PART I [Key Information](index=5&type=section&id=ITEM%203.%20KEY%20INFORMATION) This section presents selected financial data, highlighting operating losses, declining revenues, and significant business and financial risks including COVID-19 and PFIC classification [Selected Financial Data](index=5&type=section&id=A.%20Selected%20Financial%20Data) Operating revenues declined from **$11.6 million** in 2017 to **$6.6 million** in 2019, with consistent operating losses and no dividends declared Consolidated Statements of Operations Data (2017-2019, in thousands US$) | Indicator | 2017 | 2018 | 2019 | | :--- | :--- | :--- | :--- | | Total operating revenues | $11,596 | $7,101 | $6,645 | | Gross profit | $6,498 | $3,516 | $3,581 | | Loss from operations | ($490) | ($4,823) | ($3,015) | | Net income (loss) attributable to shareholders | $1,086 | ($3,193) | ($1,659) | | Basic and diluted earnings (loss) per share | $0.10 | ($0.29) | ($0.15) | Consolidated Balance Sheet Data (As of Dec 31, in thousands US$) | Indicator | 2017 | 2018 | 2019 | | :--- | :--- | :--- | :--- | | Total current assets | $65,511 | $60,595 | $58,893 | | Total assets | $66,413 | $61,445 | $59,222 | | Total current liabilities | $5,048 | $3,273 | $3,584 | | Total GigaMedia's shareholders' equity | $61,365 | $58,172 | $55,544 | - The company declared **no dividends** in 2015, 2016, 2017, 2018, and 2019[15](index=15&type=chunk) [Risk Factors](index=7&type=section&id=D.%20Risk%20Factors) The company faces business and ownership risks, including COVID-19 impact, intense competition, technological changes, data security, potential Nasdaq delisting, and PFIC classification - The COVID-19 pandemic poses a **risk of business disruption**, though it may also increase demand for online entertainment if people are required to stay home for prolonged periods[20](index=20&type=chunk)[102](index=102&type=chunk) - A substantial portion of revenue comes from PC-based games, which are in **decline** due to a market shift towards mobile and browser-based games, requiring the company to focus on **adapting to this shift**[23](index=23&type=chunk)[24](index=24&type=chunk) - The company faces **intense competition** from other online game operators in Taiwan and Hong Kong, many of whom have greater financial and marketing resources[29](index=29&type=chunk)[30](index=30&type=chunk) - The company has a **history of operating and net losses**, including a net loss of **$1.7 million** in 2019 and **$3.2 million** in 2018, and may experience losses in the future[31](index=31&type=chunk) - A **lawsuit** was filed against a subsidiary, GigaMedia Cloud, by Ennoconn Corporation, with an appeal court partially modifying the decision, **awarding Ennoconn approximately $893,000**; GigaMedia Cloud has appealed to the Taiwan Supreme Court[57](index=57&type=chunk) - As of March 31, 2020, Mr. Andre Koo beneficially owned **19.54%** of outstanding shares, giving him **significant influence** over corporate transactions and shareholder approvals[79](index=79&type=chunk)[286](index=286&type=chunk) - The company believes it is **likely classified as a Passive Foreign Investment Company (PFIC)** for the 2019 taxable year and will likely be a PFIC for 2020, which could result in **adverse U.S. federal income tax consequences** for U.S. shareholders[92](index=92&type=chunk)[321](index=321&type=chunk) [Information on the Company](index=19&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) GigaMedia, founded in 1998, provides digital entertainment services in Asia through FunTown, focusing on mobile and browser-based casual games with an 'Item-Billing' model [History and Development of the Company](index=19&type=section&id=A.%20History%20and%20Development%20of%20Our%20Company) Founded in Taiwan in 1998, GigaMedia Limited incorporated in Singapore in 1999 and completed its Nasdaq IPO in February 2000 - The business was **founded in Taiwan in October 1998**, with **GigaMedia Limited incorporated in Singapore in September 1999**[94](index=94&type=chunk) - Completed its **initial public offering in February 2000** and trades on the **Nasdaq Stock Market under the symbol GIGM**[95](index=95&type=chunk) [Business Overview](index=20&type=section&id=B.%20Business%20Overview) GigaMedia's core FunTown business focuses on mobile and browser-based casual games in Asia, using an 'Item-Billing' model for its **8.8 million** registered customers - The company operates **FunTown**, a digital entertainment portal focused on **mobile and browser-based casual games**, primarily in Taiwan and Hong Kong[98](index=98&type=chunk)[100](index=100&type=chunk) - Most products use an **'Item-Billing' model**, where users play for free and can purchase in-game virtual items and premium features[101](index=101&type=chunk) Revenue from Key Game Categories (in millions US$) | Game Category | 2017 | 2018 | 2019 | | :--- | :--- | :--- | :--- | | MahJong and other casual games | $2.4 | $1.8 | $1.8 | | Tales Runner (PC Sports Game) | $1.4 | $1.3 | $1.2 | | Mobile Role Playing Games | $7.8 | $4.0 | $3.5 | - The company **develops its casual games in-house**, **investing over $1.2 million** in 2019, and licenses role-playing and sports games from third-party developers[115](index=115&type=chunk)[116](index=116&type=chunk) - As of December 31, 2019, the company had approximately **8.8 million unique registered customers** and recorded about **57,000 active paying users** during the year[134](index=134&type=chunk) - The business experiences **seasonality**, with the **first and fourth quarters** typically being the strongest revenue periods[138](index=138&type=chunk) [Organizational Structure](index=28&type=section&id=C.%20Organizational%20Structure) GigaMedia Limited operates through wholly-owned subsidiaries, with principal digital entertainment operations in Taiwan and Hong Kong/Macau - Principal operating subsidiaries include **Hoshin GigaMedia (Taiwan)** and **FunTown World Limited (operates in Hong Kong and Macau)**[152](index=152&type=chunk) [Operating and Financial Review and Prospects](index=29&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section analyzes GigaMedia's financial performance, noting a **6.4%** revenue decrease in 2019, narrowed operating and net losses, and sufficient liquidity for 2020 [Operating Results](index=30&type=section&id=A.%20Operating%20Results) In 2019, operating revenues decreased by **6.4%** to **$6.6 million**, while gross margin improved to **53.9%**, leading to reduced operating and net losses Financial Performance Summary (2018 vs. 2019, in millions US$) | Metric | 2018 | 2019 | Change | | :--- | :--- | :--- | :--- | | Operating Revenues | $7.1 | $6.6 | -6.4% | | Gross Profit | $3.5 | $3.6 | +1.8% | | Gross Margin | 49.5% | 53.9% | +4.4pp | | Operating Expenses | $8.3 | $6.6 | -20.9% | | Loss from Operations | ($4.8) | ($3.0) | -37.5% | | Net Loss | ($3.2) | ($1.7) | -48.0% | - The decrease in 2019 revenue was mainly due to an **11.5% decline** in mobile game revenues, as certain role-playing games saw declining revenue despite retaining core players[225](index=225&type=chunk) - **Gross margin improved** in 2019 due to better management of player payment channels and fewer initial costs associated with launching new licensed games[227](index=227&type=chunk) - Selling and marketing expenses **decreased by 39.5%** in 2019 to **$2.0 million**, attributed to fewer new licensed game launches and enhanced marketing efficiency[231](index=231&type=chunk) - The company recognized impairment losses in 2019 totaling **$109k** on property, plant, and equipment, and **$15k** on intangible assets[235](index=235&type=chunk) - Net non-operating income was **$1.4 million** in 2019, primarily consisting of **$1.5 million** in interest income from bank deposits[236](index=236&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) As of December 31, 2019, cash and equivalents were **$58.3 million**, a **$1.6 million** decrease due to operating activities, with no bank borrowings and sufficient liquidity for 2020 Cash and Liquidity (in thousands US$) | Metric | 2017 | 2018 | 2019 | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | ($1,110) | ($3,914) | ($1,567) | | Net cash provided by (used in) investing activities | $935 | ($90) | ($73) | | Cash, restricted cash and cash equivalents at end of year | $64,177 | $59,826 | $58,274 | - The company had **no bank borrowings** as of December 31, 2019, and 2018[238](index=238&type=chunk) - Capital expenditures were **$0.1 million** in 2019, primarily for software and computer hardware[244](index=244&type=chunk) - The company believes its existing cash and working capital are **sufficient** for its present requirements and to meet obligations through 2020[243](index=243&type=chunk) [Research and Development](index=44&type=section&id=C.%20Research,%20Development,%20Patents%20and%20Licenses,%20etc.) The company invests in R&D to maintain competitiveness, with expenses at **$1.2 million** in 2019, a slight increase from prior years Research and Development Expenses (in millions US$) | Year | R&D Expense | | :--- | :--- | | 2017 | $1.1 | | 2018 | $1.1 | | 2019 | $1.2 | [Trend Information](index=44&type=section&id=D.%20Trend%20Information) The digital entertainment industry is shifting from PC to browser/mobile platforms, prompting GigaMedia to transition its game portfolio to casual browser/mobile games - The company is actively **extending its PC-based platform to browser/mobile casual games** to capitalize on strong market growth trends in Asia[249](index=249&type=chunk) - The **strongest demand** in the company's markets of Taiwan and Hong Kong is for **casual browser/mobile games**[248](index=248&type=chunk) [Directors, Senior Management and Employees](index=45&type=section&id=ITEM%206.%20DIRECTORS,%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section details the company's leadership, compensation, and workforce, noting a six-member board, **$0.4 million** in 2019 compensation, and a decrease to **136** employees [Directors and Senior Management](index=45&type=section&id=A.%20Directors%20and%20Senior%20Management) The company's leadership includes James Cheng-Ming Huang as Chairman, CEO, and CFO, with a six-member board comprising five independent directors - James Cheng-Ming Huang holds the positions of **Chairman of the Board, Chief Executive Officer, and Chief Financial Officer**, appointed in 2017[256](index=256&type=chunk)[258](index=258&type=chunk) [Compensation](index=46&type=section&id=B.%20Compensation) Total cash compensation for directors and executive officers was approximately **$0.4 million** in 2019, with **24,000** outstanding stock options as of March 31, 2020 - Aggregate cash compensation paid to directors and executive officers for the year ended December 31, 2019, was **approximately US$0.4 million**[266](index=266&type=chunk) - As of March 31, 2020, directors and executive officers as a group held **24,000 outstanding stock options**[267](index=267&type=chunk)[284](index=284&type=chunk) [Board Practices](index=48&type=section&id=C.%20Board%20Practices) The board comprises six members, five independent, with standing Audit and Compensation Committees composed of independent directors - The board has a standing **Audit Committee** and **Compensation Committee**; the Audit Committee consists of **three independent directors**, and the Compensation Committee consists of **two**[279](index=279&type=chunk)[280](index=280&type=chunk) [Employees](index=48&type=section&id=D.%20Employees) Total full-time employees decreased to **136** in 2019, with the majority (**117**) based in Taiwan and the largest group in development roles Employee Headcount by Year | Year | Total Employees | | :--- | :--- | | 2017 | 151 | | 2018 | 154 | | 2019 | 136 | - As of December 31, 2019, **117** of the **136** employees were located in **Taiwan**, and 19 were in **Hong Kong**[281](index=281&type=chunk) [Major Shareholders and Related-Party Transactions](index=50&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED-PARTY%20TRANSACTIONS) As of March 31, 2020, John-Lee Andre Koo was the largest shareholder with **19.54%** ownership, and no material related-party transactions occurred Major Shareholders (as of March 31, 2020) | Name of Owner | Percentage of Shares Owned | | :--- | :--- | | John-Lee Andre Koo | 19.54% | | James Cheng-Ming Huang | 7.90% | | Collin Hwang | 6.30% | | Jonathan Honig | 5.65% | - As of March 31, 2020, **60.60%** of outstanding shares were held by shareholders other than the major ones listed[287](index=287&type=chunk) [Financial Information](index=52&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) This section refers to the full consolidated financial statements and reiterates the company's policy of retaining earnings with no dividends paid or anticipated - The company has **not declared or paid any dividends** on its shares and **does not intend to pay dividends** in the foreseeable future[294](index=294&type=chunk) [The Offer and Listing](index=52&type=section&id=ITEM%209.%20THE%20OFFER%20AND%20LISTING) The company's ordinary shares have been listed and traded on the Nasdaq Stock Market under the ticker symbol 'GIGM' since February 2000 - Shares are listed on the **Nasdaq Stock Market** with the symbol **'GIGM'**[296](index=296&type=chunk) [Additional Information](index=52&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) This section covers corporate details including share capital, exchange controls, and taxation, notably highlighting the high likelihood of PFIC classification for U.S. tax purposes [Taxation](index=53&type=section&id=E.%20Taxation) This section outlines tax considerations for shareholders in Singapore and the U.S., emphasizing the high likelihood of PFIC classification for U.S. shareholders and its adverse tax implications - In Singapore, there is **no tax on capital gains**, but gains from share disposals could be taxed as income if considered part of a trade or business; **Stamp duty is payable** on share transfers within Singapore[310](index=310&type=chunk)[312](index=312&type=chunk) - The company believes it is **likely classified as a Passive Foreign Investment Company (PFIC)** for U.S. federal income tax purposes for 2019 and will likely be a PFIC for 2020[92](index=92&type=chunk)[321](index=321&type=chunk) - If classified as a PFIC, U.S. shareholders face **special, penalizing tax rules** on **'excess distributions'** and gains from selling shares; an alternative is a **mark-to-market election**, but this has its own set of rules and may not cover lower-tier PFICs[322](index=322&type=chunk)[325](index=325&type=chunk) - The company **does not intend to provide the information** necessary for U.S. shareholders to make a Qualified Electing Fund (QEF) election[327](index=327&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=58&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risks are foreign currency and interest rate risks, with foreign currency exposure from assets and minimal interest rate risk due to no outstanding bank loans - The company's **primary market risk is foreign currency risk**, as it holds some assets in currencies other than the functional currency of the holding entity; as of Dec 31, 2019, **approximately $7.8 million** in bank deposits were subject to this risk[343](index=343&type=chunk)[345](index=345&type=chunk) - A hypothetical **10% change** in exchange rates would result in a **1.1% change** in total equity as of December 31, 2019[346](index=346&type=chunk) - The company had **no outstanding bank loans** as of December 31, 2019, **limiting its exposure to interest rate risk**[348](index=348&type=chunk) PART II [Controls and Procedures](index=60&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2019, with no auditor attestation required - Management concluded that as of December 31, 2019, the company's disclosure controls and procedures were **effective**[351](index=351&type=chunk) - Based on the COSO 2013 framework, management concluded that the company's internal control over financial reporting was **effective** as of December 31, 2019[352](index=352&type=chunk) - The annual report **does not include an auditor's attestation report** on internal control over financial reporting because the company is an exempt non-accelerated filer[353](index=353&type=chunk) [Other Information](index=60&type=section&id=ITEM%2016.%20Other%20Information) This section covers corporate governance, including the audit committee financial expert, code of ethics, and **$255,000** in 2019 accountant fees, noting adherence to Singapore practices - The board of directors has determined that Mr. Casey K. TUNG is the **audit committee financial expert**[355](index=355&type=chunk) - The company has adopted a **code of ethics**, an **anti-fraud policy**, and a **whistleblower program**[357](index=357&type=chunk)[358](index=358&type=chunk)[359](index=359&type=chunk) Principal Accountant Fees (in US$) | Fee Type | 2018 | 2019 | | :--- | :--- | :--- | | Audit Fees | $237,000 | $248,000 | | Tax Fees | $18,000 | $7,000 | | All Other Fees | $0 | $0 | | **Total** | **$255,000** | **$255,000** | PART III [Financial Statements](index=63&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) This section contains the company's audited consolidated financial statements for 2017-2019, prepared under U.S. GAAP, including the auditor's report and various financial statements - The financial statements were **audited by Deloitte & Touche**, which issued an opinion that the statements **present fairly** the financial position and results of operations in conformity with **U.S. GAAP**[379](index=379&type=chunk) - The company **changed its accounting method for leases in 2019 (adoption of ASC Topic 842)** and for **revenue from contracts with customers in 2018 (adoption of ASC Topic 606)**[380](index=380&type=chunk) [Exhibits](index=64&type=section&id=ITEM%2019.%20EXHIBITS) This section lists all exhibits filed with the annual report, including corporate governance documents and Sarbanes-Oxley Act certifications

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 20-F ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended For the fiscal year ended December 31, 2018 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EX ...