UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2025

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-42892

Agencia Comercial Spirits Ltd

(Exact name of Registrant as specified in its charter)

Cayman Islands

(Jurisdiction of incorporation or organization)

No. 23-1, Shenzun Rd., Shengang Dist.

Taichung City 429014, Taiwan (R.O.C.)

Tel: +886-4-25614413
(Address of principal executive offices)

Tsai Yi Yang, Director and Chief Executive Officer

+886-4-25614413

[email protected]

No. 23-1, Shenzun Rd., Shengang Dist.

Taichung City 429014, Taiwan (R.O.C.)

(Name, Telephone, email and/or fax number and address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

19,876,500 Class A Ordinary Shares, US$0.00004 par value, at December 31, 2025

14,500,000 Class B Ordinary Shares, US$0.00004 par value, at December 31, 2025

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act of 1933.

Yes ☐ No ☒

If the report is an annual or transition report, indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15D of the Securities Exchange Act of 1934.

Yes ☐ No ☒

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company.

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the Registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the Registrant has elected to follow:

Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)

Yes ☐ No ☒

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements that reflect our current expectations and views of future events, all of which are subject to risks and uncertainties. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. You can find many (but not all) of these statements by the use of words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “will,” “would,” “should,” “could,” “may” or other similar expressions in this annual report. These statements are likely to address our growth strategy, financial results and product and development programs. You must carefully consider any such statements and should understand that many factors could cause actual results to differ from our forward-looking statements. These factors may include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward-looking statement can be guaranteed and actual future results may vary materially. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

We base our forward-looking statements on our management’s beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that actual outcomes and results may, and are likely to, differ materially from what is expressed, implied or forecast by our forward-looking statements. Accordingly, you should be careful about relying on any forward-looking statements. Except as required under the federal securities laws, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this annual report, whether as a result of new information, future events, changes in assumptions, or otherwise.

FINANCIAL STATEMENTS AND CURRENCY PRESENTATION

Basis of Presentation

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and publish our financial statements in U.S. Dollars.

Certain amounts, percentages and other figures included in this Annual Report have been subject to rounding adjustments. Accordingly, amounts, percentages and other figures shown as totals in certain tables or charts may not be the arithmetic aggregation of those that precede them and amounts and figures expressed as percentages in the text may not total 100% or, when aggregated, may not be the arithmetic aggregation of the percentages that precede them.

REFERENCES

In this Annual Report, the terms “we,” “our,” “us” and the “Company” refer to Agencia Comercial Spirits Ltd and, where the context so requires or suggests, our direct and indirect subsidiaries. Agencia Comercial Spirits Ltd is incorporated in the Cayman Islands and is a holding company with no material operations. We conduct our core business operations through our direct wholly-owned subsidiary, Ping Shiang Holding Ltd, and an indirect wholly-owned subsidiary, Agencia Comercial Co., Ltd in Taiwan (“Taiwan Operating Subsidiary”). In February 2026, we disclosed a strategic initiative to expand into the AI computing infrastructure sector, which is managed through our newly established operating subsidiary, PT. AGCC AITECH Indonesia, and its parent holding company, AGCC Investment (Indonesia) Co. Ltd, a British Virgin Islands entity through which we hold our equity interests. For additional details regarding our corporate history and a full list of our subsidiaries, see “Information on the Company – Corporate History and Structure” and Exhibit 8.1 to this Annual Report, respectively.

“Initial Public Offering” or “IPO” refers to the closing on October 23, 2025 of the Company’s initial public offering of 1,750,000 Class A Ordinary Shares at US$4.00 per share (US$7.00 million total). Subsequently, on October 31, 2025, the Company closed the issuance of an additional 262,500 Class A Ordinary Shares pursuant to the full exercise of the underwriters’ over-allotment option, bringing total gross proceeds to US$8.05 million.

References to “USD” or “US$” or “$” are to United States Dollars.

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

Not Applicable

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not Applicable

ITEM 3. KEY INFORMATION

A. Reserved

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

You should carefully consider the following risk factors and all of the information contained in this Annual Report, including but not limited to, the matters addressed in the section titled “Forward-Looking Statements,” and our financial information before you decide whether to invest in our securities. One or more of a combination of these risks could materially impact our business, financial condition or results of operations. In any such case, the market prices of the Class A Ordinary Shares could decline and you may lose part or all of your investment. Additional risks and uncertainties not currently known to us or that we currently do not consider to be material may also materially and adversely affect our business, financial condition or results of operations.

RISK FACTORS

RISKS RELATED TO OUR BUSINESS AND INDUSTRY

A decrease in consumer demand for alcoholic beverages could significantly and negatively impact our business, operations, and financial performance.

Our performance depends on consumers’ demand for our products. Various factors can cause shifts in consumer preferences, such as:

To succeed, we must anticipate and effectively respond to these shifts. If consumer preferences move away from our products, our operations and financial results would be materially and adversely affected.

Factors that may reduce consumer demand for alcoholic beverages include:

Our luxury alcoholic beverage portfolio is especially vulnerable to changing economic conditions and consumer tastes, spending habits, and preferences. This could reduce sales and profitability. Unanticipated changes in demand or preference could also impair our ability to forecast production needs and adapt to shifting consumer preferences, further negatively affecting our business, operations, and financial results.

We face significant competition from an increasing number of products and market participants, which could materially and adversely affect our business, results of operations, and financial condition.

Our whisky products face competition from a wide array of both domestic and international premium whiskies, as well as from more affordably priced generic options. Additionally, they compete against other alcoholic beverages and, to a lesser extent, non-alcoholic alternatives for consumer acceptance, brand loyalty, and visibility in retail environments and restaurant alcohol lists. Marketing attention from our distributors, many of whom maintain extensive portfolios of spirits and other beverages, further intensifies this competition. We strive to differentiate ourselves based on product taste and quality, brand image, pricing, service, and our capacity for innovation in response to evolving consumer preferences. This competitive landscape is shaped by both established players and new entrants, many of whom possess more substantial financial, technical, marketing, and distribution capabilities, as well as superior public relations resources. Consequently, we have experienced, and may continue to encounter, upward pressure on our selling, marketing, and promotional costs in light of our growth objectives. There is no guarantee that we will be able to effectively compete against our rivals in the future or that we will not face increased competition from other distilleries and beverage manufacturers.

Brand awareness and acceptance are also crucial factors in our competitive environment. Our business is substantially dependent upon the awareness and market acceptance of our whisky products and brands by our targeted consumers. Moreover, our success hinges on our independent distributors’ acceptance of our brands as having the potential to provide incremental sales growth rather than cannibalizing their existing beverage sales. The extent to which our products and brands can achieve and sustain satisfactory levels of acceptance among independent distributors, retail customers, and consumers remains to be determined. Any failure to maintain or enhance brand acceptance and market penetration could have a materially adverse impact on our revenues and overall financial performance.

We invest significant time and resources in attracting and retaining key distributors and suppliers.

Our marketing and sales strategy largely depends on the availability and performance of our independent distributors. Currently, we do not have, nor do we anticipate establishing in the future, long-term contractual commitments with our distributors. We normally enter into framework sales agreement with our distributors from time to time. During the contract term, our distributors are entitled to place purchase orders with us for each of our products at the unit price, which is typically agreed at a fixed price per bottle, set forth in the distribution agreement. Moreover, these distributors may terminate their relationship with us on short notice. It’s also important to note that some distributors handle multiple competitive products, and our products may constitute only a small part of their overall business.

Further, all of our distributors place purchase orders with us on an as-needed basis. There is no assurance that our customers will continue to place purchase orders with us in the future. In the event that any of our major distributors ceases to place purchase orders with us, reduces the amount of their purchase orders with us, or requests for more favorable terms and conditions, our business, results of operations, financial conditions and future prospects may be adversely affected.

There is no assurance that our distributors will renew the framework sales agreement with us under similar terms and conditions, nor can we guarantee that we will maintain our existing distribution relationships or successfully establish and sustain new ones in different geographic areas. Additionally, we may need to incur additional costs to attract and retain key distributors in one or more of our geographic markets to effectively exploit these markets.

The marketing efforts of our distributors are vital to our success. If our brands fail to appeal to our current distributors, or if we are unable to attract additional distributors, or if our distributors do not prioritize the marketing and promotion of our products over those of our competitors, our business, financial condition, and results of operations could be adversely affected.

In the absence of long-term supply contracts, our suppliers have the potential to reduce the quantities or priority of our orders, or to terminate sales to us due to unforeseen circumstances or factors beyond our control. While we have not historically encountered significant or prolonged challenges in procuring our products, any potential reduction in supply or loss of established supplier relationships could disrupt our procurement operations, necessitating a considerable investment of time and effort to cultivate new supply connections. However, due to the abundance of competitive suppliers, our established ad hoc procurement practice based on prevailing market conditions, and our strong market position, we believe such disruption would likely be temporary, and we would be able to find suitable suppliers in a timely manner and establish relationships with suitable replacements over time. Nevertheless, if we fail to identify suitable replacement suppliers in a timely manner or with reasonable product pricing for the type of products we specialize in selling, our operations may be disrupted, and our net revenue, gross profit margin, and results of operations may be adversely and materially impacted.

It is difficult to predict the timing and amount of our sales because our distributors and their accounts are not required to place minimum orders with us.

Our independent distributors and their accounts are not obligated to place minimum monthly or annual orders of our products. To minimize inventory costs, these distributors generally follow a “just in time” ordering approach, purchasing products from us in quantities and at times based on the specific demand in their distribution areas. For higher-demand products, a minimum par level is typically maintained in the distributors’ warehouses and reorders are only triggered when inventory falls below that level. As a result, we cannot accurately predict the timing or quantities that any of our independent distributors will purchase, nor can we be certain that they will continue to purchase our products at the same frequency and in the same quantities as they have in the past.

Moreover, our larger distributors and partners may place orders that exceed our historical order sizes. Any shortages in inventory levels, supply of raw materials, or other key supplies could have a negative impact on our ability to fulfill these larger orders, potentially affecting our business operations and customer relationships.

If we do not adequately manage our inventory levels, our operating results could be adversely affected.

We need to maintain adequate inventory levels of whisky and other alcohol beverages to be able to deliver products to distributors on a timely basis. Our inventory supply depends on our ability to accurately estimate demand for our products. However, estimating demand is inherently imprecise, particularly for new products, seasonal promotions, and new markets.

If we materially underestimate demand for our products, we might not be able to satisfy demand on a short-term basis, potentially leading to lost sales opportunities and damaged relationships with our distributors and retailers. Conversely, if we overestimate demand, we may end up with excess inventory, resulting in higher storage costs, increased trade spending, and the risk of inventory obsolescence.

Failure to properly manage our inventory to meet demand could not only damage our relationships with our distributors and retailers but also delay or lose sales opportunities, unfavorably impacting our future sales and adversely affecting our operating results. Additionally, if the inventory of our products held by our distributors and retailers is too high, they may reduce or cease placing orders for additional products, which would also unfavorably impact our sales and adversely affect our operating results.

If our inventory is lost due to theft, fire, or other damage, or becomes obsolete, our results of operations would be negatively impacted.

We expect our inventory levels to fluctuate to meet customer delivery requirements for our products. There is always a risk of loss of this inventory due to theft, fire or other damage, and any such loss, whether insured or not, could cause us to fail to meet our orders and harm our sales and operating results.

In addition, our inventory may become obsolete as we introduce new products, cease to produce old products, or modify the design of our products’ packaging, which would increase our operating losses and negatively impact our results of operations. For example, in the whisky industry, the aging process can result in losses known as the “angel’s share,” in which a portion of the liquid evaporates through the porous wood of the barrel. This natural loss, along with potential obsolescence due to changes in consumer preferences or packaging updates, can affect our inventory levels and profitability.

Our business is subject to seasonality related to sales of our products.

The whisky market experiences considerable seasonal fluctuations. Historically, a significant portion of net sales and earnings in the whisky industry occurs during the holiday season, particularly in November and December. This period is marked by increased social gatherings, family parties, and gift-giving, which drive higher demand for whisky. Additionally, the summer months, particularly June through August, also see a rise in sales due to outdoor activities and social events where whisky is a popular choice.

As a result, our operating results may fluctuate significantly from quarter to quarter, and the outcomes for any given quarter are not necessarily indicative of results for other periods. If our sales were to decline substantially below these seasonal norms for any reason, our annual revenues and earnings could be materially and adversely affected.

Our largest customers accounted for a significant portion of our total revenue for the year ended December 31, 2025.

We derive a substantial portion of our revenue from a limited number of major customers. For the year ended December 31, 2025, our largest customer in aggregate accounted for approximately 40.0% of our total revenue for the year. There is no assurance that any of our major customers will renew their framework sales agreements or continue to place purchase orders with us in the future. In the event that any of our major customers ceases to place purchase orders with our Group or reduces the amount of their purchase orders with us, our business, results of operations, financial condition and future prospects may be adversely affected.

We depend on a limited number of customers for a high percentage of our revenue. If we cannot maintain our current relationships with customers, fail to sustain recurring sources of revenue with our existing customers, or if we fail to enter into new relationships, our future operating results will be adversely affected.

For the fiscal year ended December 31, 2025, revenue from our largest customer accounted for approximately over 40.0% of our sales, of which buy from us on a purchase order basis. The revenue attributable to our top customers has fluctuated in the past and may fluctuate in the future, which could have a material adverse effect on our business, financial condition, results of operations, cash flows and prospects. In addition, the termination of these relationships could result in a temporary or permanent loss of revenue.

Our future success depends on our ability to maintain these relationships, to increase our penetration among these existing customers and to establish new relationships. We engage in conversations with other brand owners and companies regarding potential commercial opportunities on an ongoing basis, which can be time consuming. There is no assurance that any of these conversations will result in a commercial agreement, or if an agreement is reached, that the resulting relationship will be successful. Speculation in the industry about our existing or potential commercial relationships can be a catalyst for adverse speculation about us and our products, which can adversely affect our reputation and our business. In addition, if our customers order our products but fail to pay on time or at all, our liquidity, financial condition, results of operations, cash flows and prospects could be materially and adversely affected.

Contamination of our products and/or counterfeit or confusingly similar products could harm the image and integrity of, or decrease customer support for, our brands and decrease our sales.

The success of our brands depends on consumers’ positive perceptions of them. Any contamination, whether accidental or due to the intentional actions of third parties, or other incidents that compromise the integrity or consumer support of our brands could impact product demand. Contaminants in third-party raw materials or defects in the distillation and fermentation processes could result in poor beverage quality, causing illness or injury to consumers and potentially reducing sales of the affected brand or all of our brands.

Furthermore, if third parties sell counterfeit versions of our brands or brands that closely resemble ours, consumers may confuse our products with inferior alternatives. Additionally, we have no control over the usage of our whisky products, in particular the raw cask whisky, if third parties utilize our whisky to produce counterfeit whisky products resembling other whisky brands, it could create the perception that we are complicit in these activities. This confusion may result in administrative or criminal investigations, which could further damage our reputation. Consequently, these issues could lead to consumers avoiding our brands in the future, generating negative media coverage, and ultimately harm our brand equity and adversely impacting our sales and overall business operations.

Our inability to effectively manage growth or prepare for product scalability could negatively impact our employee efficiency, product quality, working capital levels, and results of operations.

Significant market growth for our products or our expansion into new markets may require an increase in our workforce for managerial, operational, financial and other functions. During periods of growth, we may experience challenges related to our operational and financial systems and controls, including quality control and delivery and service capabilities. We will also need to continue to expand, train and manage our employee base. Future growth will place significant additional responsibilities on our management team to identify, recruit, retain, integrate and motivate new employees.

Beyond the complexities of human resource management, we may also face working capital issues. We will require increased liquidity to finance the marketing of our products and the hiring of additional staff. Our new AI computing infrastructure venture requires higher levels of upfront capital and liquidity compared to our traditional operations. Any failure to secure additional financing or manage the intensive cash requirements of server leases and data center construction could constrain our working capital and force us to delay or abandon our expansion plans. To manage growth effectively, we must continually improve our operational, management and financial systems and controls. Failure to do so could result in operational and financial inefficiencies that could adversely affect our profitability. We cannot guarantee that we will be able to timely and effectively meet increased demand while maintaining the quality standards expected by our existing and potential customers.

Our ability to successfully introduce new whisky products and services is uncertain.

The success of developing, launching, selling, and supporting new or enhanced whisky products or services hinges on various factors. These include the timely and efficient completion of product design, bottling, packaging, labeling, development, and approval processes, as well as the effective implementation of these offerings in the market. Since commitments for new products and services are often made well in advance of actual sales, decisions must accurately anticipate shifts in the whisky industry. There is no guarantee that we will be successful in selecting, developing and marketing new whisky products and services or in enhancing our existing offerings. A failure in this regard could have a negative impact on our business, financial condition, and results of operations.

 Moreover, the introduction of new whisky products or enhancements by our competitors, or their adoption of innovative packaging, branding, or distribution strategies, could lead to a decline in sales or a loss of market acceptance for our planned products and services. Specifically, competitors may introduce systems, products, or services that directly compete with our offerings, leveraging newer technology or pricing strategies that we cannot match. Depending on our existing customer arrangements, this could result in the loss of customers.

In addition, our new bottling, packaging, and proprietary brand whisky business depends on the performance of third-party distilleries, brand owners, and contract manufacturers. If these third parties fail to supply products on time, maintain required quality standards, comply with applicable laws and regulations, or renew or honor brand authorization arrangements, we may experience delays, increased costs, product recalls, reputational harm, or loss of sales.

Our ability to launch and support these products also depends on our ability to comply with product labeling, import/export, excise tax, food and beverage, and alcoholic beverage regulations in multiple jurisdictions. Any failure to satisfy these requirements, or any product quality issues or customer complaints, could adversely affect our reputation, increase our costs, and materially and adversely affect our business, financial condition, and results of operations.

We are significantly expanding into the AI computing infrastructure business, which involves substantial capital commitments, high-performance hardware procurement risks, and international real estate development risks.

On February, 13 2026, we disclosed that we entered into a non-binding letter of intent to lease high-performance AI computing servers based on the NVIDIA B300 (Blackwell architecture) platform. While we have paid a significant deposit toward this arrangement, there is no guarantee that a definitive lease agreement will be executed on favorable terms, or at all. Our ability to successfully launch this business depends on several factors:

If we fail to integrate these high-performance computing assets with our planned Indonesian data center infrastructure, or if the market for AI computing power shifts before we reach operational capacity, we may never realize a return on these significant investments, which could materially harm our business and results of operations.

We may periodically face litigation specifically targeting the alcoholic beverage industry, as well as other legal actions arising in the normal course of our business.

Companies in our industry are occasionally exposed to class-action lawsuits or other private or governmental claims. These may pertain to product liability, marketing and advertising practices, distribution methods, issues related to alcohol abuse, or health concerns stemming from excessive alcohol consumption or misuse, such as underage drinking. Various groups and government agencies have occasionally voiced concerns about the harmful use of alcohol, including drinking and driving, underage drinking, and health issues related to alcohol use or misuse. Efforts have been made to link alcohol consumption to certain diseases, including various types of cancer. Such campaigns could heighten the risk of litigation against us and other industry players. In the past, lawsuits have been filed against alcoholic beverage companies alleging issues related to alcohol abuse, negative health effects, marketing or sales practices, and underage drinking. Although these lawsuits have generally been unsuccessful, future cases could potentially succeed.

In addition to industry-specific litigation, we may also be involved in other legal disputes in the ordinary course of our operations. This could include commercial disputes, enforcement actions by regulatory authorities such as tax, customs, competition, environmental, and anti-corruption agencies, or securities-related class-action lawsuits, especially following any significant drop in the value of our securities. Defending against such litigation can be costly and may result in damages, penalties, or fines, as well as reputational harm to our company and our spirits brands. It could also divert management’s attention from other business matters. Moreover, adverse judgments could lead to increased future insurance premiums, and any uninsured judgments could result in substantial financial losses, potentially having a material adverse effect on our business, results of operations, and financial condition.

Any damage to the reputation of the brands or the manufacturers of the alcoholic beverage products we sell could significantly and negatively impact our business and results of operations.

Brand prestige and reputation are crucial for the popularity and sales performance of premium alcoholic beverages. As a wholesaler specializing in these premium products, we depend on the established prestige of the brands and the reputation of the brand owners, as well as their market promotion efforts. Our focus is primarily on developing and maintaining sales channels. Consequently, our business success is heavily reliant on factors outside our control, namely the brand status and the initiatives of the brand owners.

Our lack of internal controls over financial reporting may impact the market for and price of our Class A Ordinary Shares.

Our disclosure and internal controls over financial reporting may not be effective. We may not have the financial resources or personnel to develop or implement systems that would provide us with the necessary information on a timely basis to enable us to implement financial controls. Additionally, we may face challenges in hiring and retaining a sufficient number of qualified employees on acceptable terms. As a result of these factors, we may experience difficulties in establishing management, legal, and financial controls, collecting financial data, and preparing financial statements, books of account, and corporate records that meet U.S. GAAP standards. We may also have made and may continue to make errors in the financial statements included or to be included in our public filings, such as registration statements, due to the lack of internal controls over financial reporting. If we fail to maintain an effective system of disclosure and internal controls over financial reporting, our ability to prepare timely and accurate financial statements or comply with applicable regulations could be adversely affected.

Interruptions or failures that impair access to information technology systems could adversely affect our business.

We rely on information technology systems to process, transmit, and store information related to our operations. These systems may be vulnerable to interruption due to various events beyond our control, such as natural disasters, telecommunications failures, computer viruses, hacking, and other security issues. The expansion into AI infrastructure increases our exposure to cybersecurity threats, including potential attempts to steal our software or gain access to our computing resources. Any breach of these systems could lead to legal liability, loss of sensitive data, and lasting damage to our reputation. Any significant interruptions or failures in these systems could cause disruptions in our business operations and may require substantial investments to update, remediate, or replace them with alternative systems. The costs and potential problems associated with supporting, maintaining, remediating, and upgrading our existing information technology systems, or with implementing new systems, could severely disrupt our business operations.

If we are unable to offer premium products and services at attractive prices to meet customer needs and preferences, our business, financial condition, and results of operations may be materially and adversely affected.

Our future growth depends on our ability to continue to attract new customers and increase the spending levels of existing customers. Ever-changing consumer preferences have affected and will continue to affect the Taiwanese market. We must stay abreast of emerging lifestyles and consumer preferences and anticipate product and service trends that will appeal to existing and potential future customers.

Our customers choose to purchase quality products or services from us due in part to the attractive prices and premium services that we offer, especially for limited edition products with less market availability. They may choose to shop elsewhere if we cannot match the prices, products, or services offered by our competitors. If our customers cannot find their desired products or services within our portfolio, they may stop purchasing our products or using our services, which in turn may materially and adversely affect our business, financial condition, and results of operations.

Our management team does not have any experience managing a public company.

Members of our management team do not have experience managing a publicly traded company, interacting with public company investors, or complying with the increasingly complex laws pertaining to public companies. Additionally, some members of our management team were recently hired. Our management team may not successfully or efficiently manage their new roles and responsibilities. Our transition to a public company will subject us to significant regulatory oversight and reporting obligations under the U.S. federal securities laws and the continuous scrutiny of securities analysts and investors. These new obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, financial condition, and operating results. 

The successful implementation of our business strategies is contingent upon the capabilities of our management team.

Should our management team fail to effectively implement these strategies, our development, including the generation of revenues and our sales and marketing activities, could be materially and adversely affected. In addition, managing the budgeting, forecasting, and other process control aspects of potential future growth may present significant challenges.

We may need to augment or replace members of our management team to better align with our strategic objectives. Additionally, there is a risk that we could lose key members of our management team. In such cases, it may be difficult to attract new management talent with the requisite skills and experience, which could further impair our ability to implement our business strategies and achieve our growth objectives.

We have limited insurance coverage, which could expose us to significant costs and business disruption.

We maintain employment insurance, labor insurance, occupational accident insurance and national health insurance for our employees in accordance with applicable laws in Taiwan. However, the availability and adequacy of our insurance coverage is not guaranteed, and certain risks, such as war, force majeure, or specific business interruptions, may not be covered. Furthermore, our current insurance may not adequately cover risks specific to our AI business, such as hardware failure or data center service interruptions. Additionally, there is no assurance that we will be able to renew our current insurance policies on favorable terms when they expire, which could materially affect our business if claims are not covered or if policies cannot be renewed. It is also important to note that we do not have business disruption insurance, and any such event impacting our whisky operations or our AI infrastructure could lead to significant costs and divert our resources.

We face economic and political risks associated with doing business in Taiwan and Indonesia, particularly due to the geopolitical tensions and global trade restrictions that could negatively affect our business and hence the value of your investment.

Our performance is affected by global economic conditions as well as geopolitical issues and other conditions with global reach. Macroeconomic weakness and uncertainty make it more difficult for us to manage our operations and accurately forecast financial result. As a result of the invasion of Ukraine by Russia, the United States, the European Union, the United Kingdom and other jurisdictions have imposed sanctions on certain Russian and Ukrainian persons and entities, including certain Russian banks, energy companies and defense companies, and have imposed restrictions on exports of various items to Russian and certain regions of Ukraine (including the self-proclaimed Donetsk People’s Republic and Luhansk People’s Republic and Crimea). Moreover, on February 22, 2022, the Office of Foreign Assets Control of the United States issued sanctions aimed at limiting Russia’s ability to raise funds through sovereign debt. Such ongoing events between Ukraine and Russia could also increase China/Taiwan political tensions and U.S./China trade and other relations. These geopolitical issues have resulted in increasing global tensions and create uncertainty for global commerce. Any or all of these factors could negatively affect demand for our products and our business, financial condition and result of operations. In addition, new requirements or restrictions could come into effect which might increase the scrutiny on our business or result in one or more of our business activities being deemed to have violated sanctions. Furthermore, our expansion into the AI business is subject to U.S. export controls on high-performance hardware like the NVIDIA B300 platform. Any new trade restrictions could block our hardware procurement or increase costs.

Our principal executive offices and substantially all of its assets are located in Taiwan, and substantially all of its revenues are derived from its operations in Taiwan. Accordingly, our business, financial condition and results of operations and the market price of our Class A Ordinary Shares may be affected by changes in Taiwan governmental policies, taxation, inflation or interest rates and by social instability and diplomatic and social developments in Taiwan. Our planned AI operations in Indonesia also subject us to the country’s governmental policies, foreign investment laws, and diplomatic relations with the U.S. and Taiwan. Taiwan has a unique international political status. The People’s Republic of China (“PRC”) government asserts sovereignty over the PRC and Taiwan and does not recognize the legitimacy of the government of Taiwan. The PRC government has indicated that it may use military force to gain control over Taiwan if Taiwan declares independence or if Taiwan refuses to accept the PRC’s stated “One China” policy. In addition, on March 14, 2005, the National People’s Congress of the PRC passed what is widely referred to as the “anti-secession” law, a law authorizing the PRC military to respond to efforts by Taiwan to seek formal independence. An increase in tensions between Taiwan and the PRC and the possibility of instability and uncertainty could adversely affect the prices of our securities. Relations between Taiwan and the PRC and other factors affecting Taiwan’s political environment could affect our business.

Further, our business, financial condition and results of operations and the market price of our Class A Ordinary Shares may be affected by changes in governmental policies, taxation, growth rate, inflation rate or interest rates and by social instability and diplomatic and social developments in or affecting Taiwan. In particular, the unique political status of Taiwan and its internal political movement cause sustained tension between PRC and Taiwan. Past developments related to the interactions between PRC and Taiwan, especially in relation to trade activities such as bans on exports of goods from time to time, have on occasions depressed the transactions and business operations of certain Taiwanese companies and overall economic environment. We cannot predict whether there will be an escalation of the tensions between PRC and Taiwan which would lead to new bans or tariffs on exports or even conflict. Any conflict which threatens the military, political or economic stability in Taiwan or Indonesia could materially impair our ability to fulfill our USD120 million AI infrastructure commitments and have a material adverse effect on our current or future business and financial condition and results of operations.

We have engaged in transactions with related parties, and such transactions present possible conflicts of interest that could have an adverse effect on our business and results of operations.

We have entered into a number of transactions with related parties, including our significant stockholders, directors and executive officers, and their relatives. For example, we have entered into several transactions with our Chief Executive Officer and Shareholder in which Mr. Tsai Yi Yang and Ms. Lee Li Mei have or had a significant ownership interest, respectively. See “Related Party Transactions” under Item 7. Major Shareholders and Related Part Transactions for further details. We may in the future enter into additional transactions with entities in which members of our board of directors and other related parties hold ownership interests.

Transactions such as loans and leases in which related parties hold ownership interests present potential conflicts of interest. The interests of the landlord entity and lender, along with their shareholders, may not align with the interests of our stockholders regarding the negotiation and certain other matters related to our lease or loan terms with that landlord entity or lender. We may have achieved more favorable terms if such transactions had not been entered into with related parties, and these transactions, individually or in the aggregate, may have an adverse effect on our business and results of operations, or may result in government enforcement actions or other litigation.

We are required to comply with extensive regulations and hold a number of permits and licenses to carry on our business in Taiwan and Indonesia. Our ability to obtain and maintain these regulatory approvals is uncertain, and future government regulation may place additional burdens on our efforts to import and distribute our alcoholic beverages or develop our AI infrastructure.

We are a Taiwan-based whisky import and distribution company which is subject to extensive government regulation and supervision in Taiwan. The regulatory framework addresses all aspects of operating in the whisky distribution industry, including import, registration, production, distribution, packaging, labelling, advertising, and licensing requirements and procedures, periodic renewal and reassessment processes and compliance. Violation of applicable laws and regulations may materially and adversely affect our business. In particular, if we and our cooperators are unable to obtain or renew permits or licenses required for our operations, they will not be able to process or distribute our whisky products and our business may be adversely affected.

The regulatory framework governing the alcoholic beverages distribution industry in Taiwan is subject to change and amendment from time to time. Any such change or amendment could materially and adversely impact our business, financial condition and prospects. The Taiwan government has introduced the Tobacco and Alcohol Administration Act and regulations in 2000, especially imposing obligations on the alcohol importers to obtain an import permit for entry of the alcoholic beverages into Taiwan in 2014. Moreover, if we are unable to maintain regulatory compliance, regulatory approval that has been obtained may be lost and the various reform initiatives could give rise to regulatory developments, such as more burdensome administrative procedures, which may have an adverse effect on our business, financial condition and prospects significantly. Additionally, our entry into the AI computing infrastructure business subjects us to entirely new regulatory frameworks. Our proposed development in Indonesia will require us to navigate local land-use laws, environmental regulations for data centers, and specific foreign investment approvals in the technology sector. Failure to obtain these new permits could result in the loss of our booking deposits and the termination of our expansion plans.

For further information regarding government regulation in Taiwan and other jurisdictions, see “Regulations” for more details.

Our future success depends on our ability to attract, retain and motivate senior management.

We are highly dependent on the expertise of the members of our principal members of our management. Agencia Cayman has entered into employment agreements with our executive officers, but each of them may terminate their employment with us at any time with prior written notice. In addition, we currently do not have “key-man” insurance for any of our executive officers or other key personnel.

From time to time, there may be changes in our senior management team resulting from the hiring or departure of executives, which could disrupt our business. The loss of the services of one or more of our senior management or other key employees for any reason could adversely affect our business, financial condition and operating results and require significant amounts of time, training and resources to find suitable replacements and integrate them within our business and could affect our corporate culture. If we fail to attract new personnel or fail to retain and motivate our current personnel, it could adversely affect our business and future growth prospects.

Recruiting, retaining and motivating experienced management, sales and marketing personnel will also be critical to our success. The loss of the services of our executive officers or other key employees could impede the achievement of our development and business objectives and seriously harm our ability to successfully implement our business strategy. Further, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop the mutual trust with the suppliers. Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous alcoholic beverages distribution companies for similar personnel. In addition, our management will be required to devote significant time to compliance initiatives from our status as a public company, which may require us to recruit more management personnel.

We are subject to risks relating to our leased properties.

We lease certain real properties in Taiwan from our founder and chief executive officer, Mr. Tsai Yi Yang, and his mother, Ms. Lee Li Mei. Additionally, we lease other properties in Taiwan and Hong Kong from third parties. These premises are used primarily as office space, warehouses and carpark. We may become involved in disputes with the property owners or any third parties who otherwise have rights to or interests in our leased properties. We can provide no assurance that we will be able to find suitable replacement sites on terms acceptable to us on a timely basis, or at all, or that we will not be subject to material liability resulting from third parties’ challenges on our use of such properties. If any of our leases is terminated as a result of challenges by third parties or governmental authorities for lack of title certificates or proof of authorization to lease, we do not expect to be subject to any fines or penalties, but we may be forced to relocate the affected offices, stores or warehouses and incur additional expenses relating to such relocation. We cannot guarantee that suitable alternative locations are readily available on commercially reasonable terms, or at all, and if we fail to relocate our operations in a timely manner, our business, financial condition and results of operations may be materially and adversely affected.

Our employees, collaborators and contract manufacturers may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements, which could cause significant liability for us and harm our reputation.

We are exposed to the risk that our employees, collaborators and contract manufacturers may engage in fraud or other misconduct, including intentional failures to comply with the alcohol administration laws and regulations in Taiwan or similar regulations of comparable regulatory authorities, or to comply with manufacturing standards we have established. Such misconduct could result in regulatory sanctions and serious harm to our reputation. It is not always possible to identify and deter misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws, standards or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, financial condition and results of operations, including the imposition of significant fines or other sanctions.

The tax laws of the jurisdictions in which we operate may adversely affect our business and our tax results.

The tax laws applicable to our business activities are subject to change and uncertain interpretation. Our tax position could be adversely impacted by changes in tax rates, laws, practices, treaties or regulations or changes in the interpretation thereof by the authorities in jurisdictions in which we do business.

Moreover, we conduct operations through our subsidiaries in various tax jurisdictions pursuant to transfer pricing arrangements between us and our subsidiaries. While we believe that we operate in compliance with applicable transfer pricing laws and intend to continue to do so, our transfer pricing procedures are not binding on applicable tax authorities. If tax authorities in any jurisdiction in which we operate were to successfully challenge our transfer prices as not reflecting arms’ length transactions, they could require us to adjust our transfer prices and thereby reallocate our income to reflect these revised transfer prices, which could result in a higher tax liability to us. Furthermore, a tax authority could assert that we are subject to tax in a jurisdiction where we believe we have not established a taxable connection, and such an assertion, if successful, could increase our expected tax liability in one or more jurisdictions. Such circumstances could adversely affect our financial condition, results of operations and cash flows. Additionally, our expansion into the AI business in Indonesia will subject us to new tax laws and regulations. Any changes in how Indonesia taxes foreign-owned technology projects could increase our expenses and reduce our overall profitability.

Although the audit report included in this Annual Report is issued by an independent registered public accounting firm that is subject to inspections by the Public Company Accounting Oversight Board, or the PCAOB, and has been inspected by the PCAOB on a regular basis, there is no guarantee that future audit reports will be prepared by auditors or their international affiliates in jurisdictions where the PCAOB is able to fully inspect their work, and as such, future investors may be deprived of such inspections, which could result in limitations or restrictions to our access of the U.S. capital markets.

On April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the risks associated with investing in companies based in or having substantial operations in emerging markets including China. The joint statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers in China and higher risks of fraud in emerging markets.

On May 18, 2020, Nasdaq filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating in “Restrictive Market,” (ii) adopt a new requirement relating to the qualification of management or board of directors for Restrictive Market companies, and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the company’s auditors.

On May 20, 2020, the U.S. Senate passed the HFCAA requiring a foreign company to certify it is not owned or controlled by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the PCAOB is unable to inspect the company’s auditors for three consecutive years, the issuer’s securities are prohibited from trading on a national exchange. On December 2, 2020, the U.S. House of Representatives approved the HFCAA. On December 18, 2020, the HFCAA was signed into law. On March 28, 2021, the SEC issued interim measures implementing the HFCAA which became effective on May 5, 2021. On December 2, 2021, the SEC adopted final amendments implementing congressionally mandated submission and disclosure requirements of the HFCAA, which sent into effect on January 10, 2022. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act. The bill, which was enacted, shortened the three-consecutive-year compliance period under the HFCAA to two consecutive years. As a result, the time period before our Class A Ordinary Shares may be prohibited from trading or delisted will be reduced. On September 22, 2021, the PCAOB adopted a final rule implementing the HFCAA, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCAA, whether the PCAOB is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.

Inspections of an independent registered public accounting firm conducted by the PCAOB outside China have at times identified deficiencies in those auditors’ audit procedures and quality control procedures, which may be addressed as part of the inspection process to improve future audit quality. The recent joint statement by the SEC and PCAOB, proposed rule changes submitted by Nasdaq, and the Holding Foreign Companies Accountable Act, or HFCAA, all call for additional and more stringent criteria to be applied to emerging market companies, including companies based in China, upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. On August 26, 2022, the PCAOB signed a Statement of Protocol with the China Securities Regulatory Commission and the PRC Ministry of Finance, which was the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in China and Hong Kong completely, consistent with U.S. Law. On December 15, 2022, the PCAOB determined that it was able to secure complete access to inspect and investigate registered public accounting firms headquartered in China and Hong Kong and vacated its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB may consider the need to issue a new determination. On December 29, 2022, the Accelerating HFCAA was signed into law, which amended the HFCAA by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three.

Our auditor, Enrome LLP, headquartered in Singapore, is independent registered public accounting firms with the PCAOB, are required under the laws of the United States to undergo regular inspections by the PCAOB to assess their compliance with the laws of the United States and professional standards. Therefore, it is not subject to the determinations announced by the PCAOB on December 16, 2021 as it is not on the list published by the PCAOB. However, due to the recent developments in connection with the implementation of the HFCAA, we still cannot assure you whether the SEC, Nasdaq or other regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our consolidated financial statements. The requirement in the Accelerating HFCAA that the PCAOB be permitted to inspect the issuer’s public accounting firm within two years, may result in our delisting in the future if the PCAOB is unable to inspect our accounting firm at such future time.

Our Taiwan Operating Subsidiary is subject to restrictions on paying dividend or making other payments to us, which may restrict our ability to satisfy its liquidity requirements.

We are an exempted company with limited liability incorporated under the laws of the Cayman Islands structured as a holding company, we may need dividends and other distributions on equity from our Taiwan subsidiary to satisfy our liquidity requirements. Current Taiwan regulations permit our Taiwan subsidiary to pay dividends to its shareholders only out of its accumulated profits, if any, which shall first make up previous losses and set aside at least 10% of its accumulated profits as statutory reserve each year. These reserves are not distributable as cash dividends. Furthermore, if our Taiwan subsidiary incur debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other payments to us. Any limitation on the ability of our Taiwan subsidiary to distribute dividends or to make payments to us may restrict our ability to satisfy our liquidity requirements. In addition, the dividend payments by our Taiwan subsidiary to us shall be subject to the withholding tax of 21% since Taiwan does not have a tax treaty with BVI or the Cayman Islands.

Taiwan and Indonesia laws and regulations of loans to and direct investment in Taiwan entities by offshore holding companies may delay or restrict our ability to make loans or provide additional contributions to our Operating Subsidiary, which could materially and adversely affect our ability to fund and expand our business.

We are an offshore holding company conducting our operations substantially in Taiwan through our Taiwan Operating Subsidiary. To fund our operations, we may make loans to our Taiwan Operating Subsidiary, provide additional capital contributions to our Taiwan Operating Subsidiary, establish new Taiwan subsidiaries and make capital contributions to these new Taiwan subsidiaries, or acquire offshore entities with business operations in Taiwan in an offshore transaction.

These methods of internal funding are subject to Taiwan foreign investment regulations and approvals or registrations. For example, investment, including lending long-term loans, in Taiwan entities require Foreign Investment Approval from the Department of Investment Review, Ministry of Economic Affairs. Furthermore, foreign entities are restricted or prohibited from investing in some industries which are relating to national security or public order, as specified in the negative list maintained by the Taiwan authorities, such as military-related chemical products, firearms, transportation and mass media. Similar restrictions and approval requirements apply to our planned expansion in Indonesia. Any failure to obtain necessary foreign investment approvals from Indonesian authorities could restrict our ability to fund our AI infrastructure project or acquire local assets, materially harming our growth prospects.

Our Taiwan Operating Subsidiary and Indonesian operations are subject to foreign exchange control imposed by Taiwan authorities, which may affect the paying dividends, repatriating the interest or making other payments to us.

Currently Taiwan regulates only those foreign exchange transactions that involve the conversion of the NTD into foreign currencies. Pursuant to the relevant provisions of Taiwan Foreign Exchange Control Act, foreign exchange transactions of a value of NTD500,000 or more shall be declared to the Central Bank of the Republic of China (Taiwan) (“Taiwan CBC”). Further, for a remittance by a Taiwan company or a Taiwan branch of a foreign company as follows, relevant testimonials shall be submitted and such remittance shall be subject to the reporting to and/or approval of the Taiwan CBC: (i) a single remittance of an amount of US$1 million or more; or (ii) annual accumulated settlement amount of foreign exchange purchased or sold has exceeded US$100 million. Nevertheless, Taiwan government may impose further foreign exchange restrictions in certain emergency situations, where Taiwan government experiences extreme difficulty in stabilizing the balance of payments or where there are substantial disturbances in the financial and capital markets in Taiwan. If the dividend payments or other payments by our Taiwan Operating Subsidiary to us involves the currency conversion from New Taiwan Dollar to U.S. Dollar, such conversion would be subject to the foregoing foreign exchange control imposed by Taiwan authority. Under certain circumstances as prescribed by the relevant Taiwan regulations, documentary evidence of such foreign exchange transactions shall be presented and such transactions shall be conducted at designated foreign exchange banks in Taiwan which have the licenses to carry out foreign exchange business. However, there is no assurance that these foreign exchange regulations will remain unchanged in the future. If the relevant Taiwan regulations change in the future and any required approval is not obtained, our Taiwan Operating Subsidiary’s ability to make payments to us in foreign currency may be restricted, and our capital expenditure plans, business, operating results and financial condition may be materially and adversely affected.

Foreign exchange transactions for non-trade-related purposes or exceeding the applicable annual quota threshold would require special approval from Taiwan CBC, which will be at the discretion of and considered by Taiwan CBC on a case-by-case basis. Additionally, we may provide loans to our Taiwan Operating Subsidiary. If the term of the loan provided by us to our Taiwan Operating Subsidiary is one year or more, we shall obtain prior approval from the competent authorities before the loan can be remitted into Taiwan so that the Taiwan Operating Subsidiary could obtain the prior approval from the competent authorities for the conversion of the shareholders’ loan into equity and our Taiwan Operating Subsidiary shall file a declaration of foreign debt to the competent authority when the loan is remitted into Taiwan to facilitate the repayment of loan in foreign currency. We cannot assure you that the Taiwan government will not intervene in such transactions or impose restrictions on the ability of us and our subsidiaries to transfer cash. Similarly, our expansion in Indonesia subjects us to local foreign exchange regulations. Any restrictions imposed by Indonesian authorities on the conversion or remittance of currencies could hinder our ability to fund infrastructure costs or repatriate future profits from our AI business.

Our business may be exposed to foreign exchange risks.

We distribute our whisky products in Taiwan and source the bottled whisky and raw cask whisky in multiple jurisdictions and thus we have expenses denominated in local currencies in multiple jurisdictions. As a result, we are exposed to foreign currency exchange risk, as our results of operations and cash flows are subject to fluctuations in foreign currency exchange rates. In accordance with our business decisions, our exposure to this type of risk could change depending on:

Should any of these risks materialize, this could have a material adverse effect on our business, prospects, financial condition and results of operations.

In addition, our core business is conducted in Taiwan, and our books and records are maintained in NTD. The consolidated financial statements that we file with the SEC and provide to our shareholders are presented in U.S. dollars. Changes in the exchange rates between NTD and U.S. dollars affect the value of our assets and the results of our operations, when presented in U.S. dollars. The value of NTD against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in the Taiwan’s political and economic conditions and perceived changes in the economy of Taiwan and the United States. Furthermore, our AI expansion increases our exposure to the U.S. Dollar. Because our current revenues are primarily in NTD but our major AI server lease commitments are in USD, a depreciation of the NTD against the U.S. Dollar would increase our costs and could affect our cash flows, revenue, and financial condition.

As of the date of this Annual Report, we have not entered into any hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may decide to enter into more hedging transactions in the future, the availability and effectiveness of these hedges may be limited and we may not be able to adequately hedge our exposure or at all. In addition, our currency exchange losses may be magnified by local exchange control regulations that restrict our ability to convert NTD into foreign currencies.

RISKS RELATED TO OUR DEPENDENCE ON THIRD PARTIES

Our business is highly dependent on third-party distributors for selling our products to various accounts such as retailers, restaurants, bars, hotels, casinos, and entertainment venues.

As we expand our wholesale distribution network, we expect that sales to distributors will represent an increasing portion of our future net sales. However, industry consolidation or the loss of a major distributor could have a material adverse effect on our business, financial condition and results of operations.

Our distributors also carry competing brands, including larger national and international brands. Their relationships with these competitors could influence their commitment to our products. If our independent distributors rely on a major competitor for a significant portion of their sales, they may be inclined to favor that relationship. There can be no assurance that our distributors will continue to effectively market and distribute our products in the future.

The loss of a distributor or the failure to promptly replace an underperforming distributor could impede our growth and have a material adverse effect on our business. Expanding our distribution network into new states where we do not currently have a presence may also present challenges. In addition, as we seek to increase our market share in existing markets or enter new markets, there can be no assurance that we will be successful in attracting new distributors.

The purchasing decisions of wholesalers, retailers and consumers are influenced by the perceived overall value of our products compared to competitive products, taking into account both quality and price. Unit and dollar sales may also be affected by pricing, purchasing, financing, operating, advertising or promotional decisions made by wholesalers, state and provincial government agencies and retailers. These decisions may affect the supply of, or consumer demand for, our products. In addition, we may experience higher than expected selling, general and administrative expenses if we need to increase personnel or advertising and marketing expenditures to maintain our competitive position.

Substantial disruption to operations at our warehouses or distribution facilities, or at facilities with which we contract or partner, could occur.

A disruption in the operation of our warehouses or third-party facilities could have a material adverse effect on our business. In addition, a disruption could occur at any of our other facilities or those of our suppliers, bottlers, co-packers or distributors. The disruption could occur for a variety of reasons, including full production schedules at partner facilities, fire, natural disasters, adverse weather conditions, water shortages, manufacturing problems, disease outbreaks, labor strikes, transportation or supply chain disruptions, government regulations, cybersecurity attacks or acts of terrorism.

Alternative facilities with sufficient capacity or capabilities may not be readily available, may be significantly more expensive, or may take a significant amount of time to become operational. Any of these scenarios could adversely affect our business and financial performance.

Disruptions within our supply chain, contract manufacturing, or distribution channels could have an adverse effect on our business, financial condition, and results of operations.

The prices of packaging materials, glass bottles, and other containers fluctuate depending on market conditions, governmental actions, transportation costs, fuel prices, and other factors beyond our control. Substantial increases in the prices of these items, to the extent they cannot be recouped through increases in the prices of our finished whisky products, could increase our operating costs and reduce our profitability.

Increases in the prices of our finished products resulting from a higher cost of packaging materials, glass bottles, and other containers could affect affordability in some markets and reduce our sales. Additionally, some of our packaging containers, such as glass bottles, are available from a limited number of suppliers. We and our suppliers and co-packers may not be able to maintain favorable arrangements and relationships with these suppliers, and our contingency plans may not be effective in preventing disruptions that may arise from shortages of any packaging materials or containers that are available from a limited number of suppliers.

Events such as natural disasters, widespread outbreaks of infectious diseases (such as the COVID-19 pandemic), power outages, labor strikes, political uncertainties, governmental instability, or fluctuations in oil prices arising from geopolitical events (e.g., US–Middle East tensions) could impact the supply chain and distribution channels of our contracted manufacturers or suppliers. An increase in the cost, sustained disruption in supply or shortage of glass bottles and other containers… or increases in tariffs, could negatively impact our net operating revenues and profits.

We rely on the alcohol product brands’ marketing materials when promoting our products.

We have limited influence over the promotional materials utilized by alcoholic beverage manufacturers, which may not consistently reflect our branding or values. This lack of control can hinder our ability to differentiate our products from similar offerings by competing wholesalers representing the same brands, potentially leaving consumers without a compelling reason to choose our products over others. Consequently, our success in promoting our offerings is heavily reliant on the effectiveness of the manufacturers’ marketing initiatives. If these efforts fall short, it could adversely affect our operational outcomes.

We expect to seek to establish collaborations and, if we are not able to establish them on commercially reasonable terms, we may have to alter our development plans.

We may form or seek strategic alliances, create collaborations, or enter into licensing arrangements with third parties that we believe will complement or augment our development efforts with respect to our cask-to-bottle and distribution business. Any of these relationships may require us to incur recurring or non-recurring expenses and other charges, increase our near and long-term expenditures, or disrupt our management and business.

If we are unable to enter into agreements with suitable collaborators on a timely basis, on acceptable terms or at all, we may require more time to process, repackage and bottle our proprietary brand whisky, reduce or delay its distribution, reduce the scope of our sales and marketing activities or increase our expenses and incur storage or transportation costs at our own expense. If we choose to seek another manufacturer to process our whisky products, we may need to obtain additional capital, which may not be available to us on acceptable terms or at all. If we do not enter into collaborations and do not have sufficient funds or expertise to perform the necessary bottling and packaging activities, we may not be able to deliver to our customers in a timely manner and generate product sales, which would harm our business, financial condition, results of operations and prospects.

RISKS RELATED TO OUR INTELLECTUAL PROPERTY

If our trademarks and trade names are not adequately protected, we may not be able to build name recognition in our markets of interest and our competitive position may be adversely affected.

We may not be able to obtain trademark protection in territories that we consider of significant importance to us. In addition, any of our trademarks or trade names, whether registered or unregistered, may be challenged, opposed, infringed, cancelled, circumvented or declared generic, or determined to be infringing on other marks, as applicable. We may not be able to protect our rights to these trademarks and trade names, which we will need to build name recognition by potential collaborators or customers in our markets of interest. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, we may not be able to compete effectively and our business may be adversely affected.

We expect to rely on trademarks as one means to distinguish any of our whisky products from the products of our competitors. Once we select trademarks and apply to register them, our trademark applications may not be approved. Third parties may oppose our trademark applications, or otherwise challenge our use of the trademarks. In the event that our trademarks are successfully challenged, we could be forced to rebrand our products, which could result in loss of brand recognition and could require us to devote resources to advertising and marketing new brands. Our competitors may infringe our trademarks and we may not have adequate resources to enforce our trademarks.

If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

We rely upon unpatented trade secrets and know-how to develop and maintain our competitive position. We seek to protect this trade secret and confidential information, in part, by entering into non-disclosure and confidentiality agreements with parties that have access to them, such as our employees, collaborators and other third parties.

However, any of these parties may breach such agreements and disclose our proprietary information, and we may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret can be difficult, expensive and time-consuming, and the outcome is unpredictable. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor or other third party, we would have no right to prevent them from using that technology or information to compete with us and our competitive position would be harmed. In addition, we face the risk of cybercrime. For instance, someone could hack our information networks and gain illicit access to our proprietary information, including our trade secrets. Even if we are successful in prosecuting such claims, any remedy awarded may be insufficient to fully compensate us for the improper disclosure or misappropriation.

RISKS RELATED TO OUR CLASS A ORDINARY SHARES

The Company’s Class A Ordinary Shares are currently listed on Nasdaq. However, there is no guarantee that the Company will be able to maintain the listing of its Class A Ordinary Shares on Nasdaq in the future, which could limit investors’ ability to make transactions in the Class A Ordinary Shares and subject the Company to additional trading restrictions.

In order to maintain the listing on Nasdaq, the Company is required to meet certain financial and share price criteria. The Company may be unable to meet these requirements in the future.

If the Company’s Class A Ordinary Shares are delisted from Nasdaq and the Company is unable to list its shares on another national securities exchange, such shares may be quoted on an over-the-counter market in the United States. If this occurs, the Company could face significant adverse consequences, including:

As of the date of this Annual Report, our Class A Ordinary Shares are listed on Nasdaq. Under U.S. federal law, this listing preempts state-level regulation of their sale. However, states retain the authority to investigate companies if there is suspicion of fraud. If fraud is found, states may regulate or bar the sale of shares. If we were no longer listed on Nasdaq, we would be subject to state regulations in each jurisdiction where we offer our shares.

The trading price of our Class A Ordinary Shares may be volatile, which could result in substantial losses to investors.

The trading price of our Class A Ordinary Shares may be subject to wide fluctuations. Recently, there have been instances of extreme stock price run-ups followed by rapid price declines and strong stock price volatility among recently public companies, especially those with relatively smaller public floats. As a company with a relatively small public float and market capitalization, we may experience greater stock price volatility, extreme price run-ups, lower trading volume and less liquidity than large-capitalization companies. Such volatility, including any stock-run up, may be unrelated to our actual or expected operating performance, financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Class A Ordinary Shares.

Moreover, the trading price of our Class A Ordinary Shares may fluctuate due to broad market and industry factors, such as the performance and fluctuation of the market prices of other companies with business operations located mainly in Taiwan that are listed in the U.S. The trading performance of these Taiwanese companies may affect investor sentiment toward all companies from the region listed in the U.S., which may impact the trading performance of our Class A Ordinary Shares regardless of our actual operating performance.

In addition to market and industry factors, the price and trading volume for our Class A Ordinary Shares may be highly volatile due to factors specific to our own operations, including:

Any of these factors may result in large and sudden changes in the volume and price at which our Class A Ordinary Shares will trade. Furthermore, the stock market in general experiences price and volume fluctuations that are often unrelated or disproportionate to the operating performance of companies like us. These broad market and industry fluctuations may adversely affect the market price of our Class A Ordinary Shares.

In addition, if the trading volume of our Class A Ordinary Shares is low, trading activity in relatively small quantities may easily influence the price of our Class A Ordinary Shares. This low volume of trades could also cause the price of our Class A Ordinary Shares to fluctuate greatly, with large percentage changes in price occurring in any trading day session. Holders of our Class A Ordinary Shares may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. If high spreads between the bid and asked prices of our Class A Ordinary Shares exist at the time of purchase, the stock would have to appreciate substantially on a relative percentage basis for an investor to recoup their investment. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of our Class A Ordinary Shares. As a result of this volatility, investors may experience losses on their investment in our Class A Ordinary Shares. A decline in the market price of our Class A Ordinary Shares also could adversely affect our ability to issue additional Class A Ordinary Shares or other securities and our ability to obtain additional financing in the future. No assurance can be given that an active market in our Class A Ordinary Shares will be sustained. If an active market is not maintained, holders of our Class A Ordinary Shares may be unable to readily sell the shares they hold or may not be able to sell their shares at all.

In the past, shareholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their securities. If we were involved in a class action suit, it could divert a significant amount of our management’s attention and other resources from our business and operations and require us to incur significant expenses to defend the suit, which could harm our results of operations. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.

If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our Class A Ordinary Shares, the market price for our Class A Ordinary Shares and trading volume could decline.

The trading market for our Class A Ordinary Shares will be influenced by research or reports that industry or securities analysts publish about our business. If one or more analysts who cover us downgrade our Class A Ordinary Shares, the market price for our Class A Ordinary Shares would likely decline. If one or more of these analysts cease to cover us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the market price or trading volume for our Class A Ordinary Shares to decline.

Future sales or the issuance of additional Class A Ordinary Shares could adversely affect their market price and result in dilution to our shareholders.

Sales of substantial amounts of our Class A Ordinary Shares in the public market, or the perception that these sales could occur, could adversely affect the market price of our Class A Ordinary Shares and could materially impair our ability to raise capital through equity offerings in the future.

As of the date of this annual report, we have 22,786,500 Class A Ordinary Shares outstanding. A significant portion of these shares are held by our directors, officers, and certain major shareholders. While these shares were previously subject to customary lock-up agreements in connection with our initial public offering, those restrictions have expired on April 21, 2026.

As these lock-up restrictions expire, a substantial number of shares may become eligible for sale in the public market, subject to compliance with Rule 144 under the Securities Act and other applicable regulations. We cannot predict the effect, if any, that future market sales of securities held by significant shareholders or the availability of these securities for sale will have on the prevailing market price of our Class A Ordinary Shares. In addition, if we issue additional Class A Ordinary Shares in the future to raise capital or as stock-based compensation, our existing shareholders will experience further dilution. Any such issuances or the perception that such sales or issuances might occur, may adversely affect the price of our Class A Ordinary Shares and make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem appropriate.

Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our Class A Ordinary Shares for return on your investment.

We currently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our Class A Ordinary Shares as a source for any future dividend income.

Our board of directors has complete discretion as to whether to distribute dividends. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on, among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiary, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors. Accordingly, the return on your investment in our Class A Ordinary Shares will likely depend entirely upon any future price appreciation of our Class A Ordinary Shares. There is no guarantee that our Class A Ordinary Shares will appreciate in value or even maintain the price at which you purchased the Class A Ordinary Shares. You may not realize a return on your investment in our Class A Ordinary Shares and you may even lose your entire investment in our Class A Ordinary Shares.

There can be no assurance that we will not be a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for any taxable year, which could subject U.S. investors in our Class A Ordinary Shares to significant adverse U.S. federal income tax consequences.

We will be classified as a passive foreign investment company, or PFIC, for United States federal income tax purposes for any taxable year if either (a) 75% or more of our gross income for such year consists of certain types of “passive” income or (b) 50% or more of the value of our assets (generally determined on the basis of a quarterly average) during such year produce or are held for the production of passive income (the “asset test”). We will be treated as owning our proportionate share of the assets and earnings of any other corporation in which we own, directly or indirectly, more than 25% (by value) of the stock. Based upon our current and expected income and assets, including goodwill and other unbooked intangibles not reflected on our balance sheet (taking into account the proceeds from our initial public offering) and the market price of our Class A Ordinary Shares, we do not believe we were a PFIC for the taxable year ended December 31, 2025, and we do not expect to be classified as a PFIC for the current taxable year or the foreseeable future.

While we do not expect to be classified as a PFIC, because the value of our assets for purposes of the asset test may be determined by reference to the market price of our Class A Ordinary Shares, fluctuations in the market price of our Class A Ordinary Shares may cause us to be classified as a PFIC for the current or subsequent taxable years. The determination of whether we will be classified as a PFIC will also depend, in part, on the composition of our income and assets. In addition, the composition of our income and assets will also be affected by how, and how quickly, we use our liquid assets and the cash raised in our initial public offering. If we determine not to deploy significant amounts of cash for active purposes, our risk of being a PFIC may substantially increase. It is also possible that the U.S. Internal Revenue Service, or the IRS could challenge our classification of certain income and assets as non-passive, which could result in our company being or becoming a PFIC for the current or future taxable years. Because PFIC status is a factual determination made annually after the close of each taxable year, there can be no assurance that we will not be a PFIC for the current taxable year or any future taxable year.

If we are a PFIC in any taxable year, a U.S. Holder (as defined in “Taxation — U.S. Federal Income Tax Considerations”) may incur significantly increased U.S. income tax on gain recognized on the sale or other disposition of the Class A Ordinary Shares and on the receipt of distributions on the Class A Ordinary Shares to the extent such distribution is treated as an “excess distribution” under the U.S. federal income tax rules, and such U.S. Holder may be subject to burdensome reporting requirements. Further, if we are a PFIC for any year during which a U.S. Holder holds our Class A Ordinary Shares, we generally will continue to be treated as a PFIC for all succeeding years during which such U.S. Holder holds our Class A Ordinary Shares, unless we were to cease to be a PFIC and the U.S. Holder were to make a “deemed sale” election with respect to the Class A Ordinary Shares. For more information see “Taxation — U.S. Federal Income Tax Considerations — PFIC Rules.”

Our amended and restated memorandum and articles of association contain anti-takeover provisions that could have a material adverse effect on the rights of holders of our Class A Ordinary Shares.

Our amended and restated memorandum and articles of association contain provisions to limit the ability of others to acquire control of our company or cause us to engage in change-of-control transactions. These provisions could have the effect of depriving our shareholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of our Company in a tender offer or similar transaction. Our board of directors has the authority, without further action by our shareholders, to issue preferred shares in one or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our Class A Ordinary Shares. Class B Ordinary Shares could be issued quickly with terms calculated to delay or prevent a change in control of our company or make removal of management more difficult. If our board of directors decides to issue Class B Ordinary Shares, the price of our Class A Ordinary Shares may fall and the voting and other rights of the holders of our Class A Ordinary Shares may be materially and adversely affected.

You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are an exempted company incorporated under Cayman Islands law.

We are an exempted company incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by our amended and restated memorandum and articles of association, the Companies Act (As Revised) of the Cayman Islands and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the U.S. In particular, the Cayman Islands has a less developed body of securities laws than the U.S. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the U.S.

Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of lists of shareholders of these companies. Our directors have discretion under our amended and restated memorandum and articles of association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but we are otherwise not obliged to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.

Certain corporate governance practices in the Cayman Islands, which is our home country, differ significantly from requirements for companies incorporated in other jurisdictions such as the U.S. Currently, we rely on home country practice with respect to certain corporate governance matters and as a result, our shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic issuers.

As a result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or our Controlling Shareholders than they would as public shareholders of a company incorporated in the U.S. For a discussion of significant differences between the provisions of the Companies Act (Revised) of the Cayman Islands and the laws applicable to companies incorporated in the U.S. and their shareholders, see “Share Capital — Our Memorandum and Articles.”

Certain judgments obtained against us by our shareholders may not be enforceable.

We are a Cayman Islands exempted company and substantially all of our assets are located outside of the U.S. Substantially all of our current operations are conducted in Taiwan. In addition, some of our directors and officers are nationals and residents of countries and regions other than the U.S. Substantially all of the assets of these persons are located outside the U.S. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the U.S. in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands, Hong Kong and Taiwan may render you unable to enforce a judgment against our assets or the assets of our directors and officers. For more information regarding the relevant laws of the Cayman Islands, Taiwan, and Hong Kong, see “Additional Information - Enforceability of Civil Liabilities”.

We incur increased costs as a result of being a public company.

As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and the Nasdaq, impose various requirements on the corporate governance practices of public companies. Compliance with these rules and regulations has increased our legal and financial compliance costs and has made some corporate activities more time-consuming and costly. For example, operating as a public company has made it more difficult and more expensive for us to obtain director and officer liability insurance, and we have been required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. In addition, we incur additional costs associated with our public company reporting requirements. It may also continue to be more difficult for us to find qualified persons to serve on our board of directors or as executive officers. We are continually evaluating and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of future costs we may incur or the timing of such costs.

The obligation to disclose information publicly may put us at a disadvantage to competitors that are private companies.

As a publicly listed company in the United States, we are required to file annual reports with the Securities and Exchange Commission. In some cases, we are required to disclose material agreements or results of financial operations that we would not be required to disclose if we were a private company. Our competitors may have access to this information, which would otherwise be confidential. This may give them advantages in competing with our company. Similarly, as a U.S.-listed public company, we are governed by U.S. laws that some of our competitors are not required to follow. To the extent compliance with U.S. laws increases our expenses or decreases our competitiveness against such companies, our public listing could adversely affect our results of operations.

We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.

Because we are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the U.S. that are applicable to U.S. domestic issuers, including:

We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we will furnish to the SEC on Form 6-K any material information that we make public in accordance with applicable law or stock exchange rules, including press releases relating to financial results and material events. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely than that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer.

We are a “controlled company” within the meaning of the Nasdaq listing rules, and may follow certain exemptions from certain corporate governance requirements that could adversely affect our public shareholders.

Our Controlling Shareholders, through Ping Shiang Business Ltd, continue to own more than a majority of the voting power of our outstanding Ordinary Shares. Under the Nasdaq listing rules, a company of which more than 50% of the voting power is held by an individual, group, or another company is a “controlled company” and is permitted to phase in its compliance with the independent committee requirements. As a “controlled company,” we are permitted to elect not to comply with certain corporate governance requirements. Currently, we do not utilize the exemptions available for controlled companies but instead rely on the exemptions available for foreign private issuers to follow our home country governance practices. Although we do not currently rely on the “controlled company” exemptions under the Nasdaq listing rules even if we are deemed a “controlled company”, we could elect to rely on these exemptions in the future. If we were to elect to rely on the “controlled company” exemptions, a majority of the members of our board of directors might not be independent directors and our nominating and corporate governance and compensation committees might not consist entirely of independent directors. Accordingly, if we rely on these exemptions during the period we remain a “controlled company” and during any transition period following a time when we are no longer a “controlled company”, you may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

Our dual-class voting structure limits your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A Ordinary Shares may view as beneficial.

We have a dual-class voting structure consisting of Class A Ordinary Shares and Class B Ordinary Shares. Under this structure, holders of Class A Ordinary Shares are entitled to one (1) vote per share in respect of matters requiring the votes of shareholders, while holders of Class B Ordinary Shares are entitled to ten (10) votes per share. As of the date of this Annual Report, our Controlling Shareholders, through Ping Shiang Business Ltd beneficially own 14,500,000 Class A Ordinary Shares, approximately 63.63% of our outstanding Class A Ordinary Shares and 14,500,000 Class B Ordinary Shares, representing 95.06%%, of the aggregate total voting power of our total issued and outstanding share capital.

The Controlling Shareholders have the ability to determine all matters requiring approval by shareholders. The interests of our Controlling Shareholders may not coincide with your interests, and they may make decisions with which you disagree, including decisions on important topics such as the composition of the board of directors, compensation, management succession, and our business and financial strategy. To the extent that the interests of our Controlling Shareholders differ from your interests, you may be disadvantaged by any action that they may seek to pursue. This concentrated control could also discourage others from pursuing any potential merger, takeover or other change of control transactions, which could have the effect of depriving the holders of our Class A Ordinary Shares of the opportunity to sell their shares at a premium over the prevailing market price.

The dual-class structure of our Ordinary Shares has the effect of concentrating voting control with our Controlling Shareholders. This ownership limits or precludes your ability to influence corporate matters, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transactions requiring shareholder approval, which may adversely affect the trading price of our Class A Ordinary Shares.

Each Class B Ordinary Share has ten (10) votes per share, and our Class A Ordinary Shares have one (1) vote per share. As of the date of this Annual Report, our Controlling Shareholders, through Ping Shiang Business Ltd, beneficially own 14,500,000 Class A Ordinary Shares and 14,500,000 Class B Ordinary Shares, representing 95.06% of the aggregate total voting power of our total issued and outstanding share capital. Accordingly, the Controlling Shareholders control all matters submitted to our shareholders for approval.

In addition, there is no restriction under our amended and restated memorandum and articles of association for potential future issuances of Class B Ordinary Shares. If such issuances occurred, the voting power of the holders of the Class A Ordinary Shares would be diluted.

The Controlling Shareholders have the ability to determine all matters requiring approval by shareholders, which may limit or preclude your ability to influence corporate matters for the foreseeable future, including the election of directors, amendments of our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactions requiring shareholder approval. In addition, this concentrated control may prevent or discourage unsolicited acquisition proposals or offers for our capital stock that you may feel are in your best interest as one of our shareholders. As a result, such concentrated control may adversely affect the market price of our Class A Ordinary Shares.

We cannot predict the effect that our dual-class structure may have on the market price of our Class A Ordinary Shares.

We cannot predict whether our dual-class structure will result in a lower or more volatile market price of our Class A Ordinary Shares, adverse publicity or other adverse consequences. For example, certain index providers have announced and implemented restrictions on including companies with multiple-class share structures in certain of their indices. In July 2017, FTSE Russell announced that it would require new constituents of its indices to have greater than 5% of the company’s voting rights in the hands of public stockholders, and S&P Dow Jones announced that that it would no longer admit companies with multiple-class share structures to certain of its indices, such as the S&P 500, S&P MidCap 400 and S&P SmallCap 600. Also in 2017, MSCI, a leading stock index provider, opened public consultations on its treatment of no-vote and multi-class structures and temporarily barred new multi-class listings from certain of its indices. However, in October 2018, MSCI announced its decision to include equity securities “with unequal voting structures” in its indices and to launch a new index that specifically includes voting rights in its eligibility criteria.

Under these policies, the dual-class structure of our Ordinary Shares makes us ineligible for inclusion in certain indices and, as a result, mutual funds, exchange-traded funds and other investment vehicles that attempt to passively track those indices do not invest in our Class A Ordinary Shares. It is unclear what effect, if any, they will have on the valuations of publicly-traded companies excluded from such indices, but it is possible that they may adversely affect valuations, as compared to similar companies that are included. Due to the dual-class structure of our Ordinary Shares, we are excluded from certain indices and we cannot assure you that other stock indices will not take similar actions. Given the sustained flow of investment funds into passive strategies that seek to track certain indices, exclusion from certain stock indices precludes investment by many of these funds and could make our Class A Ordinary Shares less attractive to other investors. Any such exclusion from stock indices could result in a less active trading market for our Class A Ordinary Shares. Any actions or publications by shareholder advisory firms critical of our corporate governance practices or capital structure could also adversely affect the market price of our Class A Ordinary Shares.

Because we are a foreign private issuer and are exempt from certain Nasdaq corporate governance standards applicable to U.S. issuers, you have less protection than you would have if we were a domestic issuer.

Nasdaq listing rules require listed companies to have, among other things, a majority of its board members be independent. As a foreign private issuer, however, we are permitted to, and we may follow home country practice in lieu of certain Nasdaq requirements, or we may choose to comply with the above requirement within one year of listing. The corporate governance practice in our home country, the Cayman Islands, does not require a majority of our board to consist of independent directors. Thus, although a director must act in the best interests of our Company, it is possible that fewer board members will be exercising independent judgment and the level of board oversight on the management of our Company may decrease as a result. Additionally, Nasdaq listing rules mandate that U.S. domestic issuers establish a compensation committee, a nominating and corporate governance committee, and an audit committee, each composed solely of independent directors. As a foreign private issuer, we are not subject to these requirements. Nasdaq listing rules may also require shareholder approval for certain corporate matters, such as requiring that shareholders be given the opportunity to vote on all equity compensation plans and material revisions to those plans, as well as certain ordinary share issuances. Currently, we comply with the requirements of Nasdaq listing rules requiring that a majority of our board of directors consists of independent directors and have appointed a nominating and corporate governance committee. We may, however, consider following home country practice in lieu of the requirements under Nasdaq listing rules in the future with respect to certain corporate governance standards, which may afford less protection to investors.

We are an “emerging growth company”, and the reduced disclosure requirements applicable to emerging growth companies may make our Class A Ordinary Shares less attractive to investors.

We are an emerging growth company, as defined in the JOBS Act, and may remain an emerging growth company until the last day of the fiscal year following the fifth anniversary of the completion of our initial public offering. However, if certain events occur prior to the end of such five-year period, including if we become a “large accelerated filer,” our annual gross revenues exceed US$1.235 billion or we issue more than US$1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. In this annual report, we have taken advantage of reduced reporting burden. In particular, we have provided reduced financial disclosures and have not included all of the executive compensation related information that would be required if we were not an emerging growth company. We cannot predict whether investors will find our Class A Ordinary Shares less attractive if we rely on these exemptions. If some investors find our Class A Ordinary Shares less attractive as a result, there may be a less active trading market for our Class A Ordinary Shares and the trading price of our Class A Ordinary Shares may be reduced or more volatile.

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of these accounting standards until they would otherwise apply to private companies.

Nasdaq may apply additional and more stringent criteria for our continued listing because our public float is relatively small and insiders hold a large portion of our listed securities.

Nasdaq Listing Rule 5101 provides Nasdaq with broad discretionary authority over the initial and continued listing of securities in Nasdaq and Nasdaq may use such discretion to apply additional or more stringent criteria for the continued listing of particular securities, or suspend or delist particular securities based on any event, condition, or circumstance that exists or occurs that makes continued listing of the securities on Nasdaq inadvisable or unwarranted in the opinion of Nasdaq, even though the securities meet all enumerated criteria for continued listing on Nasdaq. In addition, Nasdaq has used its discretion to apply additional and more stringent criteria in the instances, including but not limited to: (i) where the company engaged an auditor that has not been subject to an inspection by the Public Company Accounting Oversight Board (“PCAOB”), an auditor that PCAOB cannot inspect, or an auditor that has not demonstrated sufficient resources, geographic reach, or experience to adequately perform the company’s audit; (ii) where the company has a small public float, resulting in insiders holding a large portion of the company’s listed securities; and (iii) where the company did not demonstrate sufficient nexus to the U.S. capital market, including having no U.S. shareholders, operations, or members of the board of directors or management. Because our public float is relatively small, and our insiders hold a large portion of the company’s listed securities, Nasdaq may apply more stringent criteria for our continued listing. If we fail to maintain compliance with Nasdaq’s continued listing requirements, our Class A Ordinary Shares could be delisted, which may have a material adverse effect on the liquidity and market price of our Class A Ordinary Shares.

ITEM 4. INFORMATION ON THE COMPANY

Corporate Information

The Company was incorporated in the Cayman Islands as an exempted company with limited liability on March 7, 2025. Our registered office is located at McGrath Tonner Corporate Services Limited, Genesis Building, 5^th Floor, Genesis Close, PO Box 446, Cayman Islands, KY1-1106. Our principal executive offices is located at No. 23-1, Shenzun Rd., Shengang Dist., Taichung City 429014, Taiwan (R.O.C.). Our telephone number at this address is +886-4-25614413.

Our agent for service of process in the United States is Cogency Global Inc. located at 122 East 42^nd Street, 18^th Floor, New York, NY 10168.

Investors should contact us for any inquiries through the address and telephone number of our principal executive office. Our principal website is agcctw.com. The information contained on our website is not a part of this Annual Report.

Corporate History and Structure

Corporate History

On July 7, 2020, we incorporated Agencia Comercial Co., Ltd as a limited liability company under the laws of Taiwan.

On January 21, 2025, we incorporated Ping Shiang Holding Ltd as a BVI Business Company with limited liability under the laws of the British Virgin Islands.

On February 17, 2025, Ping Shiang Business Ltd, was established as a BVI Business Company with limited liability under the laws of the British Virgin Islands, and is owned by our Controlling Shareholders as to 82% by Mr. Tsai Yi Yang, our Chief Executive Officer and 18% by Ms. Lee Li Mei, the mother of Mr. Tsai Yi Yang.

On March 7, 2025, we incorporated Agencia Comercial Spirits Ltd as an exempted company with limited liability under the laws of the Cayman Islands, and 1,000 ordinary shares, being its entire issued share capital, were allotted and issued to Ping Shiang Business Ltd.

On May 21, 2025, as part of the reorganization in contemplation of our IPO, Agencia Comercial Spirits Ltd re-designated and re-classified its share capital from US$50,000.00 divided into 50,000 shares of a par value of US$1.00 each to US$50,000.00 divided into 50,000 shares of a par value of US$1.00 each, comprising (i)25,000 Class A ordinary shares of a par value of US$1.00 each and (ii) 25,000 Class B ordinary shares of a par value of US$1.00 each. Pursuant to which, the then issued and outstanding 1,000 ordinary shares held by Ping Shiang Business Ltd were repurchased by Agencia Comercial Spirits Ltd in consideration of issuing 500 Class A Ordinary Shares and 500 Class B Ordinary Shares to Ping Shiang Business Ltd.

On May 23, 2025, as part of the reorganization in contemplation of our IPO, Ping Shiang Holding Ltd acquired the entire issued share capital of Agencia Comercial Co., Ltd from all of its then shareholders, Mr. Tsai Yi Yang, Ms. Lee Li Mei, Mr. Tsai Chen His and Mr. Tsai Chen Long in consideration of NTD21,183,323, NTD13,950,000, NTD21,183,339, and NTD21,183,339, respectively.

On May 27, 2025, as part of the reorganization in contemplation of our IPO, Agencia Comercial Spirits Ltd acquired the entire issued share capital of Ping Shiang Holding Ltd from Mr. Tsai Yi Yang and Ms. Lee Li Mei in consideration of US$820 and US$180, respectively. Following the above acquisitions, Ping Shiang Business Ltd became the sole shareholder of Agencia Comercial Spirits Ltd, which in turn wholly owns Ping Shiang Holding Ltd, and indirectly wholly-owns Agencia Comercial Co., Ltd.

On May 28, 2025, Agencia Comercial Spirits Ltd allotted and issued an aggregate of 116 Class A Ordinary Shares to four investors (together the “Other Shareholders”), all of whom are independent from our Group.

On June 24, 2025, a 25,000-for-1 share split/share subdivision effected by Agencia Comercial Spirits Ltd on June 24, 2025 Agencia Comercial Spirits Ltd sub-divided its authorized shares so that the par value of each share changed from US$1.00 to US$0.00004 each and the number of authorized shares changed to 1,250,000,000 shares of par value US$0.00004 each comprising of 625,000,000 Class A Ordinary Shares of par value US$0.00004 each and 625,000,000 Class B Ordinary Shares of par value US$0.00004 each. On the same date, 2,464,000 Class A Ordinary Shares and 2,000,000 Class B Ordinary Shares, were distributed proportionately to all then existing shareholders, at a par value of US$0.00004 per share. Immediately following such issuance, the Company had a total of 17,864,000 Class A Ordinary Shares and 14,500,000 Class B Ordinary Shares issued and outstanding, each with a par value of US$0.00004, of which 14,500,000 Class A Ordinary Shares and 14,500,000 Class B Ordinary Shares were issued and held by Ping Shiang Business Ltd, and an aggregate of 3,364,000 Class A Ordinary Shares held by the Other Shareholders.

On December 5, 2025, we incorporated AGCC Japan Investment Holdings Ltd as a BVI Business Company with limited liability under the laws of the British Virgin Islands. AGCC Japan Investment Holdings Ltd is a direct, wholly-owned subsidiary of the Company and is authorized to issue a maximum of 50,000 shares with a par value of US$1.00 each.

On January 12, 2026, we incorporated AGCC America Co., Ltd as a corporation under the laws of the State of Delaware. AGCC America Co., Ltd is a direct, wholly-owned subsidiary of Agencia Comercial Spirits Ltd. The corporation is authorized to issue a total of 1,500 shares of common stock, each having a par value of US$0.01 per share.

On January 27, 2026, we incorporated AGCC Investment (Singapore) Co. Ltd as a BVI Business Company with limited liability under the laws of the British Virgin Islands. AGCC Investment (Singapore) Co. Ltd is a direct, wholly-owned subsidiary of Agencia Comercial Spirits Ltd. It is authorized to issue a maximum of 50,000 shares with a par value of US$1.00 each.

On January 28, 2026, we incorporated AGCC-One Investment (Thailand) Co. Ltd as a BVI Business Company with limited liability under the laws of the British Virgin Islands. AGCC-One Investment (Thailand) Co. Ltd is a direct, wholly-owned subsidiary of Agencia Comercial Spirits Ltd. It is authorized to issue a maximum of 50,000 shares with a par value of US$1.00 each.

On January 28, 2026, we incorporated AGCC-Two Investment (Thailand) Co. Ltd as a BVI Business Company with limited liability under the laws of the British Virgin Islands. AGCC-Two Investment (Thailand) Co. Ltd is a direct, wholly-owned subsidiary of Agencia Comercial Spirits Ltd. It is authorized to issue a maximum of 50,000 shares with a par value of US$1.00 each.

On January 28, 2026, we incorporated AGCC-Three Investment (Thailand) Co. Ltd as a BVI Business Company with limited liability under the laws of the British Virgin Islands. AGCC-Three Investment (Thailand) Co. Ltd is a direct, wholly-owned subsidiary of Agencia Comercial Spirits Ltd. It is authorized to issue a maximum of 50,000 shares with a par value of US$1.00 each.

On January 28, 2026, we incorporated AGCC Investment (Malaysia) Co. Ltd as a BVI Business Company with limited liability under the laws of the British Virgin Islands. AGCC Investment (Malaysia) Co. Ltd is a direct, wholly-owned subsidiary of the Company and is authorized to issue a maximum of 50,000 shares with a par value of US$1.00 each.

On February 6, 2026, we incorporated AGCC (HK) Co., Limited as a limited liability company under the laws of Hong Kong. AGCC (HK) Co., Limited is a direct, wholly-owned subsidiary of the Company, with an initial share capital of HKD10,000 divided into 10,000 ordinary shares, all of which were issued to the Company upon formation.

On February 6, 2026, we incorporated AGCC Investment (Indonesia) Co. Ltd as a BVI Business Company with limited liability under the laws of the British Virgin Islands. AGCC Investment (Indonesia) Co. Ltd is a direct, wholly-owned subsidiary of the Company and is authorized to issue a maximum of 50,000 shares with a par value of US$1.00 each.

On February 10, 2026, we incorporated PT. AGCC AITECH Indonesia as a limited liability company under the laws of the Republic of Indonesia and the Law No. 25 of 2007 concerning Foreign Investment. PT. AGCC AITECH Indonesia is 99.9% owned by AGCC Investment (Indonesia) Co. Ltd. The subsidiary is headquartered in Bekasi Regency and has an authorized and issued share capital of IDR10,000,000,000, divided into 10,000 shares with a nominal value of IDR1,000,000 per share. AGCC Investment (Indonesia) Co. Ltd owns 99.9% of the outstanding shares and voting power of PT. AGCC AITECH Indonesia, giving them unilateral control over PT. AGCC AITECH Indonesia’s management, board, and daily operations.

On March 4, 2026, we incorporated EJC Japan Co., Ltd. (株式会社エジシージャパン) as a joint-stock company under the laws of Japan. EJC Japan Co., Ltd. is a wholly-owned subsidiary of AGCC Japan Investment Holdings Ltd. The subsidiary is authorized to issue 100,000 shares of stock and, upon incorporation, issued 998 shares for a total stated capital of JPY9,980,000.

NX Data Co., Ltd. was incorporated on February 24, 2026 as a limited liability company under the laws of Thailand. The company was established with a total registered capital of THB5,000,000, divided into 100,000 ordinary shares with a par value of THB50.00 per share. Our subsidiaries acquired 100% ownership on March 24, 2026, through share transfers from the initial founding shareholders.

Specifically, AGCC-One Investment (Thailand) Co. Ltd acquired 1,000 shares from Mr. Timothy Yan, and AGCC-Two Investment (Thailand) Co. Ltd acquired 99,000 shares from Mr. Timothy Yan and Ms. Inez Vuthimedhi. As a result of these transactions, NX Data Co., Ltd. is an indirect, wholly-owned subsidiary of the Company, held by two of our direct subsidiaries: AGCC-One Investment (Thailand) Co. Ltd (1%), and AGCC-Two Investment (Thailand) Co. Ltd (99%).

On March 27, 2026, we incorporated AGCC Malaysia SDN. BHD. as a private company limited by shares under the laws of Malaysia. AGCC Malaysia SDN. BHD. is a wholly-owned subsidiary of AGCC Investment (Malaysia) Co. Ltd. The subsidiary is headquartered in Kuala Lumpur and was formed with an initial issued share capital of one ordinary share at a price of RM1.00.

On April 28, 2026, we incorporated AGCC AITECH (Thailand) Co., Ltd. as a limited company under the laws of Thailand. The subsidiary is headquartered in Thailand and was formed with a registered capital of THB3,000,000. AGCC AITECH (Thailand) Co., Ltd. is 98% held by AGCC-One Investment (Thailand) Co. Ltd and 1% held by AGCC-Two Investment (Thailand) Co. Ltd. AGCC-One Investment (Thailand) Co. Ltd and AGCC-Two Investment (Thailand) Co. Ltd together own 99% of the outstanding shares and voting power of AGCC AITECH (Thailand) Co., Ltd., giving them unilateral control over AGCC AITECH (Thailand) Co., Ltd’s management, board, and daily operations.

The IPO

In October 2025, we completed an initial public offering in which we offered and sold an aggregate of 2,012,500 Class A Ordinary Shares. Our Class A Ordinary Shares are listed on the Nasdaq Capital Market under the symbol “AGCC.”

Change of Principal Office

On December 19, 2025, the Company moved its principal executive office from No. 65, Ln. 114, Xishi Rd., Xi’an Vil., Fengyuan Dist. Taichung City 42061, Taiwan (R.O.C.) to the current address at No. 23-1, Shenzun Rd., Shengang Dist., Taichung City 429014, Taiwan (R.O.C.).

Change of Management

On December 11, 2025, Mr. Tsai Yi Yang, previously the chairman of the board and chief executive officer, no longer serves as chairman of the board but continues in his roles as an executive director and chief executive officer of the Company; Mr. Li Qiang has been appointed as an executive director and chairman of the board; and Mr. Tian Yiding has been appointed as an independent non-executive director of the Company, and as a member of audit committee, a member of the compensation committee, and a member of the nominating and corporate governance committee of the Company. Following the aforementioned change, Mr. Li Qiang assumes the role of chairman of the board, which was previously held by Mr. Tsai Yi Yang,

On February 25, 2026, Mr. WONG Man Ue, Nick tendered his resignation as an executive director and chief financial officer of the Company, effective February 28, 2026.

On March 1, 2026, Mr. LIU Shihao has been appointed as an executive director and chief financial officer of the Company.

On March 5, 2026, Mr. Patrick Man Shun WONG tendered his resignation as an independent director of the Company, effective March 5, 2026. Mr. Patrick Wong also stepped down from his positions as chairperson of the audit committee, member of the compensation committee, and member of the nominating and corporate governance committee.

On March 5, 2026, Mr. LI Cheuk Hang has been appointed as an independent non-executive director of the Company, and as the chairperson of the audit committee, a member of the compensation committee, and a member of the nominating and corporate governance committee of the Company.

PIPE Financing

On March 27, 2026, the Company entered into a securities purchase agreement with certain individuals and entities named therein (each, a “PIPE Investor” and collectively, the “PIPE Investors”). Pursuant to the securities purchase agreement, the PIPE Investors agreed to subscribe for and purchase from the Company, and the Company agreed to issue and sell to the PIPE Investors, an aggregate of 2,910,000 Class A ordinary shares, par value US$0.00004 per share (the “Class A Ordinary Shares”) through a private investment in public equity (“PIPE”), for a purchase price of US$5.00 per share, resulting in aggregate gross proceeds of US$14,550,000 for all PIPE Investors, on the terms and subject to the conditions set forth therein (the “PIPE Financing”). The closing of the PIPE was subject to the satisfaction of certain customary closing conditions as stipulated in the SPA and has been completed as of the date of this Annual Report.

Strategic Expansion into AI Infrastructure

In February 2026, the Company launched a strategic initiative to expand into the AI computing infrastructure sector. In connection with this expansion:

Corporate Structure

The following diagram sets forth our latest corporate structure:

Note:

Holding Company Structure

Agencia Comercial Spirits Ltd is an exempted company incorporated in the Cayman Islands with no material operations of its own. We conduct our business operations primarily through our direct wholly owned subsidiary, Ping Shiang Holding Ltd in the British Virgin Islands (“BVI”) and an indirect wholly owned subsidiary, namely Agencia Comercial Co., Ltd in Taiwan, among which Agencia Comercial Spirits Ltd holds the equity interests in its Taiwan operating subsidiary through its subsidiary incorporated in the BVI.

Beginning in early 2026, we significantly expanded our organizational structure to include several regional investment holding companies incorporated in the British Virgin Islands, which in turn hold our operating subsidiaries in the United States, Indonesia, Japan, Malaysia, and Thailand. In certain jurisdictions, such as Thailand, our operating entity is held indirectly through multiple wholly-owned investment vehicles to comply with local requirements and facilitate regional management.

As a result, our ability to pay dividends and to service any debt we may incur overseas largely depends upon dividends paid by our subsidiaries. If our subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us.

Implications of Being an Emerging Growth Company

As a company with less than US$1.235 billion in revenue for our last fiscal year, we qualify as an “emerging growth company” pursuant to the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements compared to those that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, in the assessment of the emerging growth company’s internal control over financial reporting. The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. We have elected to take advantage of such exemptions.

We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year during which we have total annual gross revenue of at least US$1.235 billion; (ii) the last day of our fiscal year following the fifth anniversary of the completion of our initial public offering; (iii) the date on which we have, during the preceding three-year period, issued more than US$1.0 billion in non-convertible debt; or (iv) the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of the Class A Ordinary Shares that are held by non-affiliates exceeds US$700 million as of the last business day of our most recently completed second fiscal quarter. Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above.

Implications of Being a Foreign Private Issuer

We are also considered as a “foreign private issuer.” We report under the Exchange Act as a non-U.S. company with foreign private issuer status. This means that, even after we no longer qualify as an emerging growth company, as long as we qualify as a foreign private issuer under the Exchange Act, we will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including:

We may take advantage of these exemptions until such time as we are no longer a foreign private issuer. We would cease to be a foreign private issuer at such time as more than 50% of our outstanding voting securities are held by U.S. residents and any of the following three circumstances applies: (i) the majority of our executive officers or directors are U.S. citizens or residents, (ii) more than 50% of our assets are located in the United States or (iii) our business is administered principally in the United States.

Both foreign private issuers and emerging growth companies are also exempt from certain more stringent executive compensation disclosure rules. Thus, even if we no longer qualify as an emerging growth company but remain a foreign private issuer, we will continue to be exempt from the more stringent compensation disclosures required of companies that are neither emerging growth companies nor foreign private issuers.

In addition, as a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the corporate governance listing requirements of Nasdaq. These practices may afford less protection to shareholders than they would enjoy if we complied fully with corporate governance listing requirements of Nasdaq. We rely on these home country practice exemptions as follows:

As a company listed on the Nasdaq Capital Market, we are subject to the Nasdaq corporate governance listing standards. However, Nasdaq rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq corporate governance listing standards. As a company incorporated in the Cayman Islands that is listed on The Nasdaq Capital Market, pursuant to the home country rule exemption set forth under Nasdaq Listing Rule 5615(a)(3)(A), which provides (with certain exceptions not relevant to the conclusions expressed herein) that a foreign private issuer may follow its home country practice in lieu of the requirements of the Nasdaq Listing Rules 5600 Series, 5250(b)(3) and 5250(d), the Company elected to be exempt from Nasdaq Listing Rule 5635, which sets forth (A) the circumstances under which shareholder approval is required prior to an issuance of securities in connection with: (a) the acquisition of the stock or assets of another company, (b) equity-based compensation of officers, directors, employees or consultants, (c) a change of control, and (d) transactions other than public offerings; (B) general provisions relating to shareholder approval; and (C) the financial viability exception to the shareholder approval requirement.

Controlled Company

We are, and will continue to be, a “controlled company” within the meaning of the applicable rules of the Nasdaq because (i) as of December 31, 2025, our Controlling Shareholders, through Ping Shiang Business Ltd, beneficially own 14,500,000 Class A Ordinary Shares, approximately 72.95% of our outstanding Class A Ordinary Shares and 14,500,000 Class B Ordinary Shares, representing 96.74%, of the aggregate total voting power of our total issued and outstanding share capital; and (ii) following the PIPE Financing on March 27, 2026, and as of the date of this Annual Report, our Controlling Shareholders, through Ping Shiang Business Ltd, beneficially own 14,500,000 Class A Ordinary Shares, approximately 63.63% of our outstanding Class A Ordinary Shares and 14,500,000 Class B Ordinary Shares, representing 95.06%, of the aggregate total voting power of our total issued and outstanding share capital.

In addition, because of the ten-to-one voting ratio between our Class B and Class A Ordinary Shares, the Controlling Shareholders will have the ability to determine all matters requiring approval by shareholders, and that the concentrated control may limit or preclude your ability to influence corporate matters for the foreseeable future, including the election of directors, amendments of our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactions requiring shareholder approval.

As a “controlled company,” we are permitted to elect not to comply with certain corporate governance requirements. If we rely on these exemptions, you will not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements. 

Market and Industry Data

This Annual Report contains estimates and information concerning our industry, including our market position and the size and growth rates of the markets in which we participate, that are based on industry publications and reports. This information involves a number of assumptions and limitations, and you are cautioned not to place undue reliance on these estimates. We have not independently verified the accuracy or completeness of the data contained in these industry reports. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the “Risk Factors” section. These and other factors could cause results to differ materially from those expressed in these publications and reports.

BUSINESS OVERVIEW

Overview

We specialize in the procurement, distribution and sale of high-quality whiskies, including both bottled and cask whisky in both Taiwan and international markets. Since the inception of Agencia Comercial Co., Ltd, our Operating Subsidiary, in Taichung, Taiwan, the Operating Subsidiary has experienced significant growth through strategic expansion and diversification. Currently, we focus on three main business areas: bottled whisky sales, raw cask whisky sales, and proprietary brand whisky packaging and distribution business via brand authorization for bottling and packaging in Asia-Pacific. During the year ended December 31, 2025, the Company did not generate revenue from the sale of raw casks. This was primarily due to the absence of suitable commercial opportunities during the period, rather than a formal discontinuation of this business area. The Company intends to continue evaluating potential opportunities relating to raw casks and may pursue such opportunities if and when they arise and are considered commercially viable. Our Group’s business model is centered on B2B relationships. This role as a facilitator has positioned us as a trusted partner in the industry.

In February 2026, the Company disclosed that it launched a new initiative to expand into AI computing infrastructure. This new business focuses on the procurement and leasing of high-performance computing resources and the development of data center facilities in Indonesia. This expansion leverages our cross-border operational expertise to meet the growing global demand for AI processing power.

Our current operations include sourcing bottled whisky from domestic suppliers in Taiwan and reputable distilleries in the UK. We engage in sales activities, in collaboration with our downstream distributors, to supply these products to bars, nightclubs, and VIP lounges. Starting from 2023, our Group has expanded to include the procurement and sale of raw cask whisky directly from distilleries, allowing it to tap into a broader market and offer unique, high-quality products, and engage with sales to other liquor and spirits distributors. The extensive experience of the chief executive officer and directors of the Company in the whisky industry has enabled us to further expand our businesses. In addition to the trading and wholesale of whisky products, starting from 2025, we have also ventured into proprietary brand whisky packaging and distribution business. Through this business area, we source premium whisky casks from renowned distilleries around the world, particularly from regions renowned for their whisky-making traditions, such as Scotland. These casks are carefully selected, monitored, and aged to perfection under our expert supervision. Once the desired maturation is achieved, the whisky is bottled and labeled under our proprietary brands, offering discerning consumers a unique and exclusive experience. The proprietary brand whisky packaging and distribution business not only diversifies our revenue streams but also enhances our brand recognition, market positioning in the premium whisky business and exploration of diverse sales channels.

Looking ahead, we aim to leverage our strong market presence and industry experience to further expand operations. Our Group plans to further obtain brand authorization and source raw cask whisky from brand owners, bottling and packaging these products in Taiwan through contract manufacturers. This initiative will mark a significant step towards brand diversification and market expansion. While the primary sales channel will continue to be B2B, we are also exploring additional sales avenues, including retail, to broaden our market reach. The Company has secured long-term authorization agreements with certain brand owners, such as Ninja Whisky and Robuchon. Furthermore, through our contractor, we have obtained certain certifications from HMRC (verified as a Bottler & Labeller of Scotch Whisky under Spirit Drinks Verification Scheme, and a Bulk Importer of Scotch Whisky under the Spirit Drinks Verification Scheme, each until March 2027, respectively) and also plans to obtain certain certifications from the Japanese Brewery Association to further solidifying its position as a trusted partner in the industry.

Our future development is guided by several strategic directions. We will continue to cover a broad range of business areas, including bottled whisky sales, raw cask whisky sales, and proprietary brand whisky packaging and distribution business. We plan to grow from our Taiwan base to the entire Asian whisky market, with a particular focus on brand authorizations for bottling, packaging, and sales. In October 2024, Hong Kong announced a substantial tariff reduction on spirits, which is expected to have a positive impact on whisky sales and aligns with our strategy to expand into new international markets. As our Group continues to innovate, it is well-positioned to meet the growing demand for premium spirits and capture a share of the expanding Asian market. While we are positioned for growth, we must navigate challenges such as low entry barriers and a high degree of distributor dependency. Furthermore, the premium nature of our products requires substantial working capital for inventory procurement and meticulous management of our financial resources. Beginning in 2026, a significant portion of our strategic focus and capital allocation will be directed toward our AI infrastructure initiative. This includes our February 2026 disclosure of our entry into a non-binding letter of intent for a USD120 million lease of NVIDIA B300 (Blackwell) servers. We believe this pivot into high-performance computing will diversify our revenue streams and position the Company as a key infrastructure provider in the emerging AI economy.

Product Categories

Spirits and Whisky Business

We are dedicated to delivering a diverse range of high-quality whisky products that cater to the discerning tastes of our customers. Our product portfolio is designed to meet the evolving demands of the market, leveraging our extensive industry experience and strategic collaborations.

Our Company operates within the whisky industry through three distinct business areas: procurement and distribution of bottled whisky, procurement and distribution of raw cask whisky, and proprietary brand whisky packaging and distribution business. Each business area plays a vital role in our overall strategy, allowing us to cater to diverse consumer preferences and market demands. During the year ended December 31, 2025, the Company did not generate revenue from the sale of raw casks. This was primarily due to the absence of suitable commercial opportunities during the period, rather than a formal discontinuation of this business area. The Company intends to continue evaluating potential opportunities relating to raw casks and may pursue such opportunities if and when they arise and are considered commercially viable.

In the distribution of bottled whisky, we are dedicated to sourcing high-quality spirits from reputable distilleries. We carefully select whiskies that adhere to stringent industry standards, ensuring they are produced using approved grains and traditional distillation methods. Each whisky is aged in oak casks for the legally required minimum period, which allows for the development of rich flavors and complex aromas. Our commitment to quality ensures that the bottled whiskies we distribute appeal to a wide range of consumers, from casual drinkers to seasoned enthusiasts. By partnering with distilleries known for their craftsmanship, we can offer a selection that highlights the unique characteristics of various regions and styles.

Meanwhile, the distribution of raw cask whisky focuses on providing distillers and businesses with access to exceptional cask-strength spirits. This offering enables our partners to craft their own unique blends, giving them the flexibility to create products that meet their specific needs. This aspect of our business emphasizes collaboration and innovation, as we work closely with clients to help them achieve their desired flavor profiles.

In the realm of our proprietary brand whisky packaging and distribution business, we take a more hands-on approach. In this area, we not only engage in sales but also oversee the bottling and packaging processes. This involvement ensures that our products meet the highest standards of quality and presentation. We carefully select suitable bottles and packaging materials that reflect our proprietary brand’s identity and commitment to excellence. Additionally, we ensure that all labeling complies with legal requirements, providing consumers with clear and accurate information about the whisky’s origin and characteristics. By managing the bottling and packaging, we maintain control over the final presentation of our products, enhancing their appeal to consumers.

This comprehensive approach across our three business areas allows us to provide a diverse range of high-quality whiskies, ensuring that each product embodies authenticity and craftsmanship. As a result, we position ourselves as a trusted partner in the whisky market, catering to both enthusiasts and newcomers alike, while fostering a deeper appreciation for this timeless spirit.

Our current product portfolio includes the distribution of bottled whisky, raw cask whisky and proprietary brand whisky:

Bottled Whisky Distribution

Our bottled whisky portfolio features a carefully curated selection of premium products sourced from both Taiwan and the United Kingdom, reflecting our commitment to quality, authenticity, and value. We offer a range of Taiwan sourced bottled whisky, such as Macallan Single Cask 1990 and Glenlivet 30-year Single Cask. These exceptional whiskies are acquired at competitive prices through trusted channels, enabling us to maintain strong profit margins while providing customers with access to exclusive, high-quality offerings. In addition, we also offer UK Imported bottled whisky selection, which includes distinguished products such as Dalmore 1995 Single Cask, a single malt whisky sourced directly from renowned distilleries in the United Kingdom. By working closely with these distilleries, we ensure the integrity of our supply chain, maintain the highest standards of quality and optimize costs efficiency. Our pricing strategy ensures a significant margin, contributing to our profitability.

Raw Cask Whisky Distribution

Our raw cask whisky sales are specifically UK imported cask whisky. These are sourced directly from renowned distilleries in the UK and sold in Taiwan without additional processing. Our clients for these products include Customer A and Customer B. This direct procurement allows for better pricing strategies, as we can pass on competitive rates to clients while maintaining healthy profit margins. Additionally, since raw cask whisky requires minimal handling, resulting in lower associated transportation costs, this further enhances overall profitability. As part of our ongoing growth strategy, we are actively working to expand our customer base for this business line. This approach not only streamlines operations but also positions our Group to respond swiftly to market demands, ultimately contributing to financial efficiency and growth.

During the year ended December 31, 2025, the Company did not generate revenue from the sale of raw casks. This was primarily due to the absence of suitable commercial opportunities during the period, rather than a formal discontinuation of this business area. The Company intends to continue evaluating potential opportunities relating to raw casks and may pursue such opportunities if and when they arise and are considered commercially viable.

Proprietary Brand Whisky Packaging and Distribution (Cask-to-bottle and Distribution Business)

Beginning in 2025, we have collaborated with renowned whisky brands to directly source raw cask whisky from distilleries, bottling and packaging it in Taiwan for sale. One notable example is Ninja Whisky, produced by 瀨古酒造株式会社. Founded in 1869, 瀨古酒造株式会社 is a traditional Japanese sake producer known for its commitment to high-quality craftsmanship and the meticulous selection of ingredients. Their time-honored techniques result in a diverse range of sake that is rich in flavor and steeped in history.

The Ninja Whisky series, including the Yamato Ninja Edition, is a unique blend that pays homage to the legendary ninja warriors of ancient Japan. Our pricing strategy for cask whisky packaging in Taiwan ensures a high profit margin compared to other product lines, achieved by sourcing directly from distilleries and minimizing logistics costs. Additionally, the quality of our products can be assured through the direct sourcing of raw cask whisky from distilleries. Bottling and packaging the whisky in Taiwan will significantly reduce transportation time, costs, and carbon footprint. In instances where brand authorization is not obtained, distilleries typically manufacture or source their bottles from the PRC or India. This process involves transporting the bottles back to the distilleries, often located in Europe, for bottling and packaging, followed by shipping the finished products to Asia for sale. Our Group recognizes that disruptions in global shipping, such as blockages of critical shipping routes like the Suez Canal crisis or other logistical interruptions, can significantly impact delivery timelines. By collaborating with distilleries and obtaining brand authorization to bottle and package raw cask whisky in Taiwan, the risks associated with potential global shipping and logistics disruptions could be substantially mitigated, and a timely delivery of the products to customers can be ensured.

AI Computing Infrastructure Initiative

In February 2026, we disclosed that we launched our AI computing infrastructure business to capitalize on the increasing global demand for high-performance processing power. This initiative represents a strategic expansion of our business model into the technology infrastructure sector.

High-Performance Computing Resources

Our initial activities in this business involve the procurement and leasing of advanced hardware. On February 13 2026, we disclosed that we entered into a non-binding letter of intent to lease approximately 300 units of NVIDIA B300 servers, based on the Blackwell architecture. These high-performance systems are designed to handle massive-scale AI workloads, including the training and deployment of large language models. We intend to lease this computing capacity to enterprise clients and technology partners.

Data Center Infrastructure

To complement our hardware investments, we are pursuing the development of dedicated data center facilities in Indonesia. We have secured a non-binding letter of intent for a land parcel of approximately 50,000 square meters to support this infrastructure. By establishing a physical presence in Indonesia, we aim to provide a scalable and secure environment for our computing resources while positioning the Company to benefit from the digital transformation in Southeast Asia.

Our Competitive Strengths

Our Capability to Offer a Comprehensive One-Stop Service Through Strategic Partnerships

We offer a comprehensive one-stop service that encompasses everything from the procurement of raw materials to packaging and sales, thereby significantly enhancing the customer experience. Our brand partnerships with renowned names such as Robuchon and Ninja allow us to procure raw materials and engage with contracted manufacturer processing, distribution, promotion, and sales. To optimize our operations, we strategically collaborate with a network of trusted third-party providers who contribute valuable industry expertise. We believe this collaboration enables us to efficiently manage functions that extend beyond our core competencies. For example, rather than investing in the equipment and infrastructure required for in-house bottling, we partner with reputable local contracted manufacturers to bottle our whiskies. This approach allows us to concentrate on our strengths while leveraging the specialized skills of our partners. The finished products are marketed under our licensed brand name, ensuring a seamless transition from production to market. We believe our ability to deliver a one-stop service not only enriches the consumer experience but also reinforces our position within the local community and the wider whisky market.

Operational Efficiency and Sustainability Through Localized Production and Distribution

The glass bottles used for our whisky products constitute a substantial volume and weight, thereby contributing to our overall carbon footprint. Our bottles and packaging materials are manufactured in the PRC, where we benefit from lower labor and material costs. Rather than transporting the bottles to the UK for filling and subsequently shipping the finished products back to Taiwan for sale, we have adopted a more efficient strategy. We transport the finished glass bottles directly from the PRC to Taiwan for bottling and distribution. Since our primary market is in Taiwan, this localized production approach has enabled a substantial reduction in both carbon emissions and transportation costs associated with extensive international shipping. This streamlined method not only minimizes our environmental impact but also significantly shortens the overall production cycle. As a result, we enhance our operational efficiency, enabling us to respond more swiftly to market demands and deliver our products to customers faster. This strategy aligns seamlessly with our commitment to sustainability.

Commitment to Quality Control and Operational Adaptability in Bottling and Packaging

Our business areas include bottling and packaging of raw cask whisky. The bottles of our proprietary brand whisky, manufactured in the PRC, undergo rigorous quality assurance checks to ensure they meet our high standards for aesthetics and functionality. Each batch of our proprietary brand bottled whisky is tested for consistency in presentation, ensuring that every bottle reflects the excellence of our proprietary brand names. Our operations are further characterized by a proactive approach to adaptability, which enables the swift adjustment of bottling techniques and packaging designs in response to market trends and consumer preferences. We believe this capacity for agile response has not only enhanced our reputation but also fostered long-term relationships with suppliers and customers.

Established and Stable Relationships with Key Suppliers and Customers

Since the establishment of our Operating Subsidiary in 2020, our industry experience, operational capabilities and strong connections in Taiwan have enabled us to establish stable relationships with a variety of suppliers and customers. For instance, one of our key suppliers represented 11.10% and 24.95% of our total purchases during the fiscal years 2024 and 2025, respectively. Our solid reputation in the whisky market has facilitated the development of a dependable network of sales channels and customers. Notably, three of our major customers have consistently partnered with us throughout 2024 and 2025. Additionally, among our major customers, two accounted in aggregate for approximately 59.10% and 39.96% of our total sales during the fiscal years 2024 and 2025, respectively, maintaining a stable business relationship with us across both years.

Extensive Industry Expertise and a Proven Track Record

Selling premium whiskies requires thorough product expertise and an understanding of the general and local market. Our management team and board of directors prioritize human capital management, firmly believing that talented individuals with proven track records drive exceptional results. Comprising multi-disciplinary executives, our leadership team has extensive experience in successfully launching, growing, and managing companies of various sizes across multiple industries, including the spirits industry. Our chief executive officer and director, Mr. Tsai Yi Yang, brings over 10 years of experience in the alcoholic beverage distribution sector in Taiwan to our management team. Under his leadership, we have built a strong reputation as a leading wholesaler of premium whisky brands. This successful track record has established us as a key player in Taiwan’s high-end alcoholic beverage wholesale market, a reputation that is particularly important given the high risk of counterfeiting associated with luxury products.

Our Growth Strategies

To advance our business objectives and strengthen our competitive position, we intend to pursue the following key strategies:

Expand Our Product Offerings Through New Strategic Partnerships

In 2026, our key development direction will centre on enhancing our business-to-business model. Our goal is to establish new partnerships with other suppliers and whisky brand owners, enabling us to obtain brand authorization and effectively carry out cask-to-bottle and distribution business within the Asia-Pacific market. By collaborating with these new brands, we can introduce a wider variety of premium products that cater to the evolving tastes and preferences of our customers. This initiative will not only expand our product portfolio but also strengthen our market presence, positioning us as a versatile player in the competitive whisky landscape. Through these partnerships, we will leverage our operational expertise and distribution capabilities to ensure that our offerings meet the highest standards of quality and appeal to both existing and new clientele.

Deepen Existing Customer Relationships and Establish New Strategic Client Connections

We will continue to focus on strengthening our partnerships, leveraging our proximity, and understanding the unique needs of our customers. Major client relationships are managed by our senior management and customer service team, who maintain close contact with our existing customers, enabling us to drive client satisfaction and identify opportunities to grow our business. Given our reputation amongst the wine distributors in Taiwan, as well as our relationships and level of entrenchment with our customers, we use insights gained through our customer lifecycle to identify additional solutions that are value-additive for our customers. These insights allow us to continually assess opportunities to develop or acquire solutions to further expand market share, drive customer retention, and fuel growth for our business. Establishing new client relationships is a critical component of our growth strategy. We will continue to expand our network with downstream distributors of alcoholic beverages, since we believe there are significant untapped opportunities across various industry verticals as well as geographies. We aim to introduce innovative, premium-branded whisky products that align with evolving consumer preferences. We will focus on fortifying the distribution network to target key venues such as wine and liquor stores, bars, nightclubs, and VIP corporate clients. By cultivating relationships with these establishments, we aim to enhance brand recognition and accessibility. Additionally, we will employ data-driven insights to refine our product offerings and marketing strategies, ensuring they resonate with our target audience.

Promote Whisky Culture and Diversify Sales Channels through Regional Expansion

To promote a vibrant whisky consumption culture and expand our sales channels, we will enhance our existing business-to-business model while actively pursuing opportunities to reach retail customers directly. This dual approach will involve strengthening partnerships with distributors to ensure our products are widely available while also exploring innovative retail strategies, such as online sales platforms and pop-up events that engage consumers. We aim to create immersive experiences that educate potential customers about whisky, from tastings to masterclasses, fostering a deeper appreciation for our products. By diversifying our sales channels, we will not only broaden our market reach but also encourage a more inclusive whisky culture that invites both connoisseurs and newcomers to explore and enjoy our premium offerings.

Expand Geographic Coverage and Penetrate Asia-Pacific Markets

In 2026, we will direct our efforts toward penetrating new markets, with a specific focus on Singapore and other countries in Asia-Pacific. We intend to conduct comprehensive market research to understand consumer preferences, regulatory requirements, and competitive landscapes in each target country. We also intend to establish strategic partnerships with local distributors and retailers in Singapore and surrounding Asia-Pacific markets. Collaborating with established market players will provide us with valuable insights and facilitate smoother entry into these new markets. To resonate with Asia-Pacific consumers, we will adapt our brand positioning and marketing efforts to reflect local tastes and cultural nuances. This may include localized branding efforts, targeted advertising campaigns, and participation in regional whisky events to engage directly with potential customers. This strategic expansion will not only diversify our revenue streams but also enhance our brand’s international reputation and reach.

Develop and Scale AI Computing Infrastructure

In 2026, we intend to establish a presence in the high-performance computing market. Our strategy involves acquiring and leasing cutting-edge hardware, such as the NVIDIA B300 platform, to provide the computational power required for modern AI applications. A key component of this growth strategy is the development of localized infrastructure in Indonesia, which we believe offers a strategic vantage point for serving the broader Southeast Asian technology market.

Attract, Train, and Retain Skilled Professionals to Support Future Growth

We believe our success greatly depends on our ability to attract, incentivize, and retain talented professionals. To sustain our growth, we plan to continue to add to our teams, including technical, sales & marketing, and customer service members. Once employed, we provide our employees with a comprehensive training program to understand our market and product offerings. We plan to implement a series of initiatives to attract additional and retain mid- to high-level personnel, including formulating a market-oriented employee compensation structure and implementing a standardized multi-level performance review mechanism. 

Importation and Storage of Whisky

The logistics surrounding the importation and storage of whisky in Taiwan are governed by stringent regulatory frameworks to ensure compliance with local laws and maintain product integrity. See “Regulatory Matters” and “Regulations — Taiwan Regulations — Regulations on Importation and Storage of Alcoholic Beverages” for additional details.

Bottled Whisky

The distribution process for imported bottled whisky commences upon the product’s arrival in Taiwan, whether by air or sea. Upon arrival, the whisky is subject to Customs Declaration Procedures, a critical step that verifies adherence to local regulations governing the importation of alcoholic beverages. This procedure includes meticulous inspections conducted by the Tobacco and Alcohol Management Division, ensuring that all products meet the required quality and safety standards.

Following successful inspection, the payment of customs duties and sales tax is mandated. This financial obligation is essential for securing the whisky’s release from customs. Once these regulatory requirements are fulfilled, the imported bottled whisky is transported to our designated warehouse. This facility is specifically designed to maintain optimal storage conditions, thereby preserving the quality and characteristics of the whisky. Equipped with advanced climate control systems and robust security measures, the warehouse ensures that each bottle retains its intended flavor profile and aroma until it reaches consumers.

Raw Cask Whisky

The importation process for raw cask whisky is more complex, involving several regulatory steps to ensure compliance and proper handling. Upon arrival, our container of the raw cask whisky is initially stored in a bonded warehouse, and an application for product registration must be submitted to the tax bureau. This application includes comprehensive details regarding the proportion and formula of the whisky to be produced, which is vital for transparency and adherence to local regulations.

After product registration is secured, an application for bonded transfer of the raw cask whisky is submitted to the tax bureau. Upon receipt of the necessary documentation, customs authorities perform an inspection, alongside an evaluation by the Tobacco and Alcohol Management Division. This dual inspection process is designed to ensure that all raw cask whisky comply with safety regulations, particularly given their classification as hazardous goods.

Throughout the importation process, from arrival to storage in the bonded warehouse and subsequent transfer, we retains ownership and control over the raw cask whisky inventory, bearing the associated risks. Following successful inspections, the raw cask whisky are transported from the bonded warehouse to the designated foundry specified by the customer, enabling customers to create their unique blends tailored to specific market demands.

Proprietary Brand Whisky

The importation and storage process for our proprietary brand whisky is aligned with that of raw cask whisky. Both processes adhere to stringent regulatory requirements to ensure compliance and maintain product integrity. Upon successful completion of the necessary inspections, the raw whisky materials are transported to our local contract manufacturers for further processing.

Suppliers

For the fiscal years 2024 and 2025, the most significant alcoholic beverage products we distributed were primarily bottled whiskies, raw cask whiskies and proprietary brand whisky. During the year ended December 31, 2025, the Company did not generate revenue from the sale of raw casks. This was primarily due to the absence of suitable commercial opportunities during the period, rather than a formal discontinuation of this business area. The Company intends to continue evaluating potential opportunities relating to raw casks and may pursue such opportunities if and when they arise and are considered commercially viable. Our business model has evolved over the years to include both the sale of bottled whiskies and the procurement and sale of raw cask whiskies, which has allowed us to diversify our product offerings and cater to a broader range of customers. During the year ended December 31, 2025, the Company did not generate revenue from the sale of raw casks. This was primarily due to the absence of suitable commercial opportunities during the period, rather than a formal discontinuation of this business area. The Company intends to continue evaluating potential opportunities relating to raw casks and may pursue such opportunities if and when they arise and are considered commercially viable.

As a wholesaler of alcoholic beverage products, we strategically procure our inventory based on our business objectives and current market conditions. Consequently, we typically do not have formal long-term supply arrangements with distributors. Instead, we rely on our established relationships with suppliers and our industry expertise to source high-quality products that meet our standards and customer demands.

Our procurement process is influenced by various factors, including the exchange rates of different currencies, as the products we import are priced in the currency of the country of origin. Fluctuations in exchange rates with the New Taiwan Dollar (NTD) can significantly impact the purchase prices of imported alcoholic beverages, subsequently affecting our profit margins. Moreover, the timing and strategy behind inventory procurement necessitate a high degree of judgment, informed by industry insights and market conditions. This approach is essential for ensuring that we acquire the right products at the appropriate time, especially those with potential for value appreciation.

Our selection of suppliers mainly considers the following conditions and criteria:

Price: Whether the price of the goods or services provided by the supplier is competitive and can help with cost control.

Service quality: Whether the supplier’s service quality is reliable, whether the quality of whisky products is reputable, and whether it can provide timely delivery.

Geographical location: In terms of the packaging and bottling process under the cask-to-bottle and distribution business, whether the supplier’s geographical location is convenient for logistics transportation, and whether it can reduce transportation costs and time.

Cooperation relationship: History and stability of cooperation between the supplier and our Group, whether there is a good basis for communication and collaboration.

Compliance and certification: Whether suppliers meet relevant industry standards and certification requirements to ensure product quality and safety.

We build trusting relationships with our suppliers to work more efficiently with suppliers to monitor inventory, forecast demand, and improve delivery efficiency. Ensure common goals and values are shared with suppliers to set sustainable development goals.

Our founder, Mr. Tsai, has over 10 years of experience in the alcoholic beverages’ distribution and wholesale business. His expertise and industry knowledge have been instrumental in guiding our procurement strategies and establishing stable relationships with our major suppliers. With a long operating history and a solid reputation in the business, we have not experienced significant difficulties in procuring alcoholic beverages in accordance with our operational objectives and budgets.

We consider our major suppliers to be those suppliers that accounted for more than 10% of our overall purchases. Although our purchases were concentrated on major suppliers, in each of the fiscal years 2024 and 2025, there were three suppliers that consistently accounted for a majority of our total purchases. As we procure alcoholic beverages from the market ad hoc based on our business objectives and the prevailing market conditions, we do not normally have long-term supply contracts with our suppliers, including our major suppliers. Instead, in our ordinary course of business, we have an established practice of issuing standard purchase orders to our suppliers for each purchase, specifying simple price, quantity, delivery, and payment terms. 

Marketing

Our marketing initiatives are intricately aligned with our distribution strategy, which is meticulously designed to cater to the diverse preferences and behaviors of our customers, ensuring that we remain competitive and relevant in the whisky market.

For our daytime retail customers, who frequent wine and liquor stores, our marketing efforts emphasize the premium and super-premium nature of our whisky products. We leverage the storied reputation and heritage of well-known whisky brands like Macallan, Dalmore, and Glenlivet to appeal to discerning consumers who value quality and craftsmanship. Our marketing campaigns highlight personalized experiences through tailored recommendations and exclusive promotions, while underscoring our commitment to sustainable practices, including eco-friendly packaging and sourcing materials from sustainable manufacturers.

In the nighttime entertainment sector, which includes nightclubs, our marketing strategy focuses on creating innovative nightlife experiences centered around whisky. We collaborate with top nightlife venues to offer exclusive whisky tastings, events, and promotions, targeting young professionals, millennials, and tourists seeking unique and immersive nightlife experiences. Our marketing materials emphasize the use of state-of-the-art sound and lighting systems, accompanied by a diverse selection of high-end whisky cocktails and gourmet food menus. We increase brand visibility through strategic partnerships with leading nightlife brands and influencers, ensuring our whisky products are featured prominently in high-profile venues.

For our VIP channels, which include exclusive clubs and high-end establishments, our marketing approach positions our whisky products as symbols of luxury and exclusivity. We offer bespoke services and custom packaging for VIP clients, providing personalized experiences such as private whisky tastings, exclusive events, and limited-edition releases. Our marketing campaigns build brand prestige through strategic collaborations with high-end establishments, ensuring our whisky products are associated with luxury and exclusivity. This approach caters to high-net-worth individuals and discerning customers seeking exclusive and luxurious experiences.

By focusing on these key areas and tailoring our marketing efforts to meet the specific needs of our customers, we aim to enhance our market positioning and drive growth in the whisky market. Our strategic approach ensures that we remain competitive and relevant, delivering exceptional value to our customers.

Competition

The whisky industry is highly competitive, with a wide range of products and market participants. We believe the principal areas of competition include flavor, packaging and positioning innovations, pricing, distribution locations and shelf space, as well as promotional and marketing strategies. Our products compete with a variety of other beverages, including spirits, beers, wines, and increasingly non-alcoholic beverages designed and marketed to mimic the flavor of alcoholic beverages. Many of these products are produced by a relatively large number of companies, many of which have substantially greater financial, marketing, and distribution resources than we do.

Within the whisky segment of the market, important factors affecting our ability to compete include speed of innovation, product appeal and differentiation to consumers, brand and product image, taste and flavor of products, trade and consumer promotions, attractive packaging, product placement and distribution, access to capital and other resources, marketing, and pricing. We also rely on our distributors to provide stable and reliable distribution and to secure adequate shelf space in retail outlets. Competitive pressures could cause our products to lose market share or experience price erosion, which could materially impact our business and the results of operations. These pressures could include directly competitive innovations, new products that are better aligned with consumer preferences, greater marketing spending, better placements, or a decline in consumer interest in the whisky segment overall.

We have experienced, and continue to experience, competition from several key players in alcoholic beverages distribution in Taiwan. According to Migo’s industry report, while the Asian whisky market is growing, certain key players leverage their access to international markets to bring in a wide range of alcoholic beverages, catering to diverse consumer preferences.

While competition in the whisky space is increasing, we believe our collaborations with internationally renowned whisky brands and our experienced management team, led by our chief executive officer, can help us navigate market challenges, optimize supply chains, and enhance customer relations, thereby contributing to our overall competitiveness. Our focus on quality, innovation, and strategic collaborations positions us well to compete in this dynamic and growing market.

Regulatory Matters

Our business in Taiwan does not require any special or specific approval, license, or permit from the authority other than the corporate license, a registration with local government and import permit for alcoholic beverages that are required for all alcoholic beverages import business.

Import and sale of whisky, either bottled whisky or raw cask whisky, are primarily regulated and governed by the National Treasury Administration, Ministry of Finance under the Tobacco and Alcohol Administration Act and its relevant regulations. Pursuant to this Act, a permit is required to conduct a whisky import business in Taiwan. However, a permit is not necessary for retail or distribution of whisky. In addition, as a whisky importer and distributer in Taiwan, the Operating Subsidiary must comply with hygiene standards, labeling regulations, and advertising regulations for its whisky products. Failure to comply with such regulations may result in fines and other administrative sanctions.

Our Operating Subsidiary has obtained and maintained a valid permit for its whisky import business, and has not been sanctioned for violations of the Tobacco and Alcohol Administration Act.

In Indonesia, our AI infrastructure business is primarily regulated and governed by the Ministry of Communication and Informatics under the Law on Electronic Information and Transactions and the Personal Data Protection Law. Pursuant to these regulations, our Indonesian operations are required to register as a Private Electronic System Provider (PSE) and comply with risk-based business licensing requirements. Additionally, as a provider of AI infrastructure, we must adhere to data residency requirements, cybersecurity standards, and ethical guidelines for artificial intelligence issued by the Indonesian government. Failure to comply with these digital and telecommunications regulations may result in the suspension of services, administrative fines, or revocation of business licenses. 

Intellectual Property

As of the date of this Annual Report, we do not hold any trademarks but only one domain name in Taiwan. We rely on a combination of intellectual property laws and restrictions on disclosure to protect our intellectual property rights. However, there is no assurance that this form of protection will be successful in any given case, since the laws in Taiwan do not protect proprietary rights as fully as in the United States.

As of the date of this Annual Report, our intellectual property rights have not been subject to any adverse claims for infringement upon third parties’ trademarks, licenses, and other intellectual property rights in Taiwan. We have not been involved in any litigation or other claims related to any third party’s intellectual property rights.

The chart below presents information about the trademark that we have the authority to use through certain licensing agreements with the inventors.

Insurance

We have purchased the following insurance:

Litigation and Other Legal Proceedings

As of the date of this Annual Report, we are not a party to, and we are not aware of any threat of, any legal proceeding that, in the opinion of our management, is likely to have a material adverse effect on our business, financial condition or operations.

REGULATIONS

We are subject to a variety of Taiwan laws, rules and regulations across a number of aspects of our business. This section sets forth a summary of the most significant laws and regulations that are applicable to our current business activities within the territory of Taiwan.

Taiwan Regulation

Regulations on Company Establishment

The establishment, operation and management of companies in Taiwan is governed by the Taiwan Company Act, which was latest amended on December 29, 2021. There are four types of companies in Taiwan: unlimited company, unlimited company with limited liability shareholders, limited company and company limited by shares. Unlimited company and unlimited company with limited liability shareholders are rarely used in practice; a company limited by shares is the most common form of business undertaken for foreign investors in Taiwan. The Taiwan Company Act applies to both Taiwan domestic companies and foreign-invested companies, unless otherwise provided in the relevant foreign investment laws and regulations.

Our Taiwan Operating Subsidiary is a company limited by shares, and our Taiwan Operating Subsidiary has been current with its corporate filings with the Administration of Commerce, Ministry of Economic Affairs, Taiwan.

Regulations on Foreign Investment

The principal regulations governing foreign investments in Taiwan are the Statute for Investment by Foreign Nationals, the Regulations for Verification of Investment by Overseas Chinese and Foreign Nationals, and the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals. In order to efficiently provide services and manage foreign investments, Taiwan government has specifically established the Department of Investment Review under the Ministry of Economic Affairs.

All investments made by foreign nationals within the territory of Taiwan must comply with the provisions of the Statute for Investment by Foreign Nationals and receive permission from the Department of Investment Review. According to the administrative ordinance “Negative List for Investment by Overseas Chinese and Foreign Nationals” issued by the Department of Investment Review, Taiwan maintains a negative list of industries closed to foreign investment as the authorities determine that they relate to national security, public order, good moral, or national health, including public utilities, power distribution, natural gas, postal service, telecommunications, mass media, and air and sea transportation.

Regulations on Merger and Acquisition

The main laws and regulations governing merger and acquisition (“M&A) activities in Taiwan are the Business Merger and Acquisitions Act, the Company Act, the Securities and Exchange Act and the Fair Trade Act.

The competent authority in charge of the regulations in relation to M&A is the Ministry of Economic Affairs. The main regulatory body in charge of public M&A transactions is the Securities Futures Bureau of the Financial Supervisory Commission, the government agency in charge of public companies. Other relevant regulatory bodies include the Fair Trade Commission, the authority in charge of antitrust clearance, and the Department of Investment Review, the authority in charge of reviewing foreign and PRC investments. If the M&A target holds any special license, the transaction may also be subject to the review of the authority in charge of such special license.

Except for certain specific sensitive activities, foreign investments in a Taiwan listed company are generally not restricted in Taiwan but are subject to the prior approval from the Department of Investment Review if a foreign investor wants to acquire 10% or more of the shares of a Taiwan listed company in a single tranche. The approval must be obtained before the completion of the transaction.

Regulations on Building Construction and Use

Under the Building Act, a building license is required for new construction, extension, reconstruction or repair of buildings. A usage license is required for usage. When alterations of usage occur after a building is constructed, such as in alterations of usage class, structure, fire-protection facilities, and parking spaces or other alteration to the originally approved usage, a usage alteration license shall be applied for.

Further, under the Building Act, users of public buildings shall entrust professional institutions or persons recognized by the central construction authority to perform inspection and attestation periodically. Such inspection and attestation results shall be reported to the authority.

Regulations on Importation and Storage of Alcoholic Beverages

The primary laws and regulations governing the distribution and processing of alcoholic beverages in Taiwan are the Tobacco and Alcohol Administration Act and its relevant regulations. Pursuant to this Act, a permit is required to conduct an alcoholic-beverages import business in Taiwan. The import business permit for alcoholic beverages does not have a fixed term but can be revoked under the following conditions: (1) the annual fee is not paid within the statutory period; (2) the business or its representative produces or imports alcoholic beverages without a permit; (3) the business or its representative produces or imports alcoholic beverages that violate the Hygiene Standards for Alcohol Products or the CNS standards for editable alcohol; (4) the business or its representative is convicted of a crime under Tax Collection Act; (5) the representative has been a representative of another alcoholic beverages import business whose permit was revoked; (6) the business closes alcoholic beverages import business does not conduct alcoholic beverages import business for two consecutive years. Importation of alcoholic beverages is subject to an inspection by the Tobacco and Alcohol Management Division, where the authority inspects all requisite documents for the importation of alcoholic beverages and examines the imported alcohol products to ensure they meet the statutory hygiene standards and labeling regulations. After successful inspection and payment of customs duties and sale taxes, the imported alcohol products are released from the custom and the importation process is completed. Imported alcohol products that fail the inspection and re-inspection may be re-exported or destroyed by the custom.

Regulations on Distribution or Processing of Alcoholic Beverages

A permit is not necessary for retail or distribution of alcoholic beverages pursuant to the Tobacco and Alcohol Administration Act. However, alcoholic beverages importers, retailers, and distributers must comply with hygiene standards, labeling regulations, and advertising regulations for their alcohol products. Failure to comply with such regulations may result in fines and other administrative sanctions.

Regulations on Intellectual Property Rights

Patent Protection

Pursuant to the Patent Act, amended on May 4, 2022, there are three types of patents in Taiwan: invention patents, utility model patents, and design patents, the respective patent terms of which are 20, 10, and 15 years, all calculated from the filing date of a patent application, while the patent rights are actionable from the issue date of the patent.

Copyright

The Copyright Act provides that original copyrightable works shall enjoy exclusive rights automatically upon their completion, with no form of registration required. The competent authority for the application and registration of trademarks is the Taiwan Intellectual Property Office (“TIPO”) under the Ministry of Economic Affairs. Basically, the economic rights endure for the life of the author and fifty years after the author’s death; the economic rights in works authored by a juristic person endure for fifty years after the public release of the work.

Since 1985, a work receives copyright protection in Taiwan upon its completion, and copyright registration is no longer a condition to receive such protection. In 1998, the voluntary copyright recordation was further abolished. In order to reduce a copyright owner’s burden of proof, Article 13 of the Copyright Act adopts a mechanism to shift the burden of proof. If a person’s name is stated as the copyright owner or a publication date or place is stated in an ordinary way on the reproductions of a work or when the work is published, the copyright of the work will be presumed to belong to such person and the work will be presumed to be published on such date or in such place. However, the claimed copyrights may be challenged by the counterparty in the court proceedings. Given that, it is recommended to preserve relevant evidence by having it notarized by a notary public. For important copyrighted work, it is recommendable to obtain a copyright certificate issued by a copyright owners’ organization so as to serve as prima facie evidence of the completion and ownership of the copyright. However, it is important to note that such private organizations do not and cannot conduct any substantive examination of the copyrightability of a work. Notwithstanding the above, there is no standard way to state relevant information or prove copyright ownership. In addition, if a defendant produces any evidence to prove the contrary, the plaintiff would still bear the burden of proof and thus should submit documents on the creation process or other proof of the authorship or copyright ownership. Therefore, when a work’s copyrightable is being challenged, only a court will have a final say over such dispute on a case-by-case basis.

Trademarks

Trademark rights in Taiwan are governed by the Trademark Act. The competent authority for the application and registration of trademarks is the TIPO. Types of protection include trademarks, certification marks, collective membership marks and collective trademarks. The trademarks which are registered are protected for 10 years from publication in the Trademark Gazette. This term may be extended successively every 10 years via application for renewal.

Trade Secrets

The Taiwan Trade Secret Act mainly governs the following items: (1) the required elements of a trade secret; (2) ownership of a trade secret; (3) the licensing of a trade secret; (4) misappropriation of a trade secret; (5) the civil remedy and criminal penalty for the misappropriation of a trade secret; (6) the issuance of a protective order during criminal investigation. Pursuant to the Trade Secret Act, the information that can be protected under the Trade Secret Act is defined as any method, technique, process, formula, program, design, or other information that may be used in the course of production, sale or operation, and must meet the following requirements: (1) secrecy; (2) economic value; and (3) reasonable measures to maintain secrecy. Under the Trade Secret Act, the types of misappropriation include acquisition, use and divulging of a trade secret by unlawful means. The Trade Secret Act provides civil remedies and criminal penalties for trade-secret misappropriation.

Regulations on Consumer Protection

In Taiwan, the main regulation governing the consumer protection is the Consumer Protection Act. Pursuant to the Consumer Protection Act, a manufacture or a service provider shall be liable for any damage caused by its products or services, unless it is able to prove that the products or services have met and complied with the contemporary technical and professional standards of reasonably expected safety requirements prior to the launching of such products or services into the market. Furthermore, if the products or services may endanger consumers’ lives, bodies, health or property, they shall be labelled in a conspicuous place with a warning and the methods for emergency handling of such danger. If an enterprise fails to perform its labelling obligations in this regard, it will be held liable for the damage caused thereby.

Regulations on Environmental Protection

The bedrock of environmental protection in Taiwan is the Basic Environment Act. In addition to the Basic Environment Act, Taiwan regulations regulate each type of pollution by a different set of regulations, including the Soil and Groundwater Pollution Remediation Act, the Waste Disposal Act, the Air Pollution Control Act, the Water Pollution Control Act, and Toxic and Concerned Chemical Substances Control Act. The competent authority governing the environmental regulations is the Environmental Protection Agency (EPA). Failure to comply with such regulations may result in fines and other administrative sanctions.

Regulations on Foreign Currency Exchange

The principal regulation governing foreign currency exchange in Taiwan is the Foreign Exchange Regulation Act, amended on April 29, 2009. Pursuant to the Foreign Exchange Regulation Act, Taiwan Dollars amounting under the amount of NTD500,000 are freely convertible no matter what transaction they are in relation with. On the other hand, the transactions involving NTD500,000 or more or its equivalent in foreign currency shall fulfill certain obligations as provided in the Regulations Governing the Declaration of Foreign Exchange Receipts and Disbursements or Transactions.

Under the Regulations Governing the Declaration of Foreign Exchange Receipts and Disbursements or Transactions, for those foreign exchange transactions which amounts more than NTD500,000 and relates to the sales of goods or provision of services, such transaction shall be declared through filing a declaration statement. For those foreign exchange transactions which are not related to the sales of goods or provision of services, ranging from NTD500,000 to US$100 million, such transaction shall be declared through filing a declaration statement, and providing supporting documents, such as contracts or letters of approval, to the bank. For those foreign exchange transactions which are not related to the sales of goods or provision of services, amounting more than US$100 million, such transaction shall be declared through filing a declaration statement, providing supporting documents to the bank, and obtaining the approval of Taiwan CBC.

Though Taiwan government has promulgated the Regulations Governing Foreign Exchange Control on July 2, 1997, pursuant to the Foreign Exchange Regulation Act, the requirements for the government to implement those foreign exchange control measures should be subject to either of the following conditions: (1) when the domestic or foreign economic disorder might endanger the stability of the domestic economy; and (2) when Taiwan suffers a severe balance of payments deficit. From the past history, the Taiwan government only implemented these foreign exchange control measures once, in 1997 during the Asian Financial Crisis.

Regulations on Dividend Distribution

The principal regulations governing dividend distribution is the Company Act. Pursuant to the Company Act, a Taiwan company shall not pay dividends unless its losses have been covered and statutory reserve funds has been set aside, which should be 10% of the company’s after-tax net profits. However, in the event that the company’s statutory reserve funds have reached the total amount of the company’s capital, the company does not need to set aside any amounts for its statutory reserve funds. If the company has no net profits, in principle, it shall not pay dividends.

Regulations on Employee Stock Incentive Plan

The principal regulations governing dividend distribution is the Company Act. Pursuant to the Company Act, a Taiwan company may choose to implement the employee stock incentive plan in 5 ways: (1) employee stock compensation, (2) employee stock option certificates, (3) employee subscription of new shares using cash as consideration, (4) treasury shares transferred to employees, and (5) employee restricted share units. After the amendment of the Company Act on August 1, 2018, transferring the company’s stocks to the employees of the company’s parent company or its subsidiaries under the employee stock incentive plan is also permitted by law.

Regulations on Employment and Social Insurance

The labor law in Taiwan is regulated mainly by the Labor Standards Act, amended in July 2024. The Labor Standards Act governs the terms and conditions of employment such as working hours, holidays, rest periods, wages, overtime, leave, and termination of employment. According to Labor Standards Act, an employer is required to reach an agreement on salary with the employees, in which the agreed salary shall meet with the minimum amount set by the competent authority. Violations of the Labor Standards Act may result in fines and other administrative sanctions, and serious violations may result in criminal liabilities.

In order to protect workers’ safety and health and to prevent occupational accidents, employers in Taiwan are also required to comply with the Occupational Safety and Health Act. According to the Occupational Safety and Health Act, the employer shall arrange safety equipment to prevent any emergency. In addition, the employer shall provide safety education and training for employees which shall enable the employees to protect themselves when any accident occurs.

Taiwan governmental authorities have passed a variety of laws and regulations regarding social insurance and employee’s pension from time to time, including, among others, the Labor Insurance Act, the National Health Insurance Act, the Labor Pension Act, and the Employment Insurance Act. Pursuant to these laws and regulations, Taiwan companies must make contributions at specified levels for their employees to the relevant social insurance and pension funds. Failure to comply with such laws and regulations may result in various fines and legal sanctions.

Regulations on Taxation 

According to the Taiwan Income Tax Act, a company incorporated in Taiwan is a Taiwan tax resident and will be subject to 20% corporate income tax on its worldwide income. A non-resident company will be subject to 20% corporate income tax on its Taiwan-sourced income. If a resident company does not distribute its financial earnings generated in a year to its shareholders by the end of the following year, a surtax of 5% would be imposed on the undistributed earnings.

Effective from 2020, the Taiwan Statute for Industrial Innovation was amended, which extends the tax incentive by 10 years until December 31, 2029, for R&D expenditure. Under the tax incentive program, a company conducting qualifying R&D activities may select one of the following incentives: (i) up to 15% of qualifying R&D expenses may be credited against corporate income tax payable in the current year; or (ii) up to 10% of qualifying R&D expenses may be credited against corporate income tax payable in the year expenses incurred and carried forward for the next 2 years. In addition, if a company uses NTD 1 million or more of its undistributed earnings to construct or purchase buildings, software or hardware equipment, or technology for use in production or operation within 3 years from the year after such earnings are derived, such investment amounts may be deducted from the undistributed earnings in calculation of the current year’s undistributed earnings for assessment of surtax imposed on undistributed earnings from the year 2018.

The alternative minimum tax (“AMT”) imposed under the Taiwan Income Basic Tax Act is a supplemental income tax which applies if the amount of regular income tax calculated pursuant to the Taiwan Income Tax Act and relevant laws and regulations is below the amount of basic tax prescribed under the Taiwan Income Basic Tax Act. The taxable income for calculating AMT includes most income that is exempt from income tax under various legislations, such as capital gains from qualified securities and future transactions. The prevailing AMT rate for business entities is between 12% to 15%, which is determined by the Executive Yuan based on the economic circumstance.

According to the Taiwan Income Tax Act, a withholding tax rate of 21% shall generally be applicable to dividends distributed to non-Taiwan resident enterprise/individual investors. The withholding tax on the dividends may be reduced pursuant to a tax treaty between Taiwan and the jurisdictions in which the non-Taiwan shareholders reside. Taiwan currently has a treaty network with 35 countries. 

ITEM 4A. UNRESOLVED STAFF COMMENTS

Not Applicable.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report. This discussion and analysis and other parts of this Annual Report contain forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under “Risk Factors” and elsewhere in this Annual Report. You should carefully read the “Risk Factors” section of this Annual Report in Item 3 to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.

As used in this Annual Report, references to “Company,” “we,” “us,” and “our” refer to Agencia Comercial Spirits Ltd and its consolidated subsidiaries, unless the context requires otherwise.

This discussion is intended to provide the reader with information that will assist in understanding our financial statements, the changes in certain key items in those financial statements from period to period, and the primary factors that accounted for those changes, how operating results affect our financial condition and results of our operations of the Company as a whole, and how certain accounting principles and estimates affect our financial statements.

OVERVIEW

We, through our Operating Subsidiary, are primarily engaged in trading of whisky products, including procurement, distribution, and sale in both Taiwan and international markets. Through the Operating Subsidiary, we import and sell a broad range of premium whisky products, which come from countries/regions such as Scotland.

Beginning in 2025, we diversified our business model by venturing into proprietary brand bottling, packaging, and sales under “Ninja Whisky” trademark. Under this new approach, we source raw cask whisky directly from renowned distilleries. We then conduct the bottling and packaging operations in Taiwan, leveraging the expertise of local contract manufacturers. The bottled products are sold under Ninja Whisky trademark. This proprietary brand model allows us to build and promote the brand identity, maintain quality control over the final product, and capture greater value from the bottling and sales process. By directly sourcing raw cask whisky and carrying out the bottling and packaging processes in Taiwan, we can offer a seamless end-to-end solution while maintaining control over the supply chain and product quality.

The following discussion and analysis of our financial condition and results of operations are prepared based on the financial data which is derived from our audited financial statements for the years ended December 31, 2025 and 2024, included in this Annual Report.

Our financial performance for the year ended December 31, 2025, demonstrated significant growth compared to the year ended December 31, 2024. Revenue increased substantially from US$2,537,743 for the year ended December 31, 2024 to US$6,206,178 for the year ended December 31, 2025, representing a year-over-year growth of approximately 145%. This substantial revenue growth was primarily driven by strong demand for our whisky products across expanded international markets, particularly Hong Kong and Japan, as well as the successful introduction of our proprietary brand whisky packaging and distribution business. It was also fueled by our successful strategies to enhance capabilities, including strengthening brand recognition, improving customer experience, and expanding product offerings to meet diverse consumer preferences across a broader geographic footprint.

Consistent with the robust revenue growth, our gross profit increased from US$1,265,303 for the year ended December 31, 2024 to US$1,888,677 for the year ended December 31, 2025, representing a year-over-year growth of approximately 49%. This increase reflects the successful scaling of our operations and the contribution of our new proprietary brand packaging and distribution business.

Our revenue composition shifted significantly during 2025. Bottled whisky sales represented 86% of total revenue for the year ended December 31, 2025, compared to 64% for the year ended December 31, 2024. Our proprietary brand whisky packaging and distribution business, launched during the year, contributed 14% of total revenue, demonstrating the successful diversification of our business model. During the year ended December 31, 2025, the Company did not generate revenue from the sale of raw casks, which accounted for 36% of total revenue in 2024. This was primarily due to the absence of suitable commercial opportunities during the period, rather than a formal discontinuation of this business area. The Company intends to continue evaluating potential opportunities relating to raw casks and may pursue such opportunities if and when they arise and are considered commercially viable.

Geographically, we achieved significant diversification during 2025. International sales expanded to represent 68% of total revenue for the year ended December 31, 2025, compared to 3% for the year ended December 31, 2024. Hong Kong emerged as our largest market, contributing 49% of total revenue, followed by Japan with 13%, and other international markets including Canada, China, and Macau. Taiwan sales accounted for 32% of total revenue, compared to 97% for the year ended December 31, 2024, reflecting our successful geographic expansion strategy.

We reported net income of US$609,382 for the year ended December 31, 2025, compared to US$779,278 for the year ended December 31, 2024. The decrease in net income, despite robust revenue growth of 145%, reflects the impact of changes in revenue mix that resulted in lower gross margin, which decreased from 50% in 2024 to 30% in 2025, coupled with significant increases in operating expenses. General and administrative expenses rose to US$959,589 for the year ended December 31, 2025, compared to US$205,341 for the year ended December 31, 2024, reflecting increased professional fees associated with IPO preparation, staff costs for key leadership hires, and expenses related to the evaluation of new business opportunities, including the proposed AI infrastructure initiatives. Sales and distribution expenses increased to US$145,059 for the year ended December 31, 2025, compared to US$45,378 for the year ended December 31, 2024, driven by expanded headcount and distribution costs to support our geographic expansion into new international markets.

The gross profit improvement of 49% was driven by our proprietary brand whisky packaging and distribution business (58% margin) and bottled whisky sales, while the operating expense increase reflected necessary public company readiness costs, investments in geographic expansion, and strategic initiatives.

Our financial condition and results of operations for the year ended December 31, 2025 reflect our strong market position, effective execution of growth and geographic expansion strategies, and successful diversification into value-added services. The sustained revenue growth for the year ended December 31, 2025 demonstrates the continued momentum of our business model and our ability to capitalize on opportunities in both domestic and international markets. These factors have positioned us favorably for continued growth and profitability in the future, as we continue to optimize our product mix, streamline international logistics as volumes mature, and grow our higher-margin proprietary brand services.

KEY FACTORS AFFECTING OUR RESULTS OF OPERATIONS 

The key factors that we believe affect our financial condition and results of operations are discussed below.

Market Demand and Customer Preferences

Our revenue is directly tied to the demand for whisky products in both domestic and international markets. Changes in consumer preferences, such as shifts toward premium or craft spirits, could significantly impact our sales volumes and profitability. As an important player in the whisky industry, we must remain agile and responsive to evolving market dynamics and consumer trends.

The Taiwan market remains a crucial revenue driver for our business. Factors influencing domestic demand in Taiwan include economic conditions, disposable income levels, demographic shifts, and cultural trends. A strong Taiwan economy and rising disposable incomes can stimulate demand for our products, particularly in the premium and luxury sectors. Conversely, economic downturns or shifts in consumer spending patterns may adversely affect sales volumes.

Although our international sales has historically been small for the year ended December 2024, we recognize significant growth potential in global markets starting in 2025. We are poised for a strategic transformation, with a substantial increase in third-party international sales. This marks a decisive shift from our previous reliance on related party transactions, contributing to our growth in non-domestic markets such as Japan, China, Hong Kong, Canada, and Macau. The global whisky market is influenced by several key factors, including consumer trends and spending patterns, economic conditions, and cultural factors. A failure to fully understand these elements may impact our ability to successfully penetrate and compete in specified international markets.

In recent years, we have witnessed a growing consumer preference for premium and craft spirits, driven by a desire for unique and authentic experiences. This trend has created opportunities for us to introduce higher-priced, limited-edition, and premium whisky offerings, potentially enhancing our profitability. However, failure to adapt to this trend or accurately anticipate consumer preferences could lead to a loss of market share and revenue.

The whisky industry is highly competitive, with numerous Taiwan and international players vying for market share. Our ability to differentiate our products, maintain brand loyalty, and effectively market our offerings is crucial for sustaining demand and profitability. Intense competition may necessitate increased marketing efforts, product innovation, or pricing adjustments, impacting our operating costs and margins.

By closely monitoring market trends, consumer preferences, and competitive dynamics, we aim to proactively adapt our product offerings, marketing strategies, and operational processes to maintain a strong position in the whisky market. Failure to effectively address shifts in demand or consumer preferences could adversely impact our sales volumes, revenue, and overall profitability.

Supplier Relations and Procurement Costs

As a trading company in the whisky industry, our ability to maintain strong relationships with reputable suppliers and secure favorable procurement terms is crucial to our success. We rely on a diverse network of suppliers from various whisky-producing regions, such as Scotland, to source premium and rare whisky products for our customers. Disruptions in our supplier relationships or changes in procurement costs can significantly impact our gross margins and profitability.

We strive to cultivate long-term partnerships with our suppliers, built on trust, transparency, and mutual understanding. Our procurement team works closely with suppliers to ensure a steady supply of high-quality products and to negotiate favorable pricing and payment terms. Additionally, our expertise in identifying and procuring unique and limited-edition whiskies from sought-after distilleries enhances our competitive advantage and enables us to command premium pricing in the market.

In 2025, we introduced our proprietary brand whisky packaging and distribution business under “Ninja Whisky” trademark. Under this model, we source bulk whisky directly from brand-owned distilleries. We then conduct bottling and packaging operations in Taiwan through local contract manufacturers, and the finished products are sold under Ninja Whisky trademark. This vertical integration allows us to maintain quality control while capturing additional value in the supply chain.

The cost of goods sold, which includes the purchase price of whisky products, import duties, and other associated costs, is a significant factor affecting our profitability. With the introduction of our proprietary brand whisky packaging and distribution business, our cost of goods sold now additionally incorporates the bottling and packaging costs. Fluctuations in the cost of goods sold can be influenced by various factors, such as global supply and demand dynamics, changes in import regulations, and currency exchange rates.

To mitigate the impact of cost fluctuations, we employ strategic inventory management practices, leveraging our industry knowledge and market intelligence to optimize our purchasing decisions. For our proprietary brand whisky packaging and distribution business, we have established long-term supply arrangements with brand partners and bottling manufacturers. We continuously explore opportunities to streamline our supply chain and logistics operations, including diversifying our supplier base for packaging materials across the Asia-Pacific region. These measures, with our existing cost management framework, help reduce operational costs and improve overall efficiency as we scale our premium whisky offerings.

Maintenance of Key Personnel

Our success is heavily dependent on the expertise, industry knowledge, and relationships cultivated by our key personnel. They possess valuable insights into the whisky industry, have established strong connections with suppliers and customers, and play a pivotal role in driving our strategic initiatives and growth objectives.

Retaining and attracting top talent in the industry is crucial for maintaining our competitive edge. We strive to create a workplace environment that fosters professional growth, rewards performance, and provides opportunities for career advancement. Additionally, we strive to offer competitive compensation packages to motivate and retain our key personnel.

The loss of key personnel or the inability to attract and retain skilled professionals could adversely impact our operations, supplier relationships, and market position. As such, we prioritize succession planning and knowledge transfer initiatives to mitigate the risks associated with personnel changes and ensure business continuity.

Furthermore, we cultivate a strong corporate culture that promotes collaboration, innovation, and a shared passion for the whisky industry. By fostering an engaging and inclusive work environment, we aim to enhance employee satisfaction and loyalty, contributing to the long-term retention of our valuable human capital.

Fluctuation in Interest Rates

As part of our financing strategy, we have obtained borrowings from a local bank in Taiwan. These borrowings are subject to fluctuations in interest rates, which can directly impact our financial expenses and profitability.

Rising interest rates can lead to an increase in the cost of servicing our debt, thereby reducing our net income. Conversely, a decline in interest rates can result in lower financing costs, positively impacting our profitability. Given the potential impact of interest rate fluctuations on our financial performance, we closely monitor market conditions and maintain a prudent approach to debt management.

To mitigate the risks associated with interest rate volatility, depending on the market situation, we may employ various strategies, such as negotiating fixed-rate borrowings or exploring hedging instruments like interest rate swaps. Additionally, we maintain a disciplined approach to capital allocation, ensuring that our borrowings are aligned with our operational requirements and growth objectives.

Our finance team regularly evaluates our debt portfolio, interest rate exposure, and potential refinancing opportunities to optimize our financing costs and maintain a healthy financial position. By proactively managing our interest rate risk, we aim to minimize the adverse effects of interest rate fluctuations on our results of operations and ensure long-term financial stability.

Fluctuation in Exchange Rates

As a company engaged in international trade, our operations are exposed to fluctuations in exchange rates. With customers and suppliers located in various countries, our revenue and expenses are denominated in multiple currencies.

Unfavorable movements in exchange rates can adversely impact our financial performance. For instance, an appreciation of the NTD against other currencies can make our products more expensive for international customers, potentially affecting our export sales and profitability. Conversely, a depreciation of the NTD can increase the costs of importing whisky products from our foreign suppliers, putting pressure on our gross margins.

Our finance team closely monitors currency markets and employs robust risk management practices to assess and manage our foreign exchange exposure proactively. By implementing these strategies, we aim to minimize the impact of currency fluctuations on our financial results and maintain a stable and predictable operating environment.

Competitive Landscape

The whisky trading industry is highly competitive, with numerous players offering similar products. Our ability to differentiate our offerings, maintain competitive pricing, and secure reliable suppliers will be critical to sustaining growth.

As we explore new markets, we may face challenges related to brand recognition, regulatory hurdles, and competition from established players, which could impact our revenue growth.

Macroeconomic Conditions

Our results of operations are influenced by global economic conditions, including inflation, recessionary pressures, and changes in consumer spending patterns. Economic downturns could reduce demand for premium products like whisky, adversely affecting our revenue.

Rising oil prices may adversely affect our business by increasing freight and logistics costs associated with shipping our whisky products from Taiwan to customers across regions. These increased costs could lead to higher product prices, reduced consumer demand, compressed profit margins, or supply chain disruptions. Additionally, higher oil prices may contribute to broader inflation, reducing consumer spending on premium products. Any sustained increase in oil prices could therefore have a material adverse effect on our revenue and results of operations.

KEY COMPONENTS OF OUR RESULTS OF OPERATIONS

To assess the performance of our business, we consider a variety of financial and operating measures. The key financial performance indicators we use include revenue, cost of revenue, gross profit and gross margin, general and administrative expenses, sales and distribution expenses, and income tax expenses. Our review of these indicators reveals the results of our business performance and provides timely and meaningful feedback to key operating decisions and allows our business to respond promptly to competitive market conditions and different demands and preferences from our customers. The key measures that we use to evaluate the performance of our business are set forth below and are discussed in greater details under “Results of Operations”.

Revenue

Our revenue is generated through the sale and distribution of bottled whisky products across three core business lines: raw cask whisky sales, bottled whisky sales, and proprietary brand whisky packaging and distribution business. The raw cask whisky sales involves wholesale transactions of entire whisky barrels to distributors and retailers, while the bottled whisky sales focuses on finished products sold through hospitality channels and corporate clients. Our proprietary brand whisky packaging and distribution business represent a vertically integrated model where we collaborate with established distilleries to bottle and package our product offerings under brand authorization, combining their heritage with our distribution expertise.

Revenue performance directly impacts our financial results through both top-line growth and product mix effects. Management prioritizes strategic balance between volume growth and product mix, as shifts in geographic markets or product categories can significantly influence profitability. We monitor how revenue composition affects gross margins, working capital requirements, and scalability across different business models.

We evaluate revenue performance through several key metrics: geographic market penetration (domestic vs. international), product category mix (raw cask vs. bottled vs. proprietary brand whisky packaging and distribution business), and trade volume relative to revenue growth. These measurements help assess pricing power, demand elasticity, and the effectiveness of distribution strategies. Management supplements this analysis with customer acquisition costs, channel profitability, and inventory turnover ratios to optimize our commercial operations.

Cost of revenue

Our cost of revenue primarily comprises the procurement costs of whisky products held for sale, including raw casks and bottled inventory, as well as direct expenses associated with import/export duties and processing fees. These costs are inherently significant in our business model due to the premium nature of our products, which require careful sourcing, aging, and handling throughout the supply chain. The composition of these costs varies across our products, with raw cask procurement, bottling operations, and international distribution each presenting distinct cost structures.

Cost of revenue directly impacts our profitability through gross margin, serving as a key indicator of our operational efficiency and pricing power. Management actively monitors procurement strategies, supplier relationships, and logistics networks to optimize these costs while maintaining product quality. Fluctuations in raw material pricing, trade tariffs, or transportation costs can materially affect margins, making cost control a critical focus area for sustaining profitability across economic cycles.

We evaluate cost of revenue performance through several operational lenses, such as procurement efficiency, measured by cost per unit across product categories; supply chain optimization, including lead times and import/export cost structures; and economies of scale as production volumes grow. These metrics inform strategic decisions regarding supplier diversification, inventory management, and pricing adjustments to align with our premium market positioning.

Gross profit and gross profit margin

Gross profit represents the difference between revenue and the cost of goods sold, serving as a fundamental measure of our production and distribution efficiency. Gross profit margin, calculated as gross profit divided by revenue, indicates the portion of each revenue dollar retained after accounting for direct product costs, reflecting our pricing power and cost management effectiveness.

Gross profit and margin directly impact our results of operations by determining the funds available to cover operating expenses and generate operating income. Higher gross margins provide greater flexibility to invest in growth initiatives while maintaining profitability, while margin pressure may require operational adjustments or cost optimization measures. These metrics ultimately influence our bottom-line performance and capacity for strategic reinvestment.

Management monitors gross profit and margin by product line and distribution channel, analyzing trends in input costs, production efficiencies, and pricing strategies. We evaluate margin sustainability through regular reviews of procurement practices, inventory management, and product mix optimization, ensuring alignment with our product mix strategy and long-term profitability targets.

General and administrative expenses

General and administrative expenses consist primarily of staff costs (including salaries, messing, etc.), expenses related to trademark, lease expenses, and professional fee (including audit fee for our consolidated financial statements). These expenses affect our results of operations by reducing operating income, as they are largely fixed in nature and do not fluctuate directly with sales volume. The level of general and administrative expenses relative to revenue influences our operating margins and overall profitability, requiring careful management to ensure the efficient allocation of resources while maintaining necessary corporate functions and strategic capabilities. Management monitors and controls these costs through regular budget reviews, operational efficiency assessments, and strategic resource allocation, while ensuring we maintain the necessary corporate governance, financial reporting capabilities, and operational support required for sustainable growth.

Sales and distribution expenses

Sales and distribution expenses consist primarily of employee-related costs for sales personnel, including salaries and benefits, along with warehouse expenses directly tied to revenue generation. These costs represent the necessary investments to maintain and grow our distribution network, sales channels, and customer relationships.

Sales and distribution expenses affect our results of operations by reducing operating profit, with their efficiency directly influencing our overall profitability. As semi-variable costs, they typically scale with business expansion but can be optimized through productivity improvements. Management monitors these expenses on a regular basis, ensuring we maintain an appropriate balance between market penetration and cost discipline. The effectiveness of our sales and distribution network is evaluated based on its ability to support revenue growth while maintaining competitive cost structures.

Income tax expenses

Income tax expenses represent the corporate income tax we are required to pay to relevant tax authorities based on our taxable income. As a Taiwan-based company, we are subject to profit tax governed by local tax laws and regulations. The expense is calculated by applying applicable tax rates to taxable income, after accounting for all allowable deductions, credits, and adjustments under the tax code.

Income tax expenses directly impact our net income and overall profitability, as they represent the final allocation of pre-tax earnings to tax obligations. The effective tax rate, which may differ from statutory rates due to available incentives and deductions, serves as our primary performance metric for tax efficiency. Management actively monitors this rate through ongoing review of tax positions, compliance with regulatory changes, and optimization of available tax planning opportunities within legal frameworks.

Results of Operations

For the years ended December 31, 2025 and 2024

The following table summarizes the results of our operations for the years ended December 31, 2025 and 2024, respectively, and provides information regarding the dollar and percentage change during such periods.

Revenue

We generated revenue of US$6,206,178 for the year ended December 31, 2025, marking a significant increase of 145% from US$2,537,743 for the year ended December 31, 2024. This growth was driven by expanded sales volumes, successful penetration into new international markets, and the introduction of our proprietary brand whisky packaging and distribution business.

Our primary revenue driver historically has been the market in Taiwan, which accounted for 97% of total revenue for the year ended December 31, 2024. For the year ended December 31, 2025, Taiwan sales represented 32% of total revenue, reflecting our successful expansion into international markets during the year. International sales expanded significantly, representing 68% of total revenue for the year ended December 31, 2025, compared to 3% for the year ended December 31, 2024. Hong Kong emerged as our largest market, contributing 49% of total revenue, followed by Japan with 13% of total revenue. Other international markets included Canada with 3% of total revenue, China with 3% of total revenue, and Macau with less than 1% of total revenue. The substantial increase in international sales was primarily driven by new distribution relationships established in Hong Kong and Japan during 2025, reflecting our successful execution of geographic expansion strategies.

A significant change occurred in our revenue composition by business areas. For the year ended December 31, 2025, bottled whisky sales represented 86% of total revenue, compared to 64% for the year ended December 31, 2024. Our proprietary brand whisky packaging and distribution business, which was introduced during 2025, represented 14% of total revenue. Raw cask whisky sales, which accounted for 36% of total revenue in 2024, represented 0% of total revenue for the year ended December 31, 2025. The absence of raw cask sales during the year was primarily attributable to the absence of suitable commercial opportunities during the period, rather than a formal discontinuation of this business area. The Company intends to continue evaluating potential opportunities relating to raw casks and may pursue such opportunities if and when they arise and are considered commercially viable. The introduction of our proprietary brand packaging and distribution business reflected our strategic shift toward higher-margin value-added services. Our focus on expanding bottled whisky offerings and strengthening our brand presence in key markets contributed significantly to revenue growth. Additionally, changing consumer preferences and growing demand for premium bottled whisky products in international markets have created favorable conditions for this strategic focus. The growth in bottled whisky sales and the introduction of proprietary brand services have allowed us to capture higher margins and forge stronger connections with our customers across a broader geographic footprint.

For the year ended December 31, 2025, we continued to implement selective pricing strategies across our product portfolio. Our whisky products are available across a wide range of price points, catering to diverse customer preferences and market demands. For the year ended December 31, 2025, selling prices ranged from US$26 to US$92,135, consistent with the prior year’s range. This diverse portfolio includes both entry-level and premium offerings. The lower end of the price range, starting at US$26, represents our more accessible varieties, appealing to a broader consumer base seeking quality at reasonable prices. In contrast, the higher end, reaching up to US$92,135, encompasses our most exclusive offerings, targeting discerning collectors and connoisseurs.

The substantial increase in revenue reflects our successful geographic expansion efforts, improved market penetration, and the introduction of new business lines, supported by favorable market conditions and increased demand for whisky products across multiple international markets.

In addition to our revenue performance, we closely monitor our trade volume, which represents the number of bottles and raw cask whisky sold during a given period. Trade volume is a key metric that provides insights into the demand for our products and the effectiveness of our sales and distribution strategies.

For the year ended December 31, 2025, our total trade volume was 30,137 bottles, compared to 44,095 bottles for the year ended December 31, 2024. The decrease in trade volume from 2024 to 2025, despite significant revenue growth of 145%, reflects a strategic shift in our product mix toward higher-value offerings and the introduction of our proprietary brand whisky packaging and distribution business, which generates revenue through value-added services rather than bottle volume.

While our trade volume decreased by approximately 32% for the year ended December 31, 2025 compared to the prior year, our revenue growth substantially outpaced this volume decline. This disparity can be attributed to two primary factors. First, we continued to focus on offering more premium and higher-priced bottled whisky products, catering to the growing demand for luxury and artisanal spirits, which resulted in a higher average selling price per bottle. Second, the introduction of our proprietary brand whisky packaging and distribution business contributed US$843,462 in revenue during 2025. Additionally, we maintained targeted pricing strategies to optimize our revenue and profitability, which contributed to the higher revenue growth relative to trade volume.

The decrease in raw cask sales volume also contributed to the overall decline in trade volume, as the Company did not generate revenue from the sale of raw casks. This was primarily due to the absence of suitable commercial opportunities during the period, rather than a formal discontinuation of this business area. The Company intends to continue evaluating potential opportunities relating to raw casks and may pursue such opportunities if and when they arise and are considered commercially viable

For the year ended December 31, 2025, we made significant strides in strengthening our market presence and expanding into new international markets. We successfully established distribution channels in Hong Kong, Japan, Canada, and Macau, allowing our products to reach a broader consumer base across multiple regions. We continued to introduce new whisky varieties and limited editions, catering to evolving consumer preferences and trends. This diversification strategy allowed us to capture a broader customer base and meet the growing demand for unique and premium whisky experiences across our expanded geographic footprint.

By combining improved market penetration with targeted geographic expansion efforts and the introduction of value-added services, we were able to capitalize on the growing demand for whisky products, driving significant revenue growth and solidifying our position as a prominent player in the industry, even as trade volume moderated in favor of higher-value offerings.

Cost of revenue

Our cost of revenue increased to US$4,317,501 for the year ended December 31, 2025, compared to US$1,272,440 for the year ended December 31, 2024, representing a 239% increase. This growth corresponded with total revenue growth of 145%, from US$2,537,743 in 2024 to US$6,206,178 in 2025. Cost of revenue as a percentage of sales increased from 50% in 2024 to 70% in 2025, reflecting changes in revenue composition and cost structure during the year.

For the year ended December 31, 2025, cost of revenue consisted of US$3,970,207 attributable to bottled whisky sales and US$347,294 attributable to our proprietary brand whisky packaging and distribution business. For the year ended December 31, 2024, cost of revenue consisted of US$880,214 attributable to bottled whisky sales and US$392,226 attributable to raw cask whisky sales.

For the bottled whisky sales, cost of revenue as a percentage of revenue generated from that business area was 74% for the year ended December 31, 2025, compared to 54% for the year ended December 31, 2024. This increase reflected shifts in product mix toward different bottled whisky varieties, increased procurement costs in certain supply categories, and the expansion of sales volumes across international markets, which initially carried higher per-unit logistics costs as new distribution channels were established.

There was no cost of revenue attributable to raw cask whisky sales for the year ended December 31, 2025, compared to US$392,226 for the year ended December 31, 2024. The absence of raw cask sales during the year was primarily attributable to the absence of suitable commercial opportunities during the period, rather than a formal discontinuation of this business area. The Company intends to continue evaluating potential opportunities relating to raw casks and may pursue such opportunities if and when they arise and are considered commercially viable.

For the proprietary brand whisky packaging and distribution business, which was introduced during 2025, cost of revenue represented 42% of revenue from that business area for the year ended December 31, 2025. This reflected the cost structure of our value-added services, including brand-authorized bottling, packaging, and sales, which leverage our operational expertise and established relationships within the industry.

At the consolidated level, the increase in cost of revenue as a percentage of sales from 50% in 2024 to 70% in 2025 was primarily attributable to significant changes in revenue mix. The proportion of bottled whisky sales increased from 64% of total revenue in 2024 to 86% in 2025, while raw cask whisky sales, which carried a cost structure of approximately 43% of revenue from that business area in 2024, were absent during the year. Additionally, the expansion into new international markets during 2025 involved higher initial logistics and distribution costs as we established new supply chain relationships and distribution channels. These factors contributed to the higher cost ratio compared to the prior year, partially offset by the introduction of our proprietary brand packaging and distribution business with its 42% cost structure.

Despite the increase in cost of revenue as a percentage of sales, we continue to benefit from strategic supplier relationships and operational efficiencies that support our ability to meet growing customer demand across an expanded geographic footprint. Management remains focused on optimizing product mix, evaluating procurement strategies, streamlining international logistics as volumes mature, and identifying cost-saving opportunities to improve our cost structure in future periods.

Gross profit and gross margin

Our gross profit for the year ended December 31, 2025 increased to US$1,888,677, compared to US$1,265,303 for the year ended December 31, 2024, representing a 49% increase. This growth was driven by expanded sales volumes and the introduction of our proprietary brand whisky packaging and distribution business, partially offset by a shift in gross margin from 50% for the year ended December 31, 2024 to 30% for the year ended December 31, 2025.

The revenue mix shifted significantly year-over-year, with international sales representing 68% of total revenue for the year ended December 31, 2025 compared to 3% for the year ended December 31, 2024, while domestic sales accounted for 32% for the year ended December 31, 2025 versus 97% for the year ended December 31, 2024. This shift reflected our successful geographic expansion into new international markets, particularly Hong Kong and Japan, which contributed substantially to revenue growth but initially carried different margin profiles as new distribution channels were established.

For our bottled whisky sales, gross profit increased to US$1,392,509 for the year ended December 31, 2025, compared to US$756,024 for the year ended December 31, 2024, representing an 86% increase. Gross margin for this business area was 26% for the year ended December 31, 2025, compared to 46% for the year ended December 31, 2024. The margin compression reflected shifts in product mix toward different bottled whisky varieties, increased procurement costs in certain supply categories, and the expansion of sales volumes across international markets, which initially carried higher per-unit logistics costs as new distribution channels were established. Despite the margin decline, the bottled whisky sales achieved significant absolute gross profit growth driven by higher sales volumes.

There was no gross profit attributable to raw cask whisky sales for the year ended December 31, 2025, compared to US$509,279 for the year ended December 31, 2024, which represented a gross margin of 56%. The absence of raw cask sales during the year was primarily attributable to the absence of suitable commercial opportunities during the period, rather than a formal discontinuation of this business area. The Company intends to continue evaluating potential opportunities relating to raw casks and may pursue such opportunities if and when they arise and are considered commercially viable.

For our proprietary brand whisky packaging and distribution business, which was introduced during 2025, gross profit amounted to US$496,168 for the year ended December 31, 2025, representing a gross margin of 58%. This strong performance reflected the higher-margin nature of our value-added services, including brand-authorized bottling, packaging, and sales, which leverage our operational expertise and established relationships within the industry.

The gross margin compression at the consolidated level from 50% in 2024 to 30% in 2025 was primarily attributable to significant changes in revenue mix. The proportion of bottled whisky sales increased from 64% of total revenue in 2024 to 86% in 2025, while raw cask whisky sales, which carried a gross margin of 56% in 2024, were absent during the year. Additionally, the expansion into new international markets during 2025 involved higher initial logistics and distribution costs as we established new supply chain relationships and distribution channels. These factors contributed to the lower consolidated gross margin compared to the year ended December 31, 2024, partially offset by the introduction of our proprietary brand packaging and distribution business with its strong 58% gross margin.

Despite the decline in consolidated gross margin, we achieved significant absolute gross profit growth of 49%, demonstrating our ability to scale operations and generate increased profitability. The introduction of our proprietary brand packaging and distribution business, with its 58% gross margin, represents a strategic move toward higher-margin value-added services that we expect will contribute increasingly to our profitability as this business line grows.

Through a combination of geographic expansion, strategic product mix adjustments, and the introduction of new business lines, we continue to demonstrate our commitment to operational excellence and long-term profitability. Management remains focused on optimizing product mix, streamlining international logistics as volumes mature, and growing our higher-margin proprietary brand services to improve gross margin performance in future periods.

General and administrative expenses

For the year ended December 31, 2025, general and administrative expenses increased to US$959,589, representing a 367% increase from US$205,341 for the year ended December 31, 2024. As a percentage of revenue, these expenses rose from 8% for the year ended December 31, 2024 to 15% for the year ended December 31, 2025, reflecting continued strategic investments in organizational infrastructure, public company readiness, and expanded operations to support our geographic expansion and new business initiatives.

The significant increase was primarily attributable to higher professional fees, which rose to US$357,329 for the year ended December 31, 2025 compared to US$85,687 for the year ended December 31, 2024. These costs were associated with ongoing IPO preparation, including comprehensive audit, legal, and advisory services, as well as professional fees related to the evaluation of new business opportunities.

Staff costs increased substantially to US$204,190 for the year ended December 31, 2025, compared to US$40,367 for the prior year, reflecting key leadership hires and expanded administrative personnel to support our growing business operations, increased international activities, and enhanced corporate governance framework.

Lease expenses rose to US$104,249 for the year ended December 31, 2025, compared to US$15,268 for the prior year, primarily due to expanded office and operational facilities to accommodate our growing team and business activities. Insurance expenses increased to US$78,473 for the year ended December 31, 2025, compared to US$7,296 for the prior year, reflecting enhanced coverage associated with our expanded operations and public company preparedness.

Insurance expenses increased to US$78,473 for the year ended December 31, 2025, compared to US$7,296 for the prior year, primarily reflecting enhanced group medical and other staff-related insurance coverage following the expansion of our workforce and implementation of more comprehensive employee benefit programs.

Other expenses increased from US$26,358 in 2024 to US$215,348 in 2025. This increase was primarily driven by (i) higher marketing and promotion costs to support the launch of the Company’s proprietary brand and expansion into new international markets; (ii) increased entertainment and travel expenses for business development activities, including meetings with potential distributors, partners, and customers across target regions; and (iii) other administrative costs associated with the Company’s expanded operations and public company infrastructure.

While these expenditures temporarily increased our operating cost ratio, they were essential to establish the financial and operational foundation required to support our long-term growth objectives, including our geographic expansion into new international markets, the introduction of our proprietary brand whisky packaging and distribution business, and the evaluation of potential strategic diversification opportunities. The higher costs reflect our transition to a more scalable organizational structure capable of supporting our expanding operations, increased market presence, and future growth initiatives.

Sales and distribution expenses

Sales and distribution expenses increased to US$145,059 for the year ended December 31, 2025, compared to US$45,378 for the year ended December 31, 2024, representing a 220% increase. The majority of sales and distribution expenses consist of salaries for sales personnel and warehouse staff, reflecting our commitment to maintaining a skilled workforce to support business operations and customer relationships. The increase was primarily driven by expanded headcount to support our geographic expansion into new international markets, including Hong Kong and Japan, as well as higher distribution-related costs associated with increased sales volumes and new logistics channels.

As a percentage of total revenue, sales and distribution expenses accounted for approximately 2% for the year ended December 31, 2025, consistent with 2% for the year ended December 31, 2024. This stable percentage, despite significant revenue growth of 145%, reflects our continued strategic approach to sales and marketing, which emphasizes targeted efforts and efficient utilization of resources while supporting expanded trade volume and revenue growth across a broader geographic footprint.

Our sales strategy has been focused on cultivating long-term relationships with key corporate customers and industry partners, leveraging our brand reputation and quality products. We have continued to invest in building a skilled sales team with deep industry knowledge and strong relationships within our target markets, both in Taiwan and internationally. The increase in absolute expenses for the year ended December 31, 2025 corresponds with expanded business activities, new market entry costs, and the associated personnel required to support our operational growth and customer service commitments.

As our international operations mature and sales volumes in newer markets stabilize, we expect sales and distribution expenses to grow at a more moderate pace, further improving operating leverage over time.

Income from Operations

Income from operations was US$784,029 for the year ended December 31, 2025, compared to US$1,014,584 for the year ended December 31, 2024, representing a 23% decrease. This decline in operating income, despite significant revenue growth of 145%, reflects the impact of changes in revenue mix, increased cost of revenue as a percentage of sales, and higher operating expenses associated with our geographic expansion, strategic initiatives, and continued investments in organizational infrastructure.

Our revenue for the year ended December 31, 2025 reached US$6,206,178, representing a significant increase of 145% compared to the year ended December 31, 2024. However, our gross profit margin decreased from 50% for the year ended December 31, 2024 to 30% for the year ended December 31, 2025, primarily attributable to shifts in revenue mix toward bottled whisky sales, the temporary absence of higher-margin raw cask whisky sales, and higher initial logistics costs associated with entering new international markets.

Additionally, operating expenses increased substantially during the year. General and administrative expenses rose to US$959,589 for the year ended December 31, 2025, compared to US$205,341 for the year ended December 31, 2024, reflecting increased professional fees associated with IPO preparation, staff costs for key leadership hires, and expenses related to the evaluation of new business opportunities. Sales and distribution expenses increased to US$145,059 for the year ended December 31, 2025, compared to US$45,378 for the prior year, driven by expanded headcount and distribution costs to support our geographic expansion into new international markets.

The combination of lower gross margin and increased operating expenses contributed to the decrease in income from operations for the year ended December 31, 2025, despite robust revenue growth. While operating income declined in absolute terms, we remain focused on optimizing our product mix, streamlining international logistics as volumes mature, and growing our higher-margin proprietary brand packaging and distribution business to improve operating performance in future periods. The investments made during 2025 in organizational infrastructure, geographic expansion, and strategic initiatives position us for long-term growth and operational leverage as these initiatives mature.

Income tax expenses

Our income tax expense for the years ended December 31, 2025 and 2024 were US$180,697 and US$238,935, respectively. The decrease in income tax expense for the year ended December 31, 2025 was primarily attributable to changes in the composition of taxable income, including the impact of non-deductible expenses and other tax adjustments.

As a company operating in Taiwan, our income tax obligations are governed by the local tax authorities and regulations. We are subject to income tax only in Taiwan, where our business operations are based.

Net Income

We reported net income of US$609,382 for the year ended December 31, 2025, compared to US$779,278 for the year ended December 31, 2024, representing a 22% decrease.

The decline in net income, despite revenue growth of 145% to US$6,206,178, was primarily attributable to changes in revenue mix that resulted in lower gross margin, which decreased from 50% in 2024 to 30% in 2025, coupled with significant increases in operating expenses. General and administrative expenses rose to US$959,589 for the year ended December 31, 2025, compared to US$205,341 for the prior year, reflecting increased professional fees associated with IPO preparation, staff costs for key leadership hires, and expenses related to the evaluation of new business opportunities. Sales and distribution expenses also increased to US$145,059 for the year ended December 31, 2025, compared to US$45,378 for the prior year, driven by expanded headcount and distribution costs to support our geographic expansion into new international markets.

These factors were partially offset by a decrease in income tax expense, which amounted to US$180,697 for the year ended December 31, 2025, compared to US$238,935 for the year ended December 31, 2024.

While net income declined in absolute terms during 2025, the investments made during the year in organizational infrastructure, geographic expansion, and strategic initiatives position us for long-term growth and improved profitability as these initiatives mature and as we continue to optimize our product mix and cost structure.

cash flows

Our cash flow is primarily derived from our operating, investing, and financing activities.

For the year ended December 31, 2025, net cash used in operating activities was US$7,498,413, compared to US$236,837 for the year ended December 31, 2024. The significant increase in cash outflows from operations was primarily attributable to substantial growth in accounts receivables and prepayments and other receivables, reflecting expanded operational activity and advance payments made in connection with evaluation of new business opportunities and supply chain expansion. These movements were partially offset by net income of US$609,382 and non-cash adjustments including depreciation and amortisation.

For the year ended December 31, 2024, net cash used in operating activities was US$236,837. This negative operating cash flow was primarily attributable to the nature of our whisky trading business, which requires us to maintain significant inventory levels to meet customer demand and support aging process of our whisky products. These cash outflows reflect our continued investment in the business as we pursue long-term growth and success.

There were no investing cash flows for the years ended December 31, 2025 and 2024.

For the year ended December 31, 2025, net cash provided by financing activities was US$23,325,813, a significant increase from US$191,786 provided for the year ended December 31, 2024. This substantial inflow was driven by proceeds from new borrowings of US$12,470,000 and proceeds from the issuance of shares totaling US$8,259,816. The share issuance proceeds included an initial capital contribution US$1,000 from Controlling Shareholders, a subsequent issuance on May 28, 2025, amounting to US$1,085,760, and US$7,173,056 generated from the initial public offering (IPO).. These inflows were partially offset by repayments to related parties and finance lease obligations.

For the year ended December 31, 2024, net cash provided by financing activities was US$191,786, primarily resulting from proceeds received from a related party to support our working capital needs and ongoing operations.

It is important to note that our cash flows from financing activities were impacted by offering costs incurred in connection with IPOs. For the year ended December 31, 2025, we incurred deferred IPO costs of US$760,361. For the year ended December 31, 2024, we incurred offering costs of US$150,151 related to IPOs. These offering costs reduced the net cash inflows from financing activities during each respective period.

We have established robust liquidity management processes, including cash flow forecasting, working capital optimization, and proactive inventory management strategies. These measures ensure that we maintain sufficient liquidity to meet our obligations as they come due. We are currently evaluating our business strategy, including potential adjustments to our product mix, pricing strategies, and market focus, to enhance profitability and accessing strategic diversification opportunities.

Please refer to the statements of cash flows in our audited financial statements for further details on our cash flow movements during the reporting periods.

liquidity and capital resources

As of December 31, 2025, the Company’s cash and cash equivalents totaled US$15,824,906, a substantial increase from US$54,752 at the end of 2024. This growth reflects the impact of significant financing activities during the year, which have substantially strengthened the Company’s liquidity position and provided financial flexibility to support strategic initiatives and operational expansion.

Working capital improved considerably to US$9,678,590 as of December 31, 2025, compared to US$1,745,572 at December 31, 2024, driven primarily by increased cash reserves and current assets.

For the year ended December 31, 2025, net cash used in operating activities was US$7,498,413, a significant change from net cash used of US$236,837 in the prior year. The outflow was primarily attributable to increases in accounts receivable and prepayments and other receivables, reflecting higher operational activity and investments in advance payments related to the Company’s evaluation of new business opportunities and supply chain expansion. These movements were partially offset by net income of US$609,382 and non-cash adjustments including depreciation and amortization.

Net cash provided by financing activities for the year ended December 31, 2025 totaled US$23,325,813, compared to US$191,786 used in financing activities during 2024. This increase was driven by proceeds from new borrowings of US$12,470,000 and the issuance of shares totaling US$8,259,816. The share issuance proceeds included an initial capital contribution US$1,000 from Controlling Shareholders, a subsequent issuance on May 28, 2025, amounting to US$1,085,760, and US$7,173,056 generated from the initial public offering (IPO). These inflows were partially offset by repayments to related parties and finance lease obligations.

Subsequent Financing Activities and Future Capital Requirements

Subsequent to the fiscal year ended December 31, 2025, the Company’s debt profile and liquidity were significantly impacted by several transactions. On April 17, 2026, the Company entered into a Deed of Assignment and Set-Off with a third-party borrower and three lenders (who are former shareholders). Pursuant to this deed, the Company assigned a US$12,000,000 loan receivable to these three lenders to settle an equivalent amount of the Company’s outstanding borrowings. As this transaction involved the exchange of a financial asset for the extinguishment of debt, it constituted a non-cash financing activity and did not result in any cash inflow or outflow.

On March 27, 2026, the Company completed a Private Investment in Public Equity (“PIPE”) financing, issuing 2,910,000 Class A ordinary shares at US$5.00 per share for total gross proceeds of US$14,550,000. These funds are earmarked for AI data center development in the U.S., Japan, and Southeast Asia. Furthermore, during April 2026, the Company enhanced its working capital through two new short-term loan facilities with independent third parties. These included an interest-free loan of US$3,500,000 entered into on April 1, 2026, and a US$6,500,000 loan bearing 3% interest per annum entered into on April 22, 2026. The proceeds from these facilities are intended for general corporate purposes. Collectively, these transactions have resulted in a significant increase in available cash for operations since the end of the 2025 fiscal year.

In addition to the aforementioned financing activities, the Company has entered into several agreements that represent significant future capital requirements. These include power purchase agreements and non-binding letters of intent ("LOIs") regarding the leasing of NVIDIA B300 high-performance servers and the acquisition of land in Indonesia for data center construction. While the LOIs are non-binding, these initiatives, if completed, may result in significant future cash outflows.

The Company believes its current cash position, together with cash flows from operations and available financing sources, will be sufficient to meet its working capital requirements and fund planned strategic initiatives for the foreseeable future. However, the Company continues to evaluate potential diversification into new business areas, including the previously announced AI infrastructure opportunities, which may require additional external funding.

commitments and contingencies

As of the date of this Annual Report, we have entered into long-term operating leases for office premises, warehouses and carpark, as well as a finance lease for a motor vehicle in Taiwan. We have also entered into long-term operating leases for office premises in Hong Kong. These lease commitments are a regular part of our business operations and are necessary to secure the required facilities for our operations.

In the ordinary course of business, we may be subject to legal proceedings regarding contractual relationships and a variety of liabilities. When a loss is assessed to be probable, and the amount of the loss is reasonably estimable, appropriate provisions are made in accordance with applicable accounting standards. As of December 31, 2024 and December 31, 2025 and through the date of this Annual Report, we are not aware of any pending or threatened claims and litigation that could have a material impact on our financial position or results of operations.

For the financial year ended December 31, 2024, we entered into an agreement with a related party regarding the right to use a trademark on our whisky products. The total commitment under this agreement amounted to JPY7,500,000 (approximately US$48,000). As of December 31, 2024, approximately US$5,120 remained outstanding under this commitment. The outstanding amount was settled in February 2025 and the full amount was capitalised as an intangible asset upon the effectiveness of the trademark agreement in March 2025.

The Company actively monitors and manages our commitments and contingencies to mitigate potential risks and liabilities. We maintain appropriate accounting policies and procedures to ensure that all significant commitments and contingencies are properly recognized, measured, and disclosed in our consolidated financial statements and related disclosures.

seasonality

While our whisky products enjoy consistent demand from a dedicated customer base of collectors, connoisseurs, and enthusiasts, we recognize that the broader whisky market experiences seasonal fluctuations. Historically, the industry sees heightened demand during the holiday season, particularly in November and December, driven by increased social gatherings, gift-giving, and celebratory consumption. Additionally, the summer months, typically June through August, may also see elevated sales due to outdoor events and social occasions where whisky is a popular choice.

Although we benefit from a stable core demand for premium whisky, these seasonal trends can influence our quarterly sales and operating results. As a result, our financial performance may vary from quarter to quarter, and the results of any single period may not be indicative of full-year performance. Should sales during these key seasonal periods fall below historical trends, our annual revenues and earnings could be adversely affected.

To mitigate the impact of seasonality, we employ strategic inventory management, marketing initiatives, and distribution planning to align with peak demand periods while maintaining sufficient supply to serve our year-round customer base. Nevertheless, fluctuations in consumer behavior, macroeconomic conditions, or other external factors could amplify or disrupt these seasonal patterns, potentially affecting our financial results.

tREND INFORMATION

Other than as described elsewhere in this Annual Report, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material adverse effect on our revenue, income from continuing operations, profitability, liquidity or capital resources, or that would cause our reported financial information to not necessarily be indicative of future operating results or financial condition.

inflation

Our business operations and financial results can be influenced by inflationary pressures, which can impact various aspects of our cost structure and profitability. Inflation can lead to higher prices for raw materials, energy, transportation, and labor, potentially increasing our overall operating costs.

For the years ended December 31, 2024 and 2025, Taiwan experienced inflation rates of 2.2% and 1.7%, respectively, as measured by the Consumer Price Index (CPI). These inflationary pressures manifested in the form of higher prices for raw materials, energy, transportation, and labor, potentially increasing our overall operating costs. We experienced inflationary pressures on certain key input costs, including procurement costs of our whisky products and labor costs. These inflationary pressures resulted in an increase in our overall cost of goods sold and operating expenses.

We continuously review our operational processes and supply chain to identify opportunities for cost savings and efficiency improvements, helping offset the impact of rising input costs.

While inflationary pressures can have an adverse impact on our profitability, we remain committed to implementing proactive measures to manage these challenges effectively.

Market risks

Currency risk

As a company engaged in international trade, our operations are exposed to fluctuations in exchange rates. With customers and suppliers located in various countries, our revenue and expenses are denominated in multiple currencies. Fluctuations in exchange rates can have a direct impact on our reported financial results, cash flows, and overall profitability.

In addition to the transactional currency risks arising from our international trade operations, we are also exposed to translation risks due to the differences between our reporting currency, i.e. the U.S. dollar (USD), functional currency, i.e. New Taiwan dollar (NTD), and the currencies in which our transactions are denominated. While our functional currency is the NTD, which is the currency of the primary economic environment in which we operate, our consolidated financial statements are presented in USD for reporting purposes. Fluctuations in the exchange rate between the NTD and the USD can impact the translation of our financial results, leading to potential gains or losses on translation. These translation effects can influence our reported financial performance and position, even in the absence of any underlying changes in our operating results or cash flows denominated in NTD.

While we continue to monitor and evaluate our exposure to foreign currency risk, as of the date of this Annual Report, we have not implemented any formal hedging policy or entered into any derivative instruments to mitigate such risk. We may consider adopting appropriate risk management strategies in the future as our business operations and exposure to foreign exchange fluctuations evolve.

Concentration and credit risks

Financial instruments that potentially expose us to concentration of credit risk consist primarily of account receivables. We conduct credit evaluations of our customers and generally do not require collateral or other security from them. We evaluate our collection experience and long outstanding balances to determine the need for an allowance for doubtful accounts. We conduct periodic reviews of financial conditions and payment practices of our customers to minimize collection risk on account receivables.

Concentration of customers

We have the following customers accounted for 10% or more of sales for the financial years ended December 31, 2024 and 2025:

We have the following customers accounted for 10% or more of account receivables as of December 31, 2024 and 2025:

Concentration of suppliers

We have the following suppliers accounted for 10% or more of purchases for the financial years ended December 31, 2024 and 2025:

We have the following suppliers accounted for 10% or more of account payables as of December 31, 2024 and 2025:

Interest rate risk

As part of our financing strategy, we have obtained borrowings from a local bank in Taiwan. These borrowings are subject to fluctuations in interest rates, which can directly impact our financial expenses and profitability. An increase in interest rates can lead to higher borrowing costs, while a decrease in interest rates can result in lower financing costs.

As of the date of this Annual Report, we have not implemented any formal hedging policy or entered into any derivative instruments to mitigate our interest rate risk.

Other market risks

In addition to currency and interest rate risks, our business operations may be exposed to other market risks, such as commodity price fluctuations, changes in customer demand, or shifts in market conditions. We continuously monitor these risks and implement appropriate risk management strategies to mitigate their potential impact on our financial performance and operations.

critical accounting policies and estimates

Management uses estimates and assumptions in preparing these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates.

While all significant accounting policies are more fully described in Note 2 (Summary of significant accounting policies) in our audited consolidated financial statements, we believe that the following accounting estimates are critical to our business operations and understanding of our financial results.

Expected credit losses on account receivables