{"url_path":"/sec/pltyf/10-k/2026/item-5","section_key":"item-5","section_title":"Item 5 OPERATING AND FINANCIAL REVIEW AND PROSPECTS.","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1433309/0001104659-26-061965-index.html","accession_number":"0001104659-26-061965","cik":"0001433309","ticker":"PLTYF","issuer_name":"Plastec Technologies, Ltd.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1433309/0001104659-26-061965-index.html","primary_entity_key":"0001433309","primary_entity_name":"Plastec Technologies, Ltd."},"word_count":4268,"has_tables":true,"body_markdown":"ITEM 5.    OPERATING AND FINANCIAL REVIEW AND PROSPECTS.\n\n*You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this Form 20-F. This discussion may contain forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements because of various factors, including those set forth under Item 3.D (“Risk Factors”) or in other parts of this Form 20-F.*\n\nA. Operating Results\n\nOverview\n\nWe used to be a vertically integrated plastic manufacturing services provider providing comprehensive precision plastic manufacturing services (through our former wholly owned subsidiary, Plastec) from mold design and fabrication and plastic injection manufacturing to secondary-process finishing as well as parts assembly to leading international OEMs, ODMs and OBMs of consumer electronics, electrical home appliances, telecommunication devices, computer peripherals and precision plastic toys.\n\nFollowing consummation of the divestment transactions on October 11, 2016 and pursuant to the terms of the Agreement more particularly described in Item 4.A of this Form 20-F, we no longer own Plastec with the result that our only operations have generally been to (i) complete the construction of our manufacturing plant in Kai Ping, China which was disposed of and transferred to Plastec upon its establishment on April 20, 2018 pursuant to the terms of the Manufacturing Plant Transfer Agreement, (ii) collect rental income from certain property we used to own and which was being leased to one of Plastec’s subsidiaries until November 2019 when the former subsidiary of ours that held the property was disposed of pursuant to the terms of the Assets Disposal Agreement, (iii) collect the payments upon Plastec achieving the performance targets for the years ended December 31, 2016 through 2018 and (iv) to explore other investment opportunities.\n\n29\n\n[Table of Contents](#TOC)\n\nTo date, we have not identified any investment opportunities, the pursuit of which we believe would be advantageous to us to supplement our current minimal operations. As a result, we cannot assure you that we will be able to locate any such investment opportunity in the future and accordingly there is no current basis for you to evaluate the possible merits or risks of any investment opportunity we may ultimately pursue. Although we do not currently intend to consummate a transaction with a business in the PRC, we are not prohibited from doing so in the future if we determine such a transaction would be beneficial to us and our shareholders.\n\nAlthough our management will endeavor to evaluate the risks inherent in any particular investment opportunity, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or not be exposed to potential risks which could have a material and adverse effect on ability to manage our business. Further, as a result of our current minimal operations, limited resources for want of operating revenues and the need to maintain adequate control of our costs and expenses, we may not be able to attract, train, motivate and recruit suitably qualified personnel to explore or effect any investment opportunity thereby making it difficult for you to evaluate our long term business, financial performance and prospects. If we do not succeed in launching any new business upon an investment opportunity to supplement our current minimal operations, our future results of operations and growth prospects may be materially and adversely affected arising from a lack of business diversification.\n\nWe have not historically utilized, and do not currently intend to enter into any transaction in the future utilizing, a VIE structure. Notwithstanding the foregoing, we are not prohibited from doing so if we determine that such a transaction would be beneficial to us and our shareholders. If we entered into a transaction in the future utilizing a VIE, we would be subject to the related risks applicable to companies that utilize such entities including but not limited to the fact that our investors may never directly hold equity interests in the VIE and instead only hold interests in a holding company and the possibility that the Chinese regulatory authorities could disallow the VIE structure entirely, which could result in limiting the target companies available to us, or result in a material change in our operations and/or the value of Plastec Technologies’ ordinary shares if we have completed a transaction with a company with major operations in China through a VIE structure. Additionally, for PRC domestic companies utilizing VIE structures that apply for the Overseas Offering and Listing, the CSRC will consult the relevant authorities and it holds the view that such PRC domestic companies shall file with the CSRC under the Trial Measures for its Overseas Offering and Listing. However, since no specific laws or regulations have been published officially, it is not known what rules or detailed implementations and interpretations will be promulgated on PRC domestic companies with VIE structures. Any of the foregoing could adversely affect us if we determine to enter into a transaction utilizing a VIE structure.\n\nOur ability to successfully effect any investment opportunity will also be dependent upon the efforts of our key personnel. However, our executive officers are not required to, and it is unlikely that they will, commit and devote their full time efforts to our affairs. Accordingly, there is no assurance that they will spend sufficient time to our locating any potential investment opportunity. Further, the unexpected loss of our executives could have a detrimental effect on us and our ability to realize any potential investment opportunity.\n\nFurther, we expect to encounter competition from entities having a business objective similar to ours, including venture capital funds, leveraged buyout funds and operating businesses competing for investment opportunities. Many of these entities are well established and have extensive experience in identifying and effecting investment opportunities directly or through affiliates. Many of these competitors possess greater technical, human and other resources than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. The foregoing may place us at a competitive disadvantage in successfully locating and consummating any investment opportunity.\n\nIn addition to the foregoing, in recent years, the number of public blank check companies that have been formed has increased substantially. As a result, fewer attractive targets may be available, and it may require more time, more effort and more resources to identify a suitable target and to consummate a transaction. Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions, or increases in the cost of additional capital needed to close a transaction or operate targets. This could increase the cost of, delay or otherwise complicate or frustrate our ability to find and consummate an attractive transaction, and may result in our inability to consummate a transaction on terms favorable to our investors altogether.\n\nCritical Accounting Policies and Estimates\n\nWe prepare our consolidated financial statements in accordance with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect:\n\n●the reported amounts of its assets and liabilities;\n\n30\n\n[Table of Contents](#TOC)\n\n●the disclosure of its contingent assets and liabilities at the end of each reporting period; and\n\n●the reported amounts of revenues and expenses during each reporting period.\n\nWe continually evaluate these estimates based on our own experience, knowledge and assessment of current business and other conditions, our expectations regarding the future based on available information and reasonable assumptions, which together form our basis for making judgments about matters that are not readily apparent from other sources. Some of our accounting policies require a higher degree of judgment than others in their application. When reading our consolidated financial statements, you should consider:\n\n●our selection of critical accounting policies;\n\n●the judgment and other uncertainties affecting the application of such policies; and\n\n●the sensitivity of reported results to changes in conditions and assumptions.\n\nWe believe the following accounting policies involve the most significant judgments and estimates used in the preparation of our financial statements:\n\nProperty, plant and equipment\n\nProperty, plant and equipment are stated at acquisition cost less accumulated depreciation. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use.\n\nDepreciation is provided to write off the cost less their residual values over their estimated useful lives, using the straight-line method, at the following rates per annum:\n\nMotor vehicles\n\n  ​ ​ ​\n\n20%\n\nComputer equipment\n\n​\n\n33.33%\n\nFurniture & office equipment\n\n​\n\n20%\n\nFixtures & fittings\n\n​\n\n20%\n\n​\n\nThe assets’ estimated residual values, depreciation methods and estimated useful lives are reviewed, and adjusted if appropriate, at each reporting date.\n\nThe gain or loss arising on retirement or disposal is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the consolidated statement of income.\n\nAll other costs, such as repairs and maintenance are charged to the operations during the financial period in which they are incurred.\n\n*Tax accounting*\n\nAs part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes for all open years subject to any statute of limitations in each of the jurisdictions in which we operate. Significant judgment is required in evaluating and determining our provision for income taxes, including amounts related to any uncertain tax positions estimated based on the recognition and measurement criteria of ASC 740 as well as currently known facts and circumstances. Therefore, inherent uncertainties exist in our estimates of our tax positions. Although we believe our reserves are reasonable, no assurance can be given that the final tax outcome of these matters will not be different from that which is reflected in our historical income tax provisions and accruals or may not result in liabilities which could be materially different from these estimates. We adjust these reserves in the light of changing facts and circumstances, such as closing of tax audit, or changes in tax law. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made. The provision for income taxes includes the effect of reserve provisions and changes to reserves that are considered appropriate. We have filed tax returns that are subject to audit or examination by competent tax authorities. Although the ultimate outcome is unknown, we believe that any adjustments that may result from tax return audits or examinations are not likely to have a material or adverse effect on our consolidated results of operations, financial condition or cash flows.\n\n31\n\n[Table of Contents](#TOC)\n\nImpairment of long-lived assets\n\nWe periodically evaluate the carrying value of long-lived assets to be held and used when events and circumstances warrant such a review. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair market values are reduced for the cost to dispose.\n\nRevenues\n\nNo revenues were generated in the fiscal years ended December 31, 2023, 2024 and 2025, whilst we had recorded other income of approximately HK$118,000 mainly from gain on disposals of plant and equipment for fiscal year ended December 31, 2024.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n  ​ ​ ​\n\nFiscal Years Ended December 31, \n\n​\n\n​\n\n​\n\n2023\n\n​\n\n2024\n\n​\n\n2025\n\n​\n\n​\n\n​\n\n(HK$’000)\n\n​\n\n​\n\n \n\nAmount\n\n  ​ ​ ​\n\n% of Total\n\n  ​ ​ ​\n\nAmount\n\n  ​ ​ ​\n\n% of Total\n\n  ​ ​ ​\n\nAmount\n\n  ​ ​ ​\n\n% of Total\n\n​\n\nOther income\n\n \n\n​\n\n—\n\n​\n\n​\n\n0.0\n\n%\n\n​\n\n118\n\n​\n\n​\n\n100.0\n\n%\n\n​\n\n64\n\n​\n\n​\n\n100.0\n\n%\n\n​\n\nOperating Costs\n\nOur operating expenses in fiscal years ended December 31, 2023, 2024 and 2025 consisted of the following:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n  ​ ​ ​\n\nFiscal Years Ended December 31, \n\n \n\n​\n\n​\n\n2023\n\n​\n\n2024\n\n​\n\n2025\n\n \n\n​\n\n  ​ ​ ​\n\n(HK$’000)\n\n \n\n​\n\n​\n\nAmount\n\n  ​ ​ ​\n\n% of Total\n\n  ​ ​ ​\n\nAmount\n\n  ​ ​ ​\n\n% of Total\n\n  ​ ​ ​\n\nAmount\n\n  ​ ​ ​\n\n% of Total\n\n \n\nSelling, general and administrative expenses\n\n \n\n​\n\n3,084\n\n​\n\n​\n\n100.0\n\n%\n\n​\n\n4,813\n\n​\n\n​\n\n100.0\n\n%\n\n​\n\n3,735\n\n​\n\n​\n\n100.0\n\n%\n\n​\n\nSelling, General and Administrative Expenses\n\nOur selling, general and administrative expenses consisted primarily of office expenses, depreciation, legal and professional expenses, directors’ compensation, insurances, transportation and motor vehicles related expenses.\n\nIncome Tax\n\n*Cayman Islands*. We are incorporated in the Cayman Islands. The government of the Cayman Islands will not, under existing legislation, impose any income tax upon the Company or its shareholders.\n\n*British Virgin Islands*. Our subsidiaries which are incorporated in the British Virgin Islands are exempted from income tax in the British Virgin Islands on their foreign-derived income.\n\n*Hong Kong*. Our previous Hong Kong subsidiary was subject to income tax on its assessable profits in Hong Kong at the prevailing corporate tax rates of 8.25% on assessable profits up to HK$2 million and 16.5% on any part of assessable profits over HK$2 million. For the years ended December 31, 2023 and 2024, however, our Hong Kong subsidiary recorded nil Hong Kong Profits Tax on the basis that it did not have any assessable profits arising in or derived from Hong Kong. After the disposal of the remaining Hong Kong subsidiary in November 2024, we had nil Hong Kong Profits Tax accordingly.\n\nThe Company had accounted for the uncertain tax positions affecting its consolidated financial position, results of operations or cash flows for previous tax years subject to examination by the relevant tax authorities. For the year ended December 31, 2024, final tax assessments for the previous open tax years were issued by the Inland Revenue Department of Hong Kong and the Company had fully settled the respective tax amount in due course and considered that no uncertain tax position should be recorded as of December 31, 2024. For the year ended December 31, 2025, we considered that there was no uncertain tax position.\n\n32\n\n[Table of Contents](#TOC)\n\nReview of Results of Operations\n\nThe following table sets forth a summary of our consolidated results of operations for the periods indicated. This information should be read together with our consolidated financial statements, including the related notes that appear elsewhere in this Form 20-F.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Fiscal Year ended December 31, **\n\n​\n\n​\n\n**2023**\n\n​\n\n**2024**\n\n​\n\n**2025**\n\n​\n\n**  ​ ​ ​**\n\n**HK$**\n\n**  ​ ​ ​**\n\n**HK$**\n\n**  ​ ​ ​**\n\n**HK$**\n\n​\n\n​\n\n(HK$’000)\n\nRevenues\n\n \n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Operating expenses, net**\n\n \n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nSelling, general and administrative expenses - third parties\n\n \n\n​\n\n(3,084)\n\n​\n\n​\n\n(4,813)\n\n​\n\n​\n\n(2,885)\n\nSelling, general and administrative expenses - a related party\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(850)\n\nOther income\n\n \n\n​\n\n—\n\n​\n\n​\n\n118\n\n​\n\n​\n\n64\n\nTotal operating expenses, net\n\n \n\n​\n\n(3,084)\n\n​\n\n​\n\n(4,695)\n\n​\n\n​\n\n(3,671)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Loss from operations**\n\n \n\n​\n\n(3,084)\n\n​\n\n​\n\n(4,695)\n\n​\n\n​\n\n(3,671)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nInterest income\n\n \n\n​\n\n4,065\n\n​\n\n​\n\n4,543\n\n​\n\n​\n\n1,732\n\nProfit/(Loss) before income tax expense\n\n \n\n​\n\n981\n\n​\n\n​\n\n(152)\n\n​\n\n​\n\n(1,939)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nIncome tax expense from operations\n\n \n\n​\n\n(1,047)\n\n​\n\n​\n\n(7,758)\n\n​\n\n​\n\n—\n\n**Net loss from operations attributable to the Company’s shareholders**\n\n \n\n​\n\n(66)\n\n​\n\n​\n\n(7,910)\n\n​\n\n​\n\n(1,939)\n\n​\n\nYear ended December 31, 2025 compared to year ended December 31, 2024\n\n*Other income*. We recorded other income of approximately HK$64,000 mainly from the reversal of previous over-provided professional fees for fiscal year ended December 31, 2025 comparing to approximately HK$118,000 mainly gain on disposals of plant and equipment for the fiscal year ended December 31, 2024.\n\n*Selling, general and administrative expenses*. Our selling, general and administrative expenses for the year ended December 31, 2025 decreased by approximately HK$1.1 million or 22.9% to approximately HK$3.7 million, comprising of approximately HK$2.9 million charged by third parties and approximately HK$0.8 million by a related party, from approximately HK$4.8 million in the year ended December 31, 2024. The decrease was mainly attributable to nil rental expenses and depreciation of furniture and fittings and office equipment, and reduced legal and professional expenses during the year.\n\n*Loss from operations*. Our loss from operations for the year ended December 31, 2025 was approximately HK$3.7 million, compared to a loss of approximately HK$4.7 million for the year ended December 31, 2024, mainly for less interest income resulted from reduced bank and cash balances after the interim dividends of approximately HK$35.3 million paid in last year.\n\n*Income tax expenses*. We did not have assessable income and thus no income tax expenses were provided for the year ended December 31, 2025, comparing to the income tax expenses of approximately HK$7.8 million which was the final tax assessed by the Inland Revenue Department of Hong Kong in the year ended December 31, 2024.\n\n*Net loss.* Our net loss for the year ended December 31, 2025 was approximately HK$1.9 million, compared to net loss of approximately HK$7.9 million for the year ended December 31, 2024.\n\nYear ended December 31, 2024 compared to year ended December 31, 2023\n\n*Other income*. We recorded other income of approximately HK$118,000 mainly from gain on disposals of plant and equipment for fiscal year ended December 31, 2024 and nil for the fiscal year ended December 31, 2023.\n\n*Selling, general and administrative expenses*. Our selling, general and administrative expenses for the year ended December 31, 2024 increased by approximately HK$1.7 million or 54.8% to approximately HK$4.8 million from approximately HK$3.1 million in the year ended December 31, 2023. The increase was mainly attributable to increased rental expenses and depreciation of furniture and fittings and office equipment of a new office, and increased legal and professional expenses during the year.\n\n33\n\n[Table of Contents](#TOC)\n\n*Loss from operations*. Our loss from operations for the year ended December 31, 2024 was approximately HK$4.7 million, compared to a loss of approximately HK$3.1 million for the year ended December 31, 2023, as a result of increased selling, general and administrative expenses for the year.\n\n*Income tax expenses*. Our income tax expenses for the year ended December 31, 2024 increased by approximately HK$6.7 million to HK$7.8 million from HK$1.1 million in the year ended December 31, 2023. The increase was due to the settlement of the final tax assessments including related tax penalty and interest for the previous open tax years issued by the Inland Revenue Department of Hong Kong during the year.\n\n*Net loss.* Our net loss for the year ended December 31, 2024 was approximately HK$7.9 million, compared to net loss of approximately HK$0.07 million for the year ended December 31, 2023.\n\nLiquidity and Capital Resources\n\nOur operations have been generally funded through a combination of net cash generated from past operations and equity capital. We believe that we have adequate working capital to finance our current operations.\n\nSummary of Cash Flows\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n  ​ ​ ​\n\nYear Ended December 31, \n\n​\n\n​\n\n2023\n\n​\n\n2024\n\n​\n\n2025\n\n​\n\n  ​ ​ ​\n\n(HK$’000)\n\nNet Cash From Operating Activities\n\n​\n\n​\n\n664\n\n  ​ ​ ​\n\n​\n\n(17,256)\n\n  ​ ​ ​\n\n​\n\n(1,847)\n\nNet Cash From Investing Activities\n\n \n\n​\n\n(7)\n\n \n\n​\n\n445\n\n \n\n​\n\n—\n\nNet Cash From Financing Activities\n\n \n\n​\n\n—\n\n \n\n​\n\n(35,321)\n\n \n\n​\n\n—\n\n​\n\n \n\n​\n\n657\n\n \n\n​\n\n(52,132)\n\n \n\n​\n\n(1,847)\n\n​\n\nYear ended December 31, 2025 compared to year ended December 31, 2024\n\n*Net Cash From Operating Activities*.**For the year ended December 31, 2025, we recorded a net cash outflow from operating activities of approximately HK$1.8 million compared to a net cash outflow from operating activities of approximately HK$17.3 million for the year ended December 31, 2024. The decrease was mainly attributable to cash settlement of tax assessments with the Inland Revenue Department of Hong Kong in last year.\n\n*Net Cash From Investing Activities*. We recorded nil cash inflow and outflow for the year ended December 31, 2025, compared to approximately HK$0.4 million for proceeds from disposals of plant and equipment for the year ended December 31, 2024.\n\n*Net Cash From Financing Activities.*We recorded nil cash inflow and outflow for the year ended December 31, 2025, compared to approximately HK$35.3 million cash outflow for the payment of interim dividends declared at US$0.35 per share to the holders of the Company’s ordinary shares during the year ended December 31, 2024.\n\nYear ended December 31, 2024 compared to year ended December 31, 2023\n\n*Net Cash From Operating Activities*.**For the year ended December 31, 2024, we recorded a net cash outflow from operating activities of approximately HK$17.3 million compared to a net cash inflow from operating activities of approximately HK$0.7 million for the year ended December 31, 2023. The decrease was mainly attributable to cash settlement of tax assessments including related tax penalty and interest for the previous open tax years issued by the Inland Revenue Department of Hong Kong during the year.\n\n*Net Cash From Investing Activities*. We recorded a cash inflow of approximately HK$0.4 million for proceeds from disposals of plant and equipment for the year ended December 31, 2024, compared to a cash outflow of approximately HK$7 thousand for acquisition of computer equipment for the year ended December 31, 2023.\n\n*Net Cash From Financing Activities*. For the year ended December 31, 2024, we recorded a cash outflow of approximately HK$35.3 million for the payment of interim dividends declared at US$0.35 per share to the holders of the Company’s ordinary shares. For the year ended December 31, 2023, we recorded nil cash inflow and outflow from financing activities.\n\n34\n\n[Table of Contents](#TOC)\n\nWorking capital\n\nWe believe that we have adequate working capital for our present requirements and that our cash and cash equivalents will provide sufficient funds to satisfy our working capital requirements for the period ending 12 months from the date of this Form 20-F. As at the year ended December 31, 2025, we had a cash and bank balance of approximately HK$42.3 million, of which approximately HK$39.9 million was denominated in Hong Kong Dollars and approximately HK$2.4 million equivalent was denominated in US Dollars, respectively.\n\nIndebtedness\n\nAs of December 31, 2025, our indebtedness was nil.\n\nAs of December 31, 2025, our estimates for contractual cash commitments, interest commitment and operating lease obligations were all nil.\n\nQuantitative and Qualitative Disclosures About Market Risks\n\nMarket risk is a broad term for the risk of economic loss due to adverse changes in the fair value of a financial instrument. These changes may be the result of various factors, including interest rates, foreign exchange rates, commodity prices and/or equity prices.\n\n*Foreign exchange risk*.  Up until November 2019, our income was mainly denominated in Renminbi whereas our costs and capital expenditures were largely denominated in Renminbi and other foreign currencies. Fluctuations in currency exchange rates, particularly among the Hong Kong dollar, U.S. dollar and Renminbi, could have a significant impact on our financial condition and results of operations, affect our gross and operating profit margins and result in foreign exchange and operating gains or losses. After completion of the disposal of our former subsidiary that generated rental revenues pursuant to the terms of the Assets Disposal Agreement in November 2019, we recorded no operating income from our continuing operations. We recorded nil foreign currency exchange gain and loss for the years ended December 31, 2023, 2024 and 2025, respectively. We currently do not plan to enter into any hedging arrangements, such as forward exchange contracts and foreign currency option contracts, to reduce the effect of our foreign exchange risk exposure, if any. However, if we decided to enter into any such hedging activities in the future, there is no assurance that we would be able to effectively manage our foreign exchange risk exposure.\n\nSeasonality\n\nWe have not been subject to any seasonality in our continuing operations in any material respect.\n\nSubsequent Material Changes\n\nThere have been no material changes in our financial condition and results of operations subsequent to December 31, 2025.\n\nB. Liquidity and Capital Resources\n\nThe disclosure set forth in Item 5.A of this Form 20-F is incorporated herein by reference.\n\nC. Research and Development, Patents and Licenses, Etc.\n\nWe do not have a department for and therefore have not incurred any significant amount in research and development.\n\nD. Trend Information\n\nThe disclosure set forth in Item 5.A of this Form 20-F is incorporated herein by reference.\n\nE. Off-Balance Sheet Arrangements\n\nThe disclosure set forth in Item 5.A of this Form 20-F is incorporated herein by reference.\n\n35\n\n[Table of Contents](#TOC)\n\nF. Contractual Obligations and Commitments\n\nThe disclosure set forth in Item 5.A of this Form 20-F is incorporated herein by reference."}