SIWI SCI & TECH (01202) announced that its board of directors, during a meeting held on November 27, 2025, reviewed and approved a proposal to utilize capital reserves to cover accumulated losses. According to an audit by Dahua, as of December 31, 2024, the company's financial statements reflected accumulated losses of RMB 272 million, with surplus reserves totaling RMB 8.7 million (including statutory surplus reserves of RMB 8.7 million and discretionary surplus reserves of RMB 0), and capital reserves of RMB 571 million.

The accumulated losses primarily stem from the company's slow business transformation, lagging product upgrades, insufficient profitability, and sustained losses between 2012 and 2021, which hindered its ability to capitalize on opportunities in the optical communications industry.

In compliance with the Company Law of the People's Republic of China, the Ministry of Finance's notice on financial handling post-implementation of the Company Law and Foreign Investment Law, and other relevant regulations, the company proposes to sequentially utilize its surplus reserves of RMB 8.7 million and capital reserves of RMB 571 million (totaling RMB 579.7 million) to fully offset its accumulated losses. The offset will be capped at the amount of losses recorded as of the end of 2024.

The capital reserves used for this purpose originate from shareholder contributions in the form of cash or equity (share premium) and are not designated for specific shareholders or restricted purposes. Upon completion of this plan, the company's capital reserves will decrease to RMB 307.7 million, and accumulated losses will be reduced to zero.

This initiative aims to help the company meet profit distribution conditions as stipulated by relevant laws and its articles of association, thereby enhancing investor returns and supporting high-quality development.