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GIGAMEDIA Ltd

GIGAMEDIA LtdGIGM财报

Nasdaq · 通信服务 · 计算机编程、数据处理等服务

GIGAMEDIA Ltd is a digital entertainment and technology service provider focused primarily on the Asian market. Its core offerings include multiplayer online games, cloud computing solutions, and digital media content, serving both individual consumer entertainment needs and enterprise digital service demands.

What changed in GIGAMEDIA Ltd's 20-F — 2022 vs 2023

Top changes in GIGAMEDIA Ltd's 2023 20-F

224 paragraphs added · 239 removed · 182 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

51 edited+12 added−21 removed140 unchanged
Liquidity and Capital Resources.” Risks Related to Our Reliance on Third Parties Dependence on network suppliers may adversely affect our operating results. Our success depends in part upon the capacity, reliability, and performance of our network infrastructure, including the capacity leased from our Internet bandwidth suppliers.
Liquidity and Capital Resources.” 6 Risks Related to Our Reliance on Third Parties Dependence on network suppliers may adversely affect our operating results. Our success depends in part upon the capacity, reliability, and performance of our network infrastructure, including the capacity leased from our Internet bandwidth suppliers.
In light of our significant cash balances and portfolio of investment securities, we believe that it is likely that we were classified as a passive foreign investment company, or PFIC, for the taxable year ended December 31, 2022, and we will likely be a PFIC for our current taxable year ending December 31, 2023, unless our share value increases substantially and/or we invest a substantial amount of the cash and other passive assets we hold in assets that produce or are held for the production of non-passive income.
In light of our significant cash balances and portfolio of investment securities, we believe that it is likely that we were classified as a passive foreign investment company, or PFIC, for the taxable year ended December 31, 2023, and we will likely be a PFIC for our current taxable year ending December 31, 2024, unless our share value increases substantially and/or we invest a substantial amount of the cash and other passive assets we hold in assets that produce or are held for the production of non-passive income.
On the contrary, a devaluation of NT dollars, Hong Kong dollars, or Singapore dollars against U.S. dollars results in a foreign exchange gain for monetary assets denominated in U.S. dollars, and a foreign exchange loss for monetary liabilities denominated in U.S. dollars.
On the contrary, a devaluation of NT dollars, or Hong Kong dollars against U.S. dollars results in a foreign exchange gain for monetary assets denominated in U.S. dollars, and a foreign exchange loss for monetary liabilities denominated in U.S. dollars.
However, based on our historical and current business activities, our intentions, the manner in which we hold ourselves out to the public, the primary activities of our officers and directors and an analysis of our non-cash assets and income during 2022, the first quarter of 2023 and in prior periods, we believe that we are not an investment company.
However, based on our historical and current business activities, our intentions, the manner in which we hold ourselves out to the public, the primary activities of our officers and directors and an analysis of our non-cash assets and income during 2023, the first quarter of 2024 and in prior periods, we believe that we are not an investment company.
End-users of our offerings depend on Internet Service Providers ("ISPs") and our system infrastructure for access to the Internet games and services we offer. Some of these services have experienced service outages in the past and could experience service outages, delays and other difficulties due to system failures, stability or interruption.
End-users of our offerings depend on Internet Service Providers (“ISPs”) and our system infrastructure for access to the Internet games and services we offer. Some of these services have experienced service outages in the past and could experience service outages, delays and other difficulties due to system failures, stability or interruption.
Subscribers may in the future obtain access to our service without paying for service by unlawfully using our authorization codes or by submitting fraudulent credit card information. To date, no material losses from unauthorized credit card transactions and theft of service have occurred.
Subscribers may obtain access to our service without paying for service by unlawfully using our authorization codes or by submitting fraudulent credit card information. To date, no material losses from unauthorized credit card transactions and theft of service have occurred.
The civil court of the second instance, the Taiwan High Court, ruled on January 8, 2020, that the decision of the Taiwan Taipei District Court should be partially modified and Ennoconn is entitled to NTD 27,084,180 (approximately $892,763). GigaMedia Cloud filed another appeal with the Taiwan Supreme Court on February 4, 2020.
The civil court of the second instance, the Taiwan High Court, ruled on January 8, 2020, that the decision of the Taiwan Taipei District Court should be partially modified and Ennoconn is entitled to NTD 27,084,180 (approximately $882,077). GigaMedia Cloud filed another appeal with the Taiwan Supreme Court on February 4, 2020.
For example, in recent years, we have detected and mitigated a few incidents of denial-of-service attacks against network providers that affected latency of connections to our games, and those incidents did not result in significant financial impact on our operations and financial results. We have experienced in the past, and may experience in the future, security breaches or attacks.
For example, in recent years, we have detected and mitigated incidents of denial-of-service attacks against network providers that affected latency of connections to our games. Such incidents, however, did not result in significant financial impact on our operations and financial results. We have experienced in the past, and may experience in the future, security breaches or attacks.
In 2022, 2021 and 2020, we incurred consolidated operating losses of US$3.0 million, US$4.0 million and US$2.2 million as well as net losses of US$2.8 million, US$3.4 million and US$1.3 million, respectively. Our future profitability will depend to a great extent upon the performance of our digital entertainment service business.
In 2023, 2022 and 2021, we incurred consolidated operating losses of US$3.2 million, US$3.0 million and US$4.0 million as well as net losses of US$3.4 million, US$2.8 million and US$3.4 million, respectively. Our future profitability will depend to a great extent upon the performance of our digital entertainment service business, as well as certain non-operating aspects.
John-Lee Andre Koo, who accordingly has considerable influence to the outcome of any corporate transaction or other matters submitted to our shareholders for approval, and his interests may differ from yours. As of March 31, 2023, Mr. John-Lee Andre Koo beneficially owned 19.54% of our outstanding Shares.
A substantial percentage of our outstanding Shares are beneficially owned by Mr. John-Lee Andre Koo, who accordingly has considerable influence to the outcome of any corporate transaction or other matters submitted to our shareholders for approval, and his interests may differ from yours. As of March 31, 2024, Mr. John-Lee Andre Koo beneficially owned 19.54% of our outstanding Shares.
Our corporate affairs are governed by our memorandum and articles of association (collectively, our “Constitution”) and by the applicable laws governing corporations incorporated in Singapore.
Our Company is incorporated under the laws of the Republic of Singapore. Our corporate affairs are governed by our memorandum and articles of association (collectively, our “Constitution”) and by the applicable laws governing corporations incorporated in Singapore.
Any disruption of or interference with our use of the Google Cloud operation would negatively affect our operations and seriously harm our business. Google provides a distributed computing infrastructure platform for business operations, or what is commonly referred to as a “cloud” computing service, and we currently rely on Google Cloud for certain of our mobile-based digital entertainment services.
Google provides a distributed computing infrastructure platform for business operations, or what is commonly referred to as a “cloud” computing service, and we currently rely on Google Cloud for certain of our mobile-based digital entertainment services. Any significant disruption of or interference with our use of Google Cloud would negatively impact our operations and our business would be seriously harmed.
Nevertheless, a part of the determination of whether we are an investment company is based upon the composition and value of our non-cash assets, a significant portion of which presently comprise our strategic investments.
Nevertheless, a part of the determination of whether we are an investment company is based upon the composition and value of our non-cash assets, a significant portion of which presently comprise our strategic investments. As a result, we could be deemed to be an investment company.
The key factors affecting our businesses include: • our ability to retain existing users; • attracting new users and maintaining user satisfaction; • the pace of rolling out new offerings or updating existing ones by us or our competitors; • the amount and timing of operating costs and capital expenditures relating to our business operations and expansion; • seasonal trends in Internet use; • price competition in the industry; • regulatory and other risks associated from our operations in Taiwan and Hong Kong.
The key factors affecting our businesses or profitability include: • our ability to retain existing users; • attracting new users and maintaining user satisfaction; • the pace of rolling out new offerings or updating existing ones by us or our competitors; • the amount and timing of operating costs and capital expenditures relating to our business operations and expansion; • seasonal trends in Internet use; • price competition in the industry; • regulatory and other risks associated from our operations in Taiwan and Hong Kong; • interest rate regarding our time deposits; and • operational and financial prospects of our investees, specifically Aeolus.
The existence of such patents, or our inability to negotiate a license for any such technology on acceptable terms, could force us to cease using such technology and offering products and services incorporating such technology.
We may not be able to negotiate such a license at a price that is acceptable. The existence of such patents, or our inability to negotiate a license for any such technology on acceptable terms, could force us to cease using such technology and offering products and services incorporating such technology.
As a result, we could be deemed to be an investment company. 15 We intend to continue to conduct our businesses and operations so as to avoid being required to register as an investment company.
We intend to continue to conduct our businesses and operations so as to avoid being required to register as an investment company.
Furthermore, certain cheating programs could cause the loss of a character’s superior features acquired by a user. The occurrence of undetected errors or defects in our digital entertainment services, and our failure to discover and disable cheating programs affecting the fairness of our service environment, could disrupt our operations, damage our reputation and ruin our users’ experiences.
The occurrence of undetected errors or defects in our digital entertainment services, and our failure to discover and disable cheating programs affecting the fairness of our service environment, could disrupt our operations, damage our reputation and ruin our users’ experiences.
Fluctuations in the exchange rates between the U.S. dollar and other currencies in which we conduct our business could adversely affect our profitability. The operations of our digital entertainment service business are conducted in NT dollars and Hong Kong dollars. Accordingly, fluctuations in the exchange rates could have a positive or negative effect on our reported results.
The operations of our digital entertainment service business are conducted in NT dollars and Hong Kong dollars. Accordingly, fluctuations in the exchange rates could have a positive or negative effect on our reported results.
If a major and urgent incident were to occur, our board of directors would be responsible to make a prompt assessment of our countermeasures and mitigation actions. 9 Our business is also vulnerable to delays or interruptions due to our reliance on infrastructure and related services provided by third parties.
If a material cybersecurity incident were to occur, our board of directors would be responsible for making a prompt assessment of our countermeasures and mitigation actions. See Item 16K, “Cybersecurity” in this annual report. Our business is also vulnerable to delays or interruptions due to our reliance on infrastructure and related services provided by third parties.
We believe that we have conducted our related-party transactions on an arm’s-length basis and on terms comparable to, or more favorable to us than, similar transactions we would enter into with independent third parties. However, we cannot assure you that all our future transactions with related parties will be beneficial to us.
We have entered into several transactions with certain related parties in the past. We believe that we have conducted our related-party transactions on an arm’s-length basis and on terms comparable to, or more favorable to us than, similar transactions we would enter into with independent third parties.
Our Share price may fluctuate in response to a number of events and factors. In addition, the financial markets in general, and the market prices for Internet-related companies in particular, have experienced extreme volatility that often has been unrelated to the operating performance of such companies.
In addition, the financial markets in general, and the market prices for Internet-related companies in particular, have experienced extreme volatility that often has been unrelated to the operating performance of such companies. These broad market and industry fluctuations may adversely affect the price of our Shares, regardless of our operating performance.
The imposition of liabilities that are not covered by insurance, in excess of insurance coverage or for which we are not indemnified by a content provider, could have a material adverse effect on our business, results of operations and financial condition. 7 Certain technologies necessary for us to provide our services may, in fact, be patented by other parties either now or in the future.
The imposition of liabilities that are not covered by insurance, in excess of insurance coverage or for which we are not indemnified by a content provider, could have a material adverse effect on our business, results of operations and financial condition.
There can be no assurance that any measures implemented will not be circumvented in the future. The board of directors oversees our cyber risk management by periodical review of a summary for recent cybersecurity incidents and the execution of our risk management program.
There can be no assurance that any measures implemented will not be circumvented in the future. The audit committee of the board of directors oversees our cyber risk management and periodically reviews summaries of recent cybersecurity incidents, if any, and updates on the execution of our risk management program, as prepared by our management team.
We cannot assure you that we will be able to effectively manage the growth of our operations, and any failure to do so may limit our future growth and materially and adversely affect our business, financial condition and results of operations. 5 Undetected programming errors or defects in our software, services and games and the proliferation of cheating programs could materially and adversely affect our digital entertainment service business, financial condition and results of operations.
We cannot assure you that we will be able to effectively manage the growth of our operations, and any failure to do so may limit our future growth and materially and adversely affect our business, financial condition and results of operations.
This situation is continuing to evolve and impacts may arise that we are not currently aware of. Our results of operations and financial condition may be affected by political instability as well as the occurrence of natural disasters and epidemics. We operate our digital entertainment business in Taiwan, Hong Kong and Macau.
Risks Related to Geopolitical and Macroeconomic Factors Our results of operations and financial condition may be affected by political instability as well as the occurrence of natural disasters and epidemics. We operate our digital entertainment business in Taiwan, Hong Kong and Macau.
We may have to engage in litigation or other legal proceedings to enforce and protect our intellectual property rights, which could result in substantial costs and diversion of our resources, and have a material adverse effect on our business, financial condition and results of operations.
We may have to engage in litigation or other legal proceedings to enforce and protect our intellectual property rights, which could result in substantial costs and diversion of our resources, and have a material adverse effect on our business, financial condition and results of operations. 8 Our future results of operations or the growth of our business may suffer if the licensors of our digital entertainment services fall short of providing us sufficient and continual support for the operation of licensed games.
In addition, the benefits of an acquisition or investment transaction may take considerable time to be fully realized and we cannot assure you that any particular acquisition or investment and the subsequent integration will produce the intended benefits. Our business could suffer if we do not successfully achieve and manage current growth and potential future growth.
In addition, the benefits of an acquisition or investment transaction may take considerable time to be fully realized and we cannot assure you that any particular acquisition or investment and the subsequent integration will produce the intended benefits. 5 Further, our business could be adversely impacted by the performance of our investments in other entities.
In addition, any compromise of security from a security breach or cyber attack could deter customers or business partners from entering into transactions that involve providing confidential information to us. As a result, any compromise to the security of our systems could have a material adverse effect on our business, reputation, financial condition, and operating results.
In addition, any compromise of security from a security breach or cyber attack could deter customers or business partners from entering into transactions that involve providing confidential information to us.
The PRC asserts sovereignty over mainland China and Taiwan and does not recognize the legitimacy of the Taiwan government.
Taiwan, as part of the Republic of China, has a unique international political status. The PRC asserts sovereignty over mainland China and Taiwan and does not recognize the legitimacy of the Taiwan government.
Our broad range of application of current technology and technology under development increases the likelihood that third parties may claim infringement by us of their intellectual property rights. The validity and scope of claims relating to the intellectual property may involve complex scientific, legal and factual questions and analysis, and tend to be uncertain.
From time to time, third parties may claim infringement by us of their intellectual property rights. Our broad range of application of current technology and technology under development increases the likelihood that third parties may claim infringement by us of their intellectual property rights.
If we fail to comply again in the future, our Shares could still be delisted from Nasdaq, which could have a material adverse effect on our stock prices and our standing with current and future investors. 13 The price of our Shares has been volatile historically and may continue to be volatile, which may make it difficult for holders to resell our Shares when desired or at attractive prices.
If we fail to comply again in the future, our Shares could still be delisted from Nasdaq, which could have a material adverse effect on our stock prices and our standing with current and future investors.
There has been substantial litigation in the various segments of the technology, PC application and mobile application markets, including with respect to the online content, electronics, and related industries regarding intellectual property rights. From time to time, third parties may claim infringement by us of their intellectual property rights.
Our success depends largely on our ability to use and develop our technology and know-how without infringing upon the intellectual property rights of third parties. There has been substantial litigation in the various segments of the technology, PC application and mobile application markets, including with respect to the online content, electronics, and related industries regarding intellectual property rights.
Any such instability, volatility or adverse impact in Greater China or in overseas markets could cause our game players to reduce their spending on our games and reduce our revenues.
Any such instability, volatility or adverse impact in Greater China or in overseas markets could cause our game players to reduce their spending on our games and reduce our revenues. Fluctuations in the exchange rates between the U.S. dollar and other currencies in which we conduct our business could adversely affect our profitability.
If our licensors fall short of providing us sufficient and continual support for the operation of licensed games, or if we are unable to maintain satisfactory relationships with our licensors, our financial condition, results of operations, future profitability and growth prospects may be materially and adversely affected. 8 Risks Related to Cybersecurity and Technology Infrastructure Our digital entertainment service business depends on the reliability of the network infrastructure and related services provided by ourselves and third parties, which is subject to physical, technological, security and other risks.
If our licensors fall short of providing us sufficient and continual support for the operation of licensed games, or if we are unable to maintain satisfactory relationships with our licensors, our financial condition, results of operations, future profitability and growth prospects may be materially and adversely affected.
If adequate capacity is not available to us as our customers’ usage increases, our network may be unable to achieve or maintain sufficiently high data transmission capacity, reliability or performance.
If adequate capacity is not available to us as our customers’ usage increases, our network may be unable to achieve or maintain sufficiently high data transmission capacity, reliability or performance. In addition, our business would suffer if our network suppliers increased the prices for their services and we were unable to pass along the increased costs to our customers.
Judgments of the U.S. courts based upon the civil liability provisions of the U.S. federal securities laws may not be enforceable in Singapore courts, and it is unclear whether Singapore courts will enter judgments in original actions brought in Singapore courts based solely upon the civil liability provisions of the U.S. federal securities laws. 14 Anti-takeover provisions under the Singapore Securities and Futures Act 2001 and the Singapore Code on Take-overs and Mergers may delay, deter or prevent a future takeover or change of control of our Company, which could adversely affect the price of our Shares.
Anti-takeover provisions under the Singapore Securities and Futures Act 2001 and the Singapore Code on Take-overs and Mergers may delay, deter or prevent a future takeover or change of control of our Company, which could adversely affect the price of our Shares.
The level of service provided by Google Cloud may also impact the usage of and our users’ satisfaction with our products and could seriously harm our business and reputation. If Google Cloud experiences interruptions in service regularly or for a prolonged basis, or other similar issues, our business would be seriously harmed.
If Google Cloud experiences interruptions in service regularly or for a prolonged basis, or other similar issues, our business would be seriously harmed.
Under the 1940 Act, investment securities include, among other things, securities of non-majority owned businesses. However, a company that is primarily engaged, directly or through wholly owned subsidiaries, in a business or businesses other than that of investing, reinvesting, owning, holding or trading in securities is not an investment company.
However, a company that is primarily engaged, directly or through wholly owned subsidiaries, in a business or businesses other than that of investing, reinvesting, owning, holding or trading in securities is not an investment company. 13 In the past, we disposed of our online gambling business and made several significant investments in online game developers and operators.
We are a Singapore company, and because the rights of shareholders under Singapore law differ from those under U.S. law, you may have difficulty in protecting your shareholder rights or enforcing any judgment obtained in the U.S. against us or our affiliates. Our Company is incorporated under the laws of the Republic of Singapore.
In addition, although there are currently no foreign exchange control regulations which restrict the ability of our subsidiaries in Taiwan to distribute dividends to us, the relevant regulations may be changed and the ability of these subsidiaries to distribute dividends to us may be restricted in the future. 12 We are a Singapore company, and because the rights of shareholders under Singapore law differ from those under U.S. law, you may have difficulty in protecting your shareholder rights or enforcing any judgment obtained in the U.S. against us or our affiliates.
Any significant disruption of or interference with our use of Google Cloud would negatively impact our operations and our business would be seriously harmed. If our users are not able to access our products through Google Cloud or encounter difficulties in doing so, we may lose users.
If our users are not able to access our products through Google Cloud or encounter difficulties in doing so, we may lose users. The level of service provided by Google Cloud may also impact the usage of and our users’ satisfaction with our products and could seriously harm our business and reputation.
In order to prepare for certain types of system problems, we have a formal disaster recovery plan. Nevertheless, any system failure, including network, software or hardware failure, which causes a delay or interruption in our e-commerce services could have a material adverse effect on our business, revenues, results of operations and financial condition.
Nevertheless, any system failure, including network, software or hardware failure, which causes a delay or interruption in our e-commerce services could have a material adverse effect on our business, revenues, results of operations and financial condition. 7 Risks Related to Intellectual Property We may be subject to claims of intellectual property right infringement by third parties, which could subject us to significant liabilities and other costs.
If such technology were held under patent by another person, we would have to negotiate a license for the use of that certain technology. We may not be able to negotiate such a license at a price that is acceptable.
Certain technologies necessary for us to provide our services may, in fact, be patented by other parties either now or in the future. If such technology were held under patent by another person, we would have to negotiate a license for the use of that certain technology.
In addition, other major natural disasters may also adversely affect our business by, for example, causing disruptions of the Internet network or otherwise affecting access to our services. 12 There are economic risks associated with doing business in Taiwan, particularly due to the tense relationship between Taiwan and the PRC.
Natural disasters or outbreak of epidemics may result in a decrease in economic activities or temporary closure of many businesses and disruption in our operations. In addition, other major natural disasters may also adversely affect our business by, for example, causing disruptions of the Internet network or otherwise affecting access to our services.
The trading price of our Shares has been and may continue to be subject to wide fluctuations. In 2022, the closing prices of our Shares on The Nasdaq Capital Market ranged from US$1.17 to US$2.32 per share, and the closing price on April 11, 2023 was US$1.41.
In 2023, the closing prices of our Shares on The Nasdaq Capital Market ranged from US$1.20 to US$1.57 per share, and the closing price on April 11, 2024 was US$1.2955. Our Share price may fluctuate in response to a number of events and factors.
Our digital entertainment services may contain undetected programming errors or other defects. These errors or other defects could damage our reputation and subject us to liability. As to online games, parties unrelated to us may develop cheating programs that enable users to acquire superior features for their game characters that they would not have otherwise.
As to online games, parties unrelated to us may develop cheating programs that enable users to acquire superior features for their game characters that they would not have otherwise. Furthermore, certain cheating programs could cause the loss of a character’s superior features acquired by a user.
Our principal executive offices and a significant portion of our assets are located in Taiwan and a major portion of our revenues of digital entertainment service business are derived from our operations in Taiwan. Taiwan, as part of the Republic of China, has a unique international political status.
There are economic risks associated with doing business in Taiwan, particularly due to the tense relationship between Taiwan and the PRC. Our principal executive office and a significant portion of our assets are located in Taiwan and a major portion of our revenues of digital entertainment service business are derived from our operations in Taiwan.
On February 22, 2023 the Taiwan Supreme Court revoked the previous ruling of the Taiwan High Court, and sent the case back to the Taiwan High Court for a retrial. On April 21, 2023, we made a court appearance before the Taiwan High Court for the preliminary proceeding.
On February 22, 2023 the Taiwan Supreme Court revoked the previous ruling of the Taiwan High Court, and sent the case back to the Taiwan High Court for a retrial. On October 30, 2023, the Taiwan High Court ruled such appeal meritorious and Ennoconn has the right to claim compensation from GigaMedia Cloud.
Any slowdown of the economy in Greater China, especially Taiwan or Hong Kong, could in turn result in a reduction in spending by our game players.
Economic slowdowns in Greater China, especially Taiwan or Hong Kong, could in turn result in a reduction in spending by our game players. 11 In addition, the global economy has experienced significant instability and there has been volatility in global financial and credit markets in recent years.
In the past, we disposed of our online gambling business and made several significant investments in online game developers and operators. As a result of these transactions, we have a significant amount of cash and securities.
As a result of these transactions, we have a significant amount of cash and securities.
In addition, our business would suffer if our network suppliers increased the prices for their services and we were unable to pass along the increased costs to our customers. 6 We rely on Google Cloud for certain of our mobile-based digital entertainment services.
We rely on Google Cloud for certain of our mobile-based digital entertainment services. Any disruption of or interference with our use of the Google Cloud operation would negatively affect our operations and seriously harm our business.
While we have implemented industry-standard physical and cybersecurity measures, our network may still be vulnerable to unauthorized access, computer viruses, denial of service and other disruptive problems.
As a result, any compromise to the security of our systems could have a material adverse effect on our business, reputation, financial condition, and operating results. 9 Our network may be vulnerable to unauthorized access, computer viruses, denial of service and other disruptive problems.
Removed
Risks Related to Intellectual Property We may be subject to claims of intellectual property right infringement by third parties, which could subject us to significant liabilities and other costs. Our success depends largely on our ability to use and develop our technology and know-how without infringing upon the intellectual property rights of third parties.
Added
For any business expansion into an industry that is very different from the one in which we currently operate, we may face financial challenges and difficulties arising from a very different cost structure and business model; we may also be exposed to a very different set of labor relations, technological, environmental, regulatory and other non-market risks associated with any new industry we seek to enter.
Removed
Our future results of operations or the growth of our business may suffer if the licensors of our digital entertainment services fall short of providing us sufficient and continual support for the operation of licensed games.
Added
Our investments may generate significant losses arising from factors that may be out of our control, such as economic downturns, geopolitical tensions and macroeconomic volatility. We may incur impairment charges in respect of our equity investees and investments in debt securities, which may affect our results of operations.
Removed
As of the date of this annual report, the Taiwan High Court has not made any further decisions. Our transactions with related parties may not benefit us and may harm our Company. We have entered into several transactions with certain related parties in the past.
Added
With respect to equity method investees, if any, we may be required to share a portion of such investees’ losses in accordance with U.S. GAAP. In each case, our results of operations may be adversely impacted if our investments do not perform. Our business could suffer if we do not successfully achieve and manage current growth and potential future growth.
Removed
See Item 7, “Major Shareholders and Related Party Transactions” in this annual report. 11 Risks Related to Geopolitical and Macroeconomic Factors An outbreak of disease or similar public health threat, such as a novel strain of coronavirus, could have a material adverse impact on our business, operating results and financial condition.
Added
Undetected programming errors or defects in our software, services and games and the proliferation of cheating programs could materially and adversely affect our digital entertainment service business, financial condition and results of operations. Our digital entertainment services may contain undetected programming errors or other defects. These errors or other defects could damage our reputation and subject us to liability.
Removed
We are vulnerable to the general economic effects of disease outbreaks and similar public health threats. In March 2020, the World Health Organization declared the outbreak of COVID-19, a novel strain of coronavirus, to be a pandemic. The COVID-19 pandemic resulted in quarantines, travel restrictions, and the temporary closure of business and facilities globally, and impacted global economic activity.
Added
In order to prepare for certain types of system problems, we have a formal disaster recovery plan.
Removed
A public health pandemic, including COVID-19, poses the risk that we or our employees, contractors, suppliers, customers and other business partners may be prevented from conducting business activities for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities.
Added
The validity and scope of claims relating to the intellectual property may involve complex scientific, legal and factual questions and analysis, and tend to be uncertain.
Removed
We have offices in Taiwan and Hong Kong, which have not been as severely affected as compared to other regions in the world. Nonetheless, we have implemented strict hygiene and social distancing practices in our daily operations in order to protect the safety and health of our employees.
Added
Risks Related to Cybersecurity and Technology Infrastructure Our digital entertainment service business depends on the reliability of the network infrastructure and related services provided by ourselves and third parties, which is subject to physical, technological, security and other risks.
Removed
We have also established a contingency plan to ensure our business continuity against the COVID-19 pandemic and future disease outbreaks. During the course of the COVID-19 pandemic, governmentally imposed stay-at-home requirements resulted in some people, especially students (one of our target markets), utilizing online entertainment at a higher rate than prior to the pandemic.
Added
On November 16, 2023, GigaMedia Cloud filed an appeal against the Taiwan High Court’s decision, and the appeal has been transferred to Taiwan Supreme Court on January 2, 2024. On April 17, 2024, the Taiwan Supreme Court, in a written notice, denied GigaMedia’s appeal. Our transactions with related parties may not benefit us and may harm our Company.
Removed
However, other groups were reluctant to spend on entertainment in light of the prolonged economic uncertainty resulting from the pandemic. As COVID-19 restrictions continue to be lifted or reduced, we may experience reduced usage of online entertainment.
Added
However, we cannot assure you that all our future transactions with related parties will be beneficial to us. See Item 7, “Major Shareholders and Related Party Transactions” in this annual report.
Removed
In addition, during the course of the COVID-19 pandemic, our Japanese and Korean licensors have experienced considerable adverse impacts, which resulted in delays in providing support, upgrades and new content, which negatively impacted our ability to sustain interest in games licensed from these licensors.
Added
The price of our Shares has been volatile historically and may continue to be volatile, which may make it difficult for holders to resell our Shares when desired or at attractive prices. The trading price of our Shares has been and may continue to be subject to wide fluctuations.
Removed
If there are future health crises, or if there are resurgence events with respect to the COVID-19 pandemic, that result in further impositions of prolonged and intensified shutdowns in Taiwan or Hong Kong, our daily operations may be further hindered, and our offline marketing activities could be indefinitely postponed, which would impact our sales and operating results.
Added
Judgments of the U.S. courts based upon the civil liability provisions of the U.S. federal securities laws may not be enforceable in Singapore courts, and it is unclear whether Singapore courts will enter judgments in original actions brought in Singapore courts based solely upon the civil liability provisions of the U.S. federal securities laws.
Removed
Further, if such developments have an increased or sustained adverse impact on the ability of our licensors to provide quality content updates and support in a timely manner, our sales and operating results could be adversely impacted.
Added
Under the 1940 Act, investment securities include, among other things, securities of non-majority owned businesses.
Removed
The extent to which COVID-19 or any future epidemic or pandemic will impact our business and results, including the ability of our customers to spend on online entertainment, is dependent on future developments, which are uncertain and unpredictable, including the severity of such outbreaks and the actions taken to contain it or treat its impact.
Removed
Although business operations have begun to normalize, the resumption of fully normal business operations may be delayed or constrained by lingering effects of the COVID-19 pandemic on us or our suppliers and third-party service providers and the potential occurrence of COVID-19 resurgence events.
Removed
Notwithstanding the continuing normalization of business operations as the COVID-19 pandemic has subsided, we may experience material and adverse impacts as a result of the long-term global economic impact of the COVID-19 pandemic. The impact of COVID-19 may also exacerbate other risks discussed in this annual report, which could have a material effect on us.
Removed
Natural disasters or outbreak of epidemics may result in a decrease in economic activities or temporary closure of many businesses and disruption in our operations.
Removed
In addition, the global economy has experienced significant instability and there has been volatility in global financial and credit markets in recent years, particularly as a result of the ramifications of the COVID-19 global pandemic and government measures undertaken in response to the pandemic and the current inflationary environment.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

44 edited+8 added−13 removed70 unchanged
The SEC maintains an Internet site that contains reports and other information we filed electronically with the SEC. The address of the SEC’s website is http:// www.sec.gov. Our website address is: http://www.gigamedia.com . Information contained on our website is not incorporated herein by reference and does not constitute part of this annual report. 16 B.
The SEC maintains an Internet site that contains reports and other information we filed electronically with the SEC. The address of the SEC’s website is http:// www.sec.gov. Our website address is: http://www.gigamedia.com . Information contained on our website is not incorporated herein by reference and does not constitute part of this annual report. B.
FunTown now provides a mobile platform for casual games, which works on both Google’s Android and Apple’s iOS operating systems and allows data synchronization between the two systems. 19 • Customer Platform. FunTown now provides a customer platform called Dream Village, which began as a community space constructed for players of our female-oriented games.
FunTown now provides a mobile platform for casual games, which works on both Google’s Android and Apple’s iOS operating systems and allows data synchronization between the two systems. • Customer Platform. FunTown now provides a customer platform called Dream Village, which began as a community space constructed for players of our female-oriented games.
Our Shares are traded on The Nasdaq Capital Market of The Nasdaq Stock Market under the symbol GIGM. In January 2006, we acquired FunTown, a digital entertainment business operated in Taiwan and Hong Kong. Our Singapore company registration number is 199905474H.
Our Shares are traded on The Nasdaq Capital Market of The Nasdaq Stock Market under the symbol GIGM. In January 2006, we acquired FunTown, a digital entertainment business operated in Taiwan and Hong Kong. 14 Our Singapore company registration number is 199905474H.
Game Sources In-house development of Casual Games We develop the casual games offered on our FunTown game platform, including online MahJong, card games, and other simple casual games. Our in-house development enables us to have better control of the game features and allow for seamless integration onto our FunTown platform.
Sources of Our Offerings In-house development of Casual Games and other offerings We develop the casual games offered on our FunTown game platform, including online MahJong, card games, and other simple casual games. Our in-house development enables us to have better control of the game features and allow for seamless integration onto our FunTown platform.
Moreover, if an online game operator fails to take corrective actions within the time limit prescribed by the competent authorities, it shall be punished for each violation by an administrative fine of NT$50,000 to NT$500,000. 22 Personal Data Protection Act On April 27, 2010, the Legislative Yuan passed a bill to amend the Computer-processed Personal Data Protection Act, which was renamed as the Personal Data Protection Act.
Moreover, if an online game operator fails to take corrective actions within the time limit prescribed by the competent authorities, it shall be punished for each violation by an administrative fine of NT$50,000 to NT$500,000. 20 Personal Data Protection Act On April 27, 2010, the Legislative Yuan passed a bill to amend the Computer-processed Personal Data Protection Act, which was renamed as the Personal Data Protection Act.
The virtual currency may be used to play MahJong and other games on the FunTown game site or to purchase in-game virtual items, but cannot be redeemed for cash. 17 Our PC-based MahJong offering has faced strong competition in recent years from the growth of mobile and browser-based online games, driven by the popularity of social networks and high mobile device usage in our markets.
The virtual currency may be used to play MahJong and other games on the FunTown game site or to purchase in-game virtual items, but cannot be redeemed for cash. 15 Our PC-based MahJong offering has faced strong competition in recent years from the growth of mobile and browser-based online games, driven by the popularity of social networks and high mobile device usage in our markets.
To complement our offerings and strengthen their appeal, we are focusing on building community-based online platforms that cater to different social networking needs of our users and provide various channels to facilitate communications among them. We intend to continue to grow and enhance our market position in the digital entertainment industry by increasing focus on mobile and browser-based games.
To complement our offerings and strengthen their appeal, we are focusing on building community-based online platforms that cater to different social networking needs of our users and provide various channels to facilitate communications among them. We intend to continue to grow and enhance our market position in the digital entertainment industry by increasing focus on mobile and browser-based entertainment services.
Therefore, we are not able to comply with the DRS eligibility provisions of Rule 5210(c). 23 However, as a foreign private issuer, we are allowed under Nasdaq listing rules to follow our home country practice in lieu of the requirements set out in Rule 5210(c).
Therefore, we are not able to comply with the DRS eligibility provisions of Rule 5210(c). 21 However, as a foreign private issuer, we are allowed under Nasdaq listing rules to follow our home country practice in lieu of the requirements set out in Rule 5210(c).
All subsidiaries are 100% owned. 24 Entity Place of Incorporation Relationship Held by our Company GigaMedia International Holdings Limited British Virgin Islands Wholly owned subsidiary GIGM Corporation Cayman Islands Wholly owned subsidiary Held by GigaMedia International Holdings Limited GigaMedia Online Entertainment Corp.
All subsidiaries are 100% owned. 22 Entity Place of Incorporation Relationship Held by our Company GigaMedia International Holdings Limited British Virgin Islands Wholly owned subsidiary GIGM Corporation Cayman Islands Wholly owned subsidiary Held by GigaMedia International Holdings Limited GigaMedia Online Entertainment Corp.
Virtual currencies may be used to play all games on the FunTown game site or to purchase virtual items, but cannot be redeemed for cash. Our revenues generated from MahJong and other casual games were approximately US$1.3 million in 2022, decreased from US$1.5 million in 2021 and US$1.8 million in 2020.
Virtual currencies may be used to play all games on the FunTown game site or to purchase virtual items, but cannot be redeemed for cash. Our revenues generated from MahJong and other casual games were approximately US$1.1 million in 2023, decreased from US$1.3 million in 2022 and US$1.5 million in 2021.
Examples of in-game events include scheduled challenges or competitions for prizes. In addition, we use in-game events to introduce and market new features of our games to our current users. We advertise our brands and our digital entertainment products across a variety of online media, including traditional online advertisements like YouTube, Google and Facebook.
Examples of in-game events include scheduled challenges or competitions for prizes. In addition, we use in-game events to introduce and market new features of our games to our current users. 17 We advertise our brands and our digital entertainment products across a variety of online media, including traditional online advertisements like YouTube, Google and Meta.
The FunTown platform has a unique function designed for players’ personal contacts, which is similar to the contact list of instant message programs. This enables players to see when their friends and family members are online and invite people in their personal network to play games together. • Social Networking.
The FunTown platform has a unique function designed for players’ personal contacts, which is similar to the contact list of instant message programs. This enables players to see when their friends and family members are online and invite people in their personal network to play games together. • Customer Services.
FunTown players can also form their own clubs, invite other players with similar interests or skill levels to join, and organize online and offline events for club members. Player clubs complement the strong social features of online games by helping to maintain an online game community. • Tournaments. FunTown provides various tournaments for its online MahJong players.
FunTown offers online club services in its game community. FunTown players can also form their own clubs, invite other players with similar interests or skill levels to join, and organize online and offline events for club members. Player clubs complement the strong social features of online games by helping to maintain an online game community. • Tournaments.
The virtual items for avatars include facial expressions, clothes and different accessories. These items are particularly popular with younger players, who customize their avatars to establish unique identities and pursue distinct fashions in the online community. • Friends and Family Messenger and Online Chatting System.
Players use avatars to create their own unique look while participating in the online community. The virtual items for avatars include facial expressions, clothes and different accessories. These items are particularly popular with younger players, who customize their avatars to establish unique identities and pursue distinct fashions in the online community. • Friends and Family Messenger and Online Chatting System.
Our principal executive offices are located at 8F, No. 22, Lane 407, Section 2, Tiding Boulevard, Taipei, Taiwan, and our telephone number is 886-2-2656-8000. Our agent in the U.S. is Computershare Limited and its office address is 480 Washington Blvd., Jersey City, New Jersey.
Our principal executive office is located at 8F, No. 22, Lane 407, Section 2, Tiding Boulevard, Taipei 114-740, Taiwan R.O.C., and our telephone number is 886-2-2656-8000. Our agent in the U.S. is Computershare Limited and its office address is 480 Washington Blvd., Jersey City, New Jersey.
We made a direct investment of more than $1.1 million during 2022 in developing our own offerings. 18 Sources of Role-playing and Sports Games Historically, we have sourced role-playing and sports games through licensing from developers in various regions where game development is well established.
We made a direct investment of more than $0.7 million during 2023 in developing our own offerings. 16 Sources of Role-playing and Sports Games Historically, we have sourced role-playing and sports games through licensing from developers in various regions where game development is well established.
Property, Plant and Equipment As of April 6, 2023, we leased approximately 28,000 square feet as office premises as our corporate head office in Taipei, Taiwan and approximately 4,000 square feet as office premises for FunTown’s office in Hong Kong. ITEM 4A. UNRESOLV ED STAFF COMMENTS None.
Taiwan Wholly owned subsidiary 23 D. Property, Plant and Equipment As of April 6, 2024, we leased approximately 28,000 square feet as office premises as our corporate head office in Taipei, Taiwan and approximately 4,000 square feet as office premises for FunTown’s office in Hong Kong. ITEM 4A. UNRESOLV ED STAFF COMMENTS None.
The cost of licensing games from developers generally consists of an upfront licensing fee, which we typically pay in several installments, and ongoing licensing fees, or royalties, which are equal to a percentage of revenues generated from operation of the game. We may also agree to provide certain minimum guarantees in royalties to developers.
The cost of licensing games from developers generally consists of an upfront licensing fee, which we typically pay in several installments, and ongoing licensing fees, or royalties, which are equal to a percentage of revenues generated from operation of the game.
Cayman Islands Wholly owned subsidiary Cambridge Entertainment Software Limited British Virgin Islands Wholly owned subsidiary GigaMedia (HK) Limited Hong Kong Wholly owned subsidiary GigaMedia (Cayman) Limited Cayman Islands Wholly owned subsidiary Held by GigaMedia Online Entertainment Corp.
Cayman Islands Wholly owned subsidiary GigaMedia (HK) Limited Hong Kong Wholly owned subsidiary GigaMedia (Cayman) Limited Cayman Islands Wholly owned subsidiary Held by GigaMedia Online Entertainment Corp.
Our MahJong games are designed for players of all levels of skill and experience. To accommodate various needs of players, we offer different online MahJong rooms based on skill levels or stakes. We believe our online MahJong game site is one of the most popular online MahJong networks in Taiwan. Players may play our online MahJong free of charge.
Players can compete with anyone on the FunTown network. Our MahJong games are designed for players of all levels of skill and experience. To accommodate various needs of players, we offer different online MahJong rooms based on skill levels or stakes. We believe our online MahJong game site is one of the most popular online MahJong networks in Taiwan.
In order to support product development capabilities and develop our proprietary online games, we intend to expand our browser/mobile-based games development capabilities.
In order to support product development capabilities and develop our proprietary digital entertainment offerings, we intend to expand our browser/mobile-based development capabilities.
After players join a club, they can participate in biweekly online inter-club tournaments. • Avatars. To enhance players’ overall entertainment experience, FunTown offers many in-game virtual items which may be purchased by players to customize their online personal graphic profiles, or avatars. Players use avatars to create their own unique look while participating in the online community.
FunTown provides various tournaments for its online MahJong players. After players join a club, they can participate in biweekly online inter-club tournaments. • Avatars. To enhance players’ overall entertainment experience, FunTown offers many in-game virtual items which may be purchased by players to customize their online personal graphic profiles, or avatars.
In addition, we compete for users against various offline entertainment products, such as console games, arcade games and handheld games, as well as various other forms of traditional or online entertainment.
Our major competitors in Taiwan include Soft-World, IGS, UserJoy and GodGame. In addition, we compete for users against various offline entertainment products, such as console games, arcade games and handheld games, as well as various other forms of traditional or online entertainment.
FunTown World Limited British Virgin Islands Wholly owned subsidiary GigaMedia Freestyle Holdings Limited British Virgin Islands Wholly owned subsidiary Megabiz Limited British Virgin Islands Wholly owned subsidiary Held by FunTown World Limited FunTown Hong Kong Limited Hong Kong Wholly owned subsidiary Held by GigaMedia (Cayman) Limited Hoshin GigaMedia Center Inc.
FunTown World Limited British Virgin Islands Wholly owned subsidiary GigaMedia Freestyle Holdings Limited British Virgin Islands Wholly owned subsidiary Held by FunTown World Limited FunTown Hong Kong Limited Hong Kong Wholly owned subsidiary Held by GigaMedia (Cayman) Limited Hoshin GigaMedia Center Inc. Taiwan Wholly owned subsidiary GigaMedia Development Corporation Taiwan Wholly owned subsidiary GigaMedia Cloud Services Co. Ltd.
FunTown Platform and Services Our FunTown platform provides many digital entertainment services for users to enhance their playing and entertainment experiences, facilitate information communication among them and support the development of a strong player community. These services include: • Player Clubs. FunTown offers online club services in its game community.
Following the commercial launch of a game, we regularly implement improvements and upgrades to our games. FunTown Platform and Services Our FunTown platform provides many digital entertainment services for users to enhance their playing and entertainment experiences, facilitate information communication among them and support the development of a strong player community. These services include: • Player Clubs.
Through our FunTown-branded platform, we develop and offer various local versions of MahJong for players in Asia, particularly in Taiwan and Hong Kong. To play our online MahJong games, players install software that can be downloaded free of charge from our game websites. Players can compete with anyone on the FunTown network.
Similar to poker, MahJong involves skill, strategy and calculation, as well as a certain degree of chance. Through our FunTown-branded platform, we develop and offer various local versions of MahJong for players in Asia, particularly in Taiwan and Hong Kong. To play our online MahJong games, players install software that can be downloaded free of charge from our game websites.
Regulations Relating to Digital Entertainment Taiwan At present, there is no specific law in Taiwan governing digital entertainment services, nor are there any specific licensing requirements imposed on Internet content providers in connection with offering online game services. 21 The Protection of Children and Youths Welfare and Rights Act The rating of internet content is governed by Article 46 of the Protection of Children and Youths Welfare and Rights Act, which requires that all internet platform providers adopt their own rules implementing “clear and practicable” protection measures in accordance with the internet content supervisory institutions engaged by the National Communications Commission (the “NCC”) and other relevant authorities to prevent youth and children from having access to harmful internet content.
The Protection of Children and Youths Welfare and Rights Act The rating of internet content is governed by Article 46 of the Protection of Children and Youths Welfare and Rights Act, which requires that all internet platform providers adopt their own rules implementing “clear and practicable” protection measures in accordance with the internet content supervisory institutions engaged by the National Communications Commission (the “NCC”) and other relevant authorities to prevent youth and children from having access to harmful internet content.
However, if the interests involved therein exceed NT$200,000,000, restrictions on maximum amount for damages to be claimed and on minimum amount for damages to be claimed (NT$500 per person for each violation) shall not apply. Hong Kong Personal Data (Privacy) Ordinance The Personal Data (Privacy) Ordinance (Cap. 486) came into effect in Hong Kong on December 20, 1996.
However, if the interests involved therein exceed NT$200,000,000, restrictions on maximum amount for damages to be claimed and on minimum amount for damages to be claimed (NT$500 per person for each violation) shall not apply.
FunTown has its own unified user account system, which allows players to use a single account to access all FunTown games. Our billing and game management system supports various billing models and deposit options, and accommodate in-house developed games and licensed games. Our customer service system enables us to assist our players inside and outside the games.
Our billing and game management system supports various billing models and deposit options, and accommodate in-house developed games and licensed games. Our customer service system enables us to assist our players inside and outside the games.
Our Customers In Taiwan and Hong Kong, as of December 31, 2022, we had an aggregate of approximately 9.0 million unique registered customers of our digital entertainment services, most of which were located in Taiwan. During the year ended December 31, 2022, we recorded approximately 43,000 active paying users.
Our Customers In Taiwan and Hong Kong, as of December 31, 2023, we had an aggregate of approximately 9.1 million unique registered customers of our digital entertainment services, most of which were located in Taiwan.
These payment aggregators allow users to pay for a variety of products and services, such as mobile phone calls and game points of different game operators, using their pre-paid scratch cards, vouchers or codes printed on receipts. 20 Offline Physical Distribution Channels Physical distribution channels mainly consist of convenience chain stores, where users may use interactive kiosk machines to purchase pre-paid game points with varying amounts.
These payment aggregators allow users to pay for a variety of products and services, such as mobile phone calls and game points of different game operators, using their pre-paid scratch cards, vouchers or codes printed on receipts.
While a player may win virtual currency in the game without paying, an average player typically has to pay to continue playing on a regular basis or to establish a track record inside our online MahJong community. Players may choose to purchase game points through various distribution channels, such as convenience stores, payment processing terminals or online/mobile payment channels.
Players may play our online MahJong free of charge. While a player may win virtual currency in the game without paying, an average player typically has to pay to continue playing on a regular basis or to establish a track record inside our online MahJong community.
As of December 31, 2022, the accumulated sales revenues of Yume100 since its launch were approximately US$12.4 million. Leveraging the operating experience of Yume100 , in mid-December 2017, we launched Akaseka , a similarly female-oriented game. Furthermore, we launched Shinobi Master New Link, a male-oriented game, in April 2019.
Leveraging the operating experience of Yume100 , in mid-December 2017, we launched Akaseka , a similarly female-oriented game. Furthermore, we launched Shinobi Master New Link, a male-oriented game, in April 2019.
Our Digital Entertainment Products MahJong and Other Casual Games MahJong is a traditional and highly popular Chinese tile-based game that is widely played in Taiwan, Hong Kong, the PRC, Japan, South Korea and other regions throughout Asia. Similar to poker, MahJong involves skill, strategy and calculation, as well as a certain degree of chance.
We expect to drive growth both organically and through accretive transactions. Our Digital Entertainment Products MahJong and Other Casual Games MahJong is a traditional and highly popular Chinese tile-based game that is widely played in Taiwan, Hong Kong, the PRC, Japan, South Korea and other regions throughout Asia.
For our role-playing games, we also collaborate with book shops, coffee shops and similar businesses to host fan meetings, where we provide immersive customer experience to promote and strengthen customers’ emotional connections with our role-playing games. Open Beta Testing We conduct our open beta testing under open market conditions.
For our role-playing games, we also collaborate with book shops, coffee shops and similar businesses to host fan meetings, where we provide immersive customer experience to promote and strengthen customers’ emotional connections with our role-playing games. Our Distribution and Payment Channels We sell game points for our digital entertainment services through various channels.
We monitor markets in the United States, South Korea, the PRC, Japan, Southeast Asia and Europe, and maintain communications with a number of leading game development studios to identify and source new online games. In selecting games, we evaluate the key factors that indicate the market trend and player demand and interest in the regions where we operate.
As part of our long-term planning, we monitor markets in the United States, South Korea, the PRC, Japan, Southeast Asia and Europe, and maintain communications with a number of leading game development studios to identify and source new online games.
An internet platform provider is required to restrict children and youths from having access to internet content upon the relevant authority’s notification that such internet content may be harmful or that such internet platform provider failed to implement “clear and practicable” protection measures.
An internet platform provider is required to restrict children and youths from having access to internet content upon the relevant authority’s notification that such internet content may be harmful or that such internet platform provider failed to implement “clear and practicable” protection measures. 19 Computer Software Ratings In July 2006, the Ministry of Economic Affairs announced the Computer Software Ratings pursuant to the Protection of Children and Youths Welfare and Rights Act, which took effect in January 2007.
The Personal Data Protection Act was last amended on December 30, 2015.
The Personal Data Protection Act was last amended on May 31, 2023.
Matters related to game software rating have been changed to the jurisdiction of the Ministry of Digital Development after August 27, 2022, they are originally under the jurisdiction of the Ministry of Economic Affairs. The definition of “game software” and the rating system have been significantly modified in the 2012 amendment.
These regulations were amended on May 29, 2012 and renamed the Game Software Rating Management Regulations, and were last amended on May 23, 2019. Matters related to game software rating have been changed to the jurisdiction of the Ministry of Digital Development after August 27, 2022, they are originally under the jurisdiction of the Ministry of Economic Affairs.
Traditionally, for our PC-based online games, players download and install client software from our websites. Our online games are offered free-of-charge to all players. Players may purchase virtual items that enhance their characters’ performance and game playing experience, or personalize their characters. From 2015 to 2022, we launched eleven mobile role-playing online games, or RPGs.
Our online games are offered free-of-charge to all players. Players may purchase virtual items that enhance their characters’ performance and game playing experience, or personalize their characters. We have launched eleven mobile role-playing online games in past years. In particular, Yume100 , which was launched at the end of September 2015, outperformed other mobile role-playing games.
In particular, Yume100 , which was launched at the end of September 2015, outperformed other mobile role-playing games. Yume100 is a story-based game that primarily targets female players in the age range of 15 to 35 years old. In the game, which has certain romantic elements, players assume game characters and complete challenges.
Yume100 is a story-based game that primarily targets female players in the age range of 15 to 35 years old. In the game, which has certain romantic elements, players assume game characters and complete challenges. As of December 31, 2023, the accumulated sales revenues of Yume100 since its launch were approximately US$12.8 million.
Players may exchange purchased game points for virtual currency and deposit into their virtual bank accounts.
Players may choose to purchase game points through various distribution channels, such as convenience stores, payment processing terminals or online/mobile payment channels. Players may exchange purchased game points for virtual currency and deposit into their virtual bank accounts.
The prolonged school closures arising from the COVID-19 pandemic also had significant positive impact on our revenues as students (one of our target markets) sought online entertainment at a higher rate. Regulation Our business is subject to various laws and regulations in the jurisdictions we operate relating to the digital entertainment industry, and is regulated by various government authorities.
Regulation Our business is subject to various laws and regulations in the jurisdictions we operate relating to the digital entertainment industry, and is regulated by various government authorities.
Our Operation Architecture We have a scalable and modular operation architecture that enables us to support and expand our digital entertainment offerings. The architecture consists of several key subsystems, including game services, a central user database, billing and payment, online customer service, game telemetry and monitoring.
The architecture consists of several key subsystems, including game services, a central user database, billing and payment, online customer service, game telemetry and monitoring. FunTown has its own unified user account system, which allows players to use a single account to access all FunTown games.
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We expect to drive growth both organically and through accretive transactions. While the COVID-19 pandemic had required people to stay home more, which caused some people, especially students (one of our target markets), to seek online entertainment at a higher rate, other groups became reluctant to spend on entertainment in light of the prolonged economic uncertainty resulting from the pandemic.
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Our revenues generated from Tales Runner were approximately US$2.7 million in 2023, decreased from US$3.4 million in 2022, but higher than US$2.4 million in 2021.
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In addition, our Japanese and Korean licensors were considerably impacted by the COVID-19 pandemic, and delays in providing support, upgrades and new content had a negative impact on the ability to sustain interest in the games licensed from these licensors.
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The falling back in revenues was mainly due to the lift of travel and social restrictions that had been imposed during the COVID-19 pandemic, and the resultant effect that fewer people spent as much time online than previously. Traditionally, for our PC-based online games, players download and install client software from our websites.
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As life is gradually returning to a post-COVID normal routine, we expect there to be a slight decline of revenues from our student customers, but also better coordination with our licensors.
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Offline Physical Distribution Channels Physical distribution channels mainly consist of convenience chain stores, where users may use interactive kiosk machines to purchase pre-paid game points with varying amounts. Our Operation Architecture We have a scalable and modular operation architecture that enables us to support and expand our digital entertainment offerings.
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Our revenues generated from Tales Runner were approximately US$3.4 million in 2022, significantly increased from US$2.4 million in 2021 and US$2.7 million in 2020. The increase was mainly due to our efforts in revitalizing and boosting this 16-year-old game in light of Hong Kong students’ prolonged periods under stay-home requirement arising from the COVID-19 pandemic.
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During the year ended December 31, 2023, we recorded approximately 33,000 active paying users, with monthly average revenue per paying user ("ARPPU") ranging from approximately $40 to $100 for different services. 18 Competition Our primary competitors in the digital entertainment business are online game operators based in Taiwan and Hong Kong.
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We believe that our market analysis enables us to better assess the quality, risks, costs and potential returns of the games.
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Regulations Relating to Digital Entertainment Taiwan At present, there is no specific law in Taiwan governing digital entertainment services, nor are there any specific licensing requirements imposed on Internet content providers in connection with offering online game services.
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Prior to negotiating a license agreement with a game developer, our game testing team evaluates the game and prepares detailed evaluation reports covering the theme, storyline, in-game culture and environment, character progression, system architecture, game art, design, virtual articles and items. Based on the results of our evaluation, we may enter into a license agreement to operate select games.
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The definition of “game software” and the rating system have been significantly modified in the 2012 amendment.
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The closed beta testing is followed by open beta testing, during which we operate our games under open market conditions and monitor the performance, consistency and stability of operational systems for the game. Following the commercial launch of a game, we regularly implement improvements and upgrades to our games.
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The Ministry of Digital Development, the central government authorities in charge of the digital and economic industry, pursuant to the Article 27 of the Personal Data Protection Act, announced the Security and Maintenance Plan for the Protection of Personal Data Files for Digital and Economic Industry on October 12, 2023.
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The FunTown platform provides an online social networking community called FunTown Village, in which players meet each other through their online avatars. In FunTown Village, players can interact and communicate, purchase virtual items, and even get married virtually.
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The purpose of the regulation is to ensure that non-government agencies in possession of personal data files shall implement proper security measures to prevent the personal data from being stolen, altered, damaged, destroyed or disclosed. Hong Kong Personal Data (Privacy) Ordinance The Personal Data (Privacy) Ordinance (Cap. 486) came into effect in Hong Kong on December 20, 1996.
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FunTown plans to introduce more virtual items within FunTown Village to address the strong social interests of its players and to help increase FunTown’s overall appeal as a distinct online game community. • Customer Services.
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During open beta testing, we do not charge users to play the new game. Open beta testing serves important marketing functions, including developing initial interest, establishing an initial user base, and generating word-of-mouth publicity to support the commercial launch of the game. Our Distribution and Payment Channels We sell game points for our digital entertainment services through various channels.
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Competition Our primary competitors in the digital entertainment business are online game operators based in Taiwan and Hong Kong. Our major competitors in Taiwan include Soft-World, IGS, UserJoy and GodGame.
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Computer Software Ratings In July 2006, the Ministry of Economic Affairs announced the Computer Software Ratings pursuant to the Protection of Children and Youths Welfare and Rights Act, which took effect in January 2007. These regulations were amended on May 29, 2012 and renamed the Game Software Rating Management Regulations, and were last amended on May 23, 2019.
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Taiwan Wholly owned subsidiary GigaMedia Development Corporation Taiwan Wholly owned subsidiary GigaMedia Cloud Services Co. Ltd. Taiwan Wholly owned subsidiary 25 D.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

55 edited+13 added−10 removed34 unchanged
We do not believe there is a reasonable likelihood there will be a material change in the estimates or assumptions used to evaluate fair values of the securities. However, if actual results are not consistent with our estimates and assumptions used to calculate estimated future cash flows, we may be exposed to impairment losses that could be material. 35
We do not believe there is a reasonable likelihood there will be a material change in the estimates or assumptions used to evaluate fair values of the securities. However, if actual results are not consistent with our estimates and assumptions used to calculate estimated future cash flows, we may be exposed to impairment losses that could be material.
In 2022, our net cash used in operating activities was approximately US$2.5 million. We collected US$6.5 million in cash from our customers, paid US$2.6 million for license fees, royalties and channel costs, and paid approximately US$6.3 million to employees, suppliers and vendors. In 2021, our net cash used in operating activities was approximately US$4.1 million.
We collected US$6.5 million in cash from our customers, paid US$2.6 million for license fees, royalties and channel costs, and paid approximately US$6.3 million to employees, suppliers and vendors. In 2021, our net cash used in operating activities was approximately US$4.1 million.
Revenues are collected in accordance with contracts and through monthly payment or in advance payments with discounts, and are recognized when (or as) we satisfy the related performance obligation. COSTS OF REVENUES.
Revenues are collected in accordance with contracts and through monthly payment or in advance payments with discounts, and are recognized when (or as) we satisfy the related performance obligation. 26 COSTS OF REVENUES.
In 2022, 2021 and 2020, the foreign exchange gain or loss were mainly arising from inter-company accounts between our wholly-owned entities using different functional currencies. While the balances of the inter-company accounts were fully eliminated in the consolidation, the foreign exchange gain or loss resulted remained in our consolidated statements of operations.
In 2023, 2022 and 2021, the foreign exchange gain or loss were mainly arising from inter-company accounts between our wholly-owned entities using different functional currencies. While the balances of the inter-company accounts were fully eliminated in the consolidation, the foreign exchange gain or loss resulted remained in our consolidated statements of operations.
Operating Results The following selected consolidated balance sheet data as of December 31, 2022 and 2021 and the selected consolidated statement of operations data for the years ended December 31, 2022, 2021 and 2020 have been derived from our audited consolidated financial statements included in Item 18 in this annual report.
Operating Results The following selected consolidated balance sheet data as of December 31, 2023 and 2022 and the selected consolidated statement of operations data for the years ended December 31, 2023, 2022 and 2021 have been derived from our audited consolidated financial statements included in Item 18 in this annual report.
The selected consolidated balance sheet data as of December 31, 2020, 2019 and 2018, and the selected consolidated statement of operations data for the years ended December 31, 2019 and 2018 have been derived from our audited consolidated financial statements for the years ended December 31, 2019 and 2018, which are not included in this annual report.
The selected consolidated balance sheet data as of December 31, 2021, 2020 and 2019, and the selected consolidated statement of operations data for the years ended December 31, 2020 and 2019 have been derived from our audited consolidated financial statements for the years ended December 31, 2020 and 2019, which are not included in this annual report.
In addition, we have contractual obligations under various license agreements to pay the licensors license fees and minimum guarantees against future royalties. There were no committed license fees and minimum guarantees against future royalties set forth in our significant license agreements as of December 31, 2022.
In addition, we have contractual obligations under various license agreements to pay the licensors license fees and minimum guarantees against future royalties. There were no committed license fees and minimum guarantees against future royalties set forth in our significant license agreements as of December 31, 2023.
We believe that our existing cash, cash equivalents and restricted cash, and our ability to obtain short-term borrowings will be sufficient to meet our capital expenditure, debt, and operating cash obligations through 2023. We believe our working capital is sufficient for our present requirements.
We believe that our existing cash, cash equivalents and restricted cash, and our ability to obtain short-term borrowings will be sufficient to meet our capital expenditure, debt, and operating cash obligations through 2024. We believe our working capital is sufficient for our present requirements.
While we have zero bank borrowing as of December 31, 2022 and 2021, we have established strong relationships with financial institutions and expect to be able to secure lines of credit to fulfill operating and strategic needs.
While we have zero bank borrowing as of December 31, 2023 and 2022, we have established strong relationships with financial institutions and expect to be able to secure lines of credit to fulfill operating and strategic needs.
B. Liquidity and Capital Resources Our principal source of liquidity in the year ended December 31, 2022, was our cash on hand. Our cash and cash equivalents are held primarily in U.S. dollars and NT dollars.
B. Liquidity and Capital Resources Our principal source of liquidity in the year ended December 31, 2023, was our cash on hand. Our cash and cash equivalents are held primarily in U.S. dollars and NT dollars.
Our capital expenditure plans for 2023, which we expect to be primarily in software and computer hardware equipment, will aim to support our lean growth initiatives in our digital entertainment service business.
Our capital expenditure plans for 2024, which we expect to be primarily in software and computer hardware equipment, will aim to support our lean growth initiatives in our digital entertainment service business.
Revenues from our legacy MahJong and casino games were US$1.3 million in 2022, down from US$1.5 million in 2021. Gross Margin Our gross margin fluctuates with players paying through different channels, changes in price and product mix, cost improvement, and exchange rate, among other factors.
Revenues from our legacy MahJong and casino games were US$1.1 million in 2023, down from US$1.3 million in 2022. Gross Margin Our gross margin fluctuates with players paying through different channels, changes in price and product mix, cost improvement, and exchange rate, among other factors.
Taxes are measured using the tax rates and laws that have been enacted or subsequently enacted as of the date of the financial statements. 29 Year to Year Comparisons Please refer to the Item 5 in our previously filed Annual Report on Form 20-F for the year ended December 31, 2021 for the comparisons of our results of operations in fiscal years 2021 and 2020.
Taxes are measured using the tax rates and laws that have been enacted or subsequently enacted as of the date of the financial statements. 27 Year to Year Comparisons Please refer to the Item 5 in our previously filed Annual Report on Form 20-F for the year ended December 31, 2022 for the comparisons of our results of operations in fiscal years 2022 and 2021.
Since the revenues from particular games are unpredictable, the table above only reflects incentive fee commitments that have been triggered by crossing the relevant revenue thresholds. 33 We typically finance our capital expenditures through cash holdings.
Since the revenues from particular games are uncertain, the table above only reflects incentive fee commitments that have been triggered by crossing the relevant revenue thresholds. We typically finance our capital expenditures through cash holdings.
We believe that the following are our critical accounting estimates: • Revenue Recognition and Deferral • Valuation of Debt and Equity Securities 34 Revenue Recognition and Deferral Our digital entertainment product and service revenues are mainly generated through sale of virtual points and in-game items, and those virtual goods purchased in our games can only be consumed in our games.
We believe that the following are our critical accounting estimates: • Revenue Recognition and Deferral • Valuation of Investment in Securities Revenue Recognition and Deferral Our digital entertainment product and service revenues are mainly generated through sale of virtual points and in-game items, and those virtual goods purchased in our games can only be consumed in our games.
Our gross capital expenditures in continuing operations for equipment, furniture and fixtures, intangible assets and other deferred assets were US$70 thousand, US$93 thousand and US$32 thousand for 2022, 2021 and 2020, respectively. Capital expenditures during 2022 were primarily for software and computer hardware equipment for our digital entertainment business and for general corporate use.
Our gross capital expenditures in continuing operations for equipment, furniture and fixtures, intangible assets and other deferred assets were US$58 thousand, US$70 thousand and US$93 thousand for 2023, 2022 and 2021, respectively. Capital expenditures during 2023 were primarily for software and computer hardware equipment for our digital entertainment business and for general corporate use.
This amount was reduced from the amounts in 2021 and 2020 as we streamlined the workforce of our development team. With a slimmer team in place for 2023, we plan to continue our exploration of digital entertainment to further develop our own products and services.
This amount was reduced from the amounts in 2022 and 2021 as we streamlined the workforce of our development team. With a slimmer team in place for 2024, we plan to continue our exploration of digital entertainment to further develop our own products and services.
Furthermore, our gross margins are negatively impacted in the year when upfront fees or initial costs are amortized for a newly introduced licensed game. Our gross profit was US$3.3 million in 2022 as compared to US$2.9 million in 2021.
Furthermore, our gross margins are negatively impacted in the year when upfront fees or initial costs are amortized for a newly introduced licensed game. Our gross profit was US$2.4 million in 2023 as compared to US$3.3 million in 2022.
We did not recognize any significant income tax benefits or expenses in 2022 or 2021. We recognized a net loss of approximately US$3.0 million, which represents a decrease of loss of US$0.4 million year-over-year, primarily resulting from the aforementioned factors. Online game operators in Taiwan and Hong Kong are currently our primary competitors.
We did not recognize any significant income tax benefits or expenses in 2023 or 2022. We recognized a net loss of approximately US$3.4 million, which represents an increase of loss of US$0.6 million year-over-year, primarily resulting from the aforementioned factors. Online game operators in Taiwan and Hong Kong are currently our primary competitors.
We make investments in research and development to keep pace and remain competitive with technology advancements and product development relating to our digital entertainment service business. For the years 2022, 2021 and 2020, we incurred US$1.1 million, US$1.4 million and US$1.3 million, respectively, in research and development activities. D.
We make investments in research and development to keep pace and remain competitive with technology advancements and product development relating to our digital entertainment service business. For the years 2023, 2022 and 2021, we incurred US$0.7 million, US$1.1 million and US$1.4 million, respectively, in research and development activities. D.
Income Tax Benefit For the Year Ended December 31, 2022 2021 2020 Amount in US$ thousands % Change from 2021 Amount in US$ thousands % Change from 2020 Amount in US$ thousands Loss before income taxes $ (2,752 ) (19.6 )% $ (3,425 ) 164.9 % $ (1,293 ) Income tax benefit — N/A — N/A — Net loss attributable to shareholders of GigaMedia $ (2,752 ) (19.6 )% $ (3,425 ) 164.9 % $ (1,293 ) In 2022 and 2021, no significant income tax benefits or expenses were incurred in our operations in respective tax jurisdictions, and full allowance was provided against all deferred tax assets.
Income Tax Benefit For the Year Ended December 31, 2023 2022 2021 Amount in US$ thousands % Change from 2022 Amount in US$ thousands % Change from 2021 Amount in US$ thousands Loss before income taxes $ (3,399 ) 23.5 % $ (2,752 ) (19.6 )% $ (3,425 ) Income tax benefit — N/A — N/A — Net loss attributable to shareholders of GigaMedia $ (3,399 ) 23.5 % $ (2,752 ) (19.6 )% $ (3,425 ) In 2023 and 2022, no significant income tax benefits or expenses were incurred in our operations in respective tax jurisdictions, and full allowance was provided against all deferred tax assets.
Operating Results — Certain Significant Events Affecting Our Results of Operations for 2022, 2021 and 2020” for a discussion of the most recent trends in our operating costs and revenues since the end of 2022.
Operating Results — Certain Significant Events Affecting Our Results of Operations for 2023, 2022 and 2021” for a discussion of the most recent trends in our operating costs and revenues since the end of 2022.
At the same time, we continued consolidating substantial resources for developing our own offerings, into which direct investment was US$1.1 million, US$1.4 million and US$1.3 million during 2022, 2021 and 2020, respectively.
At the same time, we continued consolidating substantial resources for developing our own offerings, into which direct investment was US$0.7 million, US$1.1 million and US$1.4 million during 2023, 2022 and 2021, respectively.
Our review led us to conclude that: • Compared to our in-house offerings, the operations of licensed games bear an uncompetitive cost structure where licensing costs and channel costs usually take a huge bite out of earnings, leaving little room for any marketing strategies. • The operations of licensed games are inherently dependent on the licensors and it is therefore difficult for us to take the initiative in driving changes.
After conducting a comprehensive strategic business review, we concluded that: • Compared to our in-house offerings, the operations of licensed games bear an uncompetitive cost structure where licensing costs and channel costs usually take a huge bite out of earnings, leaving little room for any marketing strategies. • The operations of licensed games are inherently dependent on the licensors and it is therefore difficult for us to take the initiative in driving changes.
Our future cash requirements will depend on a number of factors including: • the rate at which we enter into strategic transactions; • the rate at which we expand our operations and employee base; • the timing of entry into new markets and new services offered; • changes in revenues and cost splits with our business partners; • the rate at which we invest in developing and licensing our products and upgrading and maintaining our network and future technologies; and • the rate at which we grow and monetize our customer bases. 32 The following table set forth the summary of our cash flows for the years indicated: For the Year Ended December, 31 (in US$ thousands) 2022 2021 2020 Net cash used in operating activities $ (2,509 ) $ (4,135 ) $ (2,075 ) Net cash used in investing activities (70 ) (17 ) (10,041 ) Net cash used in financing activities — — — Exchange difference (75 ) (89 ) (156 ) Net decrease in cash, cash equivalents and restricted cash (2,654 ) (4,241 ) (12,272 ) Cash, cash equivalents and restricted cash at beginning of year 41,761 46,002 58,274 Cash, cash equivalents and restricted cash at end of year $ 39,107 $ 41,761 $ 46,002 OPERATING ACTIVITIES.
Our future cash requirements will depend on a number of factors including: • the rate at which we enter into strategic transactions; • the rate at which we expand our operations and employee base; • the timing of entry into new markets and new services offered; • changes in revenues and cost splits with our business partners; • the rate at which we invest in developing and licensing our products and upgrading and maintaining our network and future technologies; and • the rate at which we grow and monetize our customer bases. 30 The following table set forth the summary of our cash flows for the years indicated: For the Year Ended December, 31 (in US$ thousands) 2023 2022 2021 Net cash used in operating activities $ (1,193 ) $ (2,509 ) $ (4,135 ) Net cash provided by (used in) investing activities 837 (70 ) (17 ) Net cash used in financing activities — — — Exchange difference 32 (75 ) (89 ) Net decrease in cash, cash equivalents and restricted cash (324 ) (2,654 ) (4,241 ) Cash, cash equivalents and restricted cash at beginning of year 39,107 41,761 46,002 Cash, cash equivalents and restricted cash at end of year $ 38,783 $ 39,107 $ 41,761 OPERATING ACTIVITIES.
For a specific licensed game, we are committed to paying an incentive fee of $20 thousand to the licensor for every $600 thousand in additional revenues generated from the game during the agreement period from January 2022 to January 2024.
For a specific licensed game, we are committed to paying an incentive fee of $20 thousand to the licensor for every $600 thousand in additional revenues generated from the game during the agreement period and extended period through January 2026.
These techniques rely extensively on the use of a number of assumptions, including the discount rate, credit spreads, and estimates of future cash flows. Please see note 4 to our consolidated financial statements for additional information. We have not made any material changes in the accounting methodology used to evaluate investment in securities during the last three fiscal years.
These techniques rely extensively on the use of a number of assumptions, including the discount rate, credit spreads, and estimates of future cash flows. Please see note 4 to our consolidated financial statements for additional information. We have not made any material changes in the accounting methodology used to evaluate investment in securities as of December 31, 2023 and 2022.
For the Years Ended December 31, (in thousands US$, except for per share data) 2022 2021 2020 2019 2018 CONSOLIDATED STATEMENTS OF OPERATIONS DATA: OPERATING REVENUES Digital entertainment service revenues $ 5,585 $ 5,492 $ 6,875 $ 6,645 $ 7,101 COSTS OF REVENUES Cost of digital entertainment service revenues (2,335 ) (2,584 ) (2,956 ) (3,064 ) (3,585 ) GROSS PROFIT 3,250 2,908 3,919 3,581 3,516 OPERATING EXPENSES Product development and engineering expenses (1,110 ) (1,449 ) (1,327 ) (1,186 ) (1,091 ) Selling and marketing expenses (1,644 ) (1,729 ) (1,618 ) (1,995 ) (3,297 ) General and administrative expenses (3,515 ) (3,697 ) (3,121 ) (3,182 ) (3,684 ) Impairment loss on property, plant, and equipment — — — (109 ) — Impairment loss on intangible assets — — — (15 ) — Impairment loss on prepaid licensing and royalty fees — — — (85 ) (244 ) Other (2 ) (7 ) (5 ) (24 ) (23 ) Total operating expense (6,271 ) (6,882 ) (6,071 ) (6,596 ) (8,339 ) Loss from operations (3,021 ) (3,974 ) (2,152 ) (3,015 ) (4,823 ) Income tax benefit — — — — — Net income (loss) attributable to shareholders of GigaMedia $ (2,752 ) $ (3,425 ) $ (1,293 ) $ (1,659 ) $ (3,193 ) Earnings (loss) per share (in dollars): Basic and diluted $ (0.25 ) $ (0.31 ) $ (0.12 ) $ (0.15 ) $ (0.29 ) There were no dividends declared in 2022, 2021, 2020, 2019 and 2018. 26 As of December 31, (in thousands US$, except for number of issued shares) 2022 2021 2020 2019 2018 CONSOLIDATED BALANCE SHEET DATA: Total current assets $ 47,826 $ 42,582 $ 46,525 $ 58,893 $ 60,595 Investment in securities - noncurrent 2,371 10,322 10,000 — — Property, plant and equipment-net 103 88 22 — 121 Intangible assets-net 19 12 4 — 38 Total assets 52,136 55,518 57,023 59,222 61,445 Total current liabilities 2,637 3,216 2,923 3,584 3,273 Total GigaMedia’s shareholders’ equity 48,606 50,852 54,097 55,544 58,172 Ordinary shares, no par value, and additional paid-in capital 308,752 308,752 308,752 308,751 308,750 Number of issued shares (in thousands) 11,052 11,052 11,052 11,052 11,052 Overview We are a diversified provider of digital entertainment services.
For the Years Ended December 31, (in thousands US$, except for per share data) 2023 2022 2021 2020 2019 CONSOLIDATED STATEMENTS OF OPERATIONS DATA: OPERATING REVENUES Digital entertainment service revenues $ 4,292 $ 5,585 $ 5,492 $ 6,875 $ 6,645 COSTS OF REVENUES Cost of digital entertainment service revenues (1,846 ) (2,335 ) (2,584 ) (2,956 ) (3,064 ) GROSS PROFIT 2,446 3,250 2,908 3,919 3,581 OPERATING EXPENSES Product development and engineering expenses (729 ) (1,110 ) (1,449 ) (1,327 ) (1,186 ) Selling and marketing expenses (1,623 ) (1,644 ) (1,729 ) (1,618 ) (1,995 ) General and administrative expenses (3,242 ) (3,515 ) (3,697 ) (3,121 ) (3,182 ) Impairment loss on property, plant, and equipment — — — — (109 ) Impairment loss on intangible assets — — — — (15 ) Impairment loss on prepaid licensing and royalty fees — — — — (85 ) Other (7 ) (2 ) (7 ) (5 ) (24 ) Total operating expense (5,601 ) (6,271 ) (6,882 ) (6,071 ) (6,596 ) Loss from operations (3,155 ) (3,021 ) (3,974 ) (2,152 ) (3,015 ) Income tax benefit — — — — — Net income (loss) attributable to shareholders of GigaMedia $ (3,399 ) $ (2,752 ) $ (3,425 ) $ (1,293 ) $ (1,659 ) Earnings (loss) per share (in dollars): Basic and diluted $ (0.31 ) $ (0.25 ) $ (0.31 ) $ (0.12 ) $ (0.15 ) There were no dividends declared in 2023, 2022, 2021, 2020 and 2019. 24 As of December 31, (in thousands US$, except for number of issued shares) 2023 2022 2021 2020 2019 CONSOLIDATED BALANCE SHEET DATA: Total current assets $ 39,207 $ 47,826 $ 42,582 $ 46,525 $ 58,893 Investment in securities - noncurrent 5,777 2,371 10,322 10,000 — Property, plant and equipment-net 111 103 88 22 — Intangible assets-net 13 19 12 4 — Total assets 46,497 52,136 55,518 57,023 59,222 Total current liabilities 2,464 2,637 3,216 2,923 3,584 Total GigaMedia’s shareholders’ equity 43,538 48,606 50,852 54,097 55,544 Ordinary shares, no par value, and additional paid-in capital 308,752 308,752 308,752 308,752 308,751 Number of issued shares (in thousands) 11,052 11,052 11,052 11,052 11,052 Overview We are a diversified provider of digital entertainment services.
We collected US$5.4 million in cash from our customers, paid US$1.9 million for license fees, royalties and channel costs, and paid approximately US$7.8 million to employees, suppliers and vendors. In 2020, our net cash used in operating activities was approximately US$2.1 million.
In 2023, our net cash used in operating activities was approximately US$1.2 million. We collected US$4.0 million in cash from our customers, paid US$1.3 million for license fees, royalties and channel costs, and paid approximately US$5.9 million to employees, suppliers and vendors. In 2022, our net cash used in operating activities was approximately US$2.5 million.
We incurred an operating loss of approximately US$3.0 million, which represents a decrease of loss of approximately US$1.0 million year-over-year.
We incurred an operating loss of approximately US$3.2 million, which represents a slight increase of loss of approximately US$0.1 million year-over-year.
Obligations and Capital Expenditures As of December 31, 2022, we had the following contractual obligations: As of December 31,2022 Payment Due by Period (in US$ thousands) Within 1 year 1-3 years 3-5 years >5 years Total Operating leases $ 455 $ 838 $ 69 $ — $ 1,362 Royalty fees 20 — — — 20 Total contractual cash obligations $ 475 $ 838 $ 69 $ — $ 1,382 Operating leases represent obligations under lease agreements with respect to certain office premises that we rent for operation.
Obligations and Capital Expenditures As of December 31, 2023, we had the following contractual obligations: As of December 31,2023 Payment Due by Period (in US$ thousands) Within 1 year 1-3 years 3-5 years >5 years Total Operating leases $ 486 $ 499 $ — $ — $ 985 Royalty fees — — — — — Total contractual cash obligations $ 486 $ 499 $ — $ — $ 985 Operating leases represent obligations under lease agreements with respect to certain office premises that we rent for operation.
We recognized a non-operating income of approximately US$269 thousand, compared to income of approximately US$0.5 million in the prior year, primarily because of the increased interest income and the gain on changes in the fair value of a financial instrument, partly offset by the foreign exchange loss.
We recognized a non-operating loss of approximately US$0.2 million, compared to income of approximately US$0.3 million in the prior year, primarily because of the loss on changes in the fair value of a financial instrument, partly offset by increase in interest income and less loss on foreign exchange.
In 2022, our efforts to curb expenditure growth in the current inflationary environment resulted in the decrease in overall operating expenses. Product Development and Engineering Expenses Our product development and engineering expenses amounted to US$1.1 million in 2022, which comprised mainly personnel related expenses.
In 2023, our efforts to curb expenditure growth in the current inflationary environment resulted in the decrease in overall operating expenses, except for bad debts. Product Development and Engineering Expenses Our product development and engineering expenses amounted to US$0.7 million in 2023, which comprised mainly personnel related expenses.
Operating Revenues and Gross Margin For the Year Ended December 31, 2022 2021 2020 Amount in US$ thousands % Change from 2021 Amount in US$ thousands % Change from 2020 Amount in US$ thousands Operating revenues $ 5,585 1.7 % $ 5,492 (20.1 )% $ 6,875 Cost of revenues (2,335 ) (9.6 )% (2,584 ) (12.6 )% (2,956 ) Gross profit $ 3,250 11.8 % $ 2,908 (25.8 )% $ 3,919 Gross margin 58.2 % 52.9 % 57.0 % Operating Revenues Our operating revenue in 2022 increased by 1.7% from 2021.
Operating Revenues and Gross Margin For the Year Ended December 31, 2023 2022 2021 Amount in US$ thousands % Change from 2022 Amount in US$ thousands % Change from 2021 Amount in US$ thousands Operating revenues $ 4,292 (23.2 )% $ 5,585 1.7 % $ 5,492 Cost of revenues (1,846 ) (20.9 )% (2,335 ) (9.6 )% (2,584 ) Gross profit $ 2,446 (24.7 )% $ 3,250 11.8 % $ 2,908 Gross margin 57.0 % 58.2 % 52.9 % Operating Revenues Our operating revenue in 2023 decreased by 23.2% from 2022.
We estimate and recognize the breakage amount as revenue when the likelihood of the customer exercising the remaining rights becomes remote. We consider a variety of data points when determining the estimated breakage amount, including the time when we ceased selling prepaid products for certain services and when such prepaid products were last used in charging users’ accounts.
We consider a variety of data points when determining the estimated breakage amount, including the time when we ceased selling prepaid products for certain services and when such prepaid products were last used in charging users’ accounts.
Our net cash used in investing activities in 2021 was US$17 thousand, which was primarily used for the purchase of property, plant and equipment.
Our net cash used in investing activities in 2022 and 2021 was US$70 thousand and US$17 thousand, respectively, primarily used for the purchase of property, plant and equipment. FINANCING ACTIVITIES. Our net cash flow in financing activities in 2023, 2022 and 2021 was nil.
The table below presents, for the years indicated, information regarding our revenues, costs and expenses for our consolidated operations. 28 For the Year Ended December 31, 2022 2021 2020 Amount in US$ thousands % of total revenues Amount in US$ thousands % of total revenues Amount in US$ thousands % of total revenues OPERATING REVENUES Digital entertainment service revenues $ 5,585 100.0 $ 5,492 100.0 $ 6,875 100.0 COSTS OF REVENUES Cost of digital entertainment service revenues (2,335 ) (41.8 ) (2,584 ) (47.1 ) (2,956 ) (43.0 ) Gross profit 3,250 58.2 2,908 52.9 3,919 57.0 OPERATING EXPENSES Product development and engineering expenses (1,110 ) (19.9 ) (1,449 ) (26.4 ) (1,327 ) (19.3 ) Selling and marketing expenses (1,644 ) (29.4 ) (1,729 ) (31.5 ) (1,618 ) (23.5 ) General and administrative expenses (3,515 ) (63.0 ) (3,697 ) (67.3 ) (3,121 ) (45.4 ) Other (2 ) 0.0 (7 ) (0.1 ) (5 ) (0.1 ) Total operating expenses (6,271 ) (112.3 ) (6,882 ) (125.3 ) (6,071 ) (88.3 ) Loss from operations (3,021 ) (54.1 ) (3,974 ) (72.4 ) (2,152 ) (31.3 ) NON-OPERATING INCOME (EXPENSES), NET 269 4.8 549 10.0 859 12.5 LOSS BEFORE INCOME TAXES (2,752 ) (49.3 ) (3,425 ) (62.4 ) (1,293 ) (18.8 ) INCOME TAX BENEFIT — 0.0 — 0.0 — 0.0 NET LOSS ATTRIBUTABLE TO SHAREHOLDERS OF GIGAMEDIA $ (2,752 ) (49.3 ) $ (3,425 ) (62.4 ) $ (1,293 ) (18.8 ) The key items included in our consolidated statements of operations are: OPERATING REVENUES.
For the Year Ended December 31, 2023 2022 2021 Amount in US$ thousands % of total revenues Amount in US$ thousands % of total revenues Amount in US$ thousands % of total revenues OPERATING REVENUES Digital entertainment service revenues $ 4,292 100.0 $ 5,585 100.0 $ 5,492 100.0 COSTS OF REVENUES Cost of digital entertainment service revenues (1,846 ) (43.0 ) (2,335 ) (41.8 ) (2,584 ) (47.1 ) Gross profit 2,446 57.0 3,250 58.2 2,908 52.9 OPERATING EXPENSES Product development and engineering expenses (729 ) (17.0 ) (1,110 ) (19.9 ) (1,449 ) (26.4 ) Selling and marketing expenses (1,623 ) (37.8 ) (1,644 ) (29.4 ) (1,729 ) (31.5 ) General and administrative expenses (3,242 ) (75.5 ) (3,515 ) (63.0 ) (3,697 ) (67.3 ) Other (7 ) (0.2 ) (2 ) 0.0 (7 ) 0.0 Total operating expenses (5,601 ) (130.5 ) (6,271 ) (112.3 ) (6,882 ) (125.3 ) Loss from operations (3,155 ) (73.5 ) (3,021 ) (54.1 ) (3,974 ) (72.4 ) NON-OPERATING INCOME (EXPENSES), NET (244 ) (5.7 ) 269 4.8 549 10.0 LOSS BEFORE INCOME TAXES (3,399 ) (79.2 ) (2,752 ) (49.3 ) (3,425 ) (62.4 ) INCOME TAX BENEFIT — 0.0 — 0.0 — 0.0 NET LOSS ATTRIBUTABLE TO SHAREHOLDERS OF GIGAMEDIA $ (3,399 ) (79.2 ) $ (2,752 ) (49.3 ) $ (3,425 ) (62.4 ) The key items included in our consolidated statements of operations are: OPERATING REVENUES.
We also may be unable to adapt to technological developments before our competitors. As a consequence, we may lose our existing customers and not expand our client base, which would have a material adverse effect on our revenues and financial condition.
We also may be unable to adapt to technological developments before our competitors. As a consequence, we may lose our existing customers and not expand our client base, which would have a material adverse effect on our revenues and financial condition. The table below presents, for the years indicated, information regarding our revenues, costs and expenses for our consolidated operations.
Accordingly, we recognize revenues from the sale of virtual goods over the period of time using the output method, which is generally the estimated service period. The virtual goods for our games may have different service periods. We use the weighted average number of days of a player’s payment interval as the estimate for the service period of each game.
Accordingly, we recognize revenues from the sale of virtual goods over the period of time using the output method, which is generally the estimated service period. 32 The virtual goods for our games may have different service periods.
Certain Significant Events Affecting Our Results of Operations for 2022, 2021 and 2020 Purchase and Partial Conversion of Convertible Note of Aeolus Robotics Corporation On August 31, 2020, we entered into a convertible note purchase agreement to purchase a US$10,000,000 principal amount convertible promissory note (the “Note”) issued by Aeolus Robotics Corporation (“Aeolus”), a global company primarily engaged in designing, manufacturing, processing and sales of intellectual robotics. 27 The Note, which bears interest at a rate of 2% per annum, was due on August 30, 2022 but was extendable to August 30, 2023 at Aeolus’s option, and all or a portion of the principal amount under the Note may be converted at our option upon maturity, upon prepayment, or when certain events occur, into ordinary shares of Aeolus at a price of US$3.00 per share, or into preferred shares in Aeolus’s nearest next round equity financing where Aeolus issues further preferred shares, at a price equal to the purchase price offered in such financing or with certain discount.
The Note, which bears interest at a rate of 2% per annum, was due on August 30, 2022 but was extendable to August 30, 2023 at Aeolus’s option, and all or a portion of the principal amount under the Note was convertible at our option upon maturity, upon prepayment, or when certain events occur, into ordinary shares of Aeolus at a price of US$3.00 per share, or into preferred shares in Aeolus’s nearest next round equity financing where Aeolus issues further preferred shares, at a price equal to the purchase price offered in such financing or with certain discount.
Deferred revenues representing contract liabilities consist mainly of the advanced income related to our digital entertainment business. Deferred revenue represents proceeds received relating to the sale of virtual points and in-game items that are activated or charged to the respective user account by users, but which have not been consumed by the users or expired.
Deferred revenue represents proceeds received relating to the sale of virtual points and in-game items that are activated or charged to the respective user account by users, but which have not been consumed by the users or expired. Deferred revenue is credited to profit or loss when the virtual points and in-game items are consumed or have expired.
In accordance with R.O.C. law, an appropriation for legal reserve amounting to 10% of a company’s net profit is required until the reserve equals the aggregate par value of such Taiwan company’s issued capital stock. As of December 31, 2022, 2021 and 2020, the legal reserves of Hoshin GigaMedia were approximately US$1.5 million, US$1.5 million and US$1.5 million, respectively.
In accordance with R.O.C. law, an appropriation for legal reserve amounting to 10% of a company’s net profit is required until the reserve equals the aggregate par value of such Taiwan company’s issued capital stock. In 2023, Hoshin GigaMedia resolved to use all the legal reserves to offset its deficit.
Effective December 30, 2021, we received 735,835 shares of the Series B preferred shares issued by Aeolus by converting 20% of the US$10,000,000 principal amount of the Note. The conversion was exercised in accordance with the right under the Note at the conversion price of US$2.718 per share. After the conversion, the outstanding principal amount under the Note was US$8,000,000.
Effective December 30, 2021, we received 735,835 shares of the Series B preferred shares issued by Aeolus by converting 20% of the US$10,000,000 principal amount of the Note.
In 2022, we had total operating revenues of approximately US$5.6 million, which represents an increase of approximately US$0.1 million year-over-year. Our total costs and expenses decreased by approximately US$0.9 million year-over-year to US$8.6 million, primarily due to our efforts in improving gross margin and curbing growth of expenditures in the current inflationary environment.
In 2023, we had total operating revenues of approximately US$4.3 million, which represents a decrease of approximately US$1.3 million year-over-year. Our total costs and expenses also decreased by approximately US$1.2 million year-over-year to US$7.4 million, largely in line with the decrease of the revenues, and primarily due to our efforts in curbing growth of expenditures in the current inflationary environment.
Determining the estimated service period is subjective and requires management’s judgment. Future usage patterns may differ from historical ones, and therefore the estimated service period may change in the future. The estimated service periods for players of our current games are generally less than 6 months.
Future usage patterns may differ from historical ones, and therefore the estimated service period may change in the future. The estimated service periods for players of our current games are generally less than 6 months. Deferred revenues representing contract liabilities consist mainly of the advanced income related to our digital entertainment business.
We have not made any material changes in the accounting methodology used to estimate the service period of the virtual goods and the breakage amount during the last three fiscal years. We do not believe there is a reasonable likelihood there will be a material change in the estimates or assumptions used to calculate the deferral and recognition of revenues.
We do not believe there is a reasonable likelihood there will be a material change in the estimates or assumptions used to calculate the deferral and recognition of revenues.
Gross profit margin was 58.2 % in 2022 as compared with 52.9% in 2021, as a large portion of the revenues were from the aforementioned licensed sports game, which carry lower costs in licensing and royalty fees compared to other licensed games. 30 Operating Expenses For the Year Ended December 31, 2022 2021 2020 Amount in US$ thousands % Change from 2021 Amount in US$ thousands % Change from 2020 Amount in US$ thousands Product development and engineering expenses $ (1,110 ) (23.4 )% $ (1,449 ) 9.2 % $ (1,327 ) Selling and marketing expenses (1,644 ) (4.9 )% (1,729 ) 6.9 % (1,618 ) General and administrative expenses (3,515 ) (4.9 )% (3,697 ) 18.5 % (3,121 ) Other (2 ) (71.4 )% (7 ) 40.0 % (5 ) Total operating expenses $ (6,271 ) (8.9 )% $ (6,882 ) 13.4 % $ (6,071 ) Percentage of operating revenues (112.3 )% (125.3 )% (88.3 )% Loss from operations $ (3,021 ) (24.0 )% $ (3,974 ) 84.7 % $ (2,152 ) Operating margin (54.1 )% (72.4 )% (31.3 )% Operating expenses decreased by US$0.6 million, or 8.9%, to US$6.3 million in 2022.
Gross profit margin was 57.0 % in 2023, generally consistent with gross profit margin of 58.2% in 2022. 28 Operating Expenses For the Year Ended December 31, 2023 2022 2021 Amount in US$ thousands % Change from 2022 Amount in US$ thousands % Change from 2021 Amount in US$ thousands Product development and engineering expenses $ (729 ) (34.3 )% $ (1,110 ) (23.4 )% $ (1,449 ) Selling and marketing expenses (1,623 ) (1.3 )% (1,644 ) (4.9 )% (1,729 ) General and administrative expenses (3,242 ) (7.8 )% (3,515 ) (4.9 )% (3,697 ) Bad debt expense (7 ) 250.0 % (2 ) (71.4 )% (7 ) Total operating expenses $ (5,601 ) (10.7 )% $ (6,271 ) (8.9 )% $ (6,882 ) Percentage of operating revenues (130.5 )% (112.3 )% (125.3 )% Loss from operations $ (3,155 ) 4.4 % $ (3,021 ) (24.0 )% $ (3,974 ) Operating margin (73.5 )% (54.1 )% (72.4 )% Operating expenses decreased by US$0.7 million, or 10.7%, to US$5.6 million in 2023.
We collected US$6.5 million in cash from our customers, paid US$2.6 million for license fees, royalties and channel costs, and paid approximately US$6.3 million to employees, suppliers and vendors. INVESTING ACTIVITIES. Our net cash used in investing activities in 2022 was US$70 thousand, which was primarily used for the purchase of property, plant and equipment.
We collected US$5.4 million in cash from our customers, paid US$1.9 million for license fees, royalties and channel costs, and paid approximately US$7.8 million to employees, suppliers and vendors. INVESTING ACTIVITIES. Our net cash provided by investing activities in 2023 was US$837 thousand, which was primarily from partial repayment of the convertible note of Aeolus.
General and Administrative and Marketing Expenses General and administrative expenses amounted to US$3.5 million in 2022, slightly decreased from US$3.7 million in 2021, primarily due to the effect of a stronger U.S. dollar against NT dollar in 2022, resulting in a smaller U.S. dollar amount for local expenses. 31 Non-Operating Income and Expenses For the Year Ended December 31, 2022 2021 2020 Amount in US$ thousands % Change from 2021 Amount in US$ thousands % Change from 2020 Amount in US$ thousands Interest income $ 718 184.9 % $ 252 (58.9 )% $ 613 Gain on sales of investment - debt securities — (100.0 )% 125 N/A — Foreign exchange gain (loss), net (941 ) (871.3 )% 122 (38.7 )% 199 Changes in the fair value of investment in equity securities recognized at fair value 409 N/A — — — Other non-operating income (expenses), net 83 66.0 % 50 6.4 % 47 Non-operating income (expenses), net $ 269 (51.0 )% $ 549 (36.1 )% $ 859 Non-operating income, net was US$269 thousand in 2022 as compared to income of US$0.5 million in 2021 and income of US$0.9 million in 2020.
General and Administrative Expenses General and administrative expenses amounted to US$3.2 million in 2023, slightly decreased from US$3.5 million in 2022, primarily due to our efforts in reducing expenditures in the current inflationary environment. 29 Non-Operating Income and Expenses For the Year Ended December 31, 2023 2022 2021 Amount in US$ thousands % Change from 2022 Amount in US$ thousands % Change from 2021 Amount in US$ thousands Interest income from financial institutions $ 1,609 187.8 % $ 559 507.6 % $ 92 Interest income on securities 202 27.0 % 159 (0.6 )% 160 Gain on sales or repayment of investment - debt securities 76 N/A — (100.0 )% 125 Foreign exchange gain (loss), net (34 ) (96.4 )% (941 ) (871.3 )% 122 Changes in the fair value of investment in equity securities recognized at fair value (2,110 ) (615.9 )% 409 N/A — Other non-operating income (expenses), net 13 (84.3 )% 83 66.0 % 50 Non-operating income (expenses), net $ (244 ) (190.7 )% $ 269 (51.0 )% $ 549 Non-operating loss, net was US$0.2 million in 2023 as compared to income of US$0.3 million in 2022 and income of US$0.5 million in 2021.
We believe our working capital is sufficient for our 2023 needs but we may adjust the amount of our capital expenditures upward or downward based on cash flow from operations, the progress of our expansion plans, and market conditions.
We believe our working capital is sufficient for our 2024 needs but we may adjust the amount of our capital expenditures upward or downward based on cash flow from operations, the progress of our expansion plans, and market conditions. 31 Dividends from Our Subsidiaries Under Singapore tax regulations, foreign-sourced dividend income used for capital expenditures, including investments, and repayment of borrowings, is not deemed as remitted to Singapore and is therefore not taxable.
We evaluate the appropriateness of such estimates quarterly to see if they are in line with our observations in the operations. We believe this provides a reasonable depiction of the transfer of services to our customers, as it is the best representation of the time period during which our customers play our games.
We believe this provides a reasonable depiction of the transfer of services to our customers, as it is the best representation of the time period during which our customers play our games. Determining the estimated service period is subjective and requires management’s judgment.
On July 29, 2022, Aeolus notified GigaMedia that it had decided to exercise its right of extension under the Note to extend the original August 30, 2022 maturity date to August 30, 2023. If assuming full conversion of the remaining principal amount of the Note into ordinary shares, we would beneficially own 2,666,666 ordinary shares.
The conversion was exercised in accordance with the right under the Note at the conversion price of US$2.718 per share. 25 On July 29, 2022, Aeolus notified GigaMedia that it had decided to exercise its right of extension under the Note to extend the original August 30, 2022 maturity date to August 30, 2023.
Deferred revenue is credited to profit or loss when the virtual points and in-game items are consumed or have expired. For deferred revenues, some users may not exercise all of their contractual rights, and those unexercised rights are referred to as breakage.
For deferred revenues, some users may not exercise all of their contractual rights, and those unexercised rights are referred to as breakage. We estimate and recognize the breakage amount as revenue when the likelihood of the customer exercising the remaining rights becomes remote.
Non-operating income, net in 2021 primarily included (1) interest income of US$0.3 million generated from bank deposits and accrued from the convertible note of Aeolus, (2) foreign exchange gain of US$122 thousand, and (3) gain on sales of investment - debt securities of US$125 thousand, including a gain of US$46 thousand from the partial conversion of the convertible note of Aeolus.
Non-operating loss, net in 2023 primarily included (1) changes in the fair value of investments in the preferred shares of Aeolus, (2) interest income of US$1.8 million generated from bank deposits and accrued from the convertible note of Aeolus, (3) foreign exchange loss of US$34 thousand, and (4) realized foreign currency exchange gain of US$76 thousand arising from the partial repayment of the convertible note of Aeolus.
We will continue to monitor global events and respond accordingly to any potential business disruptions that may occur. Results of Operations Factors Affecting Our Performance We believe that competition is the principal factor affecting our results of operations. Our digital entertainment service business operates in an extremely competitive industry.
These notes bear interest at a rate of 4.5% per annum and are convertible at US$0.1 per share, while other terms and conditions are similar to the original Note. Results of Operations Factors Affecting Our Performance We believe that competition is the principal factor affecting our results of operations. Our digital entertainment service business operates in an extremely competitive industry.
Removed
Assuming full conversion of the Note into ordinary shares and the exercise or conversion of all other Aeolus rights, options and convertible securities outstanding as of August 31, 2020, we would beneficially own 3,333,333 shares representing approximately 4.62% of the total ordinary shares of Aeolus as of August 31, 2020.
Added
Certain Significant Events Affecting Our Results of Operations for 2023, 2022 and 2021 Purchase, Partial Conversion and Partial Extension of Convertible Note of Aeolus Robotics Corporation On August 31, 2020, we entered into a convertible note purchase agreement to purchase a US$10,000,000 principal amount convertible promissory note (the “Note”) issued by Aeolus Robotics Corporation (“Aeolus”), a global company primarily engaged in designing, manufacturing, processing and sales of intellectual robotics.
Removed
Along with the above 735,835 preferred shares, that would represent, assuming the exercise or conversion of all other rights, options and convertible securities, approximately 3.16% of the total voting shares of Aeolus as of December 31, 2022.
Added
On August 31, 2023, we and Aeolus entered into an agreement to amend the Note.
Removed
COVID-19 While our operations in Taiwan and Hong Kong have not been severely affected through the date of this Annual Report , we are unable to predict whether there will be significant COVID-19 resurgence events or the extent to which the global COVID-19 pandemic, or its long-term consequences, may adversely impact our business operations, financial performance and results of operations for fiscal year 2023.
Added
The amendment extends the maturity date of the Note after the partial repayment of US$1,000,000 and the payment of accrued interest on the unpaid principal amount of the Note due through August 30, 2023 in the amount of US$480,000 are made by Aeolus and the outstanding principal amount becomes US$7,000,000 due thereunder.
Removed
We have implemented strict hygiene and social distancing practices in our daily operations in order to protect the safety and health of our employees. We have also established a contingency plan to ensure our business continuity against the COVID-19 pandemic and future epidemics or pandemics .
Added
The US$1,480,000 payment by Aeolus was made on September 6, 2023 Pursuant to the amendment to the Note, the remaining principal amount of US$7,000,000 due thereunder will bear interest at a rate of 4% per annum, shall be due on February 28, 2025 (such date to be extended, at Aeolus’s option, to February 28, 2026), and all or a portion of the principal amount due thereunder may be converted upon maturity, upon prepayment or upon the occurrence of certain specified events, upon Aeolus’s next round of equity financing, or upon Aeolus’s initial public offering, at the lower of US$1.25 per share or 80% of the applicable offering price.
Removed
In late 2017, we conducted a comprehensive strategic business review.
Added
On August 15, 2023, we entered into an agreement to purchase a convertible promissory note, with principal amount of US$105,346, issued by Aeolus, and on March 15, 2024, we entered into an agreement to purchase a convertible promissory note, with principal amount of US$63,208, issued by Aeolus.
Removed
Revenues from mobile games declined to US$0.8 million in 2022 from US$1.5 million in 2021, while revenues from a certain licensed sports game increased by US$1.0 million, or 42.9%, to US$3.4 million in 2022 from US$2.4 million in 2021, mainly because repeated school closures in Hong Kong created more chances for pupils to seek online entertainments, offsetting the negative impact of delays in our Japanese and Korean licensors’ provision of support, upgrades and new content, resulting from the COVID-19 pandemic.
Added
Revenues from mobile games declined to US$0.4 million in 2023 from US$0.8 million in 2022, while revenues from a certain licensed sports game decreased by US$0.7 million, or 20.6%, to US$2.7 million in 2023 from US$3.4 million in 2022.
Removed
Selling and Marketing Expenses Selling and marketing expenses decreased by 4.9% from US$1.7 million in 2021 to US$1.6 million in 2022, primarily due to the effect of a stronger U.S. dollar against NT dollar in 2022, resulting in a smaller U.S. dollar amount for local expenses.
Added
While our monthly ARPPU remained constant in 2022 and 2023 in each year ranging from approximately $40 to $100 for different services, the decrease was mainly due to the lift of travel and social restrictions that had been imposed during the COVID-19 pandemic, and the resultant effect that fewer people spent as much time online than previously.
Removed
The increase in foreign exchange loss, net in 2022 was primarily attributable to the effect of a stronger U.S. dollar against the NT dollar as compared to 2021.
Added
Selling and Marketing Expenses Selling and marketing expenses were US$1.6 million in 2023, largely comparable to that in 2022. While prices and wage rates increased, we scaled back to control the expenditures.
Removed
Our net cash used in investing activities in 2020 was US$10.1 million, which was primarily used for the purchase of the convertible note of Aeolus (please refer to note 8 of our consolidated financial statements for additional information). FINANCING ACTIVITIES. Our net cash flow in financing activities in 2022, 2021 and 2020 was nil.
Added
As of December 31, 2023, 2022 and 2021, the legal reserves of Hoshin GigaMedia were approximately US$0, US$1.5 million and US$1.5 million, respectively.
Removed
Dividends from Our Subsidiaries Under Singapore tax regulations, foreign-sourced dividend income used for capital expenditures, including investments, and repayment of borrowings, is not deemed as remitted to Singapore and is therefore not taxable.
Added
We use the weighted average number of days of a player’s payment interval as the estimate for the service period of each game. We evaluate the appropriateness of such estimates quarterly to see if they are in line with our observations in the operations.
Added
We have not made any material changes in the accounting methodology used to estimate the service period of the virtual goods and the breakage amount as of December 31, 2023 and 2022.
Added
A hypothetical 10% increase in the estimated service period of the virtual goods would result in a decrease of earnings by $3 thousand, $5 thousand and $4 thousand for 2023, 2022 and 2021, respectively, while a hypothetical 10% decrease would result in an increase of earnings by approximately $6 thousand, $11 thousand and $10 thousand for 2023, 2022 and 2021, respectively.
Added
Please see note 4 to our consolidated financial statements for additional information. 33

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

24 edited+9 added−9 removed13 unchanged
The principal duties and responsibilities of our audit committee include: (1) overseeing and reporting on various auditing and accounting matters to our board of directors, including the selection of our independent accountants, the scope of our annual audits, fees to be paid to the independent accountants, the performance of our independent accountants and our accounting practices; (2) overseeing and reporting on various risk management matters to our board of directors; (3) considering and approving or disapproving all related-party transactions; (4) reviewing the financial statements and reports and discussing the statements and reports with our independent registered public accounting firm and management; (5)reviewing and pre-approving the engagement of our independent registered public accounting firm to perform audit services and any permissible non-audit services; (6) evaluating the performance of our independent registered public accounting firm and deciding whether to retain their services; and (7) establishing procedures for the receipt, retention and treatment of complaints received by us regarding financial controls, accounting or auditing matters.
The principal duties and responsibilities of our audit committee include: (1) overseeing and reporting on various auditing and accounting matters to our board of directors, including the selection of our independent accountants, the scope of our annual audits, fees to be paid to the independent accountants, the performance of our independent accountants and our accounting practices; (2) overseeing and reporting on various risk management matters (including in respect of cybersecurity) to our board of directors; (3) considering and approving or disapproving all related-party transactions; (4) reviewing the financial statements and reports and discussing the statements and reports with our independent registered public accounting firm and management; (5) reviewing and pre-approving the engagement of our independent registered public accounting firm to perform audit services and any permissible non-audit services; (6) evaluating the performance of our independent registered public accounting firm and deciding whether to retain their services; and (7) establishing procedures for the receipt, retention and treatment of complaints received by us regarding financial controls, accounting or auditing matters.
In accordance with our Constitution and our audit committee charter, all of the members of our audit committee must be persons who qualify as independent directors under the standards set forth in Nasdaq Rules 5605(c)(2)(A)(i) and (ii) and each of them is able to read and understand fundamental financial statements. During fiscal 2022, our audit committee met five times.
In accordance with our Constitution and our audit committee charter, all of the members of our audit committee must be persons who qualify as independent directors under the standards set forth in Nasdaq Rules 5605(c)(2)(A)(i) and (ii) and each of them is able to read and understand fundamental financial statements. During fiscal 2023, our audit committee met five times.
In accordance with our compensation committee charter, all of the members of the compensation committee are qualified independent directors under the standards set forth in Nasdaq Rules 5605(c)(2)(A)(i) and (ii). During fiscal 2022, our compensation committee met two times. We do not have a separate nominations committee of the board of directors.
In accordance with our compensation committee charter, all of the members of the compensation committee are qualified independent directors under the standards set forth in Nasdaq Rules 5605(c)(2)(A)(i) and (ii). During fiscal 2023, our compensation committee met two times. We do not have a separate nominations committee of the board of directors.
Nick Chia-En LIU was appointed as an Independent Non-Executive Director of the Board on March 15, 2011. He was also appointed as a member of the Audit Committee on March 15, 2011. (4) Mr. Damian HONG was appointed as an Independent Non-Executive Director of the Board on October 31, 2013. (5) Mr. Casey K.
Nick Chia-En LIU was appointed as an Independent Non-Executive Director of the Board on March 15, 2011. He was also appointed as a member of the Audit Committee on March 15, 2011. (4) Mr. Damian HONG was appointed as an Independent Non-Executive Director of the Board on October 31, 2013. (5) Ms.
During fiscal 2022, our board of directors met three times, and all members of the board of directors participated in the meetings of the board of directors. No director is entitled to any severance benefits on termination of his or her service. Our board of directors currently has a standing audit committee and compensation committee.
During fiscal 2023, our board of directors met five times, and all members of the board of directors participated in the meetings of the board of directors. No director is entitled to any severance benefits on termination of his or her service. Our board of directors currently has a standing audit committee and compensation committee.
Board Diversity Matrix (As of April 20, 2023) Country of Principal Executive Offices: Taiwan Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 6 Female Male Non- Binary Did Not Disclose Gender Part I: Gender Identity Directors 0 6 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ + 0 Did Not Disclose Demographic Background 0 Family Relationships There are no family relationships among any of our executive officers or directors, except that Mr.
Board Diversity Matrix (As of April 20, 2024) Country of Principal Executive Offices: Taiwan Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 6 Female Male Non- Binary Did Not Disclose Gender Part I: Gender Identity Directors 1 5 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ + 0 Did Not Disclose Demographic Background 0 Family Relationships There are no family relationships among any of our executive officers or directors.
Employees The following table sets out a breakdown of the number of our full-time employees by function as of December 31, 2022, 2021 and 2020, respectively: December 31 Function 2022 2021 2020 Development 27 41 48 Operation 37 41 43 Customer Service 13 16 19 Administrative Support 24 25 25 101 123 135 The following table sets out, as of the dates indicated, a breakdown of the number of our full-time employees by geographic location: December 31 Location 2022 2021 2020 Taipei City, Taiwan 87 108 117 Hong Kong 14 15 18 101 123 135 39 E.
Employees The following table sets out a breakdown of the number of our full-time employees by function as of December 31, 2023, 2022 and 2021, respectively: December 31 Function 2023 2022 2021 Development 27 27 41 Operation 33 37 41 Customer Service 13 13 16 Administrative Support 23 24 25 96 101 123 The following table sets out, as of the dates indicated, a breakdown of the number of our full-time employees by geographic location: December 31 Location 2023 2022 2021 Taipei City, Taiwan 83 87 108 Hong Kong 13 14 15 96 101 123 37 E.
Directors and Senior Management The following table sets forth information with respect to our directors and executive officers as of the date of this annual report: Name Age Position Year Appointed to Current Position HUANG, James Cheng-Ming 68 Chairman of the Board, Chief Executive Officer, Chief Financial Officer and Director 2017 (1) HUANG, John Ping Chang 71 Chairman of the Compensation Committee of the Board and Independent Non-Executive Director 2012/2011 (2) LIU, Nick Chia-En 61 Independent Non-Executive Director 2011 (3) HONG, Chin Fock (Damian) 75 Independent Non-Executive Director 2013 (4) TUNG, Casey K. 72 Chairman of the Audit Committee of the Board and Independent Non-Executive Director 2012/2011 (5) HUANG, Billy Bing-Yuan 65 Independent Non-Executive Director 2013 (6) (1) Mr.
Directors and Senior Management The following table sets forth information with respect to our directors and executive officers as of the date of this annual report: Name Age Position Year Appointed to Current Position HUANG, James Cheng-Ming 69 Chairman of the Board, Chief Executive Officer, Chief Financial Officer and Director 2017 (1) HUANG, John Ping Chang 72 Chairman of the Compensation Committee of the Board and Independent Non-Executive Director 2012/2011 (2) LIU, Nick Chia-En 62 Independent Non-Executive Director 2011 (3) HONG, Chin Fock (Damian) 76 Independent Non-Executive Director 2013 (4) LIN, Wan-Wan 61 Chairman of the Audit Committee of the Board and Independent Non-Executive Director 2023 (5) TSAI, Chih-Hong 69 Independent Non-Executive Director 2023 (6) (1) Mr.
Share Ownership Share Ownership of Directors and Executive Officers The table below sets forth information as to our directors’ and executive officers’ share ownership in our Company as of March 31, 2023: Person Number of Common Shares Number of Shares Issuable upon exercise of options HUANG, James Cheng-Ming 1,073,566 * HUANG, John Ping Chang — * LIU, Nick Chia-En — * TUNG, Casey K. — * HUANG, Bing-Yuan — * HONG, Chin Fock — * Directors and executive officers as a group of 6 individuals 1,073,566 12,000 * Less than 1% 40
Share Ownership Share Ownership of Directors and Executive Officers The table below sets forth information as to our directors’ and executive officers’ share ownership in our Company as of March 31, 2024: Person Number of Common Shares Number of Shares Issuable upon exercise of options HUANG, James Cheng-Ming 1,073,566 * HUANG, John Ping Chang — * LIU, Nick Chia-En — * LIN, Charlotte Wan-Wan. — * TSAI, John Chih-Hong — * HONG, Chin Fock — * Directors and executive officers as a group of 6 individuals 1,073,566 4,000 * Less than 1% F.
Employment of Executive Officers Officers are selected by and serve at the discretion of our board of directors. No executive officer is entitled to any severance benefits upon termination of his or her employment with our Company. C. Board Practices Our board of directors currently comprises six directors, including five independent non-executive members.
Employment of Executive Officers Officers are selected by and serve at the discretion of our board of directors. No executive officer is entitled to any severance benefits upon termination of his or her employment with our Company.
Billy Bing-Yuan Huang is the younger brother of Mr. John Ping Chang Huang. B. Compensation Compensation of Directors and Executive Officers For the year ended December 31, 2022, the aggregate cash compensation paid by us to our directors and executive officers was approximately US$0.5 million. For information regarding pension and retirement benefits, see note 12 to our consolidated financial statements.
B. Compensation Compensation of Directors and Executive Officers For the year ended December 31, 2023, the aggregate cash compensation paid by us to our directors and executive officers was approximately US$0.5 million. For information regarding pension and retirement benefits, see note 12 to our consolidated financial statements.
Hong began his career with the Inland Revenue Authority of Singapore before joining KPMG and working with the firm in various capacities, including post-retirement, for more than two decades. He was also a tax consultant to the law firm Allen & Gledhill in Singapore for 12 years. Mr.
He has more than 38 years of experience in taxation and tax law. Mr. Hong began his career with the Inland Revenue Authority of Singapore before joining KPMG and working with the firm in various capacities, including post-retirement, for more than two decades.
As of December 31, 2022, the total outstanding number of share options granted to our directors and officers was 12,000.
As of December 31, 2023, the total outstanding number of share options granted to our directors and officers was 8,000. As of December 31 2023, the total number of restricted stock units granted to our directors and officers was zero.
Each of these standing committees operates under a written charter adopted by our board of directors. During fiscal 2022, our directors attended all meetings held by each committee on which such director was a member. 38 Our audit committee currently consists of Casey K. Tung, Nick Chia-En Liu and Billy Bing-Yuan Huang.
Each of these standing committees operates under a written charter adopted by our board of directors. During fiscal 2023, our directors attended all meetings held by each committee on which such director was a member. 36 Our audit committee currently consists of Wan-Wan LIN, Nick Chia-En LIU and Chih-Hong TSAI.
Our compensation committee currently consists of Casey K. TUNG and John Ping Chang HUANG.
Our compensation committee currently consists of John Ping Chang HUANG and Wan-Wan LIN.
As of December 31 2022, the total number of restricted stock units granted to our directors and officers was zero. 37 The following table summarizes, as of March 31, 2023, the outstanding options granted under our employee share option plans and equity incentive plans to our directors and executive officers as a group.
The following table summarizes, as of March 31, 2024, the outstanding options granted under our employee share option plans and equity incentive plans to our directors and executive officers as a group.
Liu holds an MBA degree from the Stern School of Business at NYU and a bachelor’s degree from the University of Southern California. CHIN FOCK (DAMIAN) HONG is an independent non-executive director of our Company. He has more than 38 years of experience in taxation and tax law. Mr.
He was the managing director in Taiwan for a U.S. based game development company. Mr. Liu holds an MBA degree from the Stern School of Business at NYU and a Bachelor’s degree from the University of Southern California. CHIN FOCK (DAMIAN) HONG is an independent non-executive director of our Company.
Employee Share Option Plans and Equity Incentive Plans 2004 Employee Share Option Plan At the June 2004 Annual General Meeting, our shareholders approved the GigaMedia Limited 2004 Employee Share Option Plan (the “2004 Plan”) under which up to 7,000,000 ordinary shares (1,400,000 shares after the 2015 reverse share split) of our Company were reserved for issuance.
Date of Grant Ordinary Shares Underlying Outstanding Options Exercise Price ($/Share) Date of Expiration May 5, 2017 4,000 2.90 May 5, 2027 Total 4,000 All options granted to our directors and executive officers were granted pursuant to the option plans and the equity incentive plans as described under “— Employee Share Option Plans and Equity Incentive Plans” below. 35 Employee Share Option Plans and Equity Incentive Plans 2004 Employee Share Option Plan At the June 2004 Annual General Meeting, our shareholders approved the GigaMedia Limited 2004 Employee Share Option Plan (the “2004 Plan”) under which up to 7,000,000 ordinary shares (1,400,000 shares after the 2015 reverse share split) of our Company were reserved for issuance.
Hong served as an independent director of Chailease Holding Co Ltd. and Riverstone Holdings Ltd until his retirement in 2020. In the same year he had also stepped down from being a director of Binjaitree. He is a non-executive director of Prima Limited. Mr. Hong lectured on a part-time basis at the Singapore Management University.
He was also a tax consultant to the law firm Allen & Gledhill in Singapore for 12 years. Mr. Hong served as an independent director of Chailease Holding Co Ltd. and Riverstone Holdings Ltd until his retirement in 2020. In the same year he had also stepped down from being a director of Binjaitree.
Prior to that, he was the Director of two publicly listed companies in Thailand and Singapore, and the Chairman/ CEO of Otto-Chailease Mailorder Co., Ltd. Mr. Huang holds a master’s degree of Science in Management from MIT Sloan School of Management, U.S. JOHN PING CHANG HUANG is an independent non-executive director of our Company.
Huang also serves as Chairman of Grand Pacific Investment & Development Co., Ltd. and Sung Cheng Investment Co., Ltd. He holds a Master’s degree of Science in Management from MIT Sloan School of Management, U.S. JOHN PING CHANG HUANG is an independent non-executive director of our Company. Mr.
Directors JAMES CHENG-MING HUANG is the Chairman of the Board of Directors, Chief Executive Officer and Chief Financial Officer of our Company. He has more than 30 years of experience in finance, investment and direct marketing. Mr. Huang served as President at Grand Pacific Investment & Development Co., Ltd., for eight years before joining the Company.
Biographical information with respect to each of our directors and executive officers is set forth below. Directors JAMES CHENG-MING HUANG is the Chairman of the Board of Directors, Chief Executive Officer and Chief Financial Officer of our Company. He has more than 30 years of experience in finance, investment and direct marketing. Mr.
Huang holds a Bachelor of Arts degree from Soochow University and a degree of EMBA Program at National Taiwan University in Taiwan. Mr. Huang is the elder brother of Mr. Billy Bing-Yuan Huang. NICK CHIA-EN LIU is an independent non-executive director of our Company. He was the managing director in Taiwan for a U.S. based game development company. Mr.
Huang has more than 30 years of experience in hospitality management and investment. He is the consultant of Global Hospitality Group Inc. Mr. Huang holds a Bachelor of Arts degree from Soochow University and a degree of EMBA Program at National Taiwan University in Taiwan. NICK CHIA-EN LIU is an independent non-executive director of our Company.
TUNG was appointed as an Independent Non-Executive Director of the Board on November 24, 2011, and Chairman of the Audit Committee on November 5, 2012. He was also appointed as a member of the Compensation Committee on March 18, 2013. (6) Mr.
Wan-Wan LIN was appointed as an Independent Non-Executive Director of the Board, as well as Chairman of the Audit Committee and a member of the Compensation Committee on November 20, 2023. (6) Mr. Chih-Hong TSAI was appointed as an Independent Non-Executive Director of the Board and a member of the Audit Committee on November 20, 2023.
He earned a bachelor’s degree in Social Science at the University of Singapore and attended an international tax program at Harvard Law School. 36 CASEY K. TUNG is an independent non-executive director of our Company. Mr. Tung is a retired Certified Public Accountant in California after 40 years of serving local companies and public listed companies in Taiwan and China.
He is a non-executive director of Prima Limited. Mr. Hong lectured on a part-time basis at the Singapore Management University. He earned a Bachelor’s degree in Social Science at the University of Singapore and attended an international tax program at Harvard Law School. WAN-WAN LIN is a Certified Public Accountant both in the U.S.A. and in R.O.C.
Removed
Billy Bing-Yuan HUANG was appointed as an Independent Non-Executive Director of the Board and a member of the Audit Committee on April 18, 2013. Biographical information with respect to each of our directors and executive officers is set forth below.
Added
She served as the CEO at the accounting firm KPMG in Taiwan, and has been teaching in the Accounting Departments of several public and private universities such as National Taiwan University, National Chengchi University, Tunghai University and Tamkang University.
Removed
He is currently the Chairman of the Global Hospitality Group Inc. Mr. Huang served as the Chairman of Grand Pacific Investment & Development Co., Ltd., as well as Beijing He Qiao Property Management Co., Ltd., and CTC Group INC. Mr.
Added
Her areas of expertise are in IFRS accounting and internal controls structure for global companies, as well as full experience of assisting companies in becoming public companies in R.O.C. and serving as a consultant for companies pursuing initial public offerings, or IPOs. She 34 had served many well-known listed companies and been involved with many diverse industries.
Removed
He practiced in the areas of assurance, taxation and advisory on matters such as mergers and acquisitions, financing, and reorganizations. Mr. Tung is a member of the American Institute of Certified Public Accountants and the California Society of Certified Public Accountants. He has served as an independent director of Chailease Holding Co Ltd. in 2020.
Added
She holds a degree of EMBA Program at National Taiwan University, a Master degree in Accounting from University of Illinois at Urbana Champaign, and a Bachelor degree in Accounting from National Taiwan University. CHIH-HONG TSAI is currently an adjunct professor at the Department of Finance, School of Management, National Taiwan University.
Removed
He holds a Master of Science degree in Business Administration from California State University, Long Beach and a Bachelor of Commerce degree from Soochow University in Taiwan. BILLY BING-YUAN HUANG is an independent non-executive director of our Company. He has over 21 years of experience as an executive in the technology/media industry and a proven track record of driving growth.
Added
He also serves as a director of SinoPac Leasing Corp. Mr. Tsai had served as the senior executive in a number of well-known leasing companies. He specializes in risk control management and has tremendous management experiences.
Removed
At The Walt Disney Company, where he served as vice president responsible for the China, Hong Kong and Taiwan markets, he launched Disney Channel and Disney Junior Channel and expanded services to new online media. At Taiwan’s Videoland Communications, where he served as vice president from 1996-1998, Mr.
Added
He holds Ph.D. in Finances, College of Management at National Taiwan University, and a Master Degree of Science in Management from MIT Sloan School of Management, U.S. Board Diversity The table below provides certain information regarding the diversity of our board of directors.
Removed
Huang implemented a restructuring plan that transformed the business from an old production house into a modern cable television consortium distributing content for global television brands including CNN, Cartoon Network, and Discovery Channel. Prior to that, Mr.
Added
Compensation recovery policy In October 2022, the SEC adopted rules, pursuant to Rule 10D-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requiring national securities exchanges and national securities associations, such as Nasdaq, to amend their relevant listing standards no later than November 28, 2023 to require listed companies to adopt a written compensation recovery (clawback) policy providing for the recovery, in the event of a required accounting restatement, of incentive-based compensation received by the Chief Executive Officer and certain other “executive officers” as defined in Rule 10D-1(d) under the Exchange Act that is wholly or partially contingent on the attainment of financial performance criteria based on reported financial information that has been determined to be erroneous and has required restatement of the financial statements for accounting purposes.
Removed
Huang was vice president of Fantasmic International, a public relations and advertising firm in Taipei, and held numerous positions with prominent advertising firms in Taipei. Mr. Huang earned a master’s degree in Mass Communication from Texas Tech University and has a bachelor’s degree in Journalism from Chinese Culture University in Taipei. Mr. Huang is the younger brother of Mr.
Added
On October 30, 2023, our Board of Directors adopted a written compensation recovery policy, or the Compensation Recovery Policy. That policy is now in force with respect to the Chief Executive Officer and other executive officers, subject to compliance with applicable local laws and is included as Exhibit 97.1 to this report for the year ended December 31, 2023. C.
Removed
John Ping Chang Huang. Board Diversity The table below provides certain information regarding the diversity of our board of directors.
Added
Board Practices Our board of directors currently comprises five male directors and one female director, including five independent non-executive members.
Removed
Date of Grant Ordinary Shares Underlying Outstanding Options Exercise Price ($/Share) Date of Expiration October 28, 2013 4,000 5.05 October 28, 2023 March 28, 2014 4,000 7.15 March 28, 2024 May 5, 2017 4,000 2.90 May 5, 2027 Total 12,000 All options granted to our directors and executive officers were granted pursuant to the option plans and the equity incentive plans as described under “— Employee Share Option Plans and Equity Incentive Plans” below.
Added
Disclosure of Action to Recover Erroneously Awarded Compensation Not applicable. The full text of our compensation recovery policy is filed as Exhibit 97.1 to this annual report. 38

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

8 edited+0 added−4 removed6 unchanged
None of our major shareholders have voting rights different from those of our other shareholders. B. Related Party Transactions Since January 1, 2022 through March 31, 2023, we were not a party to any transaction with any related party that did not arise in the ordinary course of business or that was material to us.
None of our major shareholders have voting rights different from those of our other shareholders. B. Related Party Transactions Since January 1, 2023 through March 31, 2024, we were not a party to any transaction with any related party that did not arise in the ordinary course of business or that was material to us.
Stock Option Grants and Employee Share Purchase See Item 6, “Directors, Senior Management and Employees — E. Share Ownership.” 41 C. Interests of Experts and Counsel Not applicable. 42
Stock Option Grants and Employee Share Purchase See Item 6, “Directors, Senior Management and Employees — E. Share Ownership.” C. Interests of Experts and Counsel Not applicable. 39
Honig”) as UTMA custodian for Morgan Honig, (ii) 5,400 shares held by Mr. Honig as UTMA custodian for Skylar Honig and (iii) 6,800 shares held by Mr. Honig as UTMA custodian for Jett Honig. (b) Includes (i) 22,000 shares held by Titan Multi-Strategy Fund, Inc. (“Titan”) (ii) 187,000 shares held by Titan Multi-Strategy Fund, Inc.
Honig as UTMA custodian for Skylar Honig and (iii) 6,800 shares held by Mr. Honig as UTMA custodian for Jett Honig. (b) Includes (i) 22,000 shares held by Titan Multi-Strategy Fund, Inc. (“Titan”) (ii) 187,000 shares held by Titan Multi-Strategy Fund, Inc.
Major Shareholders The following table sets forth information known to us with respect to the ownership of our shares as of March 31, 2023 by each shareholder known by us to own more than 5% of our shares: Name of Owner Shares Owned Percentage of Shares Owned John-Lee Andre Koo (1) 2,159,999 19.54 % James Cheng-Ming Huang (2) 1,073,566 9.71 % Collin Hwang (3) 696,435 6.30 % Jonathan Honig (4) 1,105,145 9.99 % (1) Based on a Schedule 13G/A filed on August 14, 2017, through Champion Allied Limited, a British Virgin Islands company, and Symporium (PTC) Ltd, as trustee for Citadelle Trust, John-Lee Andre Koo has beneficial ownership of 2,159,999 ordinary shares of our Company.
Major Shareholders The following table sets forth information known to us with respect to the ownership of our shares as of March 31, 2024 by each shareholder known by us to own more than 5% of our shares: Name of Owner Shares Owned Percentage of Shares Owned John-Lee Andre Koo (1) 2,159,999 19.54 % James Cheng-Ming Huang (2) 1,073,566 9.71 % Collin Hwang (3) 696,435 6.30 % Jonathan Honig (4) 1,105,145 9.99 % (1) Based on a Schedule 13G/A filed with the SEC on August 14, 2017, John-Lee Andre Koo has beneficial ownership of 2,159,999 shares of our Company.
Collin Hwang’s address is 11F, No.36-10, Sec. 1, Fu-hsing South Rd., Taipei, Taiwan (4) Based on the Schedule 13G/A filed with the SEC on February 2, 2023, Jonathan Honig has beneficial ownership of 1,105,145 ordinary shares of our Company as follows: (a) Includes (i) 5,145 shares held by Mr. Jonathan Honig (“Mr.
(4) Based on the Schedule 13G/A filed with the SEC on January 23, 2024, Jonathan Honig has beneficial ownership of 1,105,145 ordinary shares of our Company as follows: (a) Includes (i) 5,145 shares held by Mr. Jonathan Honig (“Mr. Honig”) as UTMA custodian for Morgan Honig, (ii) 5,400 shares held by Mr.
James Cheng-Ming Huang’s address is 8F, No.22, Lane 407, Sec. 2 Tiding Blvd., Neihu Dist., Taipei City 114, Taiwan, Republic of China. (3) Based on the Schedule 13G filed with the SEC on June 19, 2017, Collin Hwang has beneficial ownership of 696,435 shares of our Company.
(2) James Cheng-Ming Huang has beneficial ownership of 1,073,566 ordinary shares of our Company as of March 31, 2024. (3) Based on the Schedule 13G filed with the SEC on June 19, 2017, Collin Hwang has beneficial ownership of 696,435 shares of our Company.
As of March 31, 2023, we had 11,052,235 Shares outstanding, of which 6,017,090 Shares representing 54.44% of our total outstanding Shares were not held by our major shareholders as disclosed above. As of March 31, 2022, one shareholder of record with a registered address in the United States, Cede & Co., nominee of The Depository Trust Company, held 8,733,747 shares.
Elizabeth Honig and Mr. Honig are married, and Mr. Honig has voting and dipositive power of the securities held by the foregoing. As of March 31, 2024, we had 11,052,235 Shares outstanding, of which 6,017,090 Shares representing 54.44% of our total outstanding Shares were not held by our major shareholders as disclosed above.
The amounts and percentages of ordinary shares beneficially owned are reported on the basis of regulations of the SEC, governing the determination of beneficial ownership of securities.
As of March 31, 2024, one shareholder of record with a registered address in the United States, Cede & Co., nominee of The Depository Trust Company, held 8,733,747 shares. The amounts and percentages of ordinary shares beneficially owned are reported on the basis of regulations of the SEC, governing the determination of beneficial ownership of securities.
Removed
On the 16th of November, 2015, John-Lee Andre Koo transferred his shareholding vehicle for shares of GigaMedia Limited from Best Method Limited to Champion Allied Limited. On the 14th of August, 2017, John-Lee Andre Koo transferred his share in Champion Allied Limited to Symporium (PTC) Ltd, in its capacity as trustee of Citadelle Trust.
Removed
John-Lee Andre Koo is the settlor of Citadelle Trust and exercises sole voting and investment power over all of the shares of GigaMedia Limited held by Symporium (PTC) Ltd, in its capacity as trustee of Citadelle Trust. The Citadelle Trust is a revocable trust and John-Lee Andre Koo is the sole beneficiary of the trust.
Removed
The address for John-Lee Andre Koo is No.6-1, Aly. 72, Ln. 114, Sec. 7, Zhongshan N. Rd., Shilin Dist., Taipei City 111, Taiwan, Republic of China. (2) James Cheng-Ming Huang has beneficial ownership of 1,073,566 ordinary shares of our Company as of March 31, 2022.
Removed
Elizabeth Honig and Mr. Honig are married, and Mr. Honig has voting and dipositive power of the securities held by the foregoing. The address of Jonathan Honig is 5825 Windsor Court, Boca Raton, Fl 33496.

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