Core Viewpoint - GigaMedia Limited successfully passed all resolutions at its Annual General Meeting held on June 27, 2024, indicating strong shareholder support for the company's strategic decisions and governance [1]. Voting Results Summary - **Resolution 1 – Adoption of audited financial statements**: - Votes in favor: 3,711,839 (96.00%) - Votes against: 94,748 (2.45%) - Abstentions: 59,832 (1.55%) [2][3] - **Resolution 2 – Approval of appointment of auditors**: - Votes in favor: 6,151,347 (97.34%) - Votes against: 120,377 (1.91%) - Abstentions: 47,431 (0.75%) [2][3] - **Resolution 3 – Approval of Directors' remuneration**: - Votes in favor: 3,619,812 (93.62%) - Votes against: 215,225 (5.57%) - Abstentions: 31,382 (0.81%) [2][3] - **Resolution 4 – Approval for authority to allot and issue shares**: - Votes in favor: 3,608,837 (93.34%) - Votes against: 243,410 (6.30%) - Abstentions: 14,172 (0.36%) [2][3] - **Resolution 5 – Approval for share purchase mandate**: - Votes in favor: 3,735,957 (96.63%) - Votes against: 116,340 (3.01%) - Abstentions: 14,122 (0.36%) [2][3] Company Overview - GigaMedia Limited is headquartered in Taipei, Taiwan, and operates as a diversified provider of digital entertainment services in Taiwan and Hong Kong. The company is recognized as an innovative leader in Asia, focusing on the development, distribution, and operation of digital entertainment, particularly in mobile and casual games [1].

Core Points - The 25th Annual General Meeting of GigaMedia Limited is scheduled for June 27, 2024, in Taipei, Taiwan [1] - The meeting will address several ordinary resolutions including the adoption of audited financial statements, appointment of auditors, and approval of directors' remuneration [2][3] Ordinary Resolutions - The company seeks to adopt the audited financial statements for the financial year ended December 31, 2023, which requires a majority vote from shareholders [17] - Approval is sought for the appointment of Deloitte & Touche and Deloitte & Touche LLP as independent external auditors until the next Annual General Meeting, with the authority to fix their remuneration for the financial year ended December 31, 2024 [18] - The remuneration for all directors is proposed to be approved in an aggregate amount not exceeding US$350,000 until the conclusion of the next Annual General Meeting [19][20] - Authority is requested for the directors to allot and issue shares, effective until the next Annual General Meeting [21][22] - A Share Purchase Mandate is proposed to allow the company to purchase or acquire its shares, which aims to enhance shareholder value and provide flexibility in capital management [23][24][25]

Revenue Performance - Revenues from MahJong and other casual games were approximately US$1.1 million in 2023, a decrease from US$1.3 million in 2022 and US$1.5 million in 2021[97]. - Revenues generated from the online sports game Tales Runner were approximately US$2.7 million in 2023, down from US$3.4 million in 2022 but up from US$2.4 million in 2021[98]. - Accumulated sales revenues of the mobile role-playing game Yume100 reached approximately US$12.8 million as of December 31, 2023[100]. - Total operating revenues for 2023 were approximately US$4.3 million, a decrease of approximately US$1.3 million year-over-year[148]. - Operating revenues for 2023 were $4,292 thousand, a decrease of 23.2% from $5,585 thousand in 2022[164]. - Revenues from mobile games declined to $400 thousand in 2023 from $800 thousand in 2022, reflecting a broader trend of reduced online engagement post-COVID[165]. - The company collected $4.0 million in cash from customers in 2023, down from $6.5 million in 2022[179]. Financial Performance - The operating loss for 2023 was approximately US$3.2 million, an increase of US$0.1 million compared to the previous year[148]. - Net loss attributable to shareholders was approximately US$3.4 million, an increase of US$0.6 million year-over-year[148]. - GigaMedia's shareholders' equity decreased to US$43.5 million in 2023 from US$48.6 million in 2022[146]. - The company recorded approximately 33,000 active paying users, with an average revenue per paying user (ARPPU) ranging from approximately $40 to $100 for different services[120]. - The company incurred $0.7 million in research and development activities in 2023, down from $1.1 million in 2022 and $1.4 million in 2021[189]. - The net cash used in operating activities for 2023 was approximately $1,193 thousand, a decrease from $2,509 thousand in 2022[179]. - Cash, cash equivalents, and restricted cash at the end of 2023 totaled $38,783 thousand, down from $39,107 thousand at the end of 2022[179]. - The company has zero bank borrowing as of December 31, 2023, and expects to secure lines of credit for operational and strategic needs[176]. Market Strategy and Operations - The company intends to enhance its market position by focusing on mobile and browser-based entertainment services and expects to drive growth through organic means and accretive transactions[92]. - FunTown operates under an item-billing revenue model, allowing users to access basic game functions for free while offering in-game purchases[91]. - FunTown's marketing strategy includes in-game events, online advertising, and offline promotions to attract and retain users[107]. - The company collaborates with leading game development studios to source new online games and localize them for target markets[104]. - The company is transitioning its game portfolio from PC-based formats to browser and mobile platforms to meet changing market demands[190]. Regulatory and Compliance - The company operates under various regulations in Taiwan, including the Protection of Children and Youths Welfare and Rights Act, which governs internet content ratings[127]. - The company has not made any material changes in the accounting methodology used to evaluate investment in securities as of December 31, 2023 and 2022[197]. - The company adopted a written compensation recovery policy on October 30, 2023, in compliance with SEC rules[216]. Shareholder Information - Major shareholders include John-Lee Andre Koo with 2,159,999 shares (19.54%), and James Cheng-Ming Huang with 1,073,566 shares (9.71%) as of March 31, 2024[231]. - The total outstanding shares as of March 31, 2024, were 11,052,235, with 54.44% (6,017,090 shares) not held by major shareholders[234]. - The aggregate cash compensation paid to directors and executive officers for the year ended December 31, 2023, was approximately US$0.5 million[210]. - The company has a total of 4,000 ordinary shares underlying outstanding options granted to directors and executive officers, with an exercise price of $2.90 per share[211]. Employment and Organizational Structure - As of December 31, 2023, the total number of full-time employees decreased to 96 from 101 in 2022, representing a decline of approximately 4.95%[222][224]. - The company has a significant organizational structure with wholly owned subsidiaries operating in Taiwan, Hong Kong, and the British Virgin Islands[140]. - The board of directors currently comprises six members, including one female director and five independent non-executive members[217]. Taxation and Financial Implications - The company is likely classified as a Passive Foreign Investment Company (PFIC) for the taxable year ended December 31, 2023, due to a significant amount of cash and the price of its shares[267]. - If classified as a PFIC, shareholders may face special tax rules on excess distributions and gains realized on the sale of shares, which could result in ordinary income taxation[268]. - The company does not impose taxes on capital gains, but gains on share disposals may be treated as income if connected to trade or business activities in Singapore[255]. - U.S. persons holding shares may be required to file IRS Form 8938 if the aggregate value of specified foreign financial assets exceeds $50,000[278].

Core Viewpoint - GigaMedia Limited reported a significant decline in revenues and increased net losses for the year 2023, while also implementing cost-cutting measures and focusing on AI development for future growth [2][6][10]. Financial Performance - For the full year 2023, GigaMedia's revenues were $4.3 million, down 23.2% from $5.6 million in 2022 [5][6]. - Gross profit for 2023 was $2.4 million, a decrease of 24.7% compared to $3.25 million in 2022 [5]. - The operating loss for 2023 was $3.2 million, slightly higher than the $3.0 million loss in 2022 [6][8]. - The net loss for 2023 was $3.5 million, compared to a net loss of $2.8 million in 2022, with a loss per share of $0.31 [5][6][8]. Fourth Quarter Overview - In Q4 2023, revenues decreased by 18.8% quarter-on-quarter and 21.1% year-over-year, primarily due to seasonal factors and declines in licensed games [5][8]. - The loss from operations in Q4 was $0.6 million, an improvement from a loss of $0.9 million in Q3 2023 [5][8]. - The net loss for Q4 was $2.6 million, which included a $2.2 million valuation loss on investments [8][9]. Balance Sheet and Cash Position - At the end of 2023, GigaMedia had cash, cash equivalents, and restricted cash totaling $38.8 million, a slight decrease from $39.1 million at the end of 2022 [3][9]. - The company maintained a solid financial position with zero bank loans and shareholders' equity of approximately $42.8 million [9][10]. Business Strategy and Outlook - GigaMedia plans to develop AI-powered tools to enhance efficiency in content renovation for casual games and explore commercialization opportunities for these tools [3][10]. - The company is also focused on expanding through mergers and acquisitions to accelerate growth and enhance shareholder value [11].

Financial Performance - GigaMedia reported revenues of $1.07 million in Q3 2023, a 4.5% increase from $1.03 million in Q2 2023, but a 32.0% decrease year-over-year from $1.58 million[6]. - Gross profit for the third quarter was $0.58 million, up 3.0% from $0.57 million in the previous quarter, but down 38.6% from $0.95 million in the same quarter last year[8]. - The consolidated loss from operations was $0.89 million, a slight improvement from a loss of $0.92 million in Q2 2023[9]. - The net loss attributable to GigaMedia was $0.51 million, compared to a net loss of $0.56 million in the previous quarter[9]. - EBITDA for Q3 2023 was reported at $(0.95) million, an improvement from $(0.98) million in Q2 2023[6]. - Net income attributable to GigaMedia for Q3 2023 was $(507,036), compared to $(561,588) in Q2 2023, showing an improvement of 9.7%[19]. - EBITDA for Q3 2023 was $(946,423), slightly better than $(982,343) in Q2 2023, indicating a reduction in losses[19]. Cash and Assets - Cash, cash equivalents, and restricted cash totaled $38.8 million as of September 30, 2023, or $3.51 per share[7]. - Total current assets decreased to $39,708,402 from $47,022,222 in the previous quarter, a decline of approximately 15.4%[18]. - Cash and cash equivalents increased to $38,510,253 from $37,462,050 in the previous quarter, a rise of 2.8%[18]. - Accounts receivable - net rose to $252,757 from $187,385 in the previous quarter, an increase of 34.8%[18]. - Marketable securities - noncurrent increased significantly to $9,432,596 from $2,371,000 in the previous quarter, a growth of 296.5%[18]. - The net asset value per share was approximately $4.27[4]. Liabilities and Equity - Total liabilities decreased to $3,449,913 from $3,395,682 in the previous quarter, a slight increase of 1.6%[18]. - Total equity decreased to $47,229,725 from $47,754,712 in the previous quarter, a decline of 1.1%[18]. - Accrued expenses increased to $1,005,141 from $855,201 in the previous quarter, an increase of 17.5%[18]. - Other current liabilities remained relatively stable at $720,223 compared to $718,266 in the previous quarter, showing minimal change[18]. Strategic Outlook - GigaMedia plans to expand its customer base and improve revenue generation mechanisms while exploring strategic investment and acquisition opportunities[10]. - The company expressed cautious optimism for the upcoming quarter despite slow consumer sentiment recovery[8]. Profitability Metrics - The gross profit margin for Q3 2023 was 54.4%, slightly lower than 55.2% in the previous quarter[3].

Financial Performance - GigaMedia reported revenues of $1.03 million in Q2 2023, a decrease of 22.6% quarter-on-quarter and 24.8% year-over-year[4]. - Gross profit for the second quarter was $0.57 million, down 28.5% from the previous quarter and 26.9% from the same period last year[7]. - The net loss attributable to GigaMedia was $0.56 million, compared to a net loss of $0.31 million in Q1 2023[7]. - Operating loss for Q2 2023 was $0.92 million, compared to a loss of $0.70 million in Q1 2023[7]. - The company reported an EBITDA loss of $0.98 million for Q2 2023[6]. - Net income attributable to GigaMedia for the quarter was a loss of $561,588, compared to a loss of $312,700 in the previous quarter[19]. - EBITDA for the quarter was reported at a loss of $982,343, worsening from a loss of $703,870 in the previous quarter[19]. - Total operating revenues for the first half of 2023 were $2.35 million, down from $2.91 million in the same period last year[17]. Cash and Assets - Cash, cash equivalents, and restricted cash at the end of Q2 2023 totaled $37.8 million, a decrease of 0.9% from Q1 2023[8]. - Total current assets decreased to $47,022,222 from $47,482,257 in the previous quarter, a decline of 1.0%[18]. - Cash and cash equivalents decreased to $37,462,050 from $37,806,540 in the previous quarter, a drop of 0.9%[18]. - Accounts receivable increased to $187,385 from $154,890 in the previous quarter, an increase of 20.9%[18]. - Marketable securities - noncurrent decreased significantly to $2,371,000 from $10,322,000 year-over-year[18]. - Prepaid expenses decreased to $225,334 from $368,322 in the previous quarter, a decline of 38.8%[18]. - Total liabilities decreased slightly to $3,395,682 from $3,393,076 in the previous quarter, indicating stability[18]. - Total equity decreased to $47,754,712 from $48,310,127 in the previous quarter, reflecting a decline of 1.1%[18]. - Other current liabilities increased to $718,266 from $636,631 in the previous quarter, an increase of 12.8%[18]. Strategic Focus - The company plans to focus on boosting productivity and pursuing strategic expansion in the second half of 2023[10]. - The company is evaluating strategic investment targets to expand its business and enhance shareholder value[10]. - GigaMedia's net asset value was reported at $4.32 per share[4].

Revenue Performance - FunTown generated approximately US$1.3 million in revenue from MahJong and other casual games in 2022, a decrease from US$1.5 million in 2021 and US$1.8 million in 2020[96]. - Revenue from the online sports game Tales Runner increased to approximately US$3.4 million in 2022, up from US$2.4 million in 2021 and US$2.7 million in 2020, attributed to revitalization efforts during the COVID-19 pandemic[97]. - The accumulated sales revenue of the mobile role-playing game Yume100 reached approximately US$12.4 million since its launch in September 2015[99]. - Total operating revenues for 2022 were approximately US$5.6 million, an increase of approximately US$0.1 million year-over-year[142]. - Operating revenues for 2022 were $5,585 thousand, representing a 1.7% increase from 2021[159]. - Digital entertainment service revenues decreased from $1.5 million in 2021 to $0.8 million in 2022, while revenues from a licensed sports game increased by 42.9% to $3.4 million[160]. Expenses and Losses - Total costs and expenses decreased by approximately US$0.9 million year-over-year to US$8.6 million, primarily due to improved gross margin and controlled expenditures[142]. - The operating loss for 2022 was approximately US$3.0 million, a decrease of approximately US$1.0 million compared to the previous year[142]. - Net loss attributable to shareholders was approximately US$2.8 million in 2022, a decrease of US$0.4 million year-over-year[142]. - Gross profit for 2022 was $3,250 thousand, with a gross profit margin of 58.2%, up from 52.9% in 2021[161]. - Total operating expenses decreased by 8.9% to $6,271 thousand in 2022, primarily due to cost control measures[163]. - Product development and engineering expenses were $1,110 thousand in 2022, a reduction of 23.4% from 2021[163]. - Selling and marketing expenses decreased by 4.9% to $1,644 thousand in 2022, influenced by currency exchange rates[166]. - General and administrative expenses were $3,515 thousand in 2022, slightly down from $3,697 thousand in 2021[167]. Customer and Market Engagement - As of December 31, 2022, the company had approximately 9.0 million unique registered customers, with around 43,000 active paying users during the year[119]. - FunTown's marketing strategy includes in-game events and online promotions to increase user engagement and attract new players[108]. - FunTown operates under an item-billing revenue model, allowing users to access basic game functions for free while offering in-game purchases for enhanced experiences[91]. - The company plans to expand its mobile and browser-based game offerings to strengthen its market position in the digital entertainment industry[92]. - FunTown's digital entertainment services are primarily focused on the high-growth mobile and browser-based casual games market in Asia[89]. Competition and Market Landscape - The company faces competition from both online game operators and offline entertainment products, with major competitors including Soft-World and IGS[120][121]. - The competitive landscape includes online game operators in Taiwan and Hong Kong, with low barriers to entry for new competitors[143]. - The company anticipates increased competition in the digital entertainment market due to low entry barriers and the introduction of new products[121]. Financial Position and Assets - Total current assets as of December 31, 2022, were US$47.8 million, compared to US$42.6 million in 2021[140]. - Total assets decreased to US$52.1 million in 2022 from US$55.5 million in 2021[140]. - Total current liabilities were US$2.6 million in 2022, down from US$3.2 million in 2021[140]. - GigaMedia's shareholders' equity was US$48.6 million as of December 31, 2022, compared to US$50.9 million in 2021[140]. - Cash and cash equivalents at the end of 2022 were $39.107 million, down from $41.761 million at the end of 2021, reflecting a net decrease of $2.654 million[173]. Research and Development - The company invested over US$1.1 million in 2022 to enhance its in-house development capabilities for casual games[101]. - The company incurred $1.1 million in research and development expenses in 2022, down from $1.4 million in 2021 and $1.3 million in 2020[181]. - The company plans to primarily invest in software and computer hardware equipment in 2023 to support growth initiatives in its digital entertainment service business[179]. Governance and Compliance - The company has a standing audit committee and compensation committee, with all directors attending meetings held by each committee[209]. - The audit committee met five times during fiscal 2022, focusing on auditing, accounting, and risk management matters[210]. - The compensation committee met two times during fiscal 2022, evaluating executive compensation and performance[211]. - The company has adopted a code of ethics applicable to key executives and directors, with full text available on its website[284]. - An anti-fraud policy was adopted on December 19, 2005, and amended on February 13, 2009, to prevent fraud schemes[285]. Shareholder Information - As of March 31, 2023, major shareholders include John-Lee Andre Koo with 2,159,999 shares (19.54%), James Cheng-Ming Huang with 1,073,566 shares (9.71%), and Jonathan Honig with 1,105,145 shares (9.99%) of the total 11,052,235 shares outstanding[220]. - The total number of full-time employees decreased from 135 in 2020 to 101 in 2022, with a notable reduction in the Development function from 48 to 27[213][214]. - The company has not declared or paid any dividends and plans to retain earnings for business operations in the foreseeable future[227]. Risk Management - The company is subject to various market risks, including changes in interest rates and foreign currency exchange rates, which may impact its financial performance[269]. - The company has not used hedging transactions to reduce exposure to exchange rate fluctuations but may consider doing so in the future[270]. - The company maintains the bulk of its financial assets in U.S. dollar-denominated assets to limit foreign currency risk exposure[273]. Internal Controls - Management assessed the effectiveness of the internal control over financial reporting as of December 31, 2022, concluding it was effective[279]. - There were no changes in internal control over financial reporting during the year ended December 31, 2022, that materially affected its effectiveness[282]. - The company is a non-accelerated filer exempt from section 404(b) of the Sarbanes-Oxley Act, thus no attestation report from the registered public accounting firm is included[281].

Financial Performance - GigaMedia reported full year 2022 revenues of $5.6 million, a slight increase of 1.7% from $5.5 million in 2021[6] - The gross profit for 2022 was $3.3 million, with a gross margin rate increase from 52.9% to 58.2%[3] - The operating loss for 2022 was reduced to $3.0 million from approximately $4.0 million in 2021[7] - The net loss for 2022 was $3.1 million, a decrease from $3.4 million in the prior year, resulting in a loss per share of $0.28 compared to $0.31[7] - Fourth quarter revenues decreased by 30.0% quarter-on-quarter to $1.1 million and by 12.3% year-over-year[10] - The consolidated net income for the fourth quarter was $0.04 million, an improvement from a net loss of $0.9 million in the previous quarter[10] Cash and Assets - Cash, cash equivalents, and restricted cash at the end of 2022 amounted to $39.1 million, down from $39.6 million at the end of the prior quarter[10] - Total current assets as of 12/31/2022 were $48,008,107, a decrease from $48,901,532 as of 09/30/2022[22] - Cash and cash equivalents as of 12/31/2022 were $38,794,467, down from $39,243,562 as of 09/30/2022[22] - Total equity as of 12/31/2022 was $48,606,612, a slight decrease from $48,875,701 as of 09/30/2022[22] - The net asset value was approximately $4.40 per share as of the end of 2022[4] Operating Expenses and Losses - Operating expenses for the three months ended 12/31/2022 totaled $1,300,397, down 20% from $1,622,524 in the previous quarter[21] - Net loss attributable to shareholders for the three months ended 12/31/2022 was $40,267, a significant improvement compared to a loss of $868,740 in the previous quarter[21] - EBITDA for the twelve months ended 12/31/2022 was $(3,743,359), compared to $(3,656,151) for the twelve months ended 12/31/2021[23] Strategic Plans - GigaMedia plans to pursue growth and promote its business in a more cost-effective way amid economic uncertainties[12] - The company is exploring potential strategic investment and acquisition targets to accelerate corporate growth and enhance long-term profitability[13] Revenue Breakdown - Digital entertainment service revenues for the three months ended 12/31/2022 were $1,101,507, a decrease of 30% compared to $1,574,971 for the previous quarter[21] - Gross profit for the twelve months ended 12/31/2022 was $3,250,358, representing an increase of 11.8% from $2,907,899 for the twelve months ended 12/31/2021[21] Liabilities - Total liabilities decreased to $3,530,618 as of 12/31/2022 from $4,143,367 as of 09/30/2022[22] Foreign Exchange - The company reported a foreign exchange gain of $413,529 for the three months ended 12/31/2022, compared to a loss of $(635,103) in the previous quarter[21]

Revenue Performance - Revenues from MahJong and other casual games were approximately US$1.5 million in 2021, a slight decrease from US$1.8 million in both 2020 and 2019[101]. - Revenues generated from the PC-based MMO sports game Tales Runner were approximately US$2.4 million in 2021, down from US$2.7 million in 2020 but up from US$1.2 million in 2019[103]. - The accumulated sales revenues of the mobile role-playing game Yume100 since its launch were approximately US$11.9 million as of December 31, 2021[105]. - Total operating revenues for 2021 were approximately US$5.5 million, a decrease of approximately US$1.4 million year-over-year[150]. - Digital entertainment service revenues for 2021 were US$11.6 million, compared to US$7.1 million in 2020, reflecting a significant increase[147]. - Operating revenues decreased by 20.1% in 2021, totaling US$5.492 million compared to US$6.875 million in 2020[169]. - Revenues from mobile games declined to US$1.5 million in 2021 from US$2.3 million in 2020, and revenues from a licensed sports game decreased by US$0.3 million to US$2.4 million[169]. Financial Performance - The company incurred an operating loss of approximately US$4.0 million in 2021, an increase of approximately US$1.8 million year-over-year[150]. - The net loss for 2021 was approximately US$3.4 million, representing an increase of US$2.1 million year-over-year[150]. - Gross profit for 2021 was approximately US$6.5 million, up from US$3.5 million in 2020[147]. - Gross profit was US$2.9 million in 2021, with a gross profit margin of 52.9%, down from US$3.9 million and 57.0% in 2020[170]. - Total costs and expenses increased by approximately US$0.4 million year-over-year to US$9.5 million, primarily due to increases in depreciation and other expenses[150]. - Total current assets as of December 31, 2021, were US$42.6 million, down from US$46.5 million in 2020[148]. - Total liabilities for the company were US$3.2 million as of December 31, 2021, compared to US$2.9 million in 2020[148]. - The company recognized a non-operating income of approximately US$0.5 million in 2021, down from US$0.9 million in the prior year[150]. - The net loss attributable to shareholders increased by 164.9% to US$3.4 million in 2021 from US$1.3 million in 2020[178]. - Net cash used in operating activities was approximately US$4.1 million in 2021, compared to US$2.1 million in 2020[181]. - Cash, cash equivalents, and restricted cash at the end of 2021 were US$41.8 million, down from US$46.0 million in 2020[181]. Business Strategy and Operations - The company plans to enhance its market position by increasing focus on mobile and browser-based games, expecting to drive growth both organically and through accretive transactions[96]. - FunTown operates a mobile platform for casual games that works on both Android and iOS, allowing data synchronization between the two systems[112]. - The company utilizes an item-billing revenue model, allowing users to access basic game functions for free while offering in-game purchases for enhanced experiences[95]. - FunTown's marketing strategy includes in-game events and online promotions to increase user engagement and attract new users[113]. - The company has established a strong brand presence in Taiwan and Hong Kong, leveraging its community-based online platforms to cater to social networking needs[96]. - The company implemented a strategy to optimize its product portfolio by trimming underperforming products and investing US$1.4 million in developing its own offerings in 2021[167]. - The transition to browser/mobile casual games is underway to capitalize on growth trends in Asia[192]. Competition and Market Environment - The company expects increased competition in the digital entertainment market due to low entry barriers, with competitors having greater financial and technical resources[127]. - The company has faced strong competition from mobile and browser-based games, prompting the launch of a web-based MahJong game application to simplify user access[99]. - The business experiences seasonality, with stronger revenue typically in the first and fourth quarters, while the second and third quarters see slower sales[128]. Technology and Infrastructure - The company has developed an extensive technology infrastructure to support online game operations, including transitioning servers to cloud solutions[124]. - The company operates a scalable and modular architecture that includes key subsystems such as game services, a central user database, and billing and payment systems[123]. - The company collaborates with telecommunication network operators and payment aggregators to distribute game points, enhancing payment flexibility for users[120][121]. Regulatory and Compliance - The company is subject to various regulations in the digital entertainment industry, including personal data protection laws in Taiwan and Hong Kong[129][136]. - The company does not utilize variable-interest entities in its operations, maintaining a straightforward organizational structure[141]. Employee and Shareholder Information - As of December 31, 2021, the total number of employees decreased to 123 from 135 in 2020, with a notable reduction in development staff from 48 to 41[221]. - Major shareholders include John-Lee Andre Koo with 2,159,999 shares (19.54%), and James Cheng-Ming Huang with 1,073,566 shares (9.71%) as of March 31, 2022[230]. - The aggregate cash compensation paid to directors and executive officers for the year ended December 31, 2021, was approximately $0.6 million[211]. - The board of directors consists of 6 male directors and no female directors as of April 20, 2022[209]. Investment and Financing - GigaMedia entered into a convertible note purchase agreement for a principal amount of US$10,000,000 with Aeolus, bearing interest at 2% per annum, due on August 30, 2022, extendable to August 30, 2023[240]. - GigaMedia has the option to convert the note into ordinary or preferred shares of Aeolus at a price of US$3.00 per share, potentially owning approximately 4.62% of Aeolus's total ordinary shares upon full conversion[240]. - On December 30, 2021, GigaMedia converted US$2,000,000 of the note into 735,835 Series B Preferred Shares at a conversion price of US$2.718 per share, leaving a remaining principal amount of US$8,000,000[240]. - The company has not declared or paid any dividends and plans to retain earnings for business operations[236]. Foreign Exchange and Currency - The company recognized a realized foreign exchange gain of approximately US$21 thousand and an unrealized foreign exchange gain of approximately US$101 thousand for the year ended December 31, 2021[280]. - A hypothetical 10% change in the exchange rate between the U.S. dollar and the underlying currencies would result in a change of 0.11% in the company's total equity as of December 31, 2021[280]. - The NT dollar to U.S. dollar exchange rate fluctuated approximately 5% from January 1, 2021, to April 11, 2022, while the Hong Kong dollar to U.S. dollar exchange rate fluctuated approximately 1.1% during the same period[281].

Financial Performance - GigaMedia reported full year revenues of $5.5 million for 2021, a decrease of 20.1% from $6.9 million in 2020[7] - The gross profit for 2021 was $2.9 million, down 25.8% from $3.9 million in the previous year[7] - The operating loss for 2021 increased to $4.0 million, compared to a loss of $2.2 million in 2020[8] - The net loss attributable to GigaMedia for 2021 was $3.4 million, up from $1.3 million in the prior year, resulting in a loss per share of $0.31[8] - Fourth quarter revenues decreased by 19.6% quarter-on-quarter and 11.4% year-over-year, totaling $1.3 million[12] - The net loss for the fourth quarter of 2021 was $1.0 million, an increase from a net loss of $0.7 million in the previous quarter[12] - Digital entertainment service revenues for the three months ended 09/30/2021 were $1,564,208, a decrease of 19.4% compared to $1,917,636 for the same period in 2020[23] - Net loss attributable to shareholders for the twelve months ended 12/31/2021 was $3,431,034, compared to a net loss of $1,293,405 for the twelve months ended 12/31/2020[23] - EBITDA for the twelve months ended 12/31/2021 was $(3,702,385), significantly higher than $(1,898,712) for the twelve months ended 12/31/2020[26] Cash and Assets - Cash, cash equivalents, and restricted cash at the end of 2021 amounted to $41.8 million, down 9.2% from $46.0 million in 2020[10] - Total current assets decreased to $42,582,517 as of 12/31/2021 from $46,525,263 as of 12/31/2020, reflecting a decline of 8.5%[24] - Cash and cash equivalents decreased to $41,455,445 as of 12/31/2021 from $45,702,352 as of 12/31/2020, a decline of 9.8%[24] - GigaMedia's net asset value was approximately $4.58 per share as of December 31, 2021[5] - Total equity decreased to $50,583,150 as of 12/31/2021 from $54,096,863 as of 12/31/2020, a decline of 6.9%[24] Liabilities and Expenses - Total liabilities increased to $4,594,599 as of 12/31/2021 from $2,926,311 as of 12/31/2020, representing an increase of 57.1%[24] - Operating expenses for the three months ended 09/30/2021 totaled $1,718,935, an increase of 16.5% compared to $1,424,778 for the same period in 2020[23] - Selling and marketing expenses for the three months ended 09/30/2021 were $495,573, an increase of 6.4% compared to $466,093 for the same period in 2020[23] Strategic Plans - The company plans to improve in-house offerings and maintain relationships with licensors to support future growth[15] - GigaMedia is evaluating strategic investment opportunities to expand its business and enhance shareholder value[15]