Statements**

<u>Critical Audit Matter Description</u>

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The Company holds investment in securities amounted to $8,173 thousand issued by a private company. The fair value of the investments is based on complex valuation methods with unobservable inputs, therefore, classified as Level 3.

Unlike the valuation of assets with readily observable market prices, therefore, more easily independently corroborated, the valuation of financial instruments classified as Level 3 is inherently subjective, and often involves the use of complex proprietary methods and unobservable inputs.

We identified the valuation of the Level 3 assets as a critical audit matter because of the complex valuation methods and unobservable inputs, including the discount rate, discount of lack of marketability and volatility management uses to estimate the fair value. This requires a high degree of auditor's professional judgment and an increased extent of effort, including the involvement of our fair value specialists, when evaluating the methods and related inputs.

<u>How the Critical Audit Matter Was Addressed in the Audit</u>

Our audit procedures included the following, among others:

• We obtained an understanding and evaluated the design and implementation of controls over management's valuation of the Level 3 assets, including controls over the Company's valuation methods and significant unobservable inputs.

• With the assistance of our fair value specialists, (1) we evaluated the appropriateness of the valuation methodologies and techniques used in determining the fair value of the Level 3 asset;(2)we tested the underlying data used in the methods calculations and the mathematical accuracy of the calculation; (3)we evaluated the appropriateness of the judgements and estimates of the key inputs used in determining the fair value of the Level 3 assets including but not limited to the discount rate, discount of lack of marketability and volatility.

/s/Deloitte & Touche

Taipei, Taiwan

Republic of China

April 29, 2026

We have served as the Company's auditor since 2017.

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GIGAMEDIA LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2025 AND 2024

(in thousands of US dollars)

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| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2025** | **2024** |
| <u>ASSETS</u> |  |  |
| CURRENT ASSETS |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents (Note 5) | $28740 | $34781 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable - net (Note 6) | 108 | 141 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment in securities - current (Note 8) | 4638 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses | 103 | 69 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash (Note 5) | 313 | 313 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other receivable (Note 8) | 672 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other current assets (Note 7) | 139 | 127 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Current Assets | 34713 | 35433 |
| INVESTMENT IN SECURITIES - NONCURRENT (Note 8) | 3535 | 5441 |
| PROPERTY, PLANT AND EQUIPMENT, NET (Note 18) | 92 | 101 |
| INTANGIBLE ASSETS - NET (Note 18) | 4 | 7 |
| OTHER ASSETS |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Refundable deposits | 189 | 182 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid licensing and royalty fees (Note 3) | 25 | 147 |
| &nbsp;&nbsp;&nbsp;&nbsp;Right-of-use assets (Notes 9 and 18) | 244 | 484 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other (Notes 8 and 12) | 402 | 563 |
| TOTAL ASSETS | $39204 | $42358 |

---

------

GIGAMEDIA LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS - (Continued)

DECEMBER 31, 2025 AND 2024

(in thousands of US dollars, except share data)

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2025** | **2024** |
| <u>LIABILITIES & SHAREHOLDERS' EQUITY</u> |  |  |
| CURRENT LIABILITIES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $57 | $38 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses (Note 10) | 1110 | 745 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue (Note 11) | 558 | 578 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other current liabilities (Notes 9 and 17) | 341 | 570 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Current Liabilities | 2066 | 1931 |
| NONCURRENT LIABILITIES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease liabilities (Note 9) | 93 | 84 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Liabilities | 2159 | 2015 |
| COMMITMENTS AND CONTINGENCIES (Note 17) |  |  |
| SHAREHOLDERS' EQUITY (Note 13) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ordinary shares, no par value, and additional paid-in capital; issued<br> and outstanding 11,052 thousand shares as of December 31, 2025<br> and 2024 | 308752 | 308752 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit | (245680) | (244126) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss (Note 14) | (26027) | (24283) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total GigaMedia Shareholders' Equity | 37045 | 40343 |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $39204 | $42358 |

---

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

------

GIGAMEDIA LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023

(in thousands of US dollars, except for earnings per share amounts)

---

| | | | |
|:---|:---|:---|:---|
|  | **2025** | **2024** | **2023** |
| OPERATING REVENUES |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Digital entertainment service revenues (Note 18) | $3474 | $2969 | $4292 |
| COSTS OF REVENUES |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of digital entertainment service revenues | (1654) | (1494) | (1846) |
| GROSS PROFIT | 1820 | 1475 | 2446 |
| OPERATING EXPENSES |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Product development and engineering expenses | (663) | (694) | (729) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling and marketing expenses | (1672) | (1451) | (1623) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses | (3082) | (3030) | (3242) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for expected credit losses (Note 6) | (1) | (1) | (7) |
|  | (5418) | (5176) | (5601) |
| LOSS FROM OPERATIONS | (3598) | (3701) | (3155) |
| NON-OPERATING INCOME (EXPENSES) |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income from financial institutions | 1220 | 1667 | 1609 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income on securities (Note 17) | 463 | 296 | 202 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on disposal or receipt of principal repayment from investment in securities (Note 8) |  |  | 76 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign exchange gain (loss), net | 402 | (426) | (34) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in the fair value of investment in equity securities recognized at fair value (Note 4) | (39) | (161) | (2110) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | (2) | 29 | 13 |
|  | 2044 | 1405 | (244) |
| LOSS BEFORE INCOME TAXES | (1554) | (2296) | (3399) |
| INCOME TAX EXPENSE (Note 16) |  |  |  |
| NET LOSS ATTRIBUTABLE TO SHAREHOLDERS OF GIGAMEDIA | $(1554) | $(2296) | $(3399) |
| LOSS PER SHARE ATTRIBUTABLE TO GIGAMEDIA |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic and Diluted: | $(0.14) | $(0.21) | $(0.31) |
| WEIGHTED AVERAGE SHARES USED TO COMPUTE LOSS PER SHARE <br> ATTRIBUTABLE TO GIGAMEDIA SHAREHOLDERS (Note 2) |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic | 11052 | 11052 | 11052 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted | 11052 | 11052 | 11052 |

---

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

------

GIGAMEDIA LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023

(in thousands of US dollars)

---

| | | | |
|:---|:---|:---|:---|
|  | **2025** | **2024** | **2023** |
| NET LOSS | $(1554) | $(2296) | $(3399) |
| OTHER COMPREHENSIVE INCOME (LOSS) - NET OF TAX: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Defined benefit pension plan adjustment | 32 | 44 | (11) |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency translation adjustment | (76) | (78) | (129) |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized holding gain (loss) on investment in securities | (1700) | (865) | (1453) |
| &nbsp;&nbsp;&nbsp;&nbsp;Reclassification adjustment for loss included in net income |  |  | (76) |
|  | (1744) | (899) | (1669) |
| COMPREHENSIVE LOSS ATTRIBUTABLE TO GIGAMEDIA <br> SHAREHOLDERS | $(3298) | $(3195) | $(5068) |

---

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

------

GIGAMEDIA LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023

(in thousands of US dollars and shares)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **GIGAMEDIA SHAREHOLDERS** | **GIGAMEDIA SHAREHOLDERS** | **GIGAMEDIA SHAREHOLDERS** | **GIGAMEDIA SHAREHOLDERS** |  |
|  | **Ordinary shares and<br>additional paid-in capital** | **Ordinary shares and<br>additional paid-in capital** | **Accumulated<br>deficit** | **Accumulated other comprehensive loss** |  |
|  | **Shares** | **Amount** | **(Note 13)** | **(Note 14)** | **Total** |
| Balance as of January 1, 2023 | 11052 | $308752 | $(238431) | $(21715) | $48606 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loss |  |  | (3399) |  | (3399) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive income |  |  |  | (1669) | (1669) |
| Balance as of December 31, 2023 | 11052 | 308752 | (241830) | (23384) | 43538 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loss |  |  | (2296) |  | (2296) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive loss |  |  |  | (899) | (899) |
| Balance as of December 31, 2024 | 11052 | 308752 | (244126) | (24283) | 40343 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loss |  |  | (1554) |  | (1554) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive loss |  |  |  | (1744) | (1744) |
| Balance as of December 31, 2025 | 11052 | $308752 | $(245680) | $(26027) | $37045 |

---

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

------

GIGAMEDIA LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023

(in thousands of US dollars)

---

| | | | |
|:---|:---|:---|:---|
|  | **2025** | **2024** | **2023** |
| CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |  |
| Net loss | $(1554) | $(2296) | $(3399) |
| Adjustments to reconcile net income (loss) to net cash used in operating<br> activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 58 | 48 | 43 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization | 9 | 10 | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for expected credit losses | 1 | 1 | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on disposal or receipt of principal repayment from investment in securities |  |  | (76) |
| &nbsp;&nbsp;&nbsp;&nbsp;Changes in the fair value of investment in equity securities recognized at fair value | 39 | 161 | 2110 |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized foreign exchange (gain) loss | (510) | 601 | (85) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net changes in: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 32 | 85 | (35) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses | (34) | (16) | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid licensing and royalty fees | 121 | (122) | 152 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid pension assets | (41) | (37) | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | (479) | (284) | 272 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 19 | (6) | (9) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 365 | (437) | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities |  | (41) | (232) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (1974) | (2333) | (1193) |
| CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchase of investment in securities | (4205) | (1063) | (105) |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of property, plant and equipment | (44) | (46) | (52) |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase in intangible assets | (6) | (4) | (6) |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase in refundable deposits | (7) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from disposal or receipt of principal repayment from investment in securities |  |  | 1000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) investing activities | (4262) | (1113) | 837 |

---

------

GIGAMEDIA LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)

FOR THE YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023

(in thousands of US dollars)

---

| | | | |
|:---|:---|:---|:---|
|  | **2025** | **2024** | **2023** |
| CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in financing activities |  |  |  |
| Net foreign currency exchange differences on cash, cash equivalents <br> and restricted cash | 195 | (243) | 32 |
| NET DECREASE IN CASH, CASH EQUIVALENTS AND<br> RESTRICTED CASH | (6041) | (3689) | (324) |
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT<br> BEGINNING OF YEAR | 35094 | 38783 | 39107 |
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END<br> OF YEAR | $29053 | $35094 | $38783 |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest paid during the year | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax paid during the year | $(4) | $— | $— |

---

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

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GIGAMEDIA LIMITED AND SUBSIDIARIES

Notes To Consolidated Financial Statements

December 31, 2025, 2024 and 2023

**NOTE 1. <u>Principal Activities, Basis of Presentation, and Summary of Significant Accounting Policies</u>**

***(a) Principal Activities***

GigaMedia Limited (referred to hereinafter as GigaMedia, our Company, we, us, or our) is a diversified provider of digital entertainment services, with a headquarters in Taipei, Taiwan.

Our digital entertainment service business operates a suite of play-for-fun digital entertainment services, mainly targeting online and mobile-device users across Asia.

***(b) Basis of Presentation***

The accompanying consolidated financial statements of our Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

***(c) Summary of significant accounting policies***

***Principles of Consolidation***

The consolidated financial statements include the accounts of GigaMedia and its subsidiaries after elimination of all inter-company accounts and transactions.

***Foreign Currency Transactions***

The functional currency of each individual consolidated entity is determined based on the primary economic environment in which the entity operates. Foreign currency transactions denominated in currencies other than the functional currencies are translated into the functional currency using the exchange rate prevailing on the transactions dates. At year-end, the balances of foreign currency monetary assets and liabilities are recorded based on prevailing exchange rates and any resulting gains or losses are included in other income and expenses. For the Investments in debt securities that are classified as either trading or available for sale that is denominated in a foreign currency, see Note 1(c), Summary of significant accounting policies - Investment in Securities, for additional information.

***Translation of Foreign Currency Financial Statements***

The reporting currency of our Company is the U.S. dollars. The functional currency of some of our Company's subsidiaries is the local currency of the respective entity. Accordingly, the financial statements of the foreign subsidiaries were translated into U.S. dollars at the following exchange rates: assets and liabilities — current rate on the balance sheet date; shareholders' equity — historical rates; income and expenses — average rate during the period. Cumulative translation adjustments resulting from this process are charged or credited to other comprehensive income.

***Use of Estimates***

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management bases its estimates on historical experience and on assumptions that it believes are reasonable. Management assesses these estimates on a regular basis; however, actual results could differ from those estimates. Items subject to such estimates and assumptions include but not limit to the deferral and breakage of revenues; the fair value of unquoted debt and equity securities, the useful lives of property, plant and equipment and right-of-use assets; allowances for credit losses; the valuation of deferred tax assets, long-lived assets, and share-based compensation; and accrued pension liabilities (prepaid pension assets), income tax uncertainties and other contingencies. We believe the critical accounting policies listed below affect management's judgments and estimates used in the preparation of the consolidated financial statements.

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***Revenue Recognition and Deferral***

*<u>General</u>*

Our recognition of revenue from contracts with customers is in accordance with the five-step revenue recognition model: (1) identify the contract with a customer; (2) identify the performance obligation in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation; and (5) recognize revenue when or as we satisfy a performance obligation.

Sales taxes assessed by governmental authorities on our revenue transactions are presented on a net basis of digital entertainment service revenues in our consolidated financial statements.

In addition to the aforementioned general policies, the following are the specific revenue recognition policies for revenue from contracts with customers.

*<u>Digital Entertainment Product and Service Revenues</u>*

Digital entertainment product and service revenues are mainly generated through sale of virtual points and in-game items, and those virtual goods purchased in our games can only be consumed in our games. Therefore, we regard the sale of a virtual good as a service, where the related performance obligation is satisfied over time, and revenues are recognized by measuring progress toward satisfying the performance obligation in a manner that best depicts the transfer of goods or services to the customer. Accordingly, we recognize revenues from the sale of virtual goods over the period of time using the output method, which is generally the estimated service period.

Digital entertainment product and service revenues are generated through the sale of virtual points, prepaid cards and game packs via various third-party storefronts, distributors and payment channels, including but not limited to the "Google Play Store," the "Apple App Store," convenience stores, telecom service providers and other payment service providers. Proceeds from sales of prepaid cards and game packs, net of sales discounts, and virtual points are deferred when received, and revenue is recognized upon the actual usage of the playing time or in-game virtual items by the end-users, or over the estimated useful life of virtual items, when the game is terminated and the period of refund claim for any sold virtual items is ended in accordance with our published policy, or when the likelihood of the customer exercising the remaining rights becomes remote. (Please see "Deferred Revenues and Breakage" below for more discussion of accounting treatments of the unexercised rights.)

*<u>Estimated Service Period</u>*

The virtual goods for our games may have different service periods. We use the weighted average number of days of a player's payment interval as the estimate for the service period of each game. We evaluate the appropriateness of such estimates quarterly to see if they are in line with our observations in the operations. We believe this provides a reasonable depiction of the transfer of services to our customers, as it is the best representation of the time period during which our customers play our games. Determining the estimated service period is subjective and requires management's judgment. Future usage patterns may differ from historical ones and therefore, the estimated service period may change in the future. The estimated service periods for players of our current games are generally less than 6 months.

*<u>Principal Agent Considerations</u>*

For the revenues generated from our digital entertainment offerings which are licensed to us for using, marketing, distributing, selling and publishing, and for the sales of our products and services via third-party storefronts and other channels, we evaluate to determine whether our revenues should be reported on a gross or net basis. Key indicators that we evaluate in determining whether we are the principal in the sale (gross reporting) or an agent (net reporting) include, but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;•which party is primarily responsible for fulfilling the promise to provide the specified good or service; and

&nbsp;&nbsp;&nbsp;&nbsp;•which party has discretion in establishing the price for the specified good or service.

Based on our evaluation of various indicators, we report revenues on a gross basis for games that we publish and operate, as we are, and we present ourselves as, responsible for fulfilling the promise of delivering the virtual goods in the game and maintaining the game environment for customers' consumption of such virtual goods. We have the discretion in establishing the price for those virtual goods, including the power to decide the range and extent of price discount or quantity discount, while the licensors or the third-party channels charge a fixed percentage of fees for such sales. And any loss on the receivables has to be absorbed by us and not the third-party channels.

------

*<u>Deferred Revenues and Breakage</u>*

Deferred revenues representing contract liabilities consist mainly of the advanced income related to our digital entertainment business. Deferred revenue represents proceeds received relating to the sale of virtual points and in-game items that are activated or charged to the respective user account by users, but which have not been consumed by the users or expired. Deferred revenue is credited to profit or loss when the virtual points and in-game items are consumed or have expired. Pursuant to relevant requirements in Taiwan, as of December 31, 2025 and 2024, cash totaling $313 thousand and $313 thousand, respectively, had been deposited in escrow accounts in banks mainly as a performance bond for the users' prepayments and virtual points, and is included within restricted cash in the consolidated balance sheets.

For deferred revenues, some users may not exercise all of their contractual rights, and those unexercised rights are referred to as breakage. We estimate and recognize the breakage amount as revenue when the likelihood of the customer exercising the remaining rights becomes remote. We consider a variety of data points when determining the estimated breakage amount, including the time when we ceased selling prepaid products for certain services and when such prepaid products were last used in charging users' accounts.

***Prepaid Licensing and Royalty Fees***

Our Company, through our subsidiaries, routinely enters into agreements with licensors to acquire licenses for using, marketing, distributing, selling and publishing digital entertainment offerings.

Prepaid licensing fees paid to licensors are amortized on a straight-line basis over the shorter of the estimated useful economic life of the relevant product and service or license period, which is usually within one to two years.

Prepaid royalty fees and related costs are initially deferred when paid to licensors and amortized as operating costs based on certain percentages of revenues generated by the licensee from operating the related digital entertainment product and service in the specific country or region over the contract period.

***Fair Value Measurements***

Our Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. We determine fair value based on assumptions that market participants would use in pricing an asset or a liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

Our Company generally determines or calculates the fair value of financial instruments using quoted market prices in active markets when such information is available; otherwise we apply appropriate present value or other valuation techniques, such as the income approach, incorporating adjusted available market discount rate information and our Company's estimates for non-performance and liquidity risk, or the market approach, where we derive the implied value of financial instruments for the target company from a recent transaction involving the target company's own securities. These techniques rely extensively on the use of a number of assumptions, including the discount rate, credit spreads, and estimates of future cash flows. (Please see Note 4, "Fair Value Measurements", for additional information.)

***Cash Equivalents, Restricted Cash and Presentation of Statements of Cash Flows***

Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and so near to their maturity that they present relatively insignificant risk from changes in interest rates. Commercial paper, negotiable certificates of deposit, time deposits and bank acceptances with original maturities of three months or less are considered to be cash equivalents.

------

Our consolidated statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Amounts generally described as restricted cash and restricted cash equivalents are included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the consolidated statement of cash flows.

***Investment in Securities***

*<u>Debt securities</u>*

Debt securities for which we have the positive intent and ability to hold to maturity are classified as held-to-maturity and are carried at amortized cost. Debt securities held primarily for the purpose of selling in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses included in income.

Debt securities not classified as held-to-maturity or trading are classified as available-for-sale and are reported at fair value with unrealized gains and losses, net of income taxes, as a separate component of other comprehensive income. When a trading or available-for-sale security is denominated in a foreign currency, changes in the exchange rate between the foreign currency and an entity's functional currency affect the security's fair value. Therefore, under the Accounting Standards Codification ("ASC") 320, Investments—Debt Securities, the trading or available-for-sale security must be remeasured from the foreign currency to the functional currency as of each reporting date by using the current exchange rate to determine the fair value of the security. The entire change in the security's fair value (including the portion related to a change in the exchange rates) is classified in accordance with ASC 320.

Losses on debt security transactions and declines in value that are determined to be the result of credit losses, if any, are reported in the consolidated statements of operations. In evaluating credit losses on the debt securities, management first considers whether the fair value is less than amortized cost. An impairment exists if the fair value of the investment is less than its amortized cost basis. Secondly, the intent or requirement to sell the securities is analyzed. If we intend to sell the debt security, or more likely than not will be required to sell the security before recovery of its amortized cost basis, any allowance for credit losses shall be written off and the amortized cost basis shall be written down to the debt security's fair value at the reporting date, with any incremental impairment reported in the consolidated statements of operations. Subsequently, it shall be determined whether the decline in fair value below the amortized cost basis has resulted from a credit loss, considering comprehensive factors including but not limited to changes in industry or area, in technology or changes that indicate likely or realized failure of the issue of the security to make scheduled interest or principal payments. Unrealized gains on credit-related recoveries are reported in the consolidated statements of operations.

*<u>Equity securities</u>*

Equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) are to be measured at fair value with changes in fair value recognized in net income.

***Receivables***

Accounts receivable are recorded at the invoiced amount and do not bear interest. Amounts collected on accounts receivable are included in net cash provided by operating activities in the consolidated statements of cash flows. Our Company maintains an allowance for credit losses for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management adopts a current expected credit loss model based on expected losses. The measurement of expected losses is based on relevant information about past events, including historical losses adjusted to take into account the amount of receivables in dispute, and the current receivables aging and current payment patterns, as well as reasonable and supportable forecasts that affect the collectability of reported amounts. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

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***Property, Plant and Equipment***

Property, plant and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is recorded on a straight-line basis over useful lives that correspond to categories as follows:

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| | |
|:---|:---|
| **<u>Categories</u>** | **Years** |
| Information and communication equipment | 4 |
| Office furniture and equipment | 6 |
| Leasehold improvements | Shorter of 5 or lease term |

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Leasehold improvements are amortized over the shorter of the term of the lease or the economic useful life of the assets. Improvements and replacements are capitalized and depreciated over their estimated useful lives, while ordinary repairs and maintenance are expensed as incurred.

***Software Cost*** 

We capitalize certain costs incurred to purchase computer software. These capitalized costs are amortized on a straight-line basis over the shorter of the useful economic life of the software or its contractual license period, which is typically one to three years.

***Impairment of Long-Lived Assets***

Long-lived assets other than goodwill not being amortized are reviewed for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value of an asset might not be recoverable from its related future undiscounted cash flows. If such assets are considered to be impaired, the impairment to be recognized is measured by the extent to which the carrying amount of the assets exceeds the estimated fair value of the assets. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. When impairment is identified, the carrying amount of the asset is reduced to its estimated fair value, and is recognized as a loss from operations. (Please see Note 4, "Fair Value Measurements", for additional information.)

***Product Development and Engineering***

Product development and engineering expenses primarily consist of research compensation, depreciation and amortization, and are expensed as incurred.

***Advertising***

Costs of broadcast advertising are recorded as expenses as advertising airtime is used. Other advertising expenditures are expensed as incurred.

Advertising expenses incurred in 2025, 2024 and 2023 totaled $0.3 million, $0.1 million and $0.2 million, respectively and were included in selling and marketing expenses.

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***Leases***

*<u>General</u>*

We determine if an arrangement is or contains a lease at contract inception. In certain situations, judgment may be required in determining if a contract contains a lease. For these arrangements, there is judgment in evaluating if the arrangement provides us with an asset that is physically distinct, or that represents substantially all of the capacity of the asset, and if we have the right to direct the use of the asset. Lease assets and liabilities are recognized based on the present value of future lease payments over the lease term at the commencement date. Included in the lease liability are future lease payments that are fixed, in-substance fixed, or are payments based on an index or rate known at the commencement date of the lease. Variable lease payments are recognized as lease expenses as incurred, and generally relate to variable payments made based on the level of services provided by the lessor of our leases. The operating lease right-of-use ("ROU") asset also includes any lease payments made prior to commencement, initial direct costs incurred, and lease incentives received. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate in determining the present value of future payments. The incremental borrowing rate represents the rate required to borrow funds over a similar term to purchase the leased asset, and is based on the information available at the commencement date of the lease. For leased assets with similar lease terms and asset type we applied a portfolio approach in determining a single incremental borrowing rate to apply to the leased assets.

In determining our lease liability, the lease term includes options to extend or terminate the lease when it is reasonably certain that we will exercise such option. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-line basis over the lease term.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, a change in future lease payments resulting from a change in an index or a rate used to determine those payments, or a change in the assessment of an option to purchase an underlying asset, our Company remeasures the lease liabilities with a corresponding adjustment to the ROU assets.

Operating lease ROU assets are presented in "Other assets" and operating lease liabilities are presented in "Other current liabilities" and "Lease liabilities" on our consolidated balance sheets.

***Retirement Plan and Net Periodic Pension Cost***

Under our defined benefit pension plan, net periodic pension cost, which includes service cost, interest cost, expected return on plan assets, amortization of unrecognized net transition obligation and gains or losses on plan assets, is recognized based on an actuarial valuation report. We recognize the funded status of pension plans and non-pension post-retirement benefit plans (retirement-related benefit plans) as an asset or a liability in the consolidated balance sheets.

Under our defined contribution pension plans, net periodic pension cost is recognized as incurred.

***Income Taxes***

The asset and liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between financial reporting and tax bases of assets and liabilities. Deferred tax assets and liabilities, which are classified as noncurrent on the consolidated balance sheets, are measured using the enacted tax rate and laws that will be in effect when the related temporary differences are expected to reverse. A valuation allowance is established when necessary to reduce deferred tax assets to the amount that more-likely-than-not will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences and loss carryforwards become deductible.

In addition, we recognize the financial statement impact of a tax position when it is more-likely-than-not that the position will be sustained upon examination. If the tax position meets the more-likely-than-not recognition threshold, the tax effect is measured at the largest amount that is greater than a 50% likelihood of being realized upon settlement. Interest and penalties on an underpayment of income taxes are reflected as income tax expense in the consolidated financial statements.

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***Earnings (Loss) Per Share***

Basic earnings (loss) per share is computed by dividing the net income (loss) attributable to ordinary shareholders for the period by the weighted average number of ordinary shares outstanding during the period. Diluted earnings (loss) per share is computed by dividing the net earnings (loss) for the period by the weighted average number of ordinary shares and potential ordinary shares outstanding during the period. Potential ordinary shares, composed of incremental ordinary shares issuable upon the exercise of options in all periods, are included in the computation of diluted earnings (loss) per share to the extent such shares are dilutive. Diluted earnings (loss) per share also takes into consideration the effect of dilutive securities issued by subsidiaries. In a period in which a loss is incurred, only the weighted average number of ordinary shares issued and outstanding is used to compute the diluted loss per share, as the inclusion of potential ordinary shares would be anti-dilutive. Therefore, for the years ended December 31, 2025, 2024 and 2023, basic and diluted loss per share were $0.14, $0.21 and $0.31, respectively.

***Segment Reporting***

Our segment reporting is mainly based on lines of business. We use the management approach in determining reportable operating segments. The management approach considers the internal organization and reporting used by our Company's chief operating decision maker ("CODM") for making operating decisions, allocating resources and assessing performance as the source for determining our operating segments. Our Company's CODM has been identified as the Chief Executive Officer.

Segment profit and loss is determined on a basis that is consistent with how our Company reports operating loss in its consolidated statements of operations. Because we operate only one segment, there are no intersegment transactions.

***(d) Recently Adopted Accounting Pronouncements***

***Income tax***

In December 2023, the FASB issued *ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures*, which requires a public business entity to disclose specific categories in its annual effective tax rate reconciliation and disaggregated information about significant reconciling items by jurisdiction and by nature. The ASU also requires entities to disclose their income tax payments (net of refunds received) to international, federal, and state and local jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received). The guidance makes several other changes to income tax disclosure requirements. The amendments in this update are effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted. Our Company has adopted the amendments on a prospective basis on January 1, 2025. The prospective adoption of this ASU does not have a material impact on our Company's consolidated financial statements and the income tax disclosures have been updated to incorporate the amendments, as described above. See Note 16 "Income Taxes" below, which reflects these amendments.

***(e) Recent Accounting Pronouncements Not Yet Adopted***

***Disclosure Improvements***

In October 2023, the FASB issued *ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative*, to amend certain disclosure and presentation requirements for a variety of topics within the ASC. These amendments align the requirements in the ASC to the removal of certain disclosure requirements set out in Regulation S-X and Regulation S-K, announced by the SEC. The effective date for each amended topic in the ASC is either the date on which the SEC's removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or on June 30, 2027, if the SEC has not removed the requirements by that date. Early adoption is prohibited. The adoption of this amendment is not expected to have a material impact on our Company's financial position, results of operations, cash flows or financial statement disclosures.

In December 2025, the FASB issued *ASU 2025-12, Codification Improvements,* as part of the standing project on its agenda to make improvements to the Codification in response to feedback from stakeholders. The amendments make Codification updates to a broad range of Topics arising from technical corrections, unintended application of the Codification, clarifications, and other minor improvements. The amendments in this ASU are effective for fiscal years beginning after December 15, 2026, and interim reporting

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periods within those fiscal years. Early adoption is permitted. The adoption of this amendment is not expected to have a material impact on our Company's financial position, results of operations, cash flows or financial statement disclosures.

***Income Statement***

In November 2024, the FASB issued *ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,* which requires disaggregated disclosure of income statement expenses for public business entities. The ASU does not change or remove existing expense disclosure requirements. The ASU also does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. In January 2025, the FASB issued *ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date*, to clarify the effective date of ASU 2024-03. This guidance is effective for fiscal years beginning after December 15, 2026, and interim reporting periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact that the adoption will have on our financial statement disclosures.

***Financial Instruments***

In July 2025, the FASB issued *ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets*. In developing reasonable and supportable forecasts as part of estimating expected credit losses, all entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The amendments in this ASU should be applied prospectively. The amendments will be effective for fiscal years beginning after December 15, 2025, and interim periods within those fiscal periods. Early adoption is permitted. We are currently evaluating the impact that the adoption will have on our results of operations, financial position, cash flows and financial statement disclosures.

***Intangibles—Goodwill and Other—Internal-Use Software***

In September 2025, the FASB issued *ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software,* which amends certain aspects of the accounting for and disclosure of software costs under ASC 350-40. The ASU makes targeted improvements to ASC 350-40 but does not fully align the framework for accounting for internally developed software costs that are subject to ASC 350-40 with the framework applied to software to be sold or marketed externally that is subject to ASC 985-20. The ASU also does not amend the guidance on costs of software licenses that are within the scope of ASC 985-20. The amendments supersede the guidance on website development costs in ASC 350-50 and relocate that guidance, along with the recognition requirements for development costs specific to websites, to ASC 350-40. The amendments are effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal periods. Early adoption is permitted. The adoption of this amendment is not expected to have a material impact on our Company's financial position, results of operations, cash flows or financial statement disclosures.

**NOTE 2. <u>EARNINGS (LOSS) PER SHARE</u>**

The following table provides a reconciliation of the denominators of the basic and diluted per share computations:

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| | | | |
|:---|:---|:---|:---|
| **(in thousand shares)** | **2025** | **2024** | **2023** |
| **Weighted average number of outstanding shares** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | 11052 | 11052 | 11052 |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of dilutive securities |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee share-based compensation |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | 11052 | 11052 | 11052 |

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Certain outstanding options were excluded from the computation of diluted EPS since their effect would have been anti-dilutive. The antidilutive stock options excluded and their associated exercise prices per share were 4 thousand shares at $2.90 as of December 31, 2025, 4 thousand shares at $2.90 as of December 31, 2024, and 29 thousand shares at $2.90 to $7.15 as of December 31, 2023. There were no antidilutive Restricted Stock Units ("RSUs") as of December 31, 2025, 2024, and 2023.

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**NOTE 3. <u>PREPAID LICENSING AND ROYALTY FEES</u>**

The following table summarizes changes to our Company's prepaid licensing and royalty fees:

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| | | | |
|:---|:---|:---|:---|
| **(in US$ thousands)** | **2025** | **2024** | **2023** |
| Balance at beginning of year | $147 | $24 | $177 |
| Addition | 50 | 321 | 36 |
| Amortization and usage | (172) | (198) | (189) |
| Balance at end of year | $25 | $147 | $24 |

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**NOTE 4. <u>FAIR VAL</u><u>UE MEASUREMENTS</u>**

The following table presents the carrying amounts and estimated fair values of our Company's financial instruments at December 31, 2025 and 2024.

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| | | | | |
|:---|:---|:---|:---|:---|
| **(in US$ thousands)** | **2025** | **2025** | **2024** | **2024** |
|  | **Carrying<br>amount** | **Fair value** | **Carrying<br>amount** | **Fair value** |
| <u>Financial assets</u> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $28740 | $28740 | $34781 | $34781 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 108 | 108 | 141 | 141 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash | 313 | 313 | 313 | 313 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other receivable - current | 672 | 672 | 2 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other receivable - noncurrent (included in Other assets) | 191 | 191 | 392 | 392 |
| &nbsp;&nbsp;&nbsp;&nbsp;Refundable deposits | 189 | 189 | 182 | 182 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment in securities - current and noncurrent | 8173 | 8173 | 5441 | 5441 |
| <u>Financial liabilities</u> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 57 | 57 | 38 | 38 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 1110 | 1110 | 745 | 745 |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease liabilities - current and noncurrent | 248 | 248 | 500 | 500 |

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The carrying amounts shown in the table are included in the consolidated balance sheets under the indicated captions.

The fair values of the financial instruments shown in the above table as of December 31, 2025 and 2024 represent the amounts that would be received to sell those assets or that would be paid to transfer those liabilities in an arm's length transaction between market participants at that date. Those fair value measurements maximize the use of observable inputs. In situations where there is little market activity for the asset or liability at the measurement date, the fair value measurement reflects our Company's own judgments about the assumptions that market participants would use in pricing the asset or liability. Those judgments are developed by us based on the best information available in the circumstances, including expected cash flows and appropriately risk-adjusted discount rates, available observable and unobservable inputs.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Cash and cash equivalents, accounts receivable, restricted cash, accounts payable, accrued expenses: The carrying amounts, at face value or cost plus accrued interest, approximate fair value because of the short maturity of these instruments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Refundable deposits: Measurement of refundable deposits with no fixed maturities is based on carrying amounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Investment in securities – current and noncurrent: Valuation techniques are applied for measurement of debt and equity securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Other receivable - current and noncurrent: Measured at amortized cost under the current expected credit loss ("CECL") model.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Lease liabilities: Measured at discounted amounts of lease payments.

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***<u>Assets and Liabilities that are Measured at Fair Value on a Recurring Basis</u>***

Our Company has segregated all financial assets and liabilities that are measured at fair value on a recurring basis (at least annually) into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date in the table below.

Assets and liabilities measured at fair value on a recurring basis are summarized as below:

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| | | | | |
|:---|:---|:---|:---|:---|
| **(in US$ thousands)** | **Fair Value Measurement Using** | **Fair Value Measurement Using** | **Fair Value Measurement Using** | **At December 31, 2025** |
|  | **Level 1** | **Level 2** | **Level 3** |  |
| <u>Assets</u> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash - time deposits | $— | $313 | $— | $313 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment in securities - current and noncurrent |  |  | 8173 | 8173 |
|  | $— | $313 | $8173 | $8486 |

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| | | | | |
|:---|:---|:---|:---|:---|
| **(in US$ thousands)** | **Fair Value Measurement Using** | **Fair Value Measurement Using** | **Fair Value Measurement Using** | **At December 31, 2024** |
|  | **Level 1** | **Level 2** | **Level 3** |  |
| <u>Assets</u> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash - time deposits | $— | $313 | $— | $313 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment in securities - current and noncurrent |  |  | 5441 | 5441 |
|  | $— | $313 | $5441 | $5754 |

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Our Company's accounting policy is to recognize transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer. There were no transfers into or out of Level 3 for the years ended December 31, 2025 and 2024.

<u>Level 2 measurements:</u>

Cash equivalents – time deposits and restricted cash – time deposits are interest-earning deposits in banks, and the cash flows are estimated based on the terms of the contracts and discounted using the market interest rates applicable to the maturity of the contracts, which are adjusted to reflect credit risks on counterparties. As the inputs into the valuation techniques are readily observable, these deposits are classified in Level 2 of the fair value hierarchy.

<u>Level 3 measurements:</u>

For assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during 2025 and 2024, a reconciliation of the beginning and ending balances are presented as follows:

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| | | |
|:---|:---|:---|
| **(in US$ thousands)** | **2025** | **2025** |
|  | **Investment in debt securities** | **Investment in equity securities** |
| Balance at beginning of year | $5384 | $57 |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchase | 4205 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Disposal or repayment |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total gains or (losses) (realized/unrealized) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;included in earnings |  | (39) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;included in other comprehensive income - unrealized gain (loss) on security | (1700) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;included in other comprehensive income - foreign currency items | 263 | 3 |
| Balance at end of year | $8152 | $21 |
| &nbsp;&nbsp;&nbsp;&nbsp;The amount of total gains or (losses) for the period<br> included in earnings attributable to the change in<br> unrealized gains or losses relating to assets still held at<br> the reporting date. | $— | $(39) |

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| | | |
|:---|:---|:---|
| **(in US$ thousands)** | **2024** | **2024** |
|  | **Investment in debt securities** | **Investment in equity securities** |
| Balance at beginning of year | $5548 | $229 |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchase | 1063 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Disposal or repayment |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total gains or (losses) (realized/unrealized) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;included in earnings |  | (161) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;included in other comprehensive income - unrealized gain (loss) on security | (865) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;included in other comprehensive income - foreign currency items | (362) | (11) |
| Balance at end of year | $5384 | $57 |
| &nbsp;&nbsp;&nbsp;&nbsp;The amount of total gains or (losses) for the period<br> included in earnings attributable to the change in<br> unrealized gains or losses relating to assets still held at<br> the reporting date. | $— | $(161) |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;The significant unobservable inputs used in the fair value measurements categorized within Level 3 of the fair value hierarchy, together with a quantitative sensitivity analysis as of December 31, 2025 and 2024 are shown below:<br><u>Investment in securities - Level 3 financial assets</u><br>**Sensitivity of the Input to Fair Value** | &nbsp;&nbsp;The significant unobservable inputs used in the fair value measurements categorized within Level 3 of the fair value hierarchy, together with a quantitative sensitivity analysis as of December 31, 2025 and 2024 are shown below:<br><u>Investment in securities - Level 3 financial assets</u><br>**Sensitivity of the Input to Fair Value** | &nbsp;&nbsp;The significant unobservable inputs used in the fair value measurements categorized within Level 3 of the fair value hierarchy, together with a quantitative sensitivity analysis as of December 31, 2025 and 2024 are shown below:<br><u>Investment in securities - Level 3 financial assets</u><br>**Sensitivity of the Input to Fair Value** | &nbsp;&nbsp;The significant unobservable inputs used in the fair value measurements categorized within Level 3 of the fair value hierarchy, together with a quantitative sensitivity analysis as of December 31, 2025 and 2024 are shown below:<br><u>Investment in securities - Level 3 financial assets</u><br>**Sensitivity of the Input to Fair Value** | &nbsp;&nbsp;The significant unobservable inputs used in the fair value measurements categorized within Level 3 of the fair value hierarchy, together with a quantitative sensitivity analysis as of December 31, 2025 and 2024 are shown below:<br><u>Investment in securities - Level 3 financial assets</u><br>**Sensitivity of the Input to Fair Value** | &nbsp;&nbsp;The significant unobservable inputs used in the fair value measurements categorized within Level 3 of the fair value hierarchy, together with a quantitative sensitivity analysis as of December 31, 2025 and 2024 are shown below:<br><u>Investment in securities - Level 3 financial assets</u><br>**Sensitivity of the Input to Fair Value** | &nbsp;&nbsp;The significant unobservable inputs used in the fair value measurements categorized within Level 3 of the fair value hierarchy, together with a quantitative sensitivity analysis as of December 31, 2025 and 2024 are shown below:<br><u>Investment in securities - Level 3 financial assets</u><br>**Sensitivity of the Input to Fair Value** |
|  |  |  |  |  | &nbsp;&nbsp;**Changes of Fair Value (in US$ thousands)** | &nbsp;&nbsp;**Changes of Fair Value (in US$ thousands)** |
| &nbsp;&nbsp;**Calculation Date** | &nbsp;&nbsp;**Valuation Technique** | &nbsp;&nbsp;**Significant**<br>**Unobservable Inputs** | &nbsp;&nbsp;**Rate for debt investment** | &nbsp;&nbsp;**Rate for equity investment** | &nbsp;&nbsp;**If the Rate of Input changes by -1%** | &nbsp;&nbsp;**If the Rate of Input changes by +1%** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 31, 2025 | &nbsp;&nbsp;&nbsp;The discounted cash flow analysis to estimate the enterprise value, and then the<br> option pricing method to allocate equity value among various classes of stakeholders.  | &nbsp;&nbsp;&nbsp;Discount rate for future cash flows | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.7% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.7% | &nbsp;&nbsp;Debt securities: +$1,473<br>Equity securities: +$36 | &nbsp;&nbsp;Debt securities: <br>-$1,441<br>Equity securities: -$15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 31, 2025 | &nbsp;&nbsp;&nbsp;The discounted cash flow analysis to estimate the enterprise value, and then the<br> option pricing method to allocate equity value among various classes of stakeholders.  | &nbsp;&nbsp;&nbsp; <br>Discount for lack of marketability | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>From 11.00% to 15.00% for different scenarios<br>| &nbsp;&nbsp;&nbsp; <br>From 15.00% to 66.00% for different scenarios | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>Debt securities: +$93<br>Equity securities: +$0 | &nbsp;&nbsp; <br>Debt securities: -$92<br>Equity securities: -$1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 31, 2025 | &nbsp;&nbsp;&nbsp;The discounted cash flow analysis to estimate the enterprise value, and then the<br> option pricing method to allocate equity value among various classes of stakeholders.  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>Volatility | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>From 30.51% to 38.00% for different scenarios<br>| &nbsp;&nbsp;&nbsp; <br>From 38.00% to 178.33% for different scenarios<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>Debt securities: +$38<br>Equity securities: -$2<br>| &nbsp;&nbsp; <br>Debt securities: -$108<br>Equity securities: +$1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 31, 2024 | &nbsp;&nbsp;&nbsp;The discounted cash flow analysis to estimate the enterprise value, and then the option pricing method to allocate equity value among various classes of stakeholders.  | &nbsp;&nbsp;&nbsp;Discount rate for future cash flows | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;38.5% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;38.5% | &nbsp;&nbsp;Debt securities: +$324<br>Equity securities: +$28 | &nbsp;&nbsp;Debt securities: -$352<br>Equity securities: -$20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 31, 2024 | &nbsp;&nbsp;&nbsp;The discounted cash flow analysis to estimate the enterprise value, and then the option pricing method to allocate equity value among various classes of stakeholders.  | &nbsp;&nbsp;&nbsp; <br>Discount for lack of marketability | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>13% | &nbsp;&nbsp;&nbsp; <br>From 13.0% to 48.0% for different scenarios | &nbsp;&nbsp; <br>Debt securities: +$62<br>Equity securities: +$1 | &nbsp;&nbsp; <br>Debt securities: -$62<br>Equity securities: -$1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 31, 2024 | &nbsp;&nbsp;&nbsp;The discounted cash flow analysis to estimate the enterprise value, and then the option pricing method to allocate equity value among various classes of stakeholders.  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>Volatility | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>29% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>29% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>Debt securities: +$99<br>Equity securities: -$1<br>| &nbsp;&nbsp; <br>Debt securities: -$36<br>Equity securities: +$2 |

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When estimating the value of the early stage enterprise, in the absence of observable market prices or a recent financing transaction, we obtained sufficient financial and operational information from the issuer's company, using the income approach as our primary method, which reflects the close relationship between the future cash generating ability of the issuer's company and respective enterprise value. As the issuer's company was still at its early stage of development with limited historical track record, market multiples were conducted for supplementary reference only.

The derived enterprise value was then served as a reasonable basis for the subsequent equity value allocation exercise to estimate the portion assignable to the issuer's convertible note and respective share categories as of the measurement date by applying a hybrid method of Probability Weighted Expected Return Method ("PWERM") and Option Pricing Method ("OPM"). Such hybrid method estimates the probability weighted value across multiple scenarios, using OPM to estimate the allocation of value within one or more of those scenarios.

***<u>Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis</u>***

Assets and liabilities measured at fair value on a nonrecurring basis include measuring impairment when required for long-lived assets. Our Company's long-lived assets measured at fair value on a nonrecurring basis include property, plant, and equipment, intangible assets, operating lease ROU assets, and prepaid licensing and royalty fees.

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No assets and liabilities measured at fair value on a nonrecurring basis were determined to be impaired as of December 31, 2025 and 2024.

**NOTE 5. <u>CASH, CASH EQUIVALENTS AND RESTRICTED CASH</u>** 

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows as of December 31, 2025 and 2024.

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| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
| **(in US$ thousands)** | **2025** | **2024** |
| Cash and savings accounts | $28740 | $34781 |
| Time deposits |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents reported on the consolidated<br> balance sheets | 28740 | 34781 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash restricted as performance bond | 313 | 313 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total cash, cash equivalents and restricted cash reported<br> on the consolidated statements of cash flows | $29053 | $35094 |

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As of December 31, 2025 and 2024, cash amounting to $313 thousand and $313 thousand, respectively, has been deposited in escrow accounts in banks mainly as a performance bond for our players' game points. These deposits are restricted and are included in restricted cash in the consolidated balance sheets.

We maintain cash and cash equivalents, as well as restricted cash, in bank accounts with major financial institutions with high credit ratings located in the following jurisdictions:

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| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
| **(in US$ thousands)** | **2025** | **2024** |
| Taiwan | $28609 | $34884 |
| Hong Kong | 444 | 210 |
|  | $29053 | $35094 |

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**NOTE 6. <u>ACCOUNTS RECEIVABLE – NET</u>**

Accounts receivable consist of the following:

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| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
| **(in US$ thousands)** | **2025** | **2024** |
| Accounts receivable | $109 | $142 |
| Less: Allowance for credit losses | (1) | (1) |
|  | $108 | $141 |

---

The following is a summary of the changes in our Company's allowance for credit losses during the years ended December 31, 2025, 2024 and 2023:

---

| | | | |
|:---|:---|:---|:---|
| **(in US$ thousands)** | **2025** | **2024** | **2023** |
| Balance at beginning of year | $1 | $2 | $1 |
| Additions: Provision for expected credit losses | 1 | 1 | 7 |
| Less: Write-off | (1) | (1) | (6) |
| Translation adjustment |  | (1) |  |
| Balance at end of year | $1 | $1 | $2 |

---

------

**NOTE 7. <u>OTHER CURRENT ASSETS</u>**

Other current assets consist of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
| **(in US$ thousands)** | **2025** | **2024** |
| Loans receivable - current | $— | $— |
| Less: Allowance for loans receivable - current |  |  |
| Excess value-added tax paid | 97 | 92 |
| Other | 42 | 35 |
|  | $139 | $127 |

---

The following is a reconciliation of changes in our Company's allowance for loans receivable - current during the years ended December 31, 2025, 2024 and 2023:

---

| | | | |
|:---|:---|:---|:---|
| **(in US$ thousands)** | **2025** | **2024** | **2023** |
| Balance at beginning of year | $— | $24 | $29 |
| Reversal for collection of bad debt |  | (24) | (5) |
| Translation adjustment |  |  |  |
| Balance at end of year | $— | $— | $24 |

---

**NOTE 8. <u>INVESTMENT IN SECURITIES</u>** 

Investment in securities – current and noncurrent consist of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
| **(in US$ thousands)** | **2025** | **2024** |
| &nbsp;&nbsp;&nbsp;&nbsp;Debt securities, classified as available-for-sale - current | $4638 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Debt securities, classified as available-for-sale - noncurrent | 3514 | 5384 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity securities | 21 | 57 |
|  | $8173 | $5441 |

---

Our Company's investment in securities - current and noncurrent are invested in convertible promissory notes and preferred shares. During 2023, we recognized a realized exchange gain of $76 thousand arising from the partial repayment of the aforementioned promissory note. Certain of our investment in securities, though denominated in US dollars, are held by an entity of ours whose functional currency is not US dollars, leading to unrealized exchange gain or loss accounted for as other comprehensive income or loss, and corresponding translation adjustment accordingly.

The promissory notes are purchased under different agreements, and are convertible into common or preferred shares at certain different prices, subject to applicable adjustments. Carrying amounts for those promissory notes and accrued interest receivable with the contractual maturities within one year are classified as current assets, while those beyond one year are classified as noncurrent. Upon conditions outlined in the agreements, the convertible promissory notes may be automatically converted or become redeemable. See Note 17, "Commitments and Contingencies, (c) Investment Agreements", for additional information.

Interest receivable on debt securities are as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
| **(in US$ thousands)** | **2025** | **2024** |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest receivable on debt securities - current (recorded within "Other receivable") | $664 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest receivable on debt securities - noncurrent (recorded within "Other" under "OTHER ASSETS") | 191 | 392 |
|  | $855 | $392 |

---

We assessed the estimated fair values of these investments as of December 31, 2025. See Note 4 "Fair Value Measurements" for additional information.

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**NOTE 9. <u>LEASE ARRANGEMENTS</u>**

During 2025 and 2024, we leased office premises and automobile for operational use with lease terms of 2 to 5 years that expire at various dates through 2029. We do not have purchase options to acquire the leasehold office premises and automobile at the end of the lease terms.

***<u>Right-of-use assets</u>***

Right-of-use assets consist of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
| **(in US$ thousands)** | **2025** | **2024** |
| Carrying amount: |  |  |
| &nbsp;&nbsp;Office premise | $127 | $450 |
| &nbsp;&nbsp;Automobile | 117 | 34 |
|  | $244 | $484 |

---

***<u>Lease liabilities</u>***

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
| **(in US$ thousands)** | **2025** | **2024** |
| Carrying amount: |  |  |
| &nbsp;&nbsp;Current portion (classified under other current liabilities) | $155 | $416 |
| &nbsp;&nbsp;Noncurrent portion | 93 | 84 |
|  | $248 | $500 |

---

Discount rates for the existing lease liabilities ranged from 1.44% to 3.5% as of December 31, 2025, and from 1.44% to 3.6% as of December 31, 2024.

***<u>Supplemental information</u>***

Supplemental disclosures of cash flow and noncash information consist of the following:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Year ended December 31** | **For the Year ended December 31** | **For the Year ended December 31** | **For the Year ended December 31** |
| **(in US$ thousands)** | **2025** | **2025** | **2024** | **2024** |
| &nbsp;&nbsp;Cash paid for operating leases | $ | 467 | $ | 481 |
| &nbsp;&nbsp;Operating lease expenses | $ | 486 | $ | 499 |
|  | **As of December 31** | **As of December 31** | **As of December 31** | **As of December 31** |
| **(in US$ thousands)** | **2025** | **2025** | **2024** | **2024** |
| &nbsp;&nbsp;Lease liabilities arising from obtaining right-of-use assets | $ | 227 | $ | 49 |
| &nbsp;&nbsp;Weighted-average remaining lease term | 1.92 years | 1.92 years | 1.18 years | 1.18 years |
| &nbsp;&nbsp;Weighted-average discount rate | 2.70% | 2.70% | 1.60% | 1.60% |

---

------

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities recorded on the consolidated balance sheet as of December 31, 2025:

---

| | |
|:---|:---|
| **(in US$ thousands)** | **Operating Leases** |
| **<u>Year</u>** |  |
| 2026 | $159 |
| 2027 | 50 |
| 2028 | 29 |
| 2029 | 17 |
| &nbsp;&nbsp;Total minimum lease payments | 255 |
| &nbsp;&nbsp;Less: amount of lease payments representing interest | (7) |
| &nbsp;&nbsp;Present value of future minimum lease payments | 248 |
| &nbsp;&nbsp;Less: current obligation under leases | (155) |
| &nbsp;&nbsp;Non-current lease obligations | $93 |

---

**NOTE 10. <u>ACCRUED EXPENSES</u>**

Accrued expenses consist of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
| **(in US$ thousands)** | **2025** | **2024** |
| Accrued professional fees | $240 | $185 |
| Accrued compensation | 400 | 200 |
| Accrued royalties | 50 | 47 |
| Accrued advertising expenses | 78 | 2 |
| Accrued director compensation and liability insurance | 63 | 63 |
| Other | 279 | 248 |
|  | $1110 | $745 |

---

**NOTE 11. <u>DEFERRED REVENUE</u>**

Deferred revenue consists of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
| **(in US$ thousands)** | **2025** | **2024** |
| Unused virtual points | $467 | $479 |
| Unamortized virtual items | 87 | 86 |
| Advances for pre-order items | 4 | 13 |
|  | $558 | $578 |

---

The breakage amounts recognized as revenue during the years ended December 31, 2025, 2024 and 2023 were $12 thousand, $16 thousand and $228 thousand, respectively.

**NOTE 12. <u>PENSION BENEFITS</u>**

Our Company and our subsidiaries have defined benefit and defined contribution pension plans that cover substantially all of our employees.

***Defined Benefit Pension Plan***

We have a defined benefit pension plan in accordance with the Labor Standards Law of the Republic of China (R.O.C.) for our employees located in Taiwan, covering substantially all full-time employees for services provided prior to July 1, 2005, and employees who have elected to remain in the defined benefit pension plan subsequent to the enactment of the Labor Pension Act on July 1, 2005. Under the defined benefit pension plan, employees are entitled to a lump sum retirement benefit upon retirement equivalent to the aggregate of 2 months' pensionable salary for each of the first 15 years of service and 1 month's pensionable salary for each year of service thereafter subject to a maximum of 45 months' pensionable salary. The pensionable salary is the monthly average salary or wage of the final six months prior to approved retirement.

We use December 31 as the measurement date for our defined benefit pension plan. The following table sets forth the plan's benefit obligations, fair value of plan assets, and funded status at December 31, 2025 and 2024:

------

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
| **(in US$ thousands)** | **2025** | **2024** |
| Benefit obligation | $340 | $317 |
| Fair value of plan assets | 552 | 488 |
| &nbsp;&nbsp;&nbsp;&nbsp;Funded status (prepaid pension assets) | $(212) | $(171) |
| Accumulated Benefit Obligation | $254 | $254 |
| Amounts recognized in the balance sheet consist of: |  |  |
| Noncurrent liabilities (assets) | $(212) | $(171) |
| Accumulated other comprehensive income |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net amount recognized | $(212) | $(171) |
| Amounts recognized in accumulated comprehensive income<br> (loss) consist of: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrecognized net gain (loss) | $61 | $30 |

---

For the years ended December 31, 2025, 2024 and 2023, the net period pension cost consisted of the following:

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31** | **December 31** | **December 31** |
| **(in US$ thousands)** | **2025** | **2024** | **2023** |
| Service cost | $— | $— | $— |
| Interest cost | 7 | 5 | 6 |
| Expected return on plan assets | (10) | (7) | (8) |
| Amortization of net loss |  |  |  |
| Curtailment gain |  |  |  |
|  | $(3) | $(2) | $(2) |

---

Weighted average assumptions used to determine benefit obligations for 2025 and 2024 were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2025** | **2024** |
| Discount rate | 1.75% | 2.00% |
| Rate of compensation increase | 2.00% | 2.00% |

---

Weighted average assumptions used to determine net periodic benefit cost for end of fiscal year were as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Discount rate | 2.00% | 1.625% |
| Rate of return on plan assets | 2.00% | 1.625% |
| Rate of compensation increase | 2.00% | 2.00% |

---

Management determines the discount rate and rate of return on plan assets based on the market yields at the valuation date on high quality corporate bonds and government bonds which are in line with the respective employees remaining service period and the historical rate of return on the above mentioned Fund mandated by the ROC Labor Standard Law.

We have contributed an amount equal to 2% of the salaries and wages paid to all qualified employees located in Taiwan to a pension fund (the "Fund"). The Fund is administered by a pension fund monitoring committee (the "Committee") and deposited in the Committee's name in the Bank of Taiwan. Our Company makes pension payments from our account in the Fund unless the Fund is insufficient, in which case we make payments from internal funds as payments become due. We seek to maintain a normal, highly liquid working capital balance to ensure payments are made timely.

We expect to make a contribution of $0 to the Fund in 2026. We expect to make future benefit payments of $25 thousand to employees from 2026 to 2030 and $107 thousand from 2031 to 2035.

***Defined Contribution Pension Plans***

We have provided defined contribution plans for employees located in Taiwan and Hong Kong. Contributions to the plans are expensed as incurred.

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***<u>Taiwan</u>***

Pursuant to the new "Labor Pension Act" enacted on July 1, 2005, our Company has a defined contribution pension plan for our employees located in Taiwan. For eligible employees who elect to participate in the defined contribution pension plan, we contribute no less than 6% of an employee's monthly salary and wage and up to the maximum amount of NT$9 thousand (approximately $286), to each of the eligible employees' individual pension accounts at the Bureau of Labor Insurance each month. Pension payments to employees are made either by monthly installments or in a lump sum from the accumulated contributions and earnings in employees' individual accounts.

***<u>Hong Kong</u>***

According to the relevant Hong Kong regulations, we provide a contribution plan for the eligible employees in Hong Kong. We must contribute at least 5% of the employees' total salaries. For this purpose, the monthly relevant contribution to their individual contribution accounts is subject to a cap of HK$1.5 thousand (approximately $193). After the termination of employment, the benefits still belong to the employees in any circumstances.

The total amount of defined contribution pension expenses pursuant to our defined contribution plans for the years ended December 31, 2025, 2024 and 2023 were $131 thousand, $137 thousand, and $163 thousand, respectively, which are included in operating expenses.

**NOTE 13. <u>SHAREHOLDERS' EQUITY</u>**

In accordance with Singapore law, the holders of ordinary shares that do not have par value, are entitled to receive dividends as declared from time to time and are entitled to one vote per share at the general meeting of our Company. All shares rank equally with regard to our Company's residual assets. In addition, we are not required to have a number of authorized ordinary shares to be issued.

**NOTE 14. <u>ACCUMULATED OTHER COMPREHENSIVE LOSS</u>**

The accumulated balances for each component of other comprehensive income (loss) are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(in US$ thousands)** | **Foreign<br>currency items** | **Unrealized<br>gain (loss) on<br>securities** | **Pension and<br>post retirement<br>benefit plans** | **Accumulated<br>other<br>comprehensive<br>loss** |
| Balance as of January 1, 2023 | $(21943) | $232 | $(4) | $(21715) |
| Foreign currency translation adjustment | (144) | 15 |  | (129) |
| Pension and post retirement benefit adjustment |  |  | (11) | (11) |
| Unrealized holding loss arising during period |  | (1453) |  | (1453) |
| Reclassification adjustments for loss included in net income |  | (76) |  | (76) |
| Balance as of December 31, 2023 | (22087) | (1282) | (15) | (23384) |
| Foreign currency translation adjustment | (177) | 99 |  | (78) |
| Pension and post retirement benefit adjustment |  |  | 44 | 44 |
| Unrealized holding loss arising during period |  | (865) |  | (865) |
| Balance as of December 31, 2024 | (22264) | (2048) | 29 | (24283) |
| Foreign currency translation adjustment | (4) | (72) |  | (76) |
| Pension and post retirement benefit adjustment |  |  | 32 | 32 |
| Unrealized holding loss arising during period |  | (1700) |  | (1700) |
| Balance as of December 31, 2025 | $(22268) | $(3820) | $61 | $(26027) |

---

There were no significant tax effects allocated to each component of other comprehensive income for the years ended December 31, 2025, 2024 and 2023.

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**NOTE 15. <u>SHARE-BASED COMPENSATION</u>**

During 2025, 2024 and 2023, no stock-based compensation expenses were incurred and recognized.

There were no capitalized stock-based compensation costs at December 31, 2025 and 2024. There was no recognized stock-based compensation tax benefit for the years ended December 31, 2025, 2024 and 2023, as our Company recognized a full valuation allowance on net deferred tax assets as of December 31, 2025 and 2024.

***(a) Overview of Stock-Based Compensation Plans***

Summarized below are the stock-based compensation plans pursuant to which awards have been granted as of December 31, 2025.

***2007 Equity Incentive Plan***

At the June 2007 annual general meeting of shareholders, the shareholders of our Company approved the GigaMedia Limited 2007 Equity Incentive Plan (the "2007 Plan") under which up to 400 thousand ordinary shares of our Company have been reserved for issuance. The 2007 Plan is administered by a committee designated by the board of directors. The committee as plan administrator has complete discretion to determine the grant of awards under the 2007 Plan. The maximum contractual term for the options under the 2007 Plan is 10 years.

Summarized below are the general terms of our stock-based compensation plans, for which awards have been granted as of December 31, 2025.

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| | | | | |
|:---|:---|:---|:---|:---|
| **Stock-Based compensation plan** | **Granted awards** | **Vesting schedule** | **Options' exercise<br>price** | **RSUs' grant date<br>fair value** |
| 2007 Plan | 675057<br><sup>(1)</sup> | immediately upon granting to four years | $2.90~$90.85 | $12.35~$76.75 |

---

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(1)The granted awards, net of forfeited or canceled options or shares, were within reserved shares of 400 thousand ordinary shares.

Options and RSUs generally vest over the schedule described above. Certain RSUs provide for accelerated vesting if there is a change in control. All options and RSUs are expected to be settled by issuing new shares.

***(b) Options***

In 2025, 2024 and 2023, no options were exercised for each year.

Our Company uses the Black-Scholes option-pricing model to estimate the fair value of stock options granted to employees on the grant date. No options were granted to employees during 2025, 2024 and 2023.

Option transactions during the last three years are summarized as follows:

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2025** | **2025** | **2025** | **2025** | **2024** | **2024** | **2023** | **2023** |
|  | **Weighted<br>Avg.<br>Exercise<br>Price** | **No. of<br>Shares<br>(in thousands)** | **Weighted-<br>Average<br>Remaining<br>Contractual<br>Term** | **Aggregate<br>Intrinsic<br>Value<br>(in thousands)** | **Weighted<br>Avg.<br>Exercise<br>Price** | **No. of<br>Shares<br>(in thousands)** | **Weighted<br>Avg.<br>Exercise<br>Price** | **No. of<br>Shares<br>(in thousands)** |
| Balance at January 1 | $2.90 | 4 |  |  | $6.56 | 29 | $6.38 | 33 |
| Options granted |  |  |  |  |  |  |  |  |
| Options exercised |  |  |  |  |  |  |  |  |
| Options Forfeited / canceled /<br> expired |  |  |  |  | 7.15 | (25) | 5.05 | (4) |
| Balance at December 31 | $2.90 | 4 | 1.34 | $— | $2.90 | 4 | $6.56 | 29 |
| Exercisable at December 31 | $2.90 | 4 | 1.34 | $— | $2.90 | 4 | $6.56 | 29 |
| Vested and expected to vest at<br> December 31 | $2.90 | 4 | 1.34 | $— | $2.90 | 4 | $6.56 | 29 |

---

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between GigaMedia's closing stock price on the last trading day of 2025 and the exercise price of an option, multiplied by the number of in-the-money

------

options) that would have been received by the option holders had they exercised their options on December 31, 2025. This amount changes based on the fair market value of GigaMedia's stock.

As of December 31, 2025, there was no unrecognized compensation cost related to non-vested options.

The following table sets forth information about stock options outstanding at December 31, 2025:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Options outstanding** | **Options outstanding** | **Options outstanding** | **Option currently exercisable** | **Option currently exercisable** |
| **Exercise price** | **No. of Shares<br>(in thousands)** | **Weighted<br>average<br>remaining<br>contractual life** | **Exercise price** | **No. of Shares<br>(in thousands)** |
| Under $5 | 4 | 1.34 years | Under $5 | 4 |
| $5~$50 |  |  | $5~$50 |  |
| $50~$100 |  |  | $50~$100 |  |
|  | 4 |  |  | 4 |

---

**NOTE 16. <u>INCOME TAXES</u>**

Our business was founded in 1998 and headquartered in Taiwan, and in connection with a public equity offering, GigaMedia Limited, our ultimate parent company, was incorporated in Singapore in 1999 as a company limited by shares. In more recent years, we have established additional subsidiaries inside and outside Taiwan to conduct aspects of our operations. As the majority of our Company's operations are taxed at the Taiwan statutory tax rate, for purposes of disclosures, components related to Taiwan and non-Taiwan operations are disclosed separately.

Income (loss) before income taxes by geographic location is as follows:

---

| | | | |
|:---|:---|:---|:---|
| **(in US$ thousands)** | **2025** | **2024** | **2023** |
| Taiwan operations | $(1443) | $(1657) | $(1726) |
| Non-Taiwan operations | (111) | (639) | (1673) |
|  | $(1554) | $(2296) | $(3399) |

---

The components of income tax benefit (expense) by taxing jurisdiction are as follows:

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| | | | |
|:---|:---|:---|:---|
| **(in US$ thousands)** | **2025** | **2024** | **2023** |
| Taiwan: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred |  |  |  |
|  | $— | $— | $— |
| Non-Taiwan: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred |  |  |  |
|  | $— | $— | $— |
| Total current income tax benefit (expense) | $— | $— | $— |
| Total deferred income tax benefit | $— | $— | $— |
| Total income tax benefit | $— | $— | $— |

---

Income taxes paid (net of refunds) for the years ended December 31, 2025, 2024 and 2023 were as follows:

---

| | | | |
|:---|:---|:---|:---|
| **(in US$ thousands)** | **2025** | **2024** | **2023** |
| Taiwan: | $4 | $— | $— |
| Non-Taiwan: |  |  |  |
|  | $4 | $— | $— |

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For purposes of the reconciliation between the provision for income taxes at the statutory rate and the provision for income taxes at the effective tax rate, the 24% Taiwan statutory tax rate (including taxes on income and on retained earnings) is applied for the years reported. Our Company adopted *ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures*, on a prospective basis beginning with the year ended December 31, 2025. The following table presents the required disclosure pursuant to *ASU 2023-09* and reconciles Taiwan statutory tax amount and rate to our Company's actual global effective amount and rate for the year ended December 31, 2025:

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| | | |
|:---|:---|:---|
|  | **2025** | **2025** |
| Taiwan statutory rate | $(311) | 20.00% |
| &nbsp;&nbsp;&nbsp;&nbsp;Taiwan statutory rate on retained earnings | (58) | 3.71% |
| Foreign tax differential |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax rate differential |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;British Virgin Islands | (93) | 6.01% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hong Kong | 31 | (1.98)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Others | (7) | 0.47% |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss carryforwards in Hong Kong subsidiaries | (1481) | 95.30% |
| &nbsp;&nbsp;&nbsp;&nbsp;Net operating loss carryforwards not utilized due to dissolution of a Hong Kong subsidiary | 1615 | (103.92)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Nontaxable items | (53) | 3.43% |
| &nbsp;&nbsp;&nbsp;&nbsp;Others | 11 | (0.73)% |
| Effect of changes in tax laws or rates enacted in the current period |  |  |
| Effect of cross-border tax laws |  |  |
| Tax credits |  |  |
| Change in deferred tax valuation allowance |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss carryforwards in Taiwan subsidiaries | (656) | 42.20% |
| &nbsp;&nbsp;&nbsp;&nbsp;Net operating loss carryforwards not utilized due to dissolution of a Taiwan subsidiary | 679 | (43.68)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Others | (4) | 0.26% |
| &nbsp;&nbsp;&nbsp;&nbsp;Exchange difference | (317) | 20.41% |
| Nontaxable or nondeductible items | 1 | (0.09)% |
| Changes in unrecognized tax benefits |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Expiration of loss carryforwards in a Taiwan subsidiary | 642 | (41.30)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Changes related to tax positions taken in prior years for all jurisdictions | 1 | (0.09)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income Taxes | $— |  |

---

In 2025, the effective tax rate was impacted significantly as a result of the dissolution of a Hong Kong subsidiary. Upon the dissolution and deregistration of a Hong Kong subsidiary of ours in February 2025, the deferred tax assets related to its net operating loss carryforwards of $9,825 thousand were derecognized. As the allowance on deferred tax assets related to these net operating loss carryforwards has been fully provided, the impact has been reflected in its net operating loss carryforwards not utilized upon the dissolution, and the corresponding reversal of the valuation allowance related to the deferred tax assets of the loss carry forwards.

In 2025, the effective tax rate was impacted significantly as a result of the dissolution of a Taiwan subsidiary. Upon the dissolution of a Taiwan subsidiary of ours in March 2025, the deferred tax assets related to its net operating loss carryforwards of $2,643 thousand were derecognized. As the allowance on deferred tax assets related to these net operating loss carryforwards has been fully provided, the impact has been reflected in its net operating loss carryforwards not utilized upon the dissolution, and the corresponding reversal of the valuation allowance related to the deferred tax assets of the loss carry forwards.

The following table presents the required reconciliation prior to our adoption of ASU 2023-09 of our effective tax rate related to the statutory tax rate in Taiwan, where our major operations are based, for the years ended December 31, 2024 and 2023:

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---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
| Taiwan statutory rate, including taxes on income and<br> retained earnings | 24.00% | 24.00% |
| Foreign tax differential | (82.00)% | 0.75% |
| Expiration of net operating loss carryforwards | (51.15)% | (27.71)% |
| Other non-deductible expenses | 46.42% | (12.84)% |
| Change in deferred tax assets and valuation allowance | 62.70% | 15.79% |
| Other | 0.03% | 0.01% |
| &nbsp;&nbsp;&nbsp;&nbsp;Effective rate |  |  |

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The significant components of our deferred tax assets consist of the following:

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| | | |
|:---|:---|:---|
| **(in US$ thousands)** | **December 31** | **December 31** |
|  | **2025** | **2024** |
| Net operating loss carryforwards | $6596 | $8732 |
| Share-based compensation | 274 | 273 |
| Investments | 128 | 123 |
| Lease right-of-use assets | 1 | 4 |
| Other | (25) | (16) |
|  | 6974 | 9116 |
| Less: valuation allowance | (6974) | (9116) |
| Deferred tax assets - net | $— | $— |

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A reconciliation of the beginning and ending amounts of our valuation allowance on deferred tax assets for the years ended December 31, 2025, 2024 and 2023 are as follows:

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| | | | |
|:---|:---|:---|:---|
| **(in US$ thousands)** | **2025** | **2024** | **2023** |
| Balance at beginning of year | $9116 | $11064 | $11880 |
| Subsequent reversal and utilization of valuation allowance | (2) | (663) | (263) |
| Changes to valuation allowance | 485 | 396 | 405 |
| Expirations | (2935) | (1175) | (942) |
| Exchange differences | 310 | (506) | (16) |
| Balance at end of year | $6974 | $9116 | $11064 |

---

Under ROC Income Tax Act, the tax loss carryforward in the preceding ten years would be deducted from income tax for Taiwan operations.

As of December 31, 2025, we had net operating loss carryforwards available to offset future taxable income, shown below by major jurisdictions:

---

| | | |
|:---|:---|:---|
| **<u>Jurisdiction</u>** | **Amount** | **Expiring year** |
| Taiwan | $25475 | 2026~2035 |
| Hong Kong | 6664 | indefinite |
|  | $32139 |  |

---

***<u>Unrecognized Tax Benefits</u>***

As of December 31, 2025, 2024 and 2023, there were no unrecognized tax benefits that if recognized would affect the effective tax rate.

There were no interest and penalties related to income tax liabilities recognized for the years ended December 31, 2025, 2024 and 2023.

------

Our major tax paying components are all located in Taiwan. As of December 31, 2025, the income tax filings in Taiwan have been examined for the years through 2023.

**NOTE 17. <u>COMMITMENTS AND CONTINGENCIES</u>**

**<u>Commitments</u>**

***(a) Operating Leases***

We rent certain office premises and automobile for operation use under lease agreements that expire at various dates through 2029. Please refer to Note 9 for more information of our lease arrangements.

***(b) License Agreements***

We have contractual obligations under various license agreements to pay the licensors license fees and minimum guarantees against future royalties. There were no committed license fees and minimum guarantees against future royalties set forth in our significant license agreements as of December 31, 2025.

For a specific licensed game, we were required to pay an incentive fee of $20 thousand to the licensor for every $600 thousand additional revenues generated from the game during the agreement period from January 2024 to January 2026. In January 2026, we entered an extension and amendment agreement to extend the term and modified certain provisions. The extension term commenced on January 27, 2026 and expires on January 26, 2028, and the incentive fee remains $20 thousand for every $600 thousand additional revenues generated during the extension term. In the extension term, the financial obligations are the same as in the original agreement period.

***(c) Investment Agreements***

On August 31, 2020, we entered into a convertible note purchase agreement to purchase a US$10,000,000 principal amount convertible promissory note (the "Note") issued by Aeolus Robotics Corporation ("Aeolus"), a global company primarily engaged in designing, manufacturing, processing and sales of intellectual robotics. The Note, which bears interest at a rate of 2% per annum, was due on August 30, 2022 but was extendable to August 30, 2023 at Aeolus's option, and all or a portion of the principal amount under the Note was convertible at GigaMedia's option upon maturity, upon prepayment, or when certain events occur, into ordinary shares or preferred shares of Aeolus at a price of US$3.00 per share, or into preferred shares in Aeolus's nearest next round equity financing where Aeolus issues further preferred shares. GigaMedia may elect to convert all or any part of the principal amount of the Note into the preferred shares to be issued at the Qualified Financing, among which (1) 20% of such outstanding principal amount shall be converted at a conversion price equal to 90% of the purchase price offered to the investors in such qualified financing, and (2) 80% of such outstanding principal amount shall converted at a conversion price equal to 100% of the purchase price offered to the investors in such qualified financing. In the event that any portion of the principal amount is converted into the ordinary or preferred shares, all the interest accrued but unpaid on such portion of principal amount shall be waived.

In November 2021, Aeolus notified GigaMedia that it intended to issue series B preferred shares, par value of US$0.0001 per share (the "Series B Preferred Shares"), to certain new series B preferred shareholders for a subscription price of US$3.02 per share (the "Next Round Financing"). The Next Round Financing constituted a Qualified Financing as defined in the said Note. GigaMedia exercised its conversion right in accordance with the Note with respect to US$2,000,000 of principal amount at the conversion price of US$2.718 per share, effective December 30, 2021. GigaMedia received 735,835 Series B Preferred Shares.

After the conversion, the outstanding principal amount under the note was US$8,000,000, and GigaMedia's right to elect to convert the remaining amount upon maturity, upon prepayment, or when certain events occur, into ordinary shares of Aeolus at a price of US$3.00 per share, is not affected.

On July 29, 2022, Aeolus notified GigaMedia that it had decided to exercise its right of extension under the Note to extend the original August 30, 2022 maturity date to August 30, 2023.

On August 31, 2023, GigaMedia and Aeolus entered into an agreement (Amendment No.1) to amend the Note. The amendment extends the maturity date of the Note after the partial repayment of US$1,000,000 and the payment of accrued interest on the unpaid principal amount of the Note due through August 30, 2023 in the amount of US$480,000 are made by Aeolus and the outstanding principal amount becomes US$7,000,000 due thereunder. The US$1,480,000 payment by Aeolus was made on September 6, 2023.

------

Pursuant to the amendment to the Note, the remaining principal amount of US$7,000,000 due thereunder will bear interest at a rate of 4% per annum, was scheduled to be due on February 28, 2025 (such date to be extended, at Aeolus's option, to February 28, 2026), and all or a portion of the principal amount due thereunder may be converted upon maturity, upon prepayment or upon the occurrence of certain specified events, upon Aeolus's next round of equity financing, or upon Aeolus's initial public offering, at the lower of US$1.25 per share or 80% of the applicable offering price. On January 21, 2025, Aeolus notified GigaMedia that it had decided to exercise its right of extension under the amendment to the Note to extend the original February 28, 2025 maturity date to February 28, 2026.

GigaMedia and Aeolus entered into three agreements to purchase convertible promissory notes on August 15, 2023, March 15, 2024 and September 24, 2024, with principal amount of US$105,346, US$63,208 and US$1,000,000, respectively. These notes bear interest at a rate of 4.5% per annum and are convertible at US$0.1 per share, while other terms and conditions are similar to the original Note.

On January 20, March 5, June 27, July 15 and December 5, 2025, we entered into five agreements to purchase convertible promissory notes, with principal amounts of US$52,674, US$2,600,000, US$26,337, US$1,500,000 and US$26,336, respectively, issued by Aeolus. These notes bear interest at a rate of 4.5% per annum and are convertible at US$0.02 per share, while other terms and conditions are similar to the original Note.

On February 28, 2026, we and Aeolus entered into an agreement (Amendment No. 2) to amend the Note. Amendment No. 2 extends the maturity date of the Note after the payment of accrued interest on the unpaid principal amount of the Note due through February 28, 2026 in the amount of US$698,593.60 are made by Aeolus. The US$698,593.60 payment by Aeolus was made on March 2, 2026.

Pursuant to Amendment No. 2 to the Note, the remaining principal amount of US$7,000,000 due thereunder will bear interest at a rate of 4% per annum, shall be due on May 31, 2026, and all or a portion of the principal amount due thereunder may be converted upon maturity, upon prepayment or upon the occurrence of certain specified events, upon Aeolus's next round of equity financing, or upon Aeolus's initial public offering, at the lower of US$1.25 per share or 80% of the applicable offering price.

**<u>Contingencies</u>**

We are subject to legal proceedings and claims that arise in the normal course of business.

On January 15, 2018, Ennoconn Corporation ("Ennoconn") filed a complaint against one of our subsidiaries, GigaMedia Cloud Services Co., Ltd. ("GigaMedia Cloud") in the Taiwan Taipei District Court. The complaint alleged that GigaMedia Cloud is obligated to pay Ennoconn NTD 79,477,648 (approximately $2,588,005) in connection with a transaction to purchase taximeters in 2015. GigaMedia Cloud filed an answer to the complaint denying Ennoconn's allegations in the lack of factual and legal basis on March 1, 2018. On November 15, 2018, the Taiwan Taipei District Court determined that all of Ennoconn's claims were without merit and made a judgment denying the complaint. On January 3, 2019, Ennoconn filed an appeal demanding the judgment which was entered in the District Court, to be reversed and amended. The civil court of the second instance, the Taiwan High Court, has conducted the session of the preparatory proceedings for several times during 2019. As a result, the Taiwan High Court ruled on January 8, 2020, that the decision of the Taiwan Taipei District Court should be partially modified and Ennoconn is entitled to NTD 27,084,180 (approximately $882,077). GigaMedia Cloud has filed another appeal with the Taiwan Supreme Court on February 4, 2020. On May 5, 2021, the Taiwan Supreme Court revoked the previous ruling of the Taiwan High Court, and sent the case back to the Taiwan High Court for a retrial. Under the Taiwan Supreme Court's ruling, the appeal made by Ennoconn should be reviewed by the Taiwan High Court by following the instructions of the Taiwan Supreme Court. On May 18, 2022, the Taiwan High Court found such appeal meritless and made a civil judgment denying the complaint by Ennoconn. On June 15, 2022, Ennoconn filed an appeal and demanded that the Taiwan Supreme Court reverse this civil judgment and remand the case to the Taiwan High Court. On February 22, 2023, the Taiwan Supreme Court revoked the previous ruling of the Taiwan High Court, and sent the case back to the Taiwan High Court for a retrial. On October 30, 2023, the Taiwan High Court ruled such appeal meritorious and Ennoconn has the right to claim compensation from GigaMedia Cloud in an amount equal to NTD 27,084,180 plus interest at a rate of 4.5% per annum incurred from January 16, 2018 until settlement date. On November 16, 2023, GigaMedia Cloud filed an appeal against the Taiwan High Court's decision, and the appeal was transferred to Taiwan Supreme Court on January 2, 2024. On April 17, 2024, the Taiwan Supreme Court denied GigaMedia's appeal and affirmed the Taiwan High Court's October 2023 decision in favor of Ennoconn, GigaMedia Cloud has accrued the related obligations. GigaMedia Cloud has been dissolved from March 5, 2025, with a reference letter dated March 23, 2026 by the court approving its completion of liquidation.

On the other hand, pursuant to Taiwan's Company Act, the shareholder of GigaMedia Cloud is limitedly liable for GigaMedia Cloud in an amount equal to the total value of shares subscribed. Therefore, we believe that the immediate parent company, the intermediate parent companies, as well as GigaMedia, the ultimate parent company, individually or collectively do not have obligations to absorb

------

GigaMedia Cloud's loss exceeding GigaMedia Cloud's net worth and accordingly, it will not have a material adverse impact on our financial condition, results of operations or cash flows.

**NOTE 18. <u>SEGMENT, PRODUCT, GEOGRAPHIC AND OTHER INFORMATION</u>**

***Segment Information***

We have only one segment, the digital entertainment business segment, which operates a portfolio of digital entertainment products, primarily targeting digital entertainment service users across Asia.

Our Company uses the Net income (loss), as reported on our Consolidated Statements of Comprehensive Income (Loss) as the measurement for the basis of performance assessment. The basis for such measurement is the same as that for the preparation of consolidated financial statements. Please refer to the consolidated statements of operations and comprehensive income (loss) for the related segment revenue and operating results.

• For the digital entertainment business segment, the CODM uses both segment gross profit and segment profit or loss from operations to allocate resources (including employees and capital resources) in the annual budget process. The CODM considers budget-to-actual variances on a monthly basis for both profit measures when making decisions about allocating capital and personnel to the segment.

• Net income (loss) is used to monitor budget versus actual results. The monitoring of budgeted versus actual results are used in assessing performance of the segment and in establishing management's compensation.

Amounts of revenues and significant expense categories that are regularly provided to the CODM and included in reported segment profit or loss are summarized as follows:

---

| | | | |
|:---|:---|:---|:---|
| **(in US$ thousands)** | **2025** | **2024** | **2023** |
| Revenues from external customers | $3474 | $2969 | $4292 |
| Personnel expenses | (2935) | (2860) | (2998) |
| Licensing and royalty fees | (755) | (637) | (952) |
| Depreciation | (58) | (48) | (43) |
| Amortization | (9) | (10) | (12) |
| Interest income | 6 | 7 | 8 |
| Interest expenses | (38) | (37) | (38) |
| Foreign exchange gain (loss) | (138) | 211 | (19) |
| Rent and utilities | (549) | (559) | (569) |
| Other expenses | (592) | (372) | (575) |
| Other non-operating income, net | (13) | 1 | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;Digital Entertainment Segment Net Loss | (1607) | (1335) | (903) |
| &nbsp;&nbsp;&nbsp;&nbsp;Headquarters expenses | (33) | (871) | (2491) |
| *Reconciliation of profit or loss* |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments and reconciling items | 86 | (90) | (5) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated Net Loss | $(1554) | $(2296) | $(3399) |

---

Reconciliations of reportable segment assets and other significant items to the consolidated totals are summarized as follows:

---

| | | |
|:---|:---|:---|
| **(in US$ thousands)** | **2025** | **2024** |
| Total assets for reportable segments | $3165 | $3274 |
| Cash held in corporate headquarters | 27768 | 33856 |
| Marketable securities - current and noncurrent | 8173 | 5441 |
| Elimination of receivables from corporate headquarters | (604) | (605) |
| Other unallocated amounts | 702 | 392 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated Total | $39204 | $42358 |

---

------

---

| | | | |
|:---|:---|:---|:---|
| **(in US$ thousands)** | **Segment<br>Totals** | **Adjustments** | **Consolidated<br>Totals** |
| **2025** |  |  |  |
| Revenues from external customers | $3474 | $— | $3474 |
| Interest income | 6 | 1677 | 1683 |
| Interest expense | (38) | 38 |  |
| Depreciation and amortization | (67) |  | (67) |
| **2024** |  |  |  |
| Revenues from external customers | 2969 |  | 2969 |
| Interest income | 7 | 1956 | 1963 |
| Interest expense | (37) | 37 |  |
| Depreciation and amortization | (58) |  | (58) |
| **2023** |  |  |  |
| Revenues from external customers | 4292 |  | 4292 |
| Interest income | 8 | 1803 | 1811 |
| Interest expense | (38) | 38 |  |
| Depreciation and amortization | (55) |  | (55) |

---

Interest income and expense allocated from headquarter to the digital entertainment business segment is based on internally negotiated rates and the adjustments represent amounts related to headquarters.

***Major Product Lines***

Revenues from our Company's major product lines are summarized as follows:

---

| | | | |
|:---|:---|:---|:---|
| **(in US$ thousands)** | **2025** | **2024** | **2023** |
| MahJong and casino casual games | $1086 | $1051 | $1070 |
| PC-based online sports games | 2057 | 1539 | 2696 |
| Mobile role playing games | 302 | 338 | 464 |
| Other games and game related revenues | 29 | 41 | 62 |
|  | $3474 | $2969 | $4292 |

---

***Major Customers***

No single customer represented 10% or more of GigaMedia's consolidated total net revenues in any period presented.

***Geographic Information***

Revenues by geographic area are attributed by country of the operating entity location. Revenue from by geographic region is as follows:

---

| | | | |
|:---|:---|:---|:---|
| **(in US$ thousands)** |  |  |  |
| **Geographic region / country** | **2025** | **2024** | **2023** |
| Taiwan | $1783 | $1602 | $1785 |
| Hong Kong | 1691 | 1367 | 2507 |
|  | $3474 | $2969 | $4292 |

---

Geographic information for property, plant and equipment, intangible assets and operating lease right-of-use assets are as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **(in US$ thousands)** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| **Geographic region / country** | **Property, plant and equipment, net** | **Intangible assets, net** | **Operating lease right-of-use assets, net** | **Property, plant and equipment, net** | **Intangible assets, net** | **Operating lease right-of-use assets, net** |
| Taiwan | $92 | $4 | $168 | $101 | $7 | $466 |
| Hong Kong |  |  | 76 |  |  | 18 |
|  | $92 | $4 | $244 | $101 | $7 | $484 |

---

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**NOTE 19. <u>SUBSEQUENT EVENT</u>**

There have been no events that have occurred subsequent to December 31, 2025, and through the date that the consolidated financial statements are issued that would require adjustment to or disclosure except as already disclosed in the consolidated financial statements.

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## Exhibit 99.4

![img55666080_0.gif](img55666080_0.gif)

 **GIGAMEDIA LIMITED AND** 

 **ITS SUBSIDIARIES**

 **(Registration Number: 199905474H)**

 **ANNUAL REPORT**

 **YEAR ENDED 31 DECEMBER 2025**

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**ANNUAL REPORT**

C O N T E N T S

---

| | |
|:---|:---|
|  | &nbsp;&nbsp;<u>PAGE</u> |
| &nbsp;&nbsp;Directors' statement | &nbsp;&nbsp;1 - 3 |
| &nbsp;&nbsp;Independent auditor's report | &nbsp;&nbsp;4 - 6 |
| &nbsp;&nbsp;Statements of financial position | &nbsp;&nbsp;7 |
| Consolidated statement of profit or loss | &nbsp;&nbsp;8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated statement of comprehensive income | &nbsp;&nbsp;9 |
| &nbsp;&nbsp;Consolidated statement of changes in equity | &nbsp;&nbsp;10 - 11 |
| &nbsp;&nbsp;Consolidated statement of cash flows | &nbsp;&nbsp;12 - 13 |
| &nbsp;&nbsp;Notes to financial statements | &nbsp;&nbsp;14 - 53 |

---

------

---

| |
|:---|
| ***GigaMedia Limited and its subsidiaries*** |
| *Financial statements* |
| *Year ended 31 December 2025* |

---

**Directors' statement**

We are pleased to submit this annual report to the members of the Company together with the audited financial statements for the financial year ended 31 December 2025.

In our opinion:

(a) the financial statements set out on pages 7 to 53 are drawn up so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2025 and the financial performance, changes in equity and cash flows of the Group for the year ended on that date in accordance with the provisions of the Singapore Companies Act 1967 (the "Act") and Financial Reporting Standards in Singapore; and

(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

**Directors**

The directors in office at the date of this statement are as follows:

---

| | |
|:---|:---|
| Huang, James Cheng-Ming |  |
| Hong, Chin Fock (Damian) |  |
| Huang, John Ping Chang |  |
| Tsai, John Chih-Hong |  |
| Liu, Nick Chia-En |  |
| Lin, Wan-Wan |  |
| Liao, Ying-Chih | (Appointed on 30 January 2026) |

---

**Directors' interests**

According to the register kept by the Company for the purposes of Section 164 of the Act, particulars of interests of directors who held office at the end of the financial year (including those held by their spouses and infant children) in shares, debentures, warrants and share options in the Company and in related corporations (other than wholly-owned subsidiaries) are as follows:

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;**Name of director and corporation<br>in which interests are held** | **Holdings at**<br>**beginning of the** <br>**financial year** | **Holdings at**<br>**end of the**<br>**financial year** |
| &nbsp;&nbsp;&nbsp;&nbsp;**<u>The Company</u>** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Huang, James Cheng-Ming** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;- ordinary shares | 1073566 | 1073566 |
| &nbsp;&nbsp;&nbsp;&nbsp;- options to subscribe for ordinary shares  | 4000 | 4000 |

---

Except as disclosed in this statement, no director who held office at the end of the financial year had interests in shares, debentures, warrants or share options of the Company or of related corporations either at the beginning of the financial year or at the end of the financial year.

Except as disclosed under the "Share options" section of this statement, neither at the end of, nor at any time during the financial year, was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

------

---

| |
|:---|
| ***GigaMedia Limited and its subsidiaries*** |
| *Financial statements* |
| *Year ended 31 December 2025* |

---

**Share options**

***2007 Equity Incentive Plan***

At the June 2007 annual general meeting of shareholders, the shareholders of the Company approved the GigaMedia Limited 2007 Equity Incentive Plan (the "2007 Plan") under which up to 400 thousand ordinary shares of the Company have been reserved for issuance. The 2007 Plan is administered by a committee designated by the board of directors. The committee as plan administrator has complete discretion to determine the grant of awards under the 2007 Plan. The maximum contractual term for the options under the 2007 Plan is 10 years. There were 4,000 shares granted in May 2017. The 2007 Plan has lapsed in <br>June 2017.

Summarised below are the general terms of its share-based compensation plans as of 31 December 2025.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;**Date granted** | **Balance at beginning of year** | **Granted during the year** | **Expired/ forfeited during the year** | **Balance at end of <br>year** | **Options' exercise price** | **Exercise period** |
|  | **'000** | **'000** | **'000** | **'000** | **US$** |  |
| 05.05.2017 | 4 | – | – | 4 | $2.90 | 05.05.2017 - 05.05.2027 |
|  | 4 | – | – | 4 |  |  |

---

All options are expected to be settled by issuing new shares.

**Auditors**

The auditors, Deloitte & Touche LLP, have indicated their willingness to accept re-appointment.

On behalf of the Board of Directors

/s/ **HUANG, JAMES CHENG-MING**

─────────────────────

**HUANG, JAMES CHENG-MING**

*Director*

/s/ **LIN, WAN-WAN**

─────────────────────

**LIN, WAN-WAN**

*Director*

29 April 2026

------

**INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF**

**GIGAMEDIA LIMITED**

**Report on the Audit of the Financial Statements**

**Opinion**

We have audited the financial statements of GigaMedia Limited (the "Company") and its subsidiaries <br>(the "Group"), which comprise the consolidated statement of financial position of the Group and the statement of financial position of the Company as at 31 December 2025, the consolidated statement of profit or loss, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows of the Group for the year then ended, and the notes to the financial statements, including material accounting policy information, as set out on pages 7 to 53.

In our opinion, the accompanying consolidated financial statements of the Group and the statement of financial position of the Company are properly drawn up in accordance with the provisions of the Singapore Companies Act 1967 (the "Act") and Financial Reporting Standards in Singapore ("FRSs") so as to give a true and fair view of the consolidated financial position of the Group and the financial position of the Company as at 31 December 2025, and of the consolidated financial performance, consolidated changes in equity and consolidated cash flows of the Group for the year ended on that date.

**Basis for Opinion**

We conducted our audit in accordance with Singapore Standards on Auditing ("SSAs"). Our responsibilities under those standards are further described in the *Auditor's Responsibilities for the Audit of the Financial Statements* section of our report. We are independent of the Group in accordance with the Accounting and Corporate Regulatory Authority *Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities* ("ACRA Code"), as applicable to audits of financial statements of public interest entities, together with the ethical requirements that are relevant to audits of the financial statements of public interest entities in Singapore. We have also fulfilled our other ethical responsibilities in accordance with these requirements and the ACRA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

**Key Audit Matters**

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current year. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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**INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF**

**GIGAMEDIA LIMITED**

**<u>Fair valuation of financial assets at fair value through profit or loss ("FVTPL")</u>**

The Company holds financial assets at FVTPL amounting to US$8,173,000 issued by a private company. The fair value of the investments is based on complex valuation methods with unobservable inputs, therefore, classified as Level 3.

Unlike the valuation of assets with readily observable market prices, therefore, more easily independently corroborated, the valuation of the financial assets at FVTPL classified as Level 3 is inherently subjective, and often involves the use of complex proprietary methods and unobservable inputs.

We identified the valuation of the financial assets at FVTPL as a key audit matter because of the complex valuation methods and unobservable inputs such as the discount rate, discount for lack of marketability and volatility management uses to estimate the fair value. This requires a high degree of auditor's professional judgment and an increased extent of effort, including the involvement of our fair value specialists, when evaluating the methods and related inputs.

The financial assets at FVTPL is disclosed in Note 8 to the financial statements.

**<u>Our audit performed and responses thereon</u>**

Our audit procedures focused on evaluating and challenging the key assumptions used in the valuation of the financial assets at FVTPL.

Our procedures included:

• We obtained an understanding and evaluated the design and implementation of controls over management's valuation of the financial assets at FVTPL, including controls over the Company's valuation methods and significant unobservable inputs.

• With the assistance of our fair value specialists, (1) we evaluated the appropriateness of the valuation methodologies and techniques used in determining the fair value of the financial assets at FVTPL; <br>(2) we tested the underlying data used in the methods calculations and the mathematical accuracy of the calculation; (3) we evaluated the appropriateness of the judgements and estimates of the key inputs used in determining the fair value of the financial assets at FVTPL including but not limited to the discount rate, discount for lack of marketability and volatility.

**Information Other than the Financial Statements and Auditor's Report Thereon**

Management is responsible for the other information. The other information comprises the directors' statement, but does not include the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

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**INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF**

**GIGAMEDIA LIMITED**

**Responsibilities of Management and Directors for the Financial Statements**

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Act and FRSs, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets.

In preparing the financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

The directors' responsibilities include overseeing the Group's financial reporting process.

**Auditor's Responsibilities for the Audit of the Financial Statements**

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.

------

**INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF**

**GIGAMEDIA LIMITED**

**Auditor's Responsibilities for the Audit of the Financial Statements (cont'd)**

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the Group financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial statements of the current year and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

**Report on Other Legal and Regulatory Requirements**

In our opinion, the accounting and other records required by the Act to be kept by the Company have been properly kept in accordance with the provisions of the Act.

The engagement partner on the audit resulting in this independent auditor's report is Tan Puay Boon.

/s/ **Deloitte & Touche LLP**

Public Accountants and

Chartered Accountants

Singapore

29 April 2026

------

---

| |
|:---|
| ***GigaMedia Limited and its subsidiaries*** |
| *Financial statements* |
| *Year ended 31 December 2025* |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;**Statements of financial position**<br>**As at 31 December 2025** | &nbsp;&nbsp;&nbsp;&nbsp;**Statements of financial position**<br>**As at 31 December 2025** | &nbsp;&nbsp;&nbsp;&nbsp;**Statements of financial position**<br>**As at 31 December 2025** | &nbsp;&nbsp;&nbsp;&nbsp;**Statements of financial position**<br>**As at 31 December 2025** | &nbsp;&nbsp;&nbsp;&nbsp;**Statements of financial position**<br>**As at 31 December 2025** | &nbsp;&nbsp;&nbsp;&nbsp;**Statements of financial position**<br>**As at 31 December 2025** |
|  |  | **Group** | **Group** | **Company** | **Company** |
|  | **Note** | **2025** | **2024** | **2025** | **2024** |
|  |  | **US$'000** | **US$'000** | **US$'000** | **US$'000** |
| &nbsp;&nbsp;&nbsp;&nbsp;**Assets** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Property, plant and equipment | 4 | 92 | 101 | – | – |
| &nbsp;&nbsp;&nbsp;&nbsp;Right-of-use assets | 5 | 244 | 484 | – | – |
| &nbsp;&nbsp;&nbsp;&nbsp;Intangible assets | 6 | 4 | 7 | – | – |
| &nbsp;&nbsp;&nbsp;&nbsp;Subsidiaries | 7 | – | – | 41609 | 43391 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other investment | 8 | 3535 | 5441 | 3535 | 5441 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets (non-current) | 9 | 591 | 745 | 191 | 392 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Non-current assets** |  | 4466 | 6778 | 45335 | 49224 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other investment | 8 | 4638 | – | 4638 | – |
| &nbsp;&nbsp;&nbsp;&nbsp;Trade and other receivables | 10 | 358 | 339 | 329 | 500 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets (current) | 9 | 689 | 147 | 664 | – |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | 11 | 29053 | 35094 | 125 | 514 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Current assets** |  | 34738 | 35580 | 5756 | 1014 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total assets** |  | 39204 | 42358 | 51091 | 50238 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Equity attributable to owners of the Company** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Share capital | 12 | 213238 | 213238 | 213238 | 213238 |
| &nbsp;&nbsp;&nbsp;&nbsp;Reserves | 13 | (8663) | (8659) | 3453 | 3528 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated losses |  | (167768) | (164474) | (179884) | (176661) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total equity** |  | 36807 | 40105 | 36807 | 40105 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Liabilities** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease liabilities | 15 | 93 | 84 | – | – |
| &nbsp;&nbsp;&nbsp;&nbsp;**Non-current liability** |  | 93 | 84 | – | – |
| &nbsp;&nbsp;&nbsp;&nbsp;Trade and other payables | 16  | 1353 | 937 | 14284 | 10133 |
| &nbsp;&nbsp;&nbsp;&nbsp;Contract liabilities | 17 | 796 | 816 | – | – |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease liabilities | 15 | 155 | 416 | – | – |
| &nbsp;&nbsp;&nbsp;&nbsp;**Current liabilities** |  | 2304 | 2169 | 14284 | 10133 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities** |  | 2397 | 2253 | 14284 | 10133 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total equity and liabilities** |  | 39204 | 42358 | 51091 | 50238 |

---

See accompanying notes to financial statements.

------

---

| |
|:---|
| ***GigaMedia Limited and its subsidiaries*** |
| *Financial statements* |
| *Year ended 31 December 2025* |

---

---

| | | | |
|:---|:---|:---|:---|
| **Consolidated statement of profit or loss**<br>**Year ended 31 December 2025** | **Consolidated statement of profit or loss**<br>**Year ended 31 December 2025** | **Consolidated statement of profit or loss**<br>**Year ended 31 December 2025** | **Consolidated statement of profit or loss**<br>**Year ended 31 December 2025** |
|  | **Note** | **2025** | **2024** |
|  |  | **US$'000** | **US$'000** |
| &nbsp;&nbsp;&nbsp;&nbsp;Revenue | 18 | 3474 | 2969 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cost of sales |  | (1654) | (1494) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Gross profit** |  | 1820 | 1475 |
| &nbsp;&nbsp;&nbsp;&nbsp;Fair value loss on financial assets at FVTPL | 8 | (1811) | (927) |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign exchange gain (loss) |  | 402 | (427) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other (expenses) income |  | (6) | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;Product development and engineering expenses |  | (663) | (694) |
| &nbsp;&nbsp;&nbsp;&nbsp;Selling and marketing expenses |  | (1672) | (1451) |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses |  | (3070) | (3016) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other operating expenses | 19 | (1) | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Results from operating activities** |  | (5001) | (5015) |
| &nbsp;&nbsp;&nbsp;&nbsp;Finance income |  | 1683 | 1963 |
| &nbsp;&nbsp;&nbsp;&nbsp;Finance expenses |  | (8) | (12) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net finance income | 20 | 1675 | 1951 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Loss before tax** |  | (3326) | (3064) |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax | 21 | – | – |
| &nbsp;&nbsp;&nbsp;&nbsp;**Loss for the year** | 22 | (3326) | (3064) |

---

See accompanying notes to financial statements.

------

---

| |
|:---|
| ***GigaMedia Limited and its subsidiaries*** |
| *Financial statements* |
| *Year ended 31 December 2025* |

---

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;**Consolidated statement of comprehensive income**<br>**Year ended 31 December 2025** | &nbsp;&nbsp;&nbsp;&nbsp;**Consolidated statement of comprehensive income**<br>**Year ended 31 December 2025** | &nbsp;&nbsp;&nbsp;&nbsp;**Consolidated statement of comprehensive income**<br>**Year ended 31 December 2025** |
|  | **2025** | **2024** |
|  | **US$'000** | **US$'000** |
| &nbsp;&nbsp;&nbsp;&nbsp;**Loss for the year** | (3326) | (3064) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Other comprehensive income (loss):** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;***Item that will not be reclassified to profit or loss:*** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Defined benefit plan remeasurements  | 32 | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;***Item that may be reclassified subsequently to profit or loss:*** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency translation differences – foreign operations | (4) | (175) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Other comprehensive income (loss) for the year, net of tax**  | 28 | (131) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total comprehensive loss for the year** | (3298) | (3195) |

---

See accompanying notes to financial statements.

------

---

| |
|:---|
| ***GigaMedia Limited and its subsidiaries*** |
| *Financial statements* |
| *Year ended 31 December 2025* |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Consolidated statement of changes in equity**<br>**Year ended 31 December 2025** | **Consolidated statement of changes in equity**<br>**Year ended 31 December 2025** | **Consolidated statement of changes in equity**<br>**Year ended 31 December 2025** | **Consolidated statement of changes in equity**<br>**Year ended 31 December 2025** | **Consolidated statement of changes in equity**<br>**Year ended 31 December 2025** | **Consolidated statement of changes in equity**<br>**Year ended 31 December 2025** | **Consolidated statement of changes in equity**<br>**Year ended 31 December 2025** |
|  | &nbsp;&nbsp;&nbsp;&nbsp;**Attributable to owners of the Company** | &nbsp;&nbsp;&nbsp;&nbsp;**Attributable to owners of the Company** | &nbsp;&nbsp;&nbsp;&nbsp;**Attributable to owners of the Company** | &nbsp;&nbsp;&nbsp;&nbsp;**Attributable to owners of the Company** | &nbsp;&nbsp;&nbsp;&nbsp;**Attributable to owners of the Company** | &nbsp;&nbsp;&nbsp;&nbsp;**Attributable to owners of the Company** |
|  | &nbsp;&nbsp;&nbsp;&nbsp;**Share**<br>**capital** | &nbsp;&nbsp;&nbsp;&nbsp;**Share** <br>**option** <br>**reserve** | &nbsp;&nbsp;&nbsp;&nbsp;**Statutory reserve** | &nbsp;&nbsp;&nbsp;&nbsp;**Accumulated losses** | &nbsp;&nbsp;&nbsp;&nbsp;**Foreign currency translation reserve** | &nbsp;&nbsp;&nbsp;&nbsp;**Total** |
|  | **US$'000** | **US$'000** | **US$'000** | **US$'000** | **US$'000** | **US$'000** |
| &nbsp;&nbsp;&nbsp;&nbsp;At 1 January 2024 | &nbsp;&nbsp;&nbsp;&nbsp;213238 | &nbsp;&nbsp;&nbsp;&nbsp;12863 | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;(161454) | &nbsp;&nbsp;&nbsp;&nbsp;(21347) | &nbsp;&nbsp;&nbsp;&nbsp;43300 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total comprehensive loss for the year** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss for the year | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;(3064) | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;(3064) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Other comprehensive (loss) income** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency translation | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(175) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(175) |
| &nbsp;&nbsp;&nbsp;&nbsp;Defined benefit plan remeasurements | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;44 | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;44 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total other comprehensive loss, net of tax** | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;44 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(175) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(131) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total comprehensive loss for the year** | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;(3020) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(175) | &nbsp;&nbsp;&nbsp;&nbsp;(3195) |
| &nbsp;&nbsp;&nbsp;&nbsp;**At 31 December 2024** | &nbsp;&nbsp;&nbsp;&nbsp;213238 | &nbsp;&nbsp;&nbsp;&nbsp;12863 | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;(164474) | &nbsp;&nbsp;&nbsp;&nbsp;(21522) | &nbsp;&nbsp;&nbsp;&nbsp;40105 |

---

See accompanying notes to financial statements.

------

---

| |
|:---|
| ***GigaMedia Limited and its subsidiaries*** |
| *Financial statements* |
| *Year ended 31 December 2025* |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Consolidated statement of changes in equity (cont'd)**<br>**Year ended 31 December 2025** | **Consolidated statement of changes in equity (cont'd)**<br>**Year ended 31 December 2025** | **Consolidated statement of changes in equity (cont'd)**<br>**Year ended 31 December 2025** | **Consolidated statement of changes in equity (cont'd)**<br>**Year ended 31 December 2025** | **Consolidated statement of changes in equity (cont'd)**<br>**Year ended 31 December 2025** | **Consolidated statement of changes in equity (cont'd)**<br>**Year ended 31 December 2025** | **Consolidated statement of changes in equity (cont'd)**<br>**Year ended 31 December 2025** |
|  | &nbsp;&nbsp;&nbsp;&nbsp;**Attributable to owners of the Company** | &nbsp;&nbsp;&nbsp;&nbsp;**Attributable to owners of the Company** | &nbsp;&nbsp;&nbsp;&nbsp;**Attributable to owners of the Company** | &nbsp;&nbsp;&nbsp;&nbsp;**Attributable to owners of the Company** | &nbsp;&nbsp;&nbsp;&nbsp;**Attributable to owners of the Company** | &nbsp;&nbsp;&nbsp;&nbsp;**Attributable to owners of the Company** |
|  | &nbsp;&nbsp;&nbsp;&nbsp;**Share**<br>**capital** | &nbsp;&nbsp;&nbsp;&nbsp;**Share** <br>**option** <br>**reserve** | &nbsp;&nbsp;&nbsp;&nbsp;**Statutory reserve** | &nbsp;&nbsp;&nbsp;&nbsp;**Accumulated losses** | &nbsp;&nbsp;&nbsp;&nbsp;**Foreign currency translation reserve** | &nbsp;&nbsp;&nbsp;&nbsp;**Total** |
|  | **US$'000** | **US$'000** | **US$'000** | **US$'000** | **US$'000** | **US$'000** |
| &nbsp;&nbsp;&nbsp;&nbsp;At 1 January 2025 | &nbsp;&nbsp;&nbsp;&nbsp;213238 | &nbsp;&nbsp;&nbsp;&nbsp;12863 | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;(164474) | &nbsp;&nbsp;&nbsp;&nbsp;(21522) | &nbsp;&nbsp;&nbsp;&nbsp;40105 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total comprehensive loss for the year** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss for the year | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;(3326) | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;(3326) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Other comprehensive income (loss)**  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency translation | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) |
| &nbsp;&nbsp;&nbsp;&nbsp;Defined benefit plan remeasurements | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;32 | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;32 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total other comprehensive income, net of tax** | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;32 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) | &nbsp;&nbsp;&nbsp;&nbsp;28 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total comprehensive loss for the year** | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;(3294) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) | &nbsp;&nbsp;&nbsp;&nbsp;(3298) |
| &nbsp;&nbsp;&nbsp;&nbsp;**At 31 December 2025** | &nbsp;&nbsp;&nbsp;&nbsp;213238 | &nbsp;&nbsp;&nbsp;&nbsp;12863 | &nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;(167768) | &nbsp;&nbsp;&nbsp;&nbsp;(21526) | &nbsp;&nbsp;&nbsp;&nbsp;36807 |

---

See accompanying notes to financial statements.

------

---

| |
|:---|
| ***GigaMedia Limited and its subsidiaries*** |
| *Financial statements* |
| *Year ended 31 December 2025* |

---

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;**Consolidated statement of cash flows**<br>**Year ended 31 December 2025** | &nbsp;&nbsp;&nbsp;&nbsp;**Consolidated statement of cash flows**<br>**Year ended 31 December 2025** | &nbsp;&nbsp;&nbsp;&nbsp;**Consolidated statement of cash flows**<br>**Year ended 31 December 2025** | &nbsp;&nbsp;&nbsp;&nbsp;**Consolidated statement of cash flows**<br>**Year ended 31 December 2025** |
|  | **Note** | **2025** | **2024** |
|  |  | **US$'000** | **US$'000** |
| &nbsp;&nbsp;&nbsp;&nbsp;**Operating activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss before tax |  | (3326) | (3064) |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments for: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss allowance for trade receivables |  | 1 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortisation – intangible assets |  | 9 | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortisation – right-of-use assets |  | 449 | 461 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on early termination of lease |  | (2) | – |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation of property, plant and equipment |  | 58 | 49 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense |  | 8 | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income |  | (1683) | (1963) |
| &nbsp;&nbsp;&nbsp;&nbsp;Fair value loss on financial assets at FVTPL |  | 1811 | 927 |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealised foreign exchange (gain) loss |  | (517) | 602 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Operating loss before working capital changes** |  | (3192) | (2965) |
| &nbsp;&nbsp;&nbsp;&nbsp;Changes in: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Trade and other receivables |  | (478) | (216) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets |  | (81) | 175 |
| &nbsp;&nbsp;&nbsp;&nbsp;Trade and other payables |  | 384 | (443) |
| &nbsp;&nbsp;&nbsp;&nbsp;Contract liabilities |  | 13 | (33) |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid pension plans |  | (41) | (37) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Cash used in operations, representing**<br>&nbsp;&nbsp;&nbsp;&nbsp;**net cash used in operating activities** |  | (3395) | (3519) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Investing activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest received |  | 1882 | 1666 |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchase of property, plant and equipment |  | (44) | (46) |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchase of intangible assets |  | (6) | (4) |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchase of financial asset at FVTPL |  | (4205) | (1063) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Net cash (used in) from investing activities** |  | (2373) | 553 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Financing activity** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Repayment of lease liabilities, representing |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;net cash used in financing activity |  | (464) | (473) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Net decrease in cash and cash equivalents** |  | (6232) | (3439) |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents at 1 January |  | 34781 | 38470 |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of exchange rate fluctuations on <br>&nbsp;&nbsp;&nbsp;&nbsp;cash held in foreign currencies |  | 191 | (250) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Cash and cash equivalents at 31 December** | 11 | 28740 | 34781 |

---

See accompanying notes to financial statements.

------

---

| |
|:---|
| ***GigaMedia Limited and its subsidiaries*** |
| *Financial statements* |
| *Year ended 31 December 2025* |

---

**Consolidated statement of cash flows (cont'd)**

**Year ended 31 December 2025**

<u>Reconciliation of liabilities arising from financing activities</u>

The table below details changes in the Group's liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group's consolidated statement of cash flows as cash flows from financing activities.

---

| | |
|:---|:---|
|  | &nbsp;&nbsp;Lease liabilities (Note 15) |
|  | &nbsp;&nbsp;USD'000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Balance at 1 January 2024 | 970 |
| &nbsp;&nbsp;&nbsp;&nbsp;Financing cash flows | (473) |
| &nbsp;&nbsp;&nbsp;&nbsp;New leases | 49 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of movements in exchange rates | (58) |
| &nbsp;&nbsp;&nbsp;&nbsp;Balance at 31 December 2024 | 500 |
| &nbsp;&nbsp;&nbsp;&nbsp;Financing cash flows | (464) |
| &nbsp;&nbsp;&nbsp;&nbsp;New leases | 227 |
| &nbsp;&nbsp;&nbsp;&nbsp;Early termination of lease | (44) |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of movements in exchange rates | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;Balance at 31 December 2025 | 248 |

---

See accompanying notes to financial statements.

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**1 Corporate information**

GigaMedia Limited (the "Company") is a limited liability company domiciled and incorporated in Singapore. The address of its registered office is at 9 Raffles Place, #26-01, Republic Plaza, Singapore 048619. Its principal place of business is at 8th Floor, No.22, Ln. 407, Sec. 2, Tiding Blvd., Taipei, Taiwan, 114 Republic of China.

The principal activity of the Company is that of investment holding. The principal activities of the subsidiaries are disclosed in Note 7 to the financial statements.

The Company is listed on the NASDAQ Stock Market in the United States.

The consolidated financial statements of the Group and statement of financial position of the Company for the year ended 31 December 2025 were authorised for issue by the Board of Directors on 29 April 2026.

***Basis of preparation***

The financial statements have been prepared in accordance with the historical cost basis except as disclosed in the material accounting policy information below, and are drawn up in accordance with the provisions of the Singapore Companies Act 1967 and Financial Reporting Standards in Singapore ("FRSs").

The financial statements are expressed in United States dollars.

***Adoption of new and revised standards***

In the current financial year, the Group has adopted all the new and revised FRSs and interpretations of FRS ("INT FRSs") that are relevant to its operations and effective for annual periods beginning on or after 1 January 2025. The adoption of these new/revised FRSs and INT FRSs does not result in changes to the Group's and Company's accounting policies in current and prior years.

***Standards issued but not yet effective***

At the date of authorisation of these financial statements, certain new/revised FRSs, INT FRSs and amendments to FRS were issued but not effective:

<u>Effective for annual periods beginning on or after 1 January 2026</u> <sup>(i)</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Amendments to FRS 109 and FRS 107: *Amendments to the Classification and Measurement of Financial Instruments*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Annual Improvements to FRSs-Volume 11

<u>Effective for annual periods beginning on or after 1 January 2027</u> <sup>(i)</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•FRS 118: *Presentation and Disclosure in Financial Statements*

<sup>(i)</sup>Earlier application is permitted.

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

Management anticipates that the adoption of the new or revised FRSs in future periods will not have a material impact on the financial statements in the period of their initial adoption, except for the following:

**FRS 118 *Presentation and Disclosures in Financial Statements***

FRS 118 replaces FRS 1 *Presentation of Financial Statements*, carrying forward many of the requirements in FRS 1 unchanged and complementing them with new requirements. In addition, some FRS 1 paragraphs have been moved to FRS 8 *Accounting Policies, Changes in Accounting Estimates and Errors* and FRS 107 *Financial Instruments: Disclosures*. Furthermore, minor amendments to FRS 7 *Statement of Cash Flows* and FRS 33 *Earnings per Share* have been made.

FRS 118 introduces new requirements to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•present specified categories and defined subtotals in the statement of profit or loss.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•provide disclosures on management-defined performance measures (MPMs) in the notes to the financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•improve aggregation and disaggregation.

In addition, all entities are required to use the operating profit subtotal as the starting point for the statement of cash flows when presenting operating cash flows under the indirect method. The Group is still in the process of assessing the impact of this new standard, particularly with respect to the structure of the Group's consolidated statement of profit or loss, the consolidated statement of cash flows and additional disclosures required for MPMs. The amendments to FRS 7 and FRS 33, as well as the revised FRS 8 and FRS 107, become effective when an entity applies FRS 118. FRS 118 requires retrospective application with specific transition provisions.

**2 Material accounting policy information**

***Fair value measurement***

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability which market participants would take into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of FRS 102 *Share-based Payment*, leasing transactions that are within the scope of FRS 116 *Leases*, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in FRS 2 *Inventories or value in use* in FRS 36 *Impairment of Assets*.

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**2 Material accounting policy information (cont'd)**

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪Level 3 - Unobservable inputs for the asset or liability.

***Basis of consolidation***

The consolidated financial statements incorporate the financial statements of the Company and entities (including structured entities) controlled by the Company and its subsidiaries. Control is achieved when the Company:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Has power over the investee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Is exposed, or has rights, to variable returns from its involvement with the investee; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company's voting rights in an investee are sufficient to give it power, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The size of the Company's holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Potential voting rights held by the Company, other vote holders or other parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Rights arising from other contractual arrangements; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders' meetings.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**2 Material accounting policy information (cont'd)**

Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. 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.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group's accounting policies.

When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as specified/permitted by applicable FRSs). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under FRS 109, when applicable, the cost on initial recognition of an investment in an associate or a joint venture.

In the Company's financial statements, investments in subsidiaries are carried at cost less any impairment in net recoverable value that has been recognised in profit or loss.

***Foreign currency***

The individual financial statements of each Group entity are measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). The Group's consolidated financial statements are presented in United States dollars as the Company is listed on the NASDAQ Stock Market at United States. The Company's functional currency is New Taiwan dollars.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a) Transactions and balances**

Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those prevailing at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the closing rate of exchange prevailing at the reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the reporting date are recognised in profit or loss for the period except for exchange differences arising on monetary items that form part of the Group's net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under translation reserve in equity. The translation reserve is reclassified from equity to the profit or loss of the Group on disposal of the foreign operation.

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**2 Material accounting policy information (cont'd)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b) Group companies**

The assets and liabilities of foreign operations are translated into United States dollars at the rate of exchange prevailing at the reporting date and income and expenses are translated at the average exchange rates for the year. The exchange differences arising on the translation are taken directly to other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in profit or loss.

In the case of a partial disposal without loss of control of a subsidiary that includes a foreign operation, the proportionate share of the cumulative amount of the exchange differences are re-attributed to non-controlling interest and are not recognised in profit or loss. For partial disposals of associates that are foreign operations, the proportionate share of the accumulated exchange differences is reclassified to profit or loss.

***Financial instruments***

Financial assets and financial liabilities are recognised on the Group's statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

Financial assets (except for trade receivables that do not have a significant financing component which are measured at transaction price), and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.

**Classification of financial assets**

The Company classifies its financial assets in the following measurement categories:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Amortised cost; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Fair value through profit or loss (FVTPL).

<u>Financial assets classified as at amortised cost</u>

These mainly comprise cash and cash equivalents and trade and other receivables.

Financial assets that meet the following conditions are subsequently measured at amortised cost:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**2 Material accounting policy information (cont'd)**

***Amortised cost and effective interest method***

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period.

The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance.

Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost. Interest income is recognised in profit or loss.

<u>Financial asset at FVTPL</u>

Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses recognised in profit or loss.

**Impairment of financial assets**

The Group recognises a loss allowance for expected credit losses ('ECL') on trade receivables, other receivables, and contract assets. The amount of ECL is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial asset. The ECL incorporates forward looking information and is a probability-weighted estimate of the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive, discounted at the original effective interest rate. Details about the Group's and Company's credit risk management and impairment policies are disclosed in Notes 10 and 24(b).

***Significant increase in credit risk***

In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Group compares the risk of a default (more than 90 days past due) occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition. In making this assessment, the Group considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort. Forward-looking information considered includes the future prospects of the industries in which the Group's debtors operate.

The Group assumes that the credit risk on a financial instrument has not increased significantly since initial recognition if the financial instrument is determined to have low credit risk at the reporting date. A financial instrument is determined to have low credit risk if i) the financial instrument has a low risk of default, ii) the borrower has a strong capacity to meet its contractual cash flow obligations in the near term and iii) adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce the ability of the borrower to fulfil its contractual cash flow obligations.

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**2 Material accounting policy information (cont'd)**

The Group regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increase in credit risk before the amount becomes past due.

***Derecognition of financial assets***

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

On derecognition of a financial asset measured at amortised cost, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognised in profit or loss.

***Financial liabilities***

Financial liabilities include trade and other payables.

**Initial recognition and measurement**

Financial liabilities are recognised on the statement of financial position when, and only when, the Group becomes a party to the contractual provisions of the financial instrument. The Group determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value plus directly attributable transaction costs.

**Subsequent measurement**

After initial recognition, financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

**Derecognition**

The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or have expired.

***Provisions***

Provisions are recognised when the Group has a present obligation (legal or constructive) where, as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made on the amount of the obligation.

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**2 Material accounting policy information (cont'd)**

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

***Equity instruments***

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

***Employee benefits***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a) Defined contribution plans**

The Group participates in the national pension schemes as defined by the laws of the countries in which it has operations. In particular, the Group makes contributions to the New Pension System under the Labor Pension Act in Taiwan, and to the Mandatory Provident Fund (MPF) scheme in Hong Kong, both are defined contribution pension schemes. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is performed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b) Employee leave entitlement**

Employee entitlements to annual leave are recognised as a liability when they accrue to the employees. The estimated liability for leave is recognised for services rendered by employees up to reporting date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c) Defined benefits plan**

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Group's net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The fair value of any plan assets is deducted. The Group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the net defined benefit liability (asset).

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**2 Material accounting policy information (cont'd)**

The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Group, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements that apply to any plan in the Group. An economic benefit is available to the Group if it is realisable during the life of the plan, or on settlement of the plan liabilities.

Remeasurements from defined benefit plans comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest). The Group recognises them immediately in other comprehensive income and all expenses related to defined benefit plans in employee benefits expense in profit or loss.

When the benefits of a plan are changed, or when a plan is curtailed, the portion of the changed benefit related to past service by employees, or the gain or loss on curtailment, is recognised immediately in profit or loss when the plan amendment or curtailment occurs.

The Group recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs. The gain or loss on settlement is the difference between the present value of the defined benefit obligation being settled as determined on the date of settlement and the settlement price, including any plan assets transferred and any payments made directly by the Group in connection with the settlement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**d) Share-based payment transactions**

The grant date fair value of share-based payment awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market performance conditions at vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

The fair value of the amount payable to employees in respect of share appreciation rights, which are settled in cash, is recognised as an expense with a corresponding increase in liabilities, over the period that the employees become unconditionally entitled to payment. The liability is remeasured at each reporting date and at settlement date based on the fair value of the share appreciation rights. Any changes in the fair value of the liability are recognised as employee benefits expense in profit or loss.

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**2 Material accounting policy information (cont'd)**

***Taxes***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a) Current income tax**

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the end of the reporting period, in the countries where the Group operates and generates taxable income.

Current income taxes are recognised in the profit or loss except to the extent that the tax relates to items recognised outside the profit or loss, either in other comprehensive income or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b) Deferred tax**

Deferred income tax is provided using the liability method on temporary differences at the reporting period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Where the deferred tax arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•In respect of temporary differences associated with investments in subsidiaries and associates, where the timing of the reversal of the temporary differences can be controlled by the Group and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax credits and unused tax losses can be utilised, except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•In respect of deductible temporary differences associated with investments in subsidiaries, deferred income tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**2 Material accounting policy information (cont'd)**

The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be utilised.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the end of the reporting period. Except for investment properties measured using the fair value model, the measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred income tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

***Leases***

**As lessee**

The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses the incremental borrowing rate specific to the lessee.

The lease liability is presented as a separate line in the statement of financial position.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**2 Material accounting policy information (cont'd)**

The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the lease term has changed, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under FRS 37. The costs are included in the related right-of-use asset.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

The right-of-use assets are presented as a separate line in the statement of financial position.

The Group applies FRS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss.

As a practical expedient, FRS 116 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Group has not used this practical expedient. For a contract that contain a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.

***Revenue recognition***

Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The Group recognises revenue when it transfers control of a product or service to a customer.

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**2 Material accounting policy information (cont'd)**

**Digital entertainment service revenue**

Digital entertainment service revenues are generated through the sale of virtual points, prepaid cards and game packs. Virtual points are sold to distributors or end-users who can make the payments through credit cards, internet banking or telecommunication service operators. Physical prepaid cards and game packs are sold through distributors and convenience stores.

Proceeds from sales of prepaid cards and game packs, net of sales discounts, and virtual points are deferred when received, and revenue is recognised over time when the virtual points and in-game items are consumed based on estimated service period. Management determines the estimated service period based on the weighted average number of days of a user's payment interval of virtual points and in-game items in the Group's online games.

The Group reports sales of virtual points on a gross basis. In the sales of virtual points, the Group acts as a principal and the Group has latitude in establishing price. Fixed percentage fees retained by convenient stores and service providers for payment processing related to the Group's digital entertainment services are recognised as cost of digital entertainment revenues.

***Segment reporting***

An operating segment is a component of the Group that engages in business activities from which it may earn revenue and incur expenses, including revenue and expenses that relate to transactions with any of the Group's other components. All operating segments' operating results are reviewed regularly by the Board of Directors (the chief operating decision maker) to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.

Segment results that are reported to the Board of Directors include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily the Company's headquarters), head office expenses and tax assets and liabilities.

Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment and intangible assets.

**3 Critical accounting judgements and key sources of estimation uncertainty**

In the application of the Group's material accounting policies, which are described in Note 2, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions would be reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**3 Critical accounting judgements and key sources of estimation uncertainty (cont'd)**

**Critical judgements in applying the Group's accounting policies**

Management is of the opinion that any instances of application of judgement are not expected to have a significant effect on the amounts recognised in the financial statements, except for judgements relating to accounting estimates as discussed below.

**Key sources of estimation uncertainty**

The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are related to the following areas, and further explained in the respective notes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Note 18 'Revenue': *Recognition of digital entertainment service revenue*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Note 24(c) *'*Financial instruments': *Fair value of financial assets at FVTPL*

**4** **Property, plant and equipment**

---

| | | | |
|:---|:---|:---|:---|
|  | **Information and communication equipment** | **Office furniture**<br>**and equipment** | **Total** |
| &nbsp;&nbsp;&nbsp;&nbsp;**Group** | **US$'000** | **US$'000** | **US$'000** |
| &nbsp;&nbsp;&nbsp;&nbsp;**Cost**  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;At 1 January 2024 | 157 | 34 | 191 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additions | 44 | 2 | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of movements in exchange rates | (11) | (2) | (13) |
| &nbsp;&nbsp;&nbsp;&nbsp;At 31 December 2024 | 190 | 34 | 224 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additions | 27 | 17 | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;Disposals | (4) | – | (4) |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of movements in exchange rates | 8 | 2 | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;At 31 December 2025 | 221 | 53 | 274 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Accumulated depreciation** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;At 1 January 2024 | 67 | 13 | 80 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation charge to profit or loss | 43 | 6 | 49 |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of movements in exchange rates | (5) | (1) | (6) |
| &nbsp;&nbsp;&nbsp;&nbsp;At 31 December 2024 | 105 | 18 | 123 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation charge to profit or loss | 50 | 8 | 58 |
| &nbsp;&nbsp;&nbsp;&nbsp;Disposals | (4) | – | (4) |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of movements in exchange rates | 4 | 1 | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;At 31 December 2025 | 155 | 27 | 182 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Carrying amounts** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;At 31 December 2024 | 85 | 16 | 101 |
| &nbsp;&nbsp;&nbsp;&nbsp;At 31 December 2025 | 66 | 26 | 92 |

---

**5**

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**6** **Right-of-use assets**

---

| | | | |
|:---|:---|:---|:---|
|  | **Office** <br>**space** | **Motor** <br>**vehicles** | **Total** |
| &nbsp;&nbsp;&nbsp;&nbsp;**Group** | **US$'000** | **US$'000** | **US$'000** |
| &nbsp;&nbsp;&nbsp;&nbsp;**Cost**  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;At 1 January 2024 | 2204 | 77 | 2281 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additions | – | 49 | 49 |
| &nbsp;&nbsp;&nbsp;&nbsp;Disposals | (114) | (74) | (188) |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of movements in exchange rates | (124) | (4) | (128) |
| &nbsp;&nbsp;&nbsp;&nbsp;At 31 December 2024 | 1966 | 48 | 2014 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additions | 116 | 111 | 227 |
| &nbsp;&nbsp;&nbsp;&nbsp;Disposals | (535) | – | (535) |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of movements in exchange rates | 84 | 1 | 85 |
| &nbsp;&nbsp;&nbsp;&nbsp;At 31 December 2025 | 1631 | 160 | 1791 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Accumulated amortisation** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;At 1 January 2024 | 1273 | 64 | 1337 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortisation charge to profit or loss | 435 | 26 | 461 |
| &nbsp;&nbsp;&nbsp;&nbsp;Disposals | (114) | (74) | (188) |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of movements in exchange rates | (78) | (2) | (80) |
| &nbsp;&nbsp;&nbsp;&nbsp;At 31 December 2024 | 1516 | 14 | 1530 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortisation charge to profit or loss | 420 | 29 | 449 |
| &nbsp;&nbsp;&nbsp;&nbsp;Disposals | (493) | – | (493) |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of movements in exchange rates | 61 | – | 61 |
| &nbsp;&nbsp;&nbsp;&nbsp;At 31 December 2025 | 1504 | 43 | 1547 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Carrying amounts** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;At 31 December 2024 | 450 | 34 | 484 |
| &nbsp;&nbsp;&nbsp;&nbsp;At 31 December 2025 | 127 | 117 | 244 |

---

The Group leases several assets including office space and motor vehicles. The average lease term is between 1 to 4 years (2024: 1 to 4 years) and rentals are generally fixed during the lease term.

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**7** **Intangible assets**

---

| | |
|:---|:---|
|  | **Purchased software costs** |
|  | **US$'000** |
| &nbsp;&nbsp;&nbsp;&nbsp;**Group** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Cost** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;At 1 January 2024 | 35 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additions | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Disposals | (10) |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of movements in exchange rates | (2) |
| &nbsp;&nbsp;&nbsp;&nbsp;At 31 December 2024 | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additions | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Disposals | (4) |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of movements in exchange rates | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;At 31 December 2025 | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Accumulated amortisation**  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;At 1 January 2024 | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortisation for the year | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;Disposals | (10) |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of movements in exchange rates | (2) |
| &nbsp;&nbsp;&nbsp;&nbsp;At 31 December 2024 | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortisation for the year | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;Disposals | (4) |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of movements in exchange rates | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;At 31 December 2025 | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Carrying amounts** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;At 31 December 2024 | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;At 31 December 2025 | 4 |

---

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**8** **Subsidiaries**

---

| | | |
|:---|:---|:---|
|  | **Company** | **Company** |
|  | **2025** | **2024** |
|  | **US$'000** | **US$'000** |
| Unquoted equity shares, at cost | 155702 | 155702 |
| Less: Allowance for impairment loss | (118493) | (116658) |
| Effect of movements in exchange rates | 4400 | 4347 |
|  | 41609 | 43391 |

---

During the year ended 31 December 2025, allowance for impairment loss amounting to US$1,835,000 (2024: US$1,988,000) was made in respect of the Company's investments in certain subsidiaries to reduce the carrying value of the investments to recoverable amounts based on the net asset value of respective subsidiaries, which approximate their fair value less costs to sell.

# Details of the subsidiaries are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name of subsidiaries** | **Principal activities** | **Country of incorporation** | **Percentage** <br>**ownership interest** | **Percentage** <br>**ownership interest** |
|  |  |  | **2025** | **2024** |
|  |  |  | **%** | **%** |
| &nbsp;&nbsp;&nbsp;***Held by the Company*** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;GigaMedia International Holdings Limited | Holding company | British Virgin <br>Islands | 100 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;GIGM Corporation | Holding company | Cayman Islands | 100 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;***Held by GigaMedia International Holdings Limited*** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;GigaMedia (HK) Limited | Holding company | Hong Kong | –\* | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;GigaMedia Online Entertainment Corp. | Holding company | Cayman Islands | 100 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;GigaMedia (Cayman) Limited. | Holding company | Cayman Islands | 100 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;***Held by FunTown <br>World Limited*** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;FunTown Hong Kong Limited | Online games | Hong Kong | &nbsp;&nbsp;&nbsp;100 | &nbsp;&nbsp;&nbsp;100 |

---

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**7 Subsidiaries (cont'd)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name of subsidiaries** | **Principal activities** | **Country of incorporation** | **Percentage** <br>**ownership interest** | **Percentage** <br>**ownership interest** |
|  |  |  | **2025** | **2024** |
|  |  |  | **%** | **%** |
| &nbsp;&nbsp;&nbsp;&nbsp;***Held by GigaMedia Online Entertainment Corp.*** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;FunTown World Limited | Holding company | British Virgin <br>Islands | 100 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;GigaMedia Freestyle Holdings Limited | Holding company | British Virgin <br>Islands | 100 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;***Held by GigaMedia (Cayman) Limited.*** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Hoshin GigaMedia Center Inc. | Online games | &nbsp;&nbsp;&nbsp;Taiwan | &nbsp;&nbsp;&nbsp;100 | &nbsp;&nbsp;&nbsp;100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Giga Development Corporation | Holding company | &nbsp;&nbsp;&nbsp;Taiwan | &nbsp;&nbsp;&nbsp;100 | &nbsp;&nbsp;&nbsp;100 |
| &nbsp;&nbsp;&nbsp;&nbsp;GigaMedia Cloud <br>Services Co., Ltd. | Dormant | Taiwan | 100\*\* | 100 |

---

\* The subsidiary was dissolved and deregistered in the first quarter of 2025.

\*\* Subsequent to the year-end, the subsidiary has completed its liquidation in the first quarter of 2026.

The proportion of voting rights held in the subsidiaries are the same as ownership interest.

**9** **Other investment**

---

| | | |
|:---|:---|:---|
|  | **Group and Company** | **Group and Company** |
|  | **2025** | **2024** |
|  | **US$'000** | **US$'000** |
| &nbsp;&nbsp;&nbsp;&nbsp;Financial asset at FVTPL<br> – Debt instrument (unquoted) | 8152 | 5384 |
| &nbsp;&nbsp;&nbsp;&nbsp; – Equity instrument (unquoted) | 21 | 57 |
|  | 8173 | 5441 |
| &nbsp;&nbsp;&nbsp;&nbsp; – Current | 4638 | – |
| &nbsp;&nbsp;&nbsp;&nbsp; – Non-current | 3535 | 5441 |
|  | 8173 | 5441 |
| &nbsp;&nbsp;&nbsp;&nbsp;Balance at beginning of year | 5441 | 5777 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additions | 4205 | 1063 |
| &nbsp;&nbsp;&nbsp;&nbsp;Fair value loss in profit or loss | (1811) | (927) |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of movement in exchange rate | 338 | (472) |
| &nbsp;&nbsp;&nbsp;&nbsp;Balance at end of year | 8173 | 5441 |

---

**10**

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**11** **Other investment (cont'd)**

On 31 August 2020, the Company entered into a convertible note purchase agreement to purchase a US$10 million (NTD295 million) principal amount of convertible promissory note (the "Note") issued by the investee, Aeolus Robotics Corporation ("Aeolus"), a global company primarily engaged in designing, manufacturing, processing and sales of intellectual robotics. The Note bears interest rate of 2% per annum and shall be due on 30 August 2022, which can be extended to 30 August 2023 at Aeolus's option. The Note is convertible into common shares at a price of US$3.00 per share, subject to certain adjustments, and shall be automatically converted upon certain conditions outlined in the purchase agreement.

On 30 December 2021, the Company received 735,835 shares of the Series B preferred shares issued by Aeolus by converting 20% of the US$10 million principal amount of the Note. The conversion was exercised in accordance with the right under the Note and was in the amount of US$2,000,000 at the conversion price of US$2.718 per share.

On 29 July 2022, Aeolus notified the Company that it had decided to exercise its right of extension under the Note to extend the original maturity date of 30 August 2022 to 30 August 2023.

On 31 August 2023, the Company and Aeolus entered into an agreement (Amendment No. 1) to amend the Note. The amendment extended the maturity date of the Note after the partial redemption of US$1,000,000 and the payment of accrued interest on the unpaid principal amount of the Note due through 30 August 2023 in the amount of US$480,000 were made by Aeolus and the outstanding principal amount became US$7,000,000 due thereunder. Payment of US$1,480,000 was made by Aeolus on 6 September 2023.

Pursuant to the Amendment No. 1 to the Note, the remaining principal amount of US$7,000,000 due thereunder bears interest at a rate of 4% per annum, was scheduled to be due on 28 February 2025 (which can be extended at Aeolus's option, to 28 February 2026), and all or a portion of the principal amount due thereunder can be converted upon maturity, upon prepayment or upon the occurrence of certain specified events, upon Aeolus's next round of equity financing, or upon Aeolus's initial public offering, at the lower of US$1.25 per share or 80% of the applicable offering price. On 21 January 2025, Aeolus notified the Company that it had decided to exercise its right of extension under the amendment to the Note to extend the original maturity date of 28 February 2025 to 28 February 2026.

The Company and Aeolus entered into three agreements to purchase convertible promissory notes on 15 August 2023, 15 March 2024 and 24 September 2024, with principal amount of US$105,346, US$63,208 and US$1,000,000, respectively. These notes bear interest at a rate of 4.5% per annum and are convertible at US$0.1 per share, while other terms and conditions are similar to the original Note.

On 20 January 2025, 5 March 2025, 27 June 2025, 15 July 2025 and 5 December 2025, the Company entered into five agreements to purchase convertible promissory notes, with principal amounts of US$52,674, US$2,600,000, US$26,337, US$1,500,000 and US$26,336, respectively, issued by Aeolus. These notes bear interest at a rate of 4.5% per annum and are convertible at US$0.02 per share, while other terms and conditions are similar to the original Note.

Subsequent to the year-end, on 28 February 2026, the Company and Aeolus entered into an agreement (Amendment No. 2) to amend the Note. Amendment No. 2 extends the maturity date of the Note after the payment of accrued interest on the unpaid principal amount of the Note due through 28 February 2026 in the amount of US$699,000 is made by Aeolus. Payment of US$699,000 was made by Aeolus on 2 March 2026.

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

# 8 Other investment (cont'd)
Pursuant to the Amendment No. 2 to the Note, the remaining principal amount of US$7,000,000 due thereunder will bear interest at a rate of 4% per annum, shall be due on 31 May 2026, and all or a portion of the principal amount due thereunder may be converted upon maturity, upon prepayment or upon the occurrence of certain specified events, upon Aeolus's next round of equity financing, or upon Aeolus's initial public offering, at the lower of US$1.25 per share or 80% of the applicable offering price.

**12** **Other assets**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  | **Group** | **Group** | **Company** | **Company** |
|  | **Note** | **2025** | **2024** | **2025** | **2024** |
|  |  | **US$'000** | **US$'000** | **US$'000** | **US$'000** |
| &nbsp;&nbsp;&nbsp;&nbsp;Refundable deposits |  | 188 | 182 | – | – |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid licensing and royalty fees |  | 25 | 147 | – | – |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid pension assets | 14 | 212 | 171 | – | – |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest receivables from financial asset at FVTPL – debt instrument |  | 855 | 392 | 855 | 392 |
|  |  | 1280 | 892 | 855 | 392 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-current assets |  | 591 | 745 | 191 | 392 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current assets |  | 689 | 147 | 664 | – |
|  |  | 1280 | 892 | 855 | 392 |

---

The Group recorded prepaid licensing and royalty fees of US$25,000 (2024: US$147,000) arising from the purchase of licences for its online games for subsequent financial periods.

**13** **Trade and other receivables**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Group** | **Group** | **Company** | **Company** |
|  | **2025** | **2024** | **2025** | **2024** |
|  | **US$'000** | **US$'000** | **US$'000** | **US$'000** |
| &nbsp;&nbsp;&nbsp;&nbsp;Trade receivables |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;- third parties | 109 | 142 | – | – |
| &nbsp;&nbsp;&nbsp;&nbsp;Less: Loss allowance for <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; trade receivables | (1) | (1) | – | – |
|  | 108 | 141 | – | – |
| &nbsp;&nbsp;&nbsp;&nbsp;Other receivables<br>&nbsp;&nbsp;&nbsp;&nbsp;due from subsidiaries | – | – | 329 | 500 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepayments | 103 | 69 | – | – |
| &nbsp;&nbsp;&nbsp;&nbsp;Others | 147 | 129 | – | – |
|  | 358 | 339 | 329 | 500 |

---

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**10 Trade and other receivables (cont'd)**

**Trade balances**

As at 1 January 2024, the Group's trade receivables from contracts with customers amounted to US$227,000 (net of loss allowance of US$2,000). The trade amounts are unsecured, interest-free and have an average credit period of 30 days (2024: 30 days).

Loss allowance for trade receivables has been measured at an amount equal to lifetime ECL. The ECL on trade receivables are estimated by reference to past default experience of the debtor and an analysis of the debtor's current financial position, adjusted for factors that are specific to the debtors, general economic conditions of the industry in which the debtors operate.

A trade receivable is written off when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into bankruptcy proceedings. None of the trade receivables that have been written off is subject to enforcement activities.

The following is an aged analysis of trade receivables at the end of the reporting period, net of loss allowance for trade receivables:

---

| | | |
|:---|:---|:---|
|  | **Group** | **Group** |
|  | **2025** | **2024** |
|  | **US$'000** | **US$'000** |
| &nbsp;&nbsp;&nbsp;&nbsp;Current | 104 | 126 |
| &nbsp;&nbsp;&nbsp;&nbsp;Past due 0 – 90 days | 2 | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;Past due 91 – 180 days | 1 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;More than 180 days | 1 | 1 |
|  | 108 | 141 |

---

The table below shows the movement in loss allowance for trade receivables:

---

| | | |
|:---|:---|:---|
|  | **Group** | **Group** |
|  | **2025** | **2024** |
|  | **US$'000** | **US$'000** |
| &nbsp;&nbsp;&nbsp;&nbsp;Balance at 1 January | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Charge to profit or loss | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Written off | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of movements in exchange rates | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;– | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) |
| &nbsp;&nbsp;&nbsp;&nbsp;Balance at 31 December | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1 |

---

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**10 Trade and other receivables (cont'd)**

**Other receivables and amounts due from subsidiaries**

The non-trade amounts due from subsidiaries are unsecured, interest-free and repayable on demand.

For purpose of impairment assessment, other receivables and amounts due from subsidiaries are considered to have low credit risk as they are not due for payment at the end of the reporting period and there has been no significant increase in the risk of default on the receivables since initial recognition.

Management estimates the loss allowance on other receivables at an amount equal to 12-month ECL, taking into account the historical default experience, current financial conditions of the counterparties and subsidiaries and the future prospects of the industry of each counterparty and subsidiary.

Based on the assessment, management is of the view that the ECL is insignificant as the credit risk of the counterparties and subsidiaries are low.

**14** **Cash and cash equivalents**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Group** | **Group** | **Company** | **Company** |
|  | **2025** | **2024** | **2025** | **2024** |
|  | **US$'000** | **US$'000** | **US$'000** | **US$'000** |
| Bank balances | 28740 | 34781 | 125 | 514 |
| Short-term deposits | 313 | 313 | – | – |
|  | 29053 | 35094 | 125 | 514 |
| &nbsp;&nbsp;&nbsp;&nbsp;Less: Restricted cash | (313) | (313) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents in the consolidated statement of cash flows | 28740 | 34781 |  |  |

---

The weighted average effective interest rate per annum relating to the fixed deposits at the reporting date for the Group is 3.67% (2024: 4.15%). Depending on the terms of the deposit, interest rates reprice every half-yearly and yearly.

In 2025, restricted cash amounting to US$313,000 (2024: US$313,000) mainly relates to deposits pledged for unutilised game point cards.

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**15** **Share capital**

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  | **No. of <br>shares** | **No. of <br>shares** |
|  | **'000** | **'000** |
| &nbsp;&nbsp;&nbsp;&nbsp;**Group and Company** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;In issue at 1 January and 31 December | 11,052 | 11,052 |

---

All issued shares are fully paid, with no par value.

**(i)** **Ordinary shares**

The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at meetings of the Company.

**(ii)** **Capital management**

The Group's primary objective when managing capital is to safeguard the Group's ability to continue as a going concern while looking for appropriate opportunities to expand its business. In order to do so, the Group may obtain new borrowings or issue new shares.

The Group actively and regularly reviews and manages its capital structure to ensure optimal capital structure and shareholder returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. The Group currently does not adopt any formal dividend policy.

There were no changes in the Group's approach to capital management during the year.

The Group is not subject to externally imposed capital requirements.

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**16** **Reserves**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Group** | **Group** | **Company** | **Company** |
|  | **2025** | **2024** | **2025** | **2024** |
|  | **US$'000** | **US$'000** | **US$'000** | **US$'000** |
| Share option reserve | 12863 | 12863 | 12863 | 12863 |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency translation reserve | (21526) | (21522) | (9410) | (9335) |
|  | (8663) | (8659) | 3453 | 3528 |

---

**Share option reserve**

Employee share options represent the equity-settled share option granted to employees and executive director of the Group. The reserve is made up of the cumulative value of services received from employee and executive directors recorded over the vesting period commencing from the grant date of share options, and is reduced by the expiry or exercise of the share options. The details of the share options are disclosed as follows:

***2007 Equity Incentive Plan***

At the June 2007 annual general meeting of shareholders, the shareholders of the Company approved the GigaMedia Limited 2007 Equity Incentive Plan (the "2007 Plan") under which up to 400 thousand ordinary shares of the Company have been reserved for issuance. The 2007 Plan is administered by a committee designated by the board of directors. The committee as plan administrator has complete discretion to determine the grant of awards under the 2007 Plan. The maximum contractual term for the options under the 2007 Plan is 10 years. The 2007 Plan has lapsed in June 2017.

Summarised below are the general terms of its share-based compensation plans as of 31 December 2025.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Date granted** | **Balance <br>at beginning <br>of year** | **Granted during** <br>**the year** | **Expired/ forfeited during <br>the year** | **Balance<br>at end** <br>**of year** | **Options' exercise price** | **Exercise <br>period** |
|  | **'000** | **'000** | **'000** | **'000** | **US$** |  |
| 05.05.2017 | 4 | – | – | 4 | $2.90 | 05.05.2017 - 05.05.2027 |
|  | 4 | – | – | 4 |  |  |

---

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**13 Reserves (cont'd)**

All options are expected to be settled by issuing new shares. At the end of the financial year, details of the options granted are as follow:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Number of outstanding share options** | **Number of outstanding share options** | **Number of outstanding share options** | **Number of outstanding share options** | **Number of outstanding share options** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Range of**<br>**exercise price** | **At**<br>**beginning of the year** | **Granted during** <br>**the year** | **Expired/ forfeited during**<br>**the year** | **Exercised during**<br>**the year** | **At <br>end of <br>the year** | **Weighted average remaining exercise <br>period** |
|  | **'000** | **'000** | **'000** | **'000** | **'000** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**2025** |  |  |  |  |  |  |
| Under US$5 | 4 | – | – | – | 4 | 1.35 years |
|  | 4 | – | – | – | 4 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**2024** |  |  |  |  |  |  |
| Under US$5 | 4 | – | – | – | 4 | 2.35 years |
| US$5–US$50 | 25 | – | (25) | – | – |  |
|  | 29 | – | (25) | – | 4 |  |

---

The options are exercisable at the end of the year.

The Company has used the Black-Scholes option-pricing model to derive the fair value of share options granted to employees on the grant date. There was no share option granted in 2025 and 2024.

***Translation reserve*** 

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**17** **Prepaid pension assets**

The Group has defined benefit and defined contribution pension plans that covered substantially all of the Group's employees.

**Defined benefit pension plan**

In accordance with the Labor Standards Law of the Republic of China, the Group has a defined benefit pension plan for its employees in Taiwan. The pension plan covers substantially all full-time employees for services provided prior to 1 July 2005, and employees who have elected to remain in the defined benefit pension plan subsequent to the enactment of the Labor Pension Act on 1 July 2005. Under the defined benefit pension plan, employees are entitled to twice the monthly salary for each year of service for the first 15 years, and an additional one month for every additional year of service, up to a maximum of 45 months. The pension payment to employees is computed based on the average monthly salary for the six months prior to approved retirement.

The Group has contributed an amount equal to 2 percent of the salaries and wages paid to all qualified employees located in Taiwan to a pension fund (the "Fund"). The Fund is administered by a pension fund monitoring committee (the "Committee") and deposited in the Committee's name in the Bank of Taiwan. The Group makes pension payments from its account in the Fund unless the Fund is insufficient, in which case the Group makes payments from internal funds as payments become due. The Group seeks to maintain a normal, highly liquid working capital balance to ensure payments are made timely.

The following provides fund status of the plan and a reconciliation of employee benefits.

---

| | | |
|:---|:---|:---|
|  | **Group** | **Group** |
|  | **2025** | **2024** |
|  | **US$'000** | **US$'000** |
| &nbsp;&nbsp;&nbsp;&nbsp;Fair value of plan assets | (552) | (488) |
| &nbsp;&nbsp;&nbsp;&nbsp;Projected benefit obligation | 340 | 317 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets – prepaid pension assets | (212) | (171) |

---

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**14 Prepaid pension assets (cont'd)**

---

| | | |
|:---|:---|:---|
| ***Expense recognised in profit or loss*** |  |  |
|  | **Group** | **Group** |
|  | **2025** | **2024** |
|  | **US$'000** | **US$'000** |
| &nbsp;&nbsp;&nbsp;&nbsp;Curtailment gain | – | – |
| &nbsp;&nbsp;&nbsp;&nbsp;Net interest on net defined benefit liability | (4) | (2) |
| &nbsp;&nbsp;&nbsp;&nbsp;Employee benefits | (4) | (2) |
| &nbsp;&nbsp;&nbsp;&nbsp;***Movement in the present value of the defined*** <br>&nbsp;&nbsp;&nbsp;&nbsp;***benefit obligations*** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Projected benefit obligation at 1 January | 317 | 339 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest cost | 7 | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Actuarial loss (gain) | 2 | (5) |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of movement in exchange rate | 14 | (22) |
| &nbsp;&nbsp;&nbsp;&nbsp;Defined benefit obligation at 31 December | 340 | 317 |
| &nbsp;&nbsp;&nbsp;&nbsp;***Movement in the fair value of plan assets*** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Fair value of plan assets at 1 January | 488 | 473 |
| &nbsp;&nbsp;&nbsp;&nbsp;Expected return on plan assets | 10 | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Actuarial gains  | 34 | 39 |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of movement in exchange rate | 20 | (31) |
| &nbsp;&nbsp;&nbsp;&nbsp;Fair value of plan assets at 31 December | 552 | 488 |
| &nbsp;&nbsp;&nbsp;&nbsp;***Return on plan assets*** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Expected return on plan assets | 10 | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Actuarial gains  | 34 | 39 |
| &nbsp;&nbsp;&nbsp;&nbsp;Actual return on plan assets | 44 | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;***Assets Categories*** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash | 100% | 100% |

---

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;***Movement in the net plan obligations (prepaid assets)*** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net prepaid assets at 1 January | (171) | (134) |
| &nbsp;&nbsp;&nbsp;&nbsp;Employee benefits | (4) | (2) |
| &nbsp;&nbsp;&nbsp;&nbsp;Defined benefit plan remeasurements  | (32) | (44) |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of movement in exchange rate | (5) | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net prepaid assets at 31 December | (212) | (171) |

---

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**14 Prepaid pension assets (cont'd)**

***Actuarial assumptions***

Weighted-average assumptions used to determine defined benefit obligations as at 31 December 2025 and 2024 were as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| &nbsp;&nbsp;&nbsp;&nbsp;Discount rate | 1.75% | 2.00% |
| &nbsp;&nbsp;&nbsp;&nbsp;Rate of compensation increase | 2.00% | 2.00% |

---

The Group does not expect to make any contribution to the Fund in 2026. The Group expects to make benefit payments of US$25,000 from 2026 to 2030 and US$107,000 from 2031 to 2035.

**Defined contribution pension plan**

The Group has provided defined contribution plans for employees located in Taiwan and Hong Kong. Contributions to the plans are expensed as incurred.

***Taiwan***

Pursuant to the Labor Pension Act enacted on 1 July 2005, the Group set up a defined contribution pension plan for its employees located in Taiwan. For eligible employees who elect to participate in the defined contribution pension plan, the Group contributes no less than 6% of the employees' salaries and wages paid each month, up to the maximum amount of NT$9,000 (approximately US$286 per individual), to the employees' individual pension accounts at the Bureau of Labor Insurance. Pension payments to employees are made either by monthly installments or in a lump sum from the accumulated contributions and earnings in employees' individual accounts.

***Hong Kong***

According to the relevant Hong Kong regulations, the Group provides a contribution plan for the eligible employees in Hong Kong. The Group must contribute at least 5 percent of their total salaries, up to the maximum amount of HK$1,500 (approximately US$193 per individual), to their individual contribution accounts of the authorities monthly. After the termination of employment, the benefits still belong to the employees in any circumstances.

The total amount of defined contribution pension expenses pursuant to defined contribution plans for the year ended 31 December 2025 was US$152,000 (2024: US$137,000).

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**18** **Lease liabilities**

---

| | | |
|:---|:---|:---|
|  | **Group** | **Group** |
|  | **2025** | **2024** |
|  | **US$'000** | **US$'000** |
| Maturity analysis: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Year 1 | 159 | 421 |
| &nbsp;&nbsp;&nbsp;&nbsp;Year 2 to 5 | 96 | 84 |
|  | 255 | 505 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: Future finance charges | (7) | (5) |
|  | 248 | 500 |
| Analysed as: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current | 155 | 416 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-current | 93 | 84 |
|  | 248 | 500 |

---

Lease liabilities were measured at the present value of the remaining lease payments, discounted using lessee's incremental borrowing rate. As at 31 December 2025, the weighted average incremental borrowing rate applied to the lease liabilities ranged between 1.44% to 3.50% (2024: 1.44% to 3.60%).

**19** **Trade and other payables**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Group** | **Group** | **Company** | **Company** |
|  | **2025** | **2024** | **2025** | **2024** |
|  | **US$'000** | **US$'000** | **US$'000** | **US$'000** |
| Trade payables | 57 | 38 | – | – |
| Accrued expenses | 1110 | 745 | 179 | 129 |
| Other payables  | 186 | 154 | – | – |
| Amount due to subsidiaries | – | – | 14105 | 10004 |
| &nbsp;&nbsp;&nbsp;&nbsp;Trade and other payables | 1353 | 937 | 14284 | 10133 |

---

The amounts due to subsidiaries are unsecured, interest-free and repayable on demand.

**20** **Contract liabilities**

As at 1 January 2024, contract liabilities amounted to US$811,000.

Contract liabilities represent proceeds received from the sale of virtual points and in-game virtual items which have not been consumed by the users or expired. Contract liabilities are credited to profit or loss and recognised as revenue when the virtual points and virtual in-game items are consumed or expired.

The amount of revenue recognised in the current reporting period which relates to brought-forward contract liabilities is US$816,000 (2024: US$811,000).

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**21** **Revenue**

---

| | | |
|:---|:---|:---|
|  | **Group** | **Group** |
|  | **2025** | **2024** |
|  | **US$'000** | **US$'000** |
| &nbsp;&nbsp;&nbsp;&nbsp;Digital entertainment service revenue\* | 3474 | 2969 |

---

\* Included in the digital entertainment service revenue is revenue from sale of virtual points amounting to US$1.4 million (2024: US$1.5 million). The digital entertainment service revenue is recognised over time.

Management expects that the transaction price allocated to the unsatisfied and/or partially unsatisfied contracts as of the end of the reporting period will be recognised as revenue during the next reporting period.

<u>Key sources of estimation uncertainty</u>

**Recognition of digital entertainment service revenue**

Digital entertainment service revenue is earned via the sale of virtual points and in-game items. Proceeds from the sale of virtual points and in-game items are deferred when received (Note 17) and revenue is recorded over time when the virtual points and in-game items are consumed based on estimated service period.

Management determines the estimated service period based on the weighted average number of days of a user's payment interval of virtual points and in-game items in the Group's online games.

**22** **Other operating expenses**

---

| | | |
|:---|:---|:---|
|  | **Group** | **Group** |
|  | **2025** | **2024** |
|  | **US$'000** | **US$'000** |
| Loss allowance for trade receivables  | 1 | 1 |

---

**23** **Net finance income**

---

| | | |
|:---|:---|:---|
|  | **Group** | **Group** |
|  | **2025** | **2024** |
|  | **US$'000** | **US$'000** |
| &nbsp;&nbsp;&nbsp;&nbsp;**Finance income** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income | 1683 | 1963 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Finance expenses** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense on lease liabilities | (8) | (12) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Net finance income** | 1675 | 1951 |

---

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**24** **Income tax**

The income tax credit varied from the amount of income tax credit determined by applying the Singapore income tax rate of 17% to loss before income tax as a result of the following differences:

---

| | | |
|:---|:---|:---|
|  | **Group** | **Group** |
|  | **2025** | **2024** |
|  | **US$'000** | **US$'000** |
| &nbsp;&nbsp;&nbsp;&nbsp;**Reconciliation of effective tax rate** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss before tax | (3326) | (3064) |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax calculated at 17% (2024: 17%) | 565 | 521 |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of tax rates in foreign jurisdictions | 175 | 162 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-deductible expenses | (315) | (164) |
| &nbsp;&nbsp;&nbsp;&nbsp;Current year losses for which no deferred tax asset<br>&nbsp;&nbsp;&nbsp;&nbsp;was recognised | (421) | (520) |
| &nbsp;&nbsp;&nbsp;&nbsp;Others | (4) | 1 |
|  | – | – |

---

As at 31 December 2025, the Group has tax losses carried forward, available to offset against future taxable income, the natures and jurisdictions of which were summarised as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2025** | **2025** | **2024** | **2024** |
| Jurisdiction | **Amount**<br>**(US$'000)** | **Expiring** <br>**year** | **Amount**<br>**(US$'000)** | **Expiring <br>year** |
| Hong Kong | 6664 | Indefinite | 11621 | Indefinite |
| Taiwan | 25475 | 2026-2035 | 28210 | 2025-2034 |

---

Deferred tax assets relating to unutilised tax losses has not been recognised due to the unpredictability of future profit streams. Consequently, the Group did not recognise deferred tax assets of US$6,974,000 (2024: US$9,116,000).

**25** **Loss for the year**

Other than those disclosed elsewhere in the financial statements, the following items have been included in arriving at loss for the year:

---

| | | |
|:---|:---|:---|
|  | **Group** | **Group** |
|  | **2025** | **2024** |
|  | **US$'000** | **US$'000** |
| &nbsp;&nbsp;&nbsp;&nbsp;Employee benefits expense (see below) | 3049 | 3062 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortisation charge on intangible assets  | 9 | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortisation charge on right-of-use assets | 449 | 461 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation of property, plant and equipment  | 58 | 49 |
| &nbsp;&nbsp;&nbsp;&nbsp;Fair value loss on financial assets at FVTPL | 1811 | 927 |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign exchange (gain) loss | (402) | 427 |

---

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**22 Loss for the year (cont'd)**

---

| | | |
|:---|:---|:---|
|  | **Group** | **Group** |
|  | **2025** | **2024** |
|  | **US$'000** | **US$'000** |
| **Employee benefits expense** |  |  |
| Wages and salaries | 2852 | 2860 |
| &nbsp;&nbsp;&nbsp;Employee expense relating to defined benefit and <br>&nbsp;&nbsp;&nbsp;&nbsp;contribution pension plans | 194 | 198 |
| &nbsp;&nbsp;&nbsp;&nbsp;Termination benefits | 3 | 4 |
|  | 3049 | 3062 |

---

**26** **Related parties**

**Share options granted to key management**

As at the end of the financial year, the total outstanding number of share options granted to key management of the Group was 4,000 (2024: 4,000).

**Transaction with key management personnel**

Key management personnel of the Group are those persons having the authority and responsibility for planning, directing and controlling the activities of the entity. The directors are considered as key management personnel of the Group.

Key management personnel compensation comprised:

---

| | | |
|:---|:---|:---|
|  | **Group** | **Group** |
|  | **2025** | **2024** |
|  | **US$'000** | **US$'000** |
| Wages and salaries | 385 | 382 |
| Director fee | 135 | 135 |
| Other benefits | 43 | 40 |
|  | 563 | 557 |

---

**Other related party transactions**

There are no significant related party transactions during 2025 and 2024.

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**27** **Financial instruments**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a) Categories of financial instruments***

The following table sets out the financial instruments as at the end of the reporting period:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Group** | **Group** | **Company** | **Company** |
|  | **2025** | **2024** | **2025** | **2024** |
|  | **US$'000** | **US$'000** | **US$'000** | **US$'000** |
| &nbsp;&nbsp;&nbsp;&nbsp;Financial asset at FVTPL | 8173 | 5441 | 8173 | 5441 |
| &nbsp;&nbsp;&nbsp;&nbsp;Financial assets at amortised cost | 30204 | 35809 | 1309 | 1406 |
| &nbsp;&nbsp;&nbsp;&nbsp;Financial liabilities at amortised cost | 1167 | 783 | 14284 | 10133 |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease liabilities | 248 | 500 | – | – |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b) *Financial risk management***

The Group has exposure to the following risks from its use of financial instruments:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Credit risk

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Liquidity risk

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Market risk

This note presents information about the Group's exposure to each of the above risks, the Group's objectives, policies and processes for measuring and managing risk, and the Group's management of capital.

**Risk management framework**

The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework. The Board has established the Audit Committee, which is responsible for overseeing the Group's risk management policies. The Audit Committee reports regularly to the Board of Directors on its activities.

The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Audit Committee oversees how management monitors compliance with the Group's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**24 Financial instruments (cont'd)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b) *Financial risk management (cont'd)***

**Credit risk**

The customers of the Group settle the payments in accordance with one of the following ways:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) by bank transfer or credit card and (2) by advanced payment. The Group is subject to credit risk only for those receivables with credits granted.

None of the Group's customers accounted for over 10 percent of the Group's revenue in 2025 and 2024 or of the balance of trade receivables as of 31 December 2025 and 2024.

The credit risk of the Group's and the Company's financial assets, which comprise bank deposits and trade and other receivables, represents the maximum exposure to credit risk is the carrying amounts of these instruments.

Cash and cash equivalents are held with reputable financial institutions and subject to immaterial credit loss.

For trade related balances, the Group has applied the simplified approach in FRS 109 to measure the loss allowance at lifetime ECL. The Group determines the expected credit losses on these items based on historical credit loss experience based on the past due status of the debtors, adjusted as appropriate to reflect current conditions and estimates of future economic conditions. Note 10 includes further details on the loss allowance for the trade receivables.

For non-trade related balances, the Group has established a policy to perform an assessment as at 31 December 2025 and 2024, of whether a financial instrument's credit risk has increased significantly since initial recognition, by considering the change in the risk of default occurring over the remaining life of the financial instrument. The Group groups its other receivables into Stage 1, Stage 2 and Stage 3, as described below:

Stage 1 When other receivables are first recognised, the Group recognised an allowance based on 12 months' ECL.

Stage 2 When other receivables have shown a significant increase in credit risk since origination, the Group records an allowance for the lifetime ECLs.

Stage 3 Other receivables considered credit-impaired. The Group records an allowance for the lifetime ECLs.

Management also makes periodic collective assessments for other receivables (including amounts due from subsidiaries) as well as individual assessment on the recoverability of other receivables based on historical settlement records, past experience and other factors. The Group classified other receivables in stage 1 and continuously monitored their credit risk.

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**24 Financial instruments (cont'd)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b) *Financial risk management (cont'd)***

**Liquidity risk**

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.

Except for the lease liabilities (Note 15), financial assets at FVTPL (Note 8) and non-current portion of other assets (Note 9), the Group's and Company's financial assets and liabilities are due on demand or within one year from the end of the reporting period.

**Market risk**

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group's income of the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising returns.

***Foreign currency risk***

The Group holds some assets or liabilities in foreign currency other than functional currency and the value of these assets and liabilities are mainly subject to foreign currency risks resulting from fluctuations in exchange rates between the United States dollars (USD) and the functional currency.

The Group's and Company's exposures to foreign currencies in United States dollars equivalent are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Group** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Group** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Company** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Company** |
|  | **2025** | **2024** | **2025** | **2024** |
|  | **US$'000** | **US$'000** | **US$'000** | **US$'000** |
| **Financial assets** |  |  |  |  |
| USD | 9628 | 9211 | 9482 | 6848 |
| **Financial liabilities** |  |  |  |  |
| USD | 200 | 149 | 14262 | 10133 |

---

------

**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**24 Financial instruments (cont'd)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b) *Financial risk management (cont'd)***

*<u>Sensitivity analysis</u>*

The following table details the Group's and Company's sensitivity to a 10% increase and decrease in the USD against the relevant functional currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management's assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates.

If the USD weakens by 10% against the functional currency of each group entity, loss before tax will (decrease) increase by:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Group** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Group** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Company** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Company** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Company** |
|  | **2025** | **2024** | **2024** | **2025** | **2024** |
|  | **US$'000** | **US$'000** | **US$'000** | **US$'000** | **US$'000** |
| USD | 943 | 906 | 906 | (478) | (329) |

---

If the USD strengthens by 10% against the functional currency of each group entity, loss before tax will (increase) decrease by the same amount above.

***Interest rate risk***

Interest rate risk is the risk that the fair value or future cash flows of the Group's and Company's financial instruments will fluctuate because of changes in market interest rates. The Group and Company are not exposed to significant interest rate risk.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c) *Fair values of financial assets and financial liabilities***

Except for financial assets at FVTPL (Note 8), the fair values of financial assets and liabilities approximate the carrying amounts of those assets and liabilities reported in the statement of financial position due to the relatively short-term maturity of these financial instruments.

The table below analyses financial instrument carried at fair value by valuation method.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Total** | **Level 1** | **Level 2** | **Level 3** |
|  | **US$'000** | **US$'000** | **US$'000** | **US$'000** |
| **Group and Company** |  |  |  |  |
| **2025** |  |  |  |  |
| Financial assets at FVTPL | 8173 | – | – | 8173 |
| **2024** |  |  |  |  |
| Financial assets at FVTPL | 5441 | – | – | 5441 |

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**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**24 Financial instruments (cont'd)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c) *Fair values of financial assets and financial liabilities (cont'd)***

The following table gives information about how the fair value of the financial assets at FVTPL is determined:

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;**Calculation date: 31 December 2025** | &nbsp;&nbsp;&nbsp;**Calculation date: 31 December 2025** | &nbsp;&nbsp;&nbsp;**Calculation date: 31 December 2025** | &nbsp;&nbsp;&nbsp;**Calculation date: 31 December 2025** | &nbsp;&nbsp;&nbsp;**Calculation date: 31 December 2025** |
| &nbsp;&nbsp;&nbsp;**Valuation technique** | &nbsp;&nbsp;&nbsp;**Significant unobservable input** | &nbsp;&nbsp;&nbsp;**Rate** | &nbsp;&nbsp;&nbsp;**Changes in Fair Value** <br>**(in US$ thousands)** | &nbsp;&nbsp;&nbsp;**Changes in Fair Value** <br>**(in US$ thousands)** |
| &nbsp;&nbsp;&nbsp;**Valuation technique** | &nbsp;&nbsp;&nbsp;**Significant unobservable input** | &nbsp;&nbsp;&nbsp;**Rate** | &nbsp;&nbsp;&nbsp;**If the Rate of Input changes by -1%** | &nbsp;&nbsp;&nbsp;**If the Rate of Input changes by +1%** |
| &nbsp;&nbsp;&nbsp;The discounted cash flow analysis to estimate the enterprise value, and then the option pricing method to allocate equity value among various classes of stakeholders. | &nbsp;&nbsp;&nbsp;Discount rate for future cash flows | &nbsp;&nbsp;&nbsp;23.7% | &nbsp;&nbsp;&nbsp;<u>Debt instrument</u><br>+$1,473<br><u>Equity instrument</u><br>+$36 | &nbsp;&nbsp;&nbsp;<u>Debt instrument</u><br>-$1,441<br><u>Equity instrument</u><br>-$15 |
| &nbsp;&nbsp;&nbsp;The discounted cash flow analysis to estimate the enterprise value, and then the option pricing method to allocate equity value among various classes of stakeholders. | &nbsp;&nbsp;&nbsp;Discount for lack of marketability ("DLOM") | &nbsp;&nbsp;&nbsp;<u>Debt instrument</u><br>From 12.0% to 15.0% for different scenarios<br><u>Equity instrument</u><br>From 15.0% to 66.0% for different scenarios | &nbsp;&nbsp;&nbsp;<u>Debt instrument</u><br>+$93<br><u>Equity instrument</u><br>+$0 | &nbsp;&nbsp;&nbsp;<u>Debt instrument</u><br>-$92<br><u>Equity instrument</u><br>-$1 |
| &nbsp;&nbsp;&nbsp;The discounted cash flow analysis to estimate the enterprise value, and then the option pricing method to allocate equity value among various classes of stakeholders. | &nbsp;&nbsp;&nbsp;Volatility | &nbsp;&nbsp;&nbsp;<u>Debt instrument</u><br>From 30.5% to 38.0% for different scenarios<br><u>Equity instrument</u><br>From 38.0% to 178.3% for different scenarios  | &nbsp;&nbsp;&nbsp;<u>Debt instrument</u><br>+$38<br><u>Equity instrument</u><br>-$2 | &nbsp;&nbsp;&nbsp;<u>Debt instrument</u><br>-$108<br><u>Equity instrument</u><br>+$2 |

---

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**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**24 Financial instruments (cont'd)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c) *Fair values of financial assets and financial liabilities (cont'd)***

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;**Calculation date: 31 December 2024** | &nbsp;&nbsp;&nbsp;**Calculation date: 31 December 2024** | &nbsp;&nbsp;&nbsp;**Calculation date: 31 December 2024** | &nbsp;&nbsp;&nbsp;**Calculation date: 31 December 2024** | &nbsp;&nbsp;&nbsp;**Calculation date: 31 December 2024** |
| &nbsp;&nbsp;&nbsp;**Valuation technique** | &nbsp;&nbsp;&nbsp;**Significant unobservable input** | &nbsp;&nbsp;&nbsp;**Rate** | &nbsp;&nbsp;&nbsp;**Changes in Fair Value** <br>**(in US$ thousands)** | &nbsp;&nbsp;&nbsp;**Changes in Fair Value** <br>**(in US$ thousands)** |
| &nbsp;&nbsp;&nbsp;**Valuation technique** | &nbsp;&nbsp;&nbsp;**Significant unobservable input** | &nbsp;&nbsp;&nbsp;**Rate** | &nbsp;&nbsp;&nbsp;**If the Rate of Input changes by -1%** | &nbsp;&nbsp;&nbsp;**If the Rate of Input changes by +1%** |
| &nbsp;&nbsp;&nbsp;The discounted cash flow analysis to estimate the enterprise value, and then the option pricing method to allocate equity value among various classes of stakeholders. | &nbsp;&nbsp;&nbsp;Discount rate for future cash flows | &nbsp;&nbsp;&nbsp;38.5% | &nbsp;&nbsp;&nbsp;<u>Debt instrument</u><br>+$324<br><u>Equity instrument</u><br>+$28 | &nbsp;&nbsp;&nbsp;<u>Debt instrument</u><br>-$352<br><u>Equity instrument</u><br>-$20 |
| &nbsp;&nbsp;&nbsp;The discounted cash flow analysis to estimate the enterprise value, and then the option pricing method to allocate equity value among various classes of stakeholders. | &nbsp;&nbsp;&nbsp;Discount for lack of marketability ("DLOM") | &nbsp;&nbsp;&nbsp;<u>Debt instrument</u><br>13.0%<br><u>Equity instrument</u><br>From 13.0% to 48.0% for different scenarios | &nbsp;&nbsp;&nbsp;<u>Debt instrument</u><br>+$62<br><u>Equity instrument</u><br>+$1 | &nbsp;&nbsp;&nbsp;<u>Debt instrument</u><br>-$62<br><u>Equity instrument</u><br>-$1 |
| &nbsp;&nbsp;&nbsp;The discounted cash flow analysis to estimate the enterprise value, and then the option pricing method to allocate equity value among various classes of stakeholders. | &nbsp;&nbsp;&nbsp;Volatility | &nbsp;&nbsp;&nbsp;<u>Debt instrument</u><br>29.0%<br><u>Equity instrument</u><br>From 29.0% to 98.0% for different scenarios  | &nbsp;&nbsp;&nbsp;<u>Debt instrument</u><br>+$99<br><u>Equity instrument</u><br>-$1 | &nbsp;&nbsp;&nbsp;<u>Debt instrument</u><br>-$36<br><u>Equity instrument</u><br>+$2 |

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<u>Key sources of estimation uncertainty</u>

*Fair value of financial assets at FVTPL*

In estimating the fair value of the financial assets at FVTPL (Note 8), the Group engages third party qualified valuer to perform the valuation. Management works closely with the qualified external valuers to establish the appropriate valuation techniques and inputs to the model.

When estimating the value of the early stage enterprise, in the absence of observable market prices or a recent financing transaction, the Company obtained sufficient financial and operational information from the issuer's company, using the income approach as the primary method, which reflects the close relationship between the future cash generating ability of the issuer's company and respective enterprise value. As the issuer's company was still at its early stage of development with limited historical track record, market multiples were conducted for supplementary reference only. In respect of the discount rate applied, management has calculated weighted average cost of capital (2024: with reference to venture capital portfolio return, adjusted for company specific risk premium).

The derived enterprise value was then served as a reasonable basis for the subsequent equity value allocation exercise to estimate the portion assignable to the issuer's convertible note and respective share categories as of the measurement date by applying a hybrid method of Probability Weighted Expected Return Method ("PWERM") and Option Pricing Method ("OPM"). Such hybrid method estimates the probability weighted value across multiple scenarios, using OPM to estimate the allocation of value within one or more of those scenarios.

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**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**28** **Segment information**

***Business segments***

For the reportable segment, the Group's chief operating decision maker reviews internal management reports on at least a quarterly basis. Management assesses the performance of the Group's operations based on the profit before income tax, total assets and total liabilities which are measured in a manner consistent with that of the consolidated financial statements. The following summary describes the operations in the Group's reportable segments:

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| | |
|:---|:---|
| Digital entertainment service: | The development and licensure of digital entertainment products and services and other investments |

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***Major Customers***

No single customer represented 10 percent or more of the Group's total revenue in 2025 and 2024.

***Geographic Information***

In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of revenue sources. Segment assets are based on the geographical location of the assets.

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;**Revenue** | **2025** | **2024** |
|  | **US$'000** | **US$'000** |
| Taiwan | 1783 | 1602 |
| Hong Kong | 1691 | 1367 |
|  | 3474 | 2969 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Non-current assets** |  |  |
| Taiwan | 4373 | 6744 |
| Hong Kong | 93 | 34 |
|  | 4466 | 6778 |

---

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**GIGAMEDIA LIMITED AND ITS SUBSIDIARIES**

**NOTES TO FINANCIAL STATEMENTS**

**31 December 2025**

**29** **Contingent liability**

On 15 January 2018, Ennoconn Corporation ("Ennoconn") filed a complaint against one of our subsidiaries, GigaMedia Cloud Services Co., Ltd. ("GigaMedia Cloud") in the Taiwan Taipei District Court. The complaint alleged that GigaMedia Cloud is obligated to pay Ennoconn NT$79,477,000 (approximately US$2,588,000) in connection with a transaction to purchase taximeters in 2015. GigaMedia Cloud filed an answer to the complaint denying Ennoconn's allegations in the lack of factual and legal basis on 1 March 2018. On 15 November 2018, the Taiwan Taipei District Court determined that all of Ennoconn's claims were without merit and made a judgment denying the complaint.

On 3 January 2019, Ennoconn filed an appeal demanding the judgment which was entered in the District Court, to be reversed and amended. The civil court of the second instance, the Taiwan High Court, has conducted the session of the preparatory proceedings for several times during 2019.<br>As a result, the Taiwan High Court ruled on 8 January 2020, that the decision of the Taiwan Taipei District Court should be partially modified and Ennoconn is entitled to NT$27,084,000 (approximately US$882,000). GigaMedia Cloud has filed another appeal with the Taiwan Supreme Court on 4 February 2020.

On 5 May 2021, the Taiwan Supreme Court revoked the previous ruling of the Taiwan High Court, and sent the case back to the Taiwan High Court for a retrial. Under the Taiwan Supreme Court's ruling, the appeal made by Ennoconn should be reviewed by the Taiwan High Court by following the instructions of the Taiwan Supreme Court.

On 18 May 2022, the Taiwan High Court found such appeal meritless and made a civil judgment denying the complaint by Ennoconn. On 15 June 2022, Ennoconn filed an appeal and demanded that the Taiwan Supreme Court reverse this civil judgment and remand the case to the Taiwan High Court. On 22 February 2023, the Taiwan Supreme Court revoked the previous ruling of the Taiwan High Court, and sent the case back to the Taiwan High Court for a retrial. On 30 October 2023, the Taiwan High Court ruled such appeal meritorious and Ennoconn has the right to claim compensation from GigaMedia Cloud. On 16 November 2023, GigaMedia Cloud filed an appeal against the Taiwan High Court's decision, and the appeal has been transferred to Taiwan Supreme Court on 2 January 2024. On 17 April 2024, the Taiwan Supreme Court, in a written notice, denied GigaMedia's appeal and affirmed the Taiwan High Court's October 2023 decision in favor of Ennoconn.

GigaMedia Cloud accrued its best estimate for the ultimate resolution of this claim. Subsequent to the year-end, GigaMedia Cloud has been legally liquidated on 23 March 2026, followed by a reference letter from the court approving its completion of liquidation. On the other hand, pursuant to Taiwan's Company Act, the shareholder of GigaMedia Cloud is limitedly liable for GigaMedia Cloud in an amount equal to the total value of shares subscribed. Therefore, it is believed that the immediate parent company, the intermediate parent companies, as well as GigaMedia, the ultimate parent company, individually or collectively do not have obligations to absorb GigaMedia Cloud's loss exceeding GigaMedia Cloud's net worth and accordingly, it will not have a material adverse impact on the Group's and Company's financial condition, results of operations or cash flows.

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### Attached PDF Documents

**Attachment 1:** `gigm-ex99_2.pdf`

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