{"url_path":"/sec/brqsf/10-k/2026/item-4","section_key":"item-4","section_title":"Item 4 INFORMATION ON THE COMPANY**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1650575/0001213900-26-057706-index.html","accession_number":"0001213900-26-057706","cik":"0001650575","ticker":"BRQSF","issuer_name":"Borqs Technologies, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1650575/0001213900-26-057706-index.html","primary_entity_key":"0001650575","primary_entity_name":"Borqs Technologies, Inc."},"word_count":3019,"has_tables":true,"body_markdown":"**ITEM 4. INFORMATION ON THE COMPANY**\n\n \n\n**Overview**\n\n \n\nBorqs Technologies, Inc. (formerly\nknown as “Pacific Special Acquisition Corp.”, and hereinafter referred to as the “Company” “Borqs Technologies”,\n“Borqs” or “we”) was incorporated in the British Virgin Islands on July 1, 2015. The Company was formed to acquire,\nengage in a share exchange, share reconstruction and amalgamation, purchasing all or substantially all of the assets of, entering into\ncontractual arrangements, or engaging in any other similar business combination with one or more businesses or entities.\n\n \n\nOn August 18, 2017, the Company\nacquired 100% of the equity interest of BORQS International Holding Corp. (“Borqs International”) and its subsidiaries (collectively\nreferred to as “Borqs Group” or together with the BVI parent company collectively referred to as the “Group”)\nin an all-stock merger transaction. Concurrent with the completion of the acquisition of Borqs International, the Company changed its\nname from “Pacific Special Acquisition Corp.”, to “Borqs Technologies, Inc.”\n\n \n\nWe have employees in Beijing,\nChina. Our parent company is in the British Virgin Islands, and our agent in the BVI is Kingston Chambers, and their address is P.O. Box\n173, Road Town, Tortola, British Virgin Islands.\n\n \n\nUntil we sold our core businesses\nto Sasken, we were a global provider in software, development services, and products providing customizable, differentiated, and scalable\nAndroid-based smart connected devices and cloud service solutions. We were a leading provider of commercial grade Android platform software\nfor mobile chipset manufacturers, mobile device OEMs, and mobile operators, as well as complete product solutions of mobile connected\ndevices for enterprise and consumer applications. We acquired 51% ownership in HHE on October 19, 2021, which designed and commercialized\nsolar power and energy storage solutions to residential and commercial customers in the United States. As of March 6, 2024, the Company\nhas completed the sale of its ownership in HHE.\n\n \n\nOur Connected Solutions business\nunit (the “Connected Solutions BU”) works closely with chipset partners to develop new connected devices. Borqs developed\nthe reference Android software platform and hardware platform for Intel and Qualcomm phones and tablets. We provide Connected Solutions\ncustomers with customized, integrated, commercial grade Android platform software and service solutions to address vertical market segment\nneeds through the targeted BorqsWare software platform solutions. The BorqsWare software platform consisted of BorqsWare Client Software\nand BorqsWare Server Software. The BorqsWare Client Software platform has been used in Android phones, tablets, watches, and various Internet-of-things\n(“IoT”) devices. The BorqsWare Server Software platform consisted of back-end server software that allows customers to develop\ntheir own mobile end-to-end services for their devices.\n\n  \n\nIn the years ended December\n31, 2023, 2024 and 2025, Borqs generated 42.1%, 49.4% and 64.6% of its Connected Solutions BU revenues from customers headquartered outside\nof China and 57.9%, 50.6% and 35.4% from customers headquartered in China.\n\n \n\nWe have dedicated significant\nresources to research and development, and have research and development centers in Beijing, China and Bangalore, India. As of December\n31, 2025, the Group had 13 employees based in China, Hong Kong, and United States.\n\n \n\nThe following customers accounted\nfor near 10% or more of our total revenues for the years indicated:\n\n \n\n2025 \nM-KOPA Kenya Limited \n 53.9%\n\n  \n  \n   \n\n2024 \nMetro (Suzhou) Technologies Co Ltd \n 50.6%\n\n  \nM-KOPA Kenya Limited \n 21.0%\n\n  \n  \n   \n\n2023 \nMetro (Suzhou) Technologies Co Ltd \n 57.8%\n\n  \nECOM Instruments \n 19.9%\n\n  \nGreatCall, Inc. \n 12.7%\n\n \n\n30 \n\n \n\n \n\nAs of April 9, 2025 we completed the sale of all\nof our core businesses to Sasken, and effectively all of the activities as described above belong to and are operated by Sasken. Further,\naccording to the non-compete clauses of the sale, the Company and certain of its executives are restricted from participating in similar\nODM and IoT business activities for a period of 5 years thereafter.\n\n \n\n**History and Development of the Company**\n\n \n\n**Corporate Organizational Chart**\n\n \n\nThe following diagram illustrates\nour current corporate structure and the place of formation, ownership interest, and affiliation of each of our subsidiaries and unconsolidated\nminority interests in certain entities as of the date of this report.  \n\n \n\n** **\n\n**Borqs Entities Including Wholly-Owned Subsidiaries\nand Consolidated Affiliated Entities**\n\n \n\n \n●\nBorqs Technologies, Inc. (BRQS) – the BVI parent holding company and the listing company.\n\n \n\n \n●\nBorqs Capital, Inc. – a British Virgin Islands company that is responsible for U.S. investments.\n\n \n\n \n●\nBorqs Technologies USA, Inc. (BTUSA) – a US entity responsible for commercial contracts with customers that require a US entity for contractual basis.\n\n \n\n \n●\nBorqs Hong Kong Limited (BHK) – a Hong Kong entity that holds 60% of the shares of Borqs Technologies Ltd (BTCHN), holds 60% of the shares of Borqs KK (BKK), and holds 100% of Borqs Chongqing Ltd (BCQ) and 100% of Borqs Beijing Ltd (BBJ). This entity signs a majority of our commercial contracts with international customers.\n\n \n\n \n●\nBorqs Beijing Ltd. (BBJ) – a wholly foreign-owned enterprise, a “WFOE” as it is called, in China. This entity is responsible for general administration and hardware R&D purposes.\n\n \n\n \n●\nBorqs Chongqing Ltd. (BCQ) – a wholly owned foreign enterprise in China that is a holding company for Beijing Big Cloud Century Technology Ltd, and it is responsible for the purchasing and management of the component supplies for the manufacturing of our products.\n\n \n\n \n●\nBeijing Big Cloud Century Technology Ltd. (BC-Tech) – an entity in China and is a holding company for Beijing Big Cloud Network Technology Co. Ltd and Beijing Borqs Software Technology Co. Ltd.\n\n \n\n31 \n\n \n\n \n\n \n●\nBeijing Borqs Software Technology Co. Ltd. (BSW) – an entity in China that is responsible for our software R&D.\n\n \n\n \n●\nBeijing Big Cloud Network Technology Co. Ltd (BC-NW) – an entity in China that was formerly the holding company of our VIE entities engaged in the business of mobile virtual network operator (“MVNO”). The VIE entities and the MVNO business were sold as of October 2020.\n\n \n\n \n●\nBorqs Technologies Ltd. (BTCHN) – a Sino-foreign entity in China for setting up a manufacturing facility in Huzhou, China, and is a holding company for Borqs Huzhou Ltd (BHZ).\n\n \n\n \n●\nBorqs Huzhou Ltd. (BHZ) – an entity in China responsible for the operations of our hardware manufacturing activities in Huzhou, China.\n\n \n\nAs of December 31, 2025, the\nGroup had 13 employees.\n\n \n\nFor additional information,\nsee Note 1 in our consolidated financial statements.\n\n \n\n**Business Units**\n\n \n\nUntil our core businesses\nwere sold to Sasken, we had two business units (“BU”), Connected Solutions and Solar Power before the deconsolidation of HHE.\nThe divestiture of HHE which included all of the Solar Power BU was completed as of March 6, 2024; thereafter the remaining Connected\nSolutions BU was sold to Sasken as of April 9, 2025. We currently do not have a core operational business activity.\n\n \n\nThe Connected Solutions BU\ndeveloped wireless smart connected devices and cloud solutions. Borqs provided Connected Solutions’ customers with customized, integrated,\ncommercial grade Android platform software and service solutions to address vertical market segment needs through the targeted BorqsWare\nsoftware platform solutions. The BorqsWare software platform consisted of BorqsWare Client Software and BorqsWare Server Software. The\nBorqsWare Client Software platform consisted of three major components: the latest commercial grade Android software that worked with\nparticular mobile chipsets, functionality enhancements of the open source Android software, and mobile operator required services. Based\non the BorqsWare Client Software platform, customers may require Borqs to provide further customization based on their specific market\nneeds. The BorqsWare Client Software platform has been used in Android phones, tablets, watches, and various Internet-of-things (“IoT”)\ndevices. The BorqsWare Server Software platform consisted of back-end server software that allows customers to develop their own mobile\nend-to-end services for their devices. The BorqsWare Server Software provided software necessary for upgrades, charging, and various APIs\nthat enhance the customers’ services. Based on BorqsWare Server Software service platform, customers may require us to provide further\ncustomization based on their specific needs.\n\n \n\nThe Solar Power BU, HHE of\nwhich we acquired 51% ownership in October 2021, is a Delaware limited liability company that brought state-of-the-art energy storage\nsystems to both residential and commercial markets. With operations in Hawaii, Wisconsin, and California, HHE designed and developed proprietary\nstorage systems and software and control platform solutions. The HHE team was made up of renewable energy industry veterans, engineering\nand deploying energy storage systems that enable greater energy independence.\n\n \n\nOn December 13, 2022, Borqs\nTechnologies received a letter from the Department of the Treasury on behalf of the Committee on Foreign Investment in the United States\n(“CFIUS”) stating that the Company is required to negotiate with CFIUS to fully divest its ownership interests and rights\nin Holu Hou Energy LLC (“HHE”) due to HHE’s solar energy storage system and EnergyShare technology for Multi-Dwelling\nResidential Units being deemed a potential national security risk.\n\n \n\n32 \n\n \n\n \n\nOn March 16, 2023, the Company\nand HHE entered into a National Security Agreement (“NSA”) with the Department of Defense and the Department of Treasury.\nThe NSA provides that the divestment shall occur within six months unless extended by the U.S. Government. The NSA also contains standstill\nprovisions which provide that the Company shall not acquire any additional ownership interest in HHE, merge with or into HHE, affect any\nchanges to the rights held by the Company, except as necessary to affect its obligations under the NSA, or acquire or take possession\nof any assets of HHE. Further, upon the completion of the Divestment, the Company shall terminate or irrevocably waive any information,\nconsent, board appointment, board observer, or other governance rights held by the Company, except for any rights that are determined\nby the U.S. Government to be necessary to affect the provisions of the NSA. The NSA outlines the steps to be taken concerning the Divestment:\nengaging a nationally recognized investment bank with experience in administering competitive sales and auction processes; assigning and\nhiring of security and monitoring personnel to directly communicate with the U.S. Government; removing all of Borqs’ administrative\nand technical influence over HHE; and creating a plan to divest all of Borqs’ investment interests and rights in HHE. Under the\nrequirement of the NSA, Borqs has assigned its interests in HHE into a Divestment Trust according to a Divestment Trust Agreement (“DTA”)\ndated March 20, 2023, entered into between Borqs, HHE, and a trustee.\n\n \n\nAs discussed above, the Solar\nPower BU, a separate segment was deconsolidated on December 31, 2022, and reclassified as held for sale as of December 31, 2022, for the\ncarrying amounts will be recovered principally through a sale and revenues and expenses related to HHE have been reclassified in the accompanying\nconsolidated financial statements as discontinued operations for fiscal 2022.\n\n \n\nAs of March 6, 2024, the Company\ncompleted the sale of its ownership in HHE.\n\n \n\n*Connected Solutions BU*\n\n \n\nThe Connected Solutions BU\nhelped customers design, develop and realize the commercialization of their connected devices.\n\n \n\nOur Connected Solutions business\nunit worked closely with chipset partners to develop new connected devices. Borqs developed the reference Android software platform and\nhardware platform for Intel and Qualcomm phones and tablets. We provided Connected Solutions customers with customized, integrated, commercial\ngrade Android platform software and service solutions to address vertical market segment needs through the targeted BorqsWare software\nplatform solutions. The BorqsWare software platform consisted of BorqsWare Client Software and BorqsWare Server Software. The BorqsWare\nClient Software platform had been used in Android phones, tablets, watches, and various Internet-of-things (“IoT”) devices.\nThe BorqsWare Server Software platform consisted of back-end server software that allows customers to develop their own mobile end-to-end\nservices for their devices.\n\n \n\nThe Connected Solutions BU\nhad a global customer base covering the core parts of the Android platform value chain, including mobile chipset manufacturers, mobile\ndevice OEMs and mobile operators.\n\n \n\nOn April 8, 2025 the Company\nsigned a Share Purchase Agreement (“SPA”) with Sasken which provided for Sasken’s acquisition of the Company’s\ncore business through the purchase of BORQS International Holding Corp, the Company’s wholly owned subsidiary. The transactions\ncontemplated by the SPA (the “Sale”) were consummated on April 9, 2025. Included in the Sale are all of the Company’s\nembedded software design and customized hardware manufacturing of products for the Internet of Things (IoT) activities, customer contracts,\ntechnology licenses, intellectual property, employment agreements with key personnel and assets required for the Company’s operations.\nSasken agreed to pay the Company an aggregate purchase price of $40 million, subject to adjustments for working capital, amounts withheld\nfor taxes payable, and certain earnout payments linked to performance in 2025.\n\n \n\n33 \n\n \n\n \n\n*Solar Power BU*\n\n \n\nWe acquired a 51% controlling\ninterest in HHE as of October 19, 2021. HHE develops and commercializes solar power systems that consist of solar modules, including solar\npanels and electrical components, controllers, inverters, and lithium-based battery modules associated with the solar modules so as to\nprovide total independent energy solutions to our residential and commercial customers.\n\n \n\n HHE designs, develops,\nintegrates and installs solar power systems for the residential and commercial customers. The financial results of HHE from the date of\nacquisition up to December 31, 2021, were consolidated into Borqs’ financial statements. HHE recognizes revenues when the solar\npower projects are fully completed. During the period of consolidation, no solar power projects were completed, and consequently, no revenues\nfrom HHE were recognized. The cash receipts from customers from ongoing projects and newly started projects were booked as deferred revenue.\n\n \n\nHHE was deconsolidated on\nDecember 31, 2022. Assets and liabilities related to HHE, which the Group acquired in October 2021, were reclassified as held for sale\nas of December 31, 2022, and revenues and expenses related to Solar Energy segment were reclassified as discontinued operations for all\nperiods presented.\n\n \n\nAs of March 6, 2024, the Company\nhas completed the sale of its ownership in HHE.\n\n \n\n**Competition**\n\n \n\nThe Company believes that\nthe marketplace for connected devices is highly fragmented but that few are capable of providing an end-to-end solution with software,\nhardware, and product realization. The solar industry is anchored with several large companies, while many small companies across the\nU.S. also provide customized installations.\n\n \n\nThe market for connected devices\nand solar solutions is rapidly evolving, and in the future, the Company may not be able to compete successfully against current and potential\ncompetitors. The Company expects competition to intensify as new competitors enter the market and as existing competitors attempt to diversify\nand expand their software and service solutions offerings. The primary competitors for the Company include traditional hardware-centric\nOEMs and software development companies.\n\n \n\n \n●\nThe traditional OEMs are strong in hardware design and own factories, but they are very weak in software development as well as not familiar with operator and mobile chipset requirements;\n\n \n\n \n●\nThe large software development companies have sizable software teams and global coverage, but they are very weak in hardware design and manufacturing expertise;\n\n \n\n \n●\nSome of the Company’s competitors have significantly greater financial, technical, marketing, sales, and other resources and significantly greater name recognition than we have.\n\n \n\n**Government Regulation**\n\n \n\nThe Company’s operations\nare subject to extensive and complex state, provincial, and local laws, rules, and regulations. The PRC government restricts or imposes\nconditions on foreign investment in the telecommunications business. Borqs International Holding Corp and its PRC subsidiaries are considered\nforeign persons or foreign-invested enterprises under PRC foreign investment-related laws. As a result, they are subject to PRC legal\nrestrictions on or conditions for foreign ownership of telecommunication businesses.\n\n \n\n34 \n\n \n\n \n\n**Employees**\n\n \n\nAs of December 31, 2025, we\nhad 13 employees, 9 in China and Hong Kong and 4 in United States. None of our employees are represented by a labor union.\n\n \n\nThe Company pays most of its\nemployees a base salary and performance-based bonuses, including annual incentive bonuses and project-based bonuses. It pays commissions\nto sales personnel. Employees are also eligible to participate in the Company’s stock incentive program.\n\n \n\nThe Company is required under\nPRC laws and regulations to participate in a government-mandated, defined benefit plan for its full-time employees, under which we provide\nsocial welfare benefits, such as pension, medical care, unemployment insurance, work-related injury insurance, maternity insurance, and\nemployee housing fund. The Company employees are not covered by any collective bargaining agreement. The Company believes it has good\nrelations with its employees.\n\n \n\nThe Company uses a variety\nof methods to recruit technical professionals to ensure that it has sufficient research and development and other expertise on an ongoing\nbasis, including the company website, an external online recruiting website, targeted technical forums, campus recruitment at leading\ntechnical universities and institutions, job fairs and internal referrals from current employees.\n\n \n\nThe Company offers training\nprograms to its employees covering professional training such as training related to customer service and product management, and technical\ntraining such as training related to telephony and project management. The Company holds periodic workshops to enhance the leadership\nskills of management personnel.\n\n \n\n**Description of Properties**\n\n \n\nThe Company’s principal\nexecutive offices are located in Hong Kong. The Company leased office and warehouse spaces pursuant to leases as described below.\n\n \n\nLocations \nApproximate Size \nPrimary Uses \nLease Expiration Date\n\nBeijing, China \n1180 sq. meters \nManagement office \nDecember 31, 2025\n\n \n\nThe Company mostly subcontracts\nmanufacturing to other factories. At the Company’s Huzhou facility, there is an assembly line with capacity for half a million units\nper year for small orders.\n\n \n\n**Segments**\n\n \n\nIn the year 2025, prior to\nthe sale of our business to Sasken, we operate in one reportable segment, which is the Connected Solutions Business Unit. See Note 2,\nSegment Reporting, of our notes to consolidated financial statements.\n\n \n\n**Geographic Concentration**\n\n \n\nThe following table sets forth\nthe Company’s connected solutions net revenues from customers, in absolute amount and as a percentage of net revenues, based on\nlocation of the customer’s headquarters.\n\n \n\n  \nFor the years ended December 31, \n\n  \n2023  \n2024  \n2025 \n\n  \n$  \n%  \n$  \n%  \n$  \n% \n\n  \n($’000) \n\nUnited States \n 4,136  \n 20.1% \n 3,948  \n 14.2% \n -  \n 0.0%\n\nChina \n 11,891  \n 57.9% \n 14,025  \n 50.6% \n 4,819  \n 35.4%\n\nRest of the World \n 4,540  \n 22.0% \n 9,740  \n 35.2% \n 8,783  \n 64.6%\n\nNet Revenues \n 20,567  \n 100.0% \n 27,713  \n 100.0% \n 13,602  \n 100.0%\n\n \n\n35 \n\n \n\n \n\n**Available Information**\n\n \n\nOur annual reports on Form 20-F,\ncurrent reports on Form 6-K, and other forms and periodic reports as a foreign private issuer, are available free of charge on our\nwebsite (*www.borqs.com*) as soon as reasonably practicable after we have electronically filed such materials with or furnished such\nmaterials to the Securities and Exchange Commission. They are also available at *www.sec.gov*."}