Interim report
Page 1
~1~ ENNOSTAR INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REVIEW REPORT SEPTEMBER 30, 2025 AND 2024 ------------------------------------------------------------------------------------------------------------------------------------ For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese -language auditors’ report and financial statements shall prevail.
Page 2
~2~ INDEPENDENT AUDITORS’ REVIEW REPORT PWCR25000182 To the Board of Directors and Shareholders of ENNOSTAR Inc. Introduction We have reviewed the accompanying consolidated balance sheets of ENNOSTAR Inc. and subsidiaries (the “Group”) as at September 30 , 202 5 and 202 4, and the related consolidated statements of comprehensive income for the three months and nine months then ended, as well as the consolidated statements of changes in equity and of cash flows for the nine months then ended, and notes to the consolidated financial statements, including a summary of material accounting policies. Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” that came into effect as endorsed by the Financial Supervisory Commission. Our responsibility is to express a conclusion on these consolidated financial statements based on our reviews. Scope of review Except as explained in the following paragraph, we conducted our reviews in accordance with the Statement on Review Engagements 2410, “ Review of Financial Information Performed by the Independent Auditor of the Entity” in the Republic of China. A revie w of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and conse quently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Page 3
~3~ Basis for qualified conclusion As explained in Note 4(3), the financial statements of certain insignificant consolidated subsidiaries and information disclosed in Note 13 were not reviewed by independent auditors. Total assets of these subsidiaries amounted to NT$ 5,184,063 thousand and NT$6,378,460 thousand, constituting 9.92% and 10.87% of the consolidated total assets as at September 30, 2025 and 2024, respectively, total liabilities amounted to NT$575,949 thousand and NT$1,461,293 thousand, constituting 6.33% and 11.76% of the consolidated total liabilities as at September 30, 202 5 and 202 4 respectively, and the total comprehensive income (loss) amounted to NT$ 268,111 thousand, (NT$194,095) thousand, (NT$556,996) thousand and (NT$758,929) thousand, constituting (67.57%), (82.35%), 16.84% and 74.10% of the consolidated total comprehensive income for the three months and nine months then ended, respectively. The balance of these investments accounted for u sing equity method amounting to NT$1,992,860 thousand and NT$2,310,436 thousand, respectively, and the comprehensive loss recognized from associates and joint ventures accounted for under the equity method amounting to NT$7,799 thousand, NT$ 64,416 thousand, NT$ 209,392 thousand and NT$ $208,696 thousand, respectively, were included. Qualified conclusion Except for the adjustments to the consolidated financial statements, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries been reviewed by independent auditors as described in the Basis for qualified conclusion section above, based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as at September 30, 2025 and 2024, and of its consolidated financial performanc e for the three months and nine months then ended and its consolidated cash flows for the nine months then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” that came into effect as endorsed by the Financial Supervisory Commission.
Page 4
~4~ Li, Tien-Yi Chou, Chien-Hung For and on behalf of PricewaterhouseCoopers, Taiwan November 7, 2025 ------------------------------------------------------------------------------------------------------------------------------- The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompa nying consolidated financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.
Page 5
ENNOSTAR INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2025, DECEMBER 31, 2024 AND SEPTEMBER 30, 2024 (Expressed in thousands of New Taiwan dollars) (The balance sheets as of September 30,2025 and 2024 are reviewed, not audited) ~5~ September 30, 2025 December 31, 2024 September 30, 2024 Assets Notes AMOUNT % AMOUNT % AMOUNT % Current assets 1100 Cash and cash equivalents 6(1) $ 14,327,601 27 $ 14,677,812 25 $ 14,379,151 24 1110 Financial assets at fair value through profit or loss - current 6(2) 2,699 - - - 46,797 - 1136 Current financial assets at amortised cost 6(4) and 8 115,062 - 644,017 1 959,804 2 1150 Notes receivable, net 6(5) and 8 1,184,761 2 748,305 1 718,165 1 1170 Accounts receivable, net 6(5) 6,609,987 13 7,677,262 13 7,993,692 14 1180 Accounts receivable - related parties, net 7 412,700 1 418,795 1 480,002 1 1200 Other receivables 184,778 - 119,049 - 210,759 - 1210 Other receivables - related parties 7 42,220 - 52,401 - 40,376 - 130X Inventories 6(6) 4,441,000 9 4,729,684 8 4,610,002 8 1410 Prepayments 515,286 1 534,956 1 575,970 1 1460 Non-current assets held for sale - net 6(12) - - 131,173 - 99,094 - 1470 Other current assets 16,082 - 38,034 - 41,634 - 11XX Current Assets 27,852,176 53 29,771,488 50 30,155,446 51 Non-current assets 1517 Non-current financial assets at fair value through other comprehensive income 6(3) 2,701,900 5 5,272,388 9 3,268,451 6 1535 Non-current financial assets at amortised cost 6(4) and 8 129,410 - 252,497 - 225,907 - 1550 Investments accounted for using equity method 6(7) and 7 2,880,034 6 2,972,537 5 3,088,850 5 1600 Property, plant and equipment 6(8)(11), 7 and 8 13,622,136 26 15,595,045 26 16,200,218 28 1755 Right-of-use assets 6(9) 1,360,672 3 1,516,486 3 1,568,078 3 1760 Investment property - net 498,127 1 586,322 1 653,897 1 1780 Intangible assets 6(10) 1,275,471 2 1,382,416 2 1,457,800 2 1840 Deferred income tax assets 1,709,587 3 1,775,732 3 1,748,723 3 1900 Other non-current assets 8 238,895 1 352,884 1 327,801 1 15XX Non-current assets 24,416,232 47 29,706,307 50 28,539,725 49 1XXX Total assets $ 52,268,408 100 $ 59,477,795 100 $ 58,695,171 100 (Continued)
Page 6
ENNOSTAR INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2025, DECEMBER 31, 2024 AND SEPTEMBER 30, 2024 (Expressed in thousands of New Taiwan dollars) (The balance sheets as of September 30,2025 and 2024 are reviewed, not audited) The accompanying notes are an integral part of these consolidated financial statements. ~6~ September 30, 2025 December 31, 2024 September 30, 2024 Liabilities and Equity Notes AMOUNT % AMOUNT % AMOUNT % Current liabilities 2100 Short-term borrowings 6(13) $ 196,566 - $ 566,428 1 $ 176,652 - 2110 Short-term notes and bills payable 6(14) and 8 174,376 - 845,699 1 925,126 2 2120 Financial liabilities at fair value through profit or loss - current 6(2) 70,084 - 75,337 - 236 - 2150 Notes payable 9,500 - 10,877 - 1,857 - 2170 Accounts payable 2,880,194 6 2,850,161 5 2,930,013 5 2180 Accounts payable - related parties 7 260,082 1 131,583 - 266,487 - 2200 Other payables 6(15) and 7 3,030,785 6 3,427,573 6 3,472,322 6 2230 Current tax liabilities 83,936 - 36,057 - 36,690 - 2280 Current lease liabilities 72,782 - 87,429 - 88,763 - 2320 Long-term liabilities, current portion 6(16) and 8 162,054 - 1,130,416 2 1,809,566 3 2399 Other current liabilities - others 326,702 1 520,383 1 384,663 1 21XX Current Liabilities 7,267,061 14 9,681,943 16 10,092,375 17 Non-current liabilities 2540 Long-term borrowings 6(16) and 8 130,938 - 257,791 1 495,763 1 2570 Deferred tax liabilities 371,784 1 532,068 1 287,062 1 2580 Non-current lease liabilities 1,140,917 2 1,263,801 2 1,309,508 2 2600 Other non-current liabilities 6(17)(19) 192,793 - 202,974 - 237,157 - 25XX Non-current liabilities 1,836,432 3 2,256,634 4 2,329,490 4 2XXX Total Liabilities 9,103,493 17 11,938,577 20 12,421,865 21 Equity attributable to owners of parent company Share capital 6(20) 3110 Share capital - common stock 7,379,405 14 7,379,405 13 7,379,405 13 Capital surplus 6(21) 3200 Capital surplus 36,432,680 70 38,403,057 63 38,392,788 65 Retained earnings 6(22) 3350 Accumulated deficit ( 2,149,613 ) ( 4 ) ( 1,422,637 ) ( 2 ) ( 848,632 ) ( 1 ) Other equity interest 6(23) 3400 Other equity interest 613,656 1 1,951,165 4 72,905 - 3500 Treasury shares 6(20) ( 135,163 ) - ( 135,163 ) - ( 135,163 ) - 31XX Equity attributable to owners of the parent 42,140,965 81 46,175,827 78 44,861,303 77 36XX Non-controlling interest 1,023,950 2 1,363,391 2 1,412,003 2 3XXX Total equity 43,164,915 83 47,539,218 80 46,273,306 79 Significant contingent liabilities and unrecognized contract commitments 9 3X2X Total liabilities and equity $ 52,268,408 100 $ 59,477,795 100 $ 58,695,171 100
Page 7
ENNOSTAR INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (Expressed in thousands of New Taiwan dollars, except for earnings(loss) per share amounts) (Unaudited) ~7~ Three months ended September 30 Nine months ended September 30 2025 2024 2025 2024 Items Notes AMOUNT % AMOUNT % AMOUNT % AMOUNT % 4000 Sales revenue 6(24) and 7 $ 5,602,991 100 $ 6,691,398 100 $ 16,975,085 100 $ 18,880,620 100 5000 Operating costs 6(6)(17)(18)(30)(31) and 7 ( 5,282,538 ) ( 94 ) ( 5,587,344 ) ( 84 ) ( 15,572,693 ) ( 92 ) ( 16,078,724 ) ( 85 ) 5900 Operating margin 320,453 6 1,104,054 16 1,402,392 8 2,801,896 15 5910 Unrealized profit from sales - - - - - - - - 5920 Realized loss from sales - - - - - - ( 13 ) - 5950 Net operating margin 320,453 6 1,104,054 16 1,402,392 8 2,801,883 15 Operating expenses 6(17)(18)(30)(31) 6100 Selling expenses ( 209,083 ) ( 4 ) ( 264,180 ) ( 4 ) ( 659,750 ) ( 4 ) ( 733,343 ) ( 4 ) 6200 General and administrative expenses ( 384,244 ) ( 7 ) ( 396,295 ) ( 6 ) ( 1,199,019 ) ( 7 ) ( 1,235,946 ) ( 6 ) 6300 Research and development expenses ( 589,543 ) ( 10 ) ( 623,873 ) ( 9 ) ( 1,758,742 ) ( 10 ) ( 1,812,918 ) ( 10 ) 6450 Expected credit losses ( 376 ) - ( 3,956 ) - ( 15,305 ) - ( 9,465 ) - 6000 Total operating expenses ( 1,183,246 ) ( 21 ) ( 1,288,304 ) ( 19 ) ( 3,632,816 ) ( 21 ) ( 3,791,672 ) ( 20 ) 6500 Other income and expenses - net 6(19)(25) 5,008 - 60,751 1 61,882 - 80,059 - 6900 Operating loss ( 857,785 ) ( 15 ) ( 123,499 ) ( 2 ) ( 2,168,542 ) ( 13 ) ( 909,730 ) ( 5 ) Non-operating income and expenses 7100 Interest income 6(4)(26) 67,332 1 57,275 1 193,633 1 176,160 1 7010 Other income 6(19)(27) 141,901 2 157,834 2 335,894 2 379,642 2 7020 Other gains and losses 6(11)(28) 44,148 1 ( 942 ) - ( 36,467 ) - ( 251,658 ) ( 1 ) 7050 Finance costs 6(29) ( 11,752 ) - ( 25,368 ) - ( 51,510 ) - ( 100,789 ) - 7055 Expected credit losses ( 1,194 ) - ( 20 ) - ( 160 ) - ( 626 ) - 7060 Share of loss of associates and joint ventures accounted for using equity method 6(7) 9,446 - ( 105,486 ) ( 1 ) ( 174,855 ) ( 1 ) ( 316,284 ) ( 2 ) 7000 Total non-operating income and expenses 249,881 4 83,293 2 266,535 2 ( 113,555 ) - 7900 Loss before income tax ( 607,904 ) ( 11 ) ( 40,206 ) - ( 1,902,007 ) ( 11 ) ( 1,023,285 ) ( 5 ) 7950 Income tax (expense) benefit 6(32) ( 7,975 ) - 10,765 - ( 44,490 ) - ( 98,889 ) ( 1 ) 8200 Loss for the period ( $ 615,879 ) ( 11 ) ( $ 29,441 ) - ( $ 1,946,497 ) ( 11 ) ( $ 1,122,174 ) ( 6 ) (Continued)
Page 8
ENNOSTAR INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (Expressed in thousands of New Taiwan dollars, except for earnings(loss) per share amounts) (Unaudited) The accompanying notes are an integral part of these consolidated financial statements. ~8~ Three months ended September 30 Nine months ended September 30 2025 2024 2025 2024 Items Notes AMOUNT % AMOUNT % AMOUNT % AMOUNT % Other comprehensive income (loss) Components of other comprehensive income that will not be reclassified to profit or loss 8311 (Loss) gain on remeasurements of defined benefit plans $ - - $ - - ( $ 575 ) - $ 22 - 8316 Unrealised gain (loss) from investments in equity instruments measured at fair value through other comprehensive income 6(3) ( 488,996 ) ( 9 ) 140,301 2 ( 537,040 ) ( 3 ) ( 741,153 ) ( 4 ) 8320 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income (loss) that will not be reclassified to profit or loss 6(7) ( 2,111 ) - ( 40 ) - ( 2,086 ) - 673 - 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 6(7)(32) 82,954 2 ( 44,611 ) ( 1 ) 53,826 - 143,373 1 8310 Components of other comprehensive income (loss) that will not be reclassified to profit or loss ( 408,153 ) ( 7 ) 95,650 1 ( 485,875 ) ( 3 ) ( 597,085 ) ( 3 ) Components of other comprehensive income that will be reclassified to profit or loss 8361 Cumulative translation differences of foreign operations 588,820 10 163,692 3 ( 808,561 ) ( 5 ) 624,494 3 8370 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income (loss) that will be reclassified to profit or loss 6(7) 38,085 1 6,090 - ( 67,882 ) - 71,066 1 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss 6(7)(32) 338 - ( 290 ) - 1,316 - ( 436 ) - 8360 Components of other comprehensive income (loss) that will be reclassified to profit or loss 627,243 11 169,492 3 ( 875,127 ) ( 5 ) 695,124 4 8300 Other comprehensive income (loss) $ 219,090 4 $ 265,142 4 ( $ 1,361,002 ) ( 8 ) $ 98,039 1 8500 Total comprehensive income (loss) ( $ 396,789 ) ( 7 ) $ 235,701 4 ( $ 3,307,499 ) ( 19 ) ( $ 1,024,135 ) ( 5 ) Income (loss) attributable to: 8610 Equity holders of the parent company ( $ 613,232 ) ( 11 ) $ 7,492 - ( $ 1,933,320 ) ( 11 ) ( $ 762,002 ) ( 4 ) 8620 Non-controlling interest ( $ 2,647 ) - ( $ 36,933 ) - ( $ 13,177 ) - ( $ 360,172 ) ( 2 ) Comprehensive income (loss) attributable to: 8710 Equity holders of the parent company ( $ 435,171 ) ( 8 ) $ 255,874 4 ( $ 3,246,948 ) ( 19 ) ( $ 709,124 ) ( 3 ) 8720 Non-controlling interest $ 38,382 1 ( $ 20,173 ) - ( $ 60,551 ) - ( $ 315,011 ) ( 2 ) Earnings (loss) per share (NT$) 9750 Total basic earnings (loss) per share 6(33) ( $ 0.83 ) $ 0.01 ( $ 2.62 ) ( $ 1.02 ) 9850 Total diluted earnings (loss) per share 6(33) ( $ 0.83 ) $ 0.01 ( $ 2.62 ) ( $ 1.02 )
Page 9
ENNOSTAR INC. AND SUBSIDIARIES CONSOLIDA TED STA TEMENTS OF CHANGES IN EQUITY NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (Expressed in thousands of New Taiwan dollars) Equity attributable to owners of the parent Retained earnings Other equity interest Notes Share capital - common stock Capital surplus Legal reserve Special reserve Unappropriated retained earnings (Accumulated deficit) Cumulative translation differences of foreign operations Unrealised gain (loss) from financial assets measured at fair value through other comprehensive income Treasury shares Total Non-controlling interest Total equity The accompanying notes are an integral part of these consolidated financial statements. ~9~ 2024 Balance at January 1, 2024 $ 7,529,405 $ 46,447,060 $ 216,945 $ 154,927 ( $ 6,814,704 ) ( $ 208,746 ) $ 184,450 ( $ 135,163 ) $ 47,374,174 $ 1,770,562 $ 49,144,736 Loss for the period - - - - ( 762,002 ) - - - ( 762,002 ) ( 360,172 ) ( 1,122,174 ) Other comprehensive income (loss) for the period - - - - 24 649,963 ( 597,109 ) - 52,878 45,161 98,039 Total comprehensive income (loss) - - - - ( 761,978 ) 649,963 ( 597,109 ) - ( 709,124 ) ( 315,011 ) ( 1,024,135 ) Appropriation of 2023 earnings Reversal of special reserve - - - ( 54,843 ) 54,843 - - - - - - Legal reserve used to offset accumulated deficits - - ( 216,945 ) - 216,945 - - - - - - Special reserve used to offset accumulated deficits - - - ( 100,084 ) 100,084 - - - - - - Capital surplus used to offset accumulated deficits 6(21)(22) - ( 6,442,833 ) - - 6,442,833 - - - - - - Cash dividends from capital surplus 6(21)(22) - ( 677,646 ) - - - - - - ( 677,646 ) - ( 677,646 ) Changes in ownership interests in subsidiaries accounted for using equity method 6(21) - ( 400,995 ) - - - - - - ( 400,995 ) - ( 400,995 ) Change in equity of associates and joint ventures accounted for using equity method 6(21) - ( 13,811 ) - - - - - - ( 13,811 ) - ( 13,811 ) Adjustments of capital surplus for the Company's cash dividends received by subsidiaries 6(21) - 1,178 - - - - - - 1,178 - 1,178 Difference between consideration and carrying amount of subsidiaries acquired and disposed 6(21) - ( 19,564 ) - - ( 42,308 ) - - - ( 61,872 ) - ( 61,872 ) Employee Stock Ownership Trust cancellation return - 49 - - - - - - 49 - 49 Retirement of treasury share 6(20) ( 150,000 ) ( 500,650 ) - - - - - 650,650 - - - Purchase of treasury shares 6(20) - - - - - - - ( 650,650 ) ( 650,650 ) - ( 650,650 ) Non-controlling interests - - - - - - - - - ( 43,548 ) ( 43,548 ) Disposal of equity investment measured at fair value through other comprehensive income - - - - ( 44,347 ) - 44,347 - - - - Balance at September 30, 2024 $ 7,379,405 $ 38,392,788 $ - $ - ( $ 848,632 ) $ 441,217 ( $ 368,312 ) ( $ 135,163 ) $ 44,861,303 $ 1,412,003 $ 46,273,306 2025 Balance at January 1, 2025 $ 7,379,405 $ 38,403,057 $ - $ - ( $ 1,422,637 ) $ 443,401 $ 1,507,764 ( $ 135,163 ) $ 46,175,827 $ 1,363,391 $ 47,539,218 Loss for the period - - - - ( 1,933,320 ) - - - ( 1,933,320 ) ( 13,177 ) ( 1,946,497 ) Other comprehensive loss for the period - - - - ( 72 ) ( 828,132 ) ( 485,424 ) - ( 1,313,628 ) ( 47,374 ) ( 1,361,002 ) Total comprehensive loss - - - - ( 1,933,392 ) ( 828,132 ) ( 485,424 ) - ( 3,246,948 ) ( 60,551 ) ( 3,307,499 ) Capital surplus used to offset accumulated deficits 6(21)(22) - ( 1,422,637 ) - - 1,422,637 - - - - - - Cash dividends from capital surplus 6(21)(22) - ( 664,146 ) - - - - - - ( 664,146 ) - ( 664,146 ) Changes in ownership interests in subsidiaries accounted for using equity method 6(21) - 7,076 - - - - - - 7,076 - 7,076 Change in equity of associates and joint ventures accounted for using equity method 6(21) - 102,720 - - ( 206,226 ) - - - ( 103,506 ) - ( 103,506 ) Adjustments of capital surplus for the Company's cash dividends received by subsidiaries 6(21) - 1,154 - - - - - - 1,154 - 1,154 Difference between consideration and carrying amount of subsidiaries acquired or disposed 6(21) - ( 2,987 ) - - ( 33,948 ) - - - ( 36,935 ) - ( 36,935 ) Employee Stock Ownership Trust cancellation return 6(21) - 1,242 - - - - - - 1,242 - 1,242 Other changes in capital surplus 6(21) - 7,201 - - - - - - 7,201 - 7,201 Disposal of equity investment measured at fair value through other comprehensive income 6(23) - - - - 23,953 - ( 23,953 ) - - - - Non-controlling interests - - - - - - - - - ( 278,890 ) ( 278,890 ) Balance at September 30, 2025 $ 7,379,405 $ 36,432,680 $ - $ - ( $ 2,149,613 ) ( $ 384,731 ) $ 998,387 ( $ 135,163 ) $ 42,140,965 $ 1,023,950 $ 43,164,915
Page 10
ENNOSTAR INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (Expressed in thousands of New Taiwan dollars) Nine months ended September 30 Notes 2025 2024 ~10~ CASH FLOWS FROM OPERATING ACTIVITIES Loss before tax ( $ 1,902,007 ) ( $ 1,023,285 ) Adjustments Adjustments to reconcile profit (loss) Depreciation 6(8)(9)(30) 2,687,598 3,133,093 Amortization 6(10)(30) 238,698 250,231 Expected credit losses 12(2) 15,465 10,091 Net (gain) loss on financial assets at fair value through profit or loss 6(28) ( 85,441 ) 73,622 Interest expense 6(29) 51,510 100,789 Interest income 6(26) ( 193,633 ) ( 176,160 ) Compensation cost of share -based payment 6(18) ( 2,101 ) 1,219 Dividend income 6(27) ( 19,499 ) ( 20,526 ) Share of loss of associates and joint ventures accounted for using equity method 6(7) 174,855 316,284 Gain on disposal of property, plant and equipment 6(28) ( 75,187 ) ( 127,283 ) Loss on disposal of intangible assets 6(28) 995 580 Gain on disposal of non-current assets held for sale 6(28) ( 58,900 ) ( 148,692 ) (Gain) loss on disposal of investments 6(28) ( 70,070 ) 105,590 Impairment loss on non -financial assets 6(11)(28) - 304,635 Gain from lease modification 6(28) ( 580 ) ( 1,231 ) Intangible assets transferred to expense 6(10) - 250 Expense transferred to property, plant and equipment 6(8) ( 256 ) - Realized loss from sales - 13 Other income from recognition of long -term deferred revenues 6(19) ( 50,153 ) ( 45,866 ) Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss 184,769 5,506 Notes receivable ( 470,062 ) 68,862 Accounts receivable 924,472 ( 330,331 ) Other receivables ( 58,815 ) ( 90,117 ) Inventories 187,279 ( 318,543 ) Prepayments 67,323 ( 32,686 ) Other current assets 20,519 9,357 Other non-current assets ( 8,048 ) - Changes in operating liabilities Financial liabilities at fair value through profit or loss - current ( 106,668 ) ( 103,245 ) Notes payable ( 1,377 ) 52 Accounts payable 241,876 428,676 Other payables ( 437,458 ) ( 178,441 ) Other current liabilities ( 119,957 ) 43,670 Other non-current liabilities 62,880 ( 175 ) Cash inflow generated from operations 1,198,027 2,255,939 Interest received 181,644 180,385 Dividend received 29,615 32,055 Interest paid ( 37,059 ) ( 87,421 ) Income tax paid ( 28,712 ) ( 75,436 ) Net cash flows from operating activities 1,343,515 2,305,522 (Continued)
Page 11
ENNOSTAR INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (Expressed in thousands of New Taiwan dollars) Nine months ended September 30 Notes 2025 2024 The accompanying notes are an integral part of these consolidated financial statements. ~11~ CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposal of financial assets at fair value through other comprehensive income $ 1,843,264 $ 262,499 Acquisiton of financial assets at amortised cost - ( 57,389 ) Proceeds from disposal of financial assets at amortised cost 623,690 - Proceeds from disposal of financial assets at fair value through profit or loss - 177,652 Acquisition of investments accounted for using equity method ( 322,560 ) - Proceeds from disposal of investments accounted for using equity method 6(34) 57,929 83,723 Increase in prepayments for investments ( 13,000 ) - Proceeds from disposal of subsidiaries 6(34) 971 51,829 Proceeds from disposal of non -current assets held for sale 150,377 496,864 Acquisition of property, plant and equipment 6(34) ( 758,741 ) ( 948,241 ) Proceeds from disposal of property, plant and equipment 6(34) 106,610 724,111 Decrease in refundable deposits 7,487 9,850 Acquisition of intangible assets 6(34) ( 70,313 ) ( 51,830 ) Increase in other non-current assets ( 80 ) ( 70,480 ) Decrease in changes of consolidated entities ( 12,888 ) ( 238,761 ) Net cash flows from investing activities 1,612,746 439,827 CASH FLOWS FROM FINANCING ACTIVITIES Decrease in short-term loans 6(35) ( 365,523 ) ( 559,895 ) Decrease in short-term notes and bills payable 6(35) ( 648,161 ) ( 326,532 ) Proceeds from long-term loans 6(35) 2,872 - Repayment of long-term loans 6(35) ( 1,098,060 ) ( 1,418,281 ) Increase (decrease) in guarantee deposits received 6(35) 5,419 ( 1,205 ) Repayment of principal portion of lease liabilities 6(35) ( 74,161 ) ( 81,246 ) Cash dividends paid 6(34) ( 662,992 ) ( 676,468 ) Purchase of treasury share 6(20) - ( 650,650 ) Acquisition of ownership interests in subsidiaries ( 244,289 ) ( 498,694 ) Disposal of ownership interests in subsidiaries (without losing control) 3,138 - Change in non-controlling interests - 530 Employee Stock Ownership Trust cancellation return 9,541 3,841 Return of unclaimed overdue dividends by shareholders 6(21) 7,201 - Net cash flows used in financing activities ( 3,065,015 ) ( 4,208,600 ) Effects of foreign currency exchange ( 241,457 ) 278,914 Net decrease in cash and cash equivalents ( 350,211 ) ( 1,184,337 ) Cash and cash equivalents at beginning of period 14,677,812 15,563,488 Cash and cash equivalents at end of period $ 14,327,601 $ 14,379,151
Page 12
~12~ ENNOSTAR INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (Expressed in thousands of New Taiwan dollars, except as otherwise indicated) 1. HISTORY AND ORGANIZATION ENNOSTAR Inc. (the “Company”) was incorporated on January 6, 2021. The Company ’s shares have been traded on the Taiwan Stock Exchange in the Republic of China since the date of its incorporation. The share exchange transaction, wherein the Company was established by Epistar Corporation (“Epistar”) and acquired all issued and outstanding ordinary shares of Epistar and Lextar Electronics Corp. (“ Lextar”) by way of share exchange, has been approved both at Epistar ’s board meeting on June 18, 2020 and special shareholders’ meeting on August 7, 2020. The share exchange was conducted at an exchange ratio of 1 ordinary share of Epistar and Lextar for 0.5 and 0.275 ordinary share of the Company , respectively. As a result, Epistar and Lextar became wholly -owned subsidiaries of the Company on January 6, 2021, and both of Epistar’s and Lextar’s ordinary shares have been delisted while the ordinary shares of the Company were listed starting from the same date under the symbol “3714”. The Company applied for a name change in 2025, which was approved by the Ministry of Economic Affairs on July 14, 2025. The Company and its subsidiar ies (collectively referred here in a s the “Group”) are engaged in the research and development, design, manufacturing and sales of EPI wafers and chips of A1GaInP, AlGaAs and InGaN and light-emitting diode packages and modules. 2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDA TED FINANCIAL STA TEMENTS AND PROCEDURES FOR AUTHORIZATION These consolidated fi nancial statements were authori zed for issuance by the Board of Directors on November 7, 2025. 3. APPLICA TION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS (1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“ IFRS®”) Accounting Standards that came into effect as endorsed by the Financial Supervisory Commission (“FSC”) New standards, interpretations and amendments endorsed by the FSC and became effective from 2025 are as follows: The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment. New Standards, Interpretations and Amendments Effective date by International Accounting Standards Board (IASB) Amendments to IAS 21, ‘Lack of exchangeability’ January 1, 2025
Page 13
~13~ (2) Effect of new issuances of or amendments to IFRS Accounting Standards as endorsed by the FSC but not yet adopted by the Group New standards, interpretations and amendments endorsed by the FSC effective from 202 6 are as follows: The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment. (3) IFRS Accounting Standards issued by IASB but not yet endorsed by the FSC New standards, interpretations and amendments issued by IASB but not yet included in the IFRS Accounting Standards as endorsed by the FSC are as follows: Note：The FSC has announced in a press release on September 25, 2025 that public companies will apply IFRS 18 starting from the fiscal year 2028. Additionally, entities can choose to adopt IFRS 18 earlier based on their requirements after the FSC endorses IFRS 18. Except for the following, the above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group ’s assessment. The quantitative impact will be disclosed when the assessment is complete. IFRS 18, ‘Presentation and disclosure in financial statements’ IFRS 18, ‘Presentation and disclosure in financial statements’ replaces IAS 1. The standard introduces a defined structure of the statement of profit or loss, disclosure requirements related to management- defined performance measures, and enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes. 4. SUMMARY OF MATERIAL ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these consolidated financial statements are set out below, others are consistent with Note 4 in the consolidated financial statements for the year ended December 31, 2024. These policies have been consistently applied to all the periods presented, unless otherwise stated. (1) Compliance statement A. The consolidated financial statements of the Group have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Accounting Standard 34, ‘Interim financial reporting’ that came into effect as endorsed by the FSC. B. The consolidated financial statements of the Group should be read together w ith the 2024 consolidated financial statements of the Group. New Standards, Interpretations and Amendments Effective date by IASB Amendments to IFRS 9 and IFRS 7, ‘Amendments to the classification and measurement of financial instruments’ January 1, 2026 Amendments to IFRS 9 and IFRS 7, ‘Contracts referencing nature- dependent electricity’ January 1, 2026 IFRS 17, ‘Insurance contracts’ January 1, 2023 Amendments to IFRS 17, ‘Insurance contracts’ January 1, 2023 Amendments to IFRS 17, ‘Initial application of IFRS 17 and IFRS 9 – comparative information’ January 1, 2023 Annual Improvements to IFRS Accounting Standards—Volume 11 January 1, 2026 New Standards, Interpretations and Amendments Effective date by IASB Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ To be determined by IASB IFRS 18, ‘Presentation and disclosure in financial statements’ January 1, 2027 (Note) IFRS 19, ‘Subsidiaries without public accountability: disclosures’ January 1, 2027
Page 14
~14~ (2) Basis of preparation A. Except for the following items, these consolidated financial statements have been prepared under the historical cost convention: (a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss. (b) Financial assets at fair value through other comprehensive income. (c) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation. B. The preparatio n of financial statements in co mpliance with International Financial Reporting Standards, International Accounting Standards, IFRIC® Interpretations, and SIC® Interpretations that came into effect as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5. (3) Basis of consolidation A. Basis for preparation of consolidated financial statements: The principles used in the preparation of the financial statements were consistent with those used in the financial statements for the year ended December 31, 2024. B. Subsidiaries included in the consolidated financial statements: Name of Investor Name of Subsidiary Main Business Activities September 30, 2025 December 31, 2024 September 30, 2024 Note ENNOSTAR Inc. Epistar Corporation Resarching, developing, manufacturing and sales of LED wafers and chips 100% 100% 100% ENNOSTAR Inc. Lextar Electronics Corp. Resarching, developing, manufacturing and sales of LED wafers, packages and modules 100% 100% 100% ENNOSTAR Inc. Harvestar Investment Corp. General investment 100% 100% 100% Note 8 Note 9 ENNOSTAR Inc. Calystar Investment Corp. General investment 100% 100% 100% Note 8 Note 9 ENNOSTAR Inc. Amengine Corporation Developing, manufacturing and sales of optical sensing modules - 75.96% 75.96% Note 2 Note 8 Epistar Corporation Lighting Investment Corp. General investment 100% 100% 100% Note 8 Note 9 Epistar Corporation Epistar JV Holding (BVI) Co., Ltd. General investment 100% 100% 100% Epistar Corporation Unikorn Semiconductor Corporation OEM manufacturing of iii-v semiconductors 100% 100% 100% Note 8 Note 9 Ownership
Page 15
~15~ Name of Investor Name of Subsidiary Main Business Activities September 30, 2025 December 31, 2024 September 30, 2024 Note Ownership Epistar Corporation GaN Force Corporation Design, manfacturing and sales of semiconductor materials and modules 64.32% 64.32% 64.32% Note 1 Note 8 Note 9 Epistar Corporation Can Yang Investments Limited General investment 3.53% 3.53% 3.53% Note 8 Note 9 Epistar JV Holding (BVI) Co., Ltd. LiteStar JV Holding (BVI) Co., Ltd. General investment 82.41% 82.41% 82.41% Note 8 Note 9 Epistar JV Holding (BVI) Co., Ltd. United LED Corporation Hong Kong Limited General investment 74.86% 74.86% 74.86% Note 8 Note 9 Epistar JV Holding (BVI) Co., Ltd. Episky (Hong Kong) Ltd. General investment 100% 100% 100% Note 8 Note 9 Epistar JV Holding (BVI) Co., Ltd. HUGA Holding (SAMOA) Limited General investment 100% 100% 100% Note 8 Note 9 Epistar JV Holding (BVI) Co., Ltd. Can Yang Investments Limited General investment 88.21% 88.21% 88.21% Note 8 Note 9 LiteStar JV Holding (BVI) Co., Ltd. Epicrystal (Hong Kong) Co., Ltd. General investment 100% 100% 100% Note 8 Note 9 Epicrystal (Hong Kong) Co., Ltd. Epicrystal Corporation (ChangZhou) Ltd. Manufacturing and sales of LED wafers and chips 93.38% 93.38% 93.38% United LED Corporation Hong Kong Limited United LED Shan Dong Corporation Information technology consulting services 100% 100% 100% Note 7 Note 8 Note 9 Episky (Hong Kong) Ltd. Episky Corporation (Xiamen) Ltd. Manufacturing and sales of LED chips 100% 100% 100% Episky Corporation (Xiamen) Ltd. Epicrystal Corporation (ChangZhou) Ltd. Manufacturing and sales of LED wafers and chips 3.31% 3.31% 3.31% Episky Corporation (Xiamen) Ltd. Shenzhen Epikylin Optoelectronics Co.,Ltd. Sales of LED chips - 100% 100% Note 3 Note 8 Lighting Investment Corp. Lighting Investment Ltd. General investment 100% 100% 100% Note 8 Note 9 Lighting Investment Corp. Can Yang Investments Limited General investment 6.87% 6.87% 6.87% Note 8 Note 9
Page 16
~16~ Name of Investor Name of Subsidiary Main Business Activities September 30, 2025 December 31, 2024 September 30, 2024 Note Ownership Lighting Investment Corp. GaN Force Corporation Design, manfacturing and sales of semiconductor materials and modules 35.68% 35.68% 35.68% Note 1 Note 8 Note 9 Lighting Investment Ltd. Luxlite (HK) Corporation Limited General investment - 100% 100% Note 4 Note 8 Can Yang Investments Limited Jiangsu Canyang Optoelectronics Ltd. Manufacturing and sales of LED wafers and chips 100% 100% 100% Note 8 ProLight Opto Technology Corporation ProLight Opto Holding Corporation General investment 100% 100% 100% Note 8 Note 9 ProLight Opto Holding Corporation ProLight Opto Technology Corporation General investment 100% 100% 100% Note 8 Note 9 ProLight Opto Technology Corporation Shanghai Welight Electronic Co., LTD Wholesale and export and import of LED and related electronic products 100% 100% 100% Note 8 Note 9 Lextar Electronics Corp. LEXTAR (SINGAPORE) PTE. LTD. General investment 100% 100% 100% Note 9 Lextar Electronics Corp. Liang Li Venture Corp. General investment 100% 100% 100% Note 8 Note 9 Lextar Electronics Corp. Wellypower Optronics Corporation General investment 100% 100% 100% Note 8 Note 9 Lextar Electronics Corp. Apower Optronics Corporation General investment 100% 100% 100% Note 8 Note 9 Lextar Electronics Corp. Wellybond Corporation General investment 100% 100% 100% Note 8 Note 9 Lextar Electronics Corp. Trendylite Corporation Sales of LED products 53.84% 53.84% 53.84% Note 8 Note 9 Lextar Electronics Corp. Hexawave, Inc. Manufacturing and sales of compound semiconductor materials and modules - 31.48% 31.48% Note 5 Note 8 Lextar Electronics Corp. ProLight Opto Technology Corporation Manufacturing and sales of LED packages - 9.84% 9.84% Note 6 Note 8
Page 17
~17~ Note 1: GaN Force Corporation has applied for liquidation in 2023. Note 2: As the Company transferred the shares of Amengine Corporation and resigned the director’s position, Amengine Corporation has been excluded from the consolidated entity since June 2025. Note 3: Shenzhen Epikylin Optoelectronics Co., Ltd. had completed liquidation in June 2025. Note 4: Luxlite(HK) Corporation Limited had completed liquidation in July 2025. Note 5: As Lextar Electronics Corp. and Wellybond Corporation transferred the shares of Hexawave, Inc. and resigned the director’s position, Hexawave, Inc. has been excluded from the consolidated entity since September 2025. Note 6: Due to the reorganization, the shares of ProLight Opto Technology Corporation originally held by Lextar Electronics Corp. and Liang Li Venture Corp. are now held by Wellybond Corporation, as of September 30, 2025, the shareholding ratios of Wellybond Corporation, in ProLight Opto Technology Corporation is 93.51%. Note 7: United LED Shan Dong Corporation has applied for liquidation in 2025. Name of Investor Name of Subsidiary Main Business Activities September 30, 2025 December 31, 2024 September 30, 2024 Note Ownership LEXTAR (SINGAPORE) PTE. LTD., Wellypower Optronics Corporation and Apower Optronics Corporation Lextar Electronics (Suzhou) Corp. Manufacturing and sales of LED and modules 100% 100% 100% Note 9 LEXTAR (SINGAPORE) PTE. LTD. Lextar Electronics Korea Ltd. Sale of LED and after- sales service 100% 100% 100% Note 8 Note 9 Liang Li Venture Corp. ProLight Opto Technology Corporation Manufacturing and sales of LED packages - 9.84% 9.84% Note 6 Note 8 Wellybond Corporation Vogito Innovation Co., Ltd. Design,developing, reasearching and sales of health care products 50.00% 50.00% 50.00% Note 8 Note 9 Wellybond Corporation ProLight Opto Technology Corporation Manufacturing and sales of LED packages 93.51% 34.01% 31.47% Note 6 Note 8 Note 9 Wellybond Corporation Hexawave, Inc. Manufacturing and sales of compound semiconductor materials and modules - 31.47% 31.48% Note 5 Note 8 Wellybond Corporation Trendylite Corporation Sales of LED products 40.37% 40.37% 40.37% Note 8 Note 9 Lextar Electronics (Suzhou) Corp. Lextar Electronics (Chuzhou) Corp. Manufacturing and sales of LED and modules 100% 100% 100%
Page 18
~18~ Note 8: The financial statements of the entity as of and for the nine months ended September 30, 2024 were not reviewed by independent auditors as the entity did not meet the definition of significant subsidiary. Note 9: The financial statements of the entity as of and for the nine months ended September 30, 2025 were not reviewed by independent auditors as the entity did not meet the definition of significant subsidiary. C. Subsidiaries not included in the consolidated financial statements: None. D. Adjustments for subsidiaries with different balance sheet dates: None. E. Significant restrictions: None. F. Subsidiaries that have non-controlling interest that are material to the Group: None. (4) Employee benefits Pension cost for the interim period is calculated on a year-to-date basis by using the pension cost rate derived from the actuarial valuation at the end of the prior financial year, adjusted for significant market fluctuations since that time and for signi ficant curtailments, settlements, or other significant one-off events. Also, the related information is disclosed accordingly. (5) Income tax The interim period income tax expense is recognised based on the estimated average annual effective income tax rate expected for the full financial year applied to the pretax income of the interim period, and the related information is disclosed accordingly. 5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY There was no significant change in the reporting period. Please refer to Note 5 in the consolidated financial statements for the year ended December 31, 2024. 6. DETAILS OF SIGNIFICANT ACCOUNTS (1) Cash and cash equivalents The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote. (2) Financial assets and liabilities at fair value through profit or loss September 30, 2025 December 31, 2024 September 30, 2024 Cash on hand and revolving funds 429$ 1,199$ 1,136$ Checking accounts and demand deposits 1,801,034 1,975,519 2,505,200 Time deposits 11,657,138 12,327,165 11,479,759 Bonds sold under repurchase agreement 869,000 373,929 393,056 14,327,601$ 14,677,812$ 14,379,151$ Asset Items September 30, 2025 December 31, 2024 September 30, 2024 Current items: Financial assets mandatorily measured at fair value through profit or loss Valuation adjustment of derivatives 2,699$ -$ 46,797$ 2,699 - 46,797
Page 19
~19~ A. The Group entered into contracts relating to derivative financial asset s/liabilities which were not accounted for under hedge accounting. The information is listed below: The Group entered into forward foreign exchange contracts to hedge exchange rate risk of export and import proceeds. However, these forward foreign exchange contracts are not accounted for under hedge accounting. Asset Items September 30, 2025 December 31, 2024 September 30, 2024 Non-current items: Financial assets mandatorily measured at fair value through profit or loss Unlisted stocks 154,825$ 218,083$ 215,484$ Valuation adjustments 154,825)( 218,083)( 215,484)( - - - 2,699$ -$ 46,797$ Liability items September 30, 2025 December 31, 2024 September 30, 2024 Current items: Financial liabilities held for trading Valuation adjustment of derivatives 70,084$ 75,337$ 236$ Financial instruments Notional principal (in thousands) Currency Maturity date Forward foreign exchange contract - sell USD 79,300 USD to NTD 2025.10.01~2026.03.17 Forward foreign exchange contract - sell USD 25,000 USD to RMB 2025.10.28~2026.02.26 Forward foreign exchange contract - buy CNY 22,000 NTD to RMB 2025.10.23 Foreign exchange swap USD 3,500 USD to NTD 2025.11.19~2026.01.16 Financial instruments Notional principal (in thousands) Currency Maturity date Forward foreign exchange contract - sell USD 82,700 USD to NTD 2025.01.02~2025.05.19 Forward foreign exchange contract - sell USD 7 USD to JPY 2025.01.23 Forward foreign exchange contract - sell USD 21,000 USD to RMB 2025.02.28~2025.04.29 Foreign exchange swap USD 9,000 USD to NTD 2025.01.03~2025.04.02 Financial instruments Notional principal (in thousands) Currency Maturity date Forward foreign exchange contract - sell USD 88,500 USD to NTD 2024.10.01~2025.02.20 Forward foreign exchange contract - sell USD 45 USD to JPY 2024.10.24~2024.11.22 Forward foreign exchange contract - sell USD 25,000 USD to RMB 2024.10.30~2025.02.28 September 30, 2024 September 30, 2025 December 31, 2024
Page 20
~20~ B. The net gain (loss) recognized by the Group amounted to ($105,595), $ 55,334, $85,441 and ($73,622) for the three months and the nine months ended September 30, 202 5 and 202 4, respectively. C. Information on credit risk of financial assets /liabilities at fair value through profit or loss is provided in Notes 12(2) and (3). (3) Financial assets at fair value through other comprehensive income A. The Group has elected to classify investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $2,701,900, $5,272,388 and $3,268,451 as at September 30, 2025, December 31, 2024 and September 30, 2024, respectively. B. Aiming to satisfy the operating plan, the Group sold $1,327,314, $263,889, $1,846,295 and $263,889 of equity instruments at fair value and the cumulative income (loss) on disposal which was transferred from other equity to retained earnings amounted to ($289,069), ($44,347), $23,953 and ($44,347) during the three months and nine months ended September 30, 2025 and 2024 , respectively. C. Amounts recognized in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below: D. As of September 30, 2025, December 31, 2024 and September 30, 2024 , without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at fair value through other comprehensive income held by the Group was $2,701,900, $5,272,388 and $ 3,268,451, respectively. E. Information relating to credit risk of financial assets at fair value through other comprehensive income is provided in Notes 12(2) and (3). Items September 30, 2025 December 31, 2024 September 30, 2024 Non-current items: Equity instruments Listed stocks 336,996$ 555,526$ 734,742$ Unlisted stocks 1,713,259 3,437,377 3,380,766 2,050,255 3,992,903 4,115,508 Valuation adjustment 651,645 1,279,485 847,057)( 2,701,900$ 5,272,388$ 3,268,451$ Equity instruments at fair value through other Three months ended Three months ended comprehensive income September 30, 2025 September 30, 2024 Fair value change recognized in other comprehensive (loss) income 488,996)($ 140,301$ Dividend income recognized in profit or loss held at end of period 19,143$ 15,477$ Equity instruments at fair value through other Nine months ended Nine months ended comprehensive income September 30, 2025 September 30, 2024 Fair value change recognized in other comprehensive loss 537,040)($ 741,153)($ Dividend income recognized in profit or loss held at end of period 19,269$ 15,600$
Page 21
~21~ (4) Financial assets at amortised cost A. Amounts recognized in profit or loss in relation to financial assets at amortised cost are listed below: B. As of September 30, 2025, December 31, 2024 and September 30, 2024 , without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at amortised cost held by the Group was $244,472, $896,514 and $1,185,711, respectively. C. Details of the Group’s financial assets at amortised cost pledged to others as collateral are provided in Note 8. D. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2). The counterparties of the Group ’s investments in certificates of deposit are financial institutions with high credit quality, so the Group expects that the probability of counterparty default is remote. (5) Notes and accounts receivable Items September 30, 2025 December 31, 2024 September 30, 2024 Current items: Time deposits with maturity over three months 3,500$ 136,637$ 327,500$ Restricted bank deposits 111,562 507,380 632,304 115,062$ 644,017$ 959,804$ Non-current items: Restricted bank deposits 129,410$ 252,497$ 225,907$ Three months ended Three months ended September 30, 2025 September 30, 2024 Interest income 817$ 1,348$ Nine months ended Nine months ended September 30, 2025 September 30, 2024 Interest income 4,298$ 4,352$ September 30, 2025 December 31, 2024 September 30, 2024 Notes receivable 1,184,761$ 748,305$ 718,165$ Less: Allowance for uncollectible accounts - - - 1,184,761$ 748,305$ 718,165$ Accounts receivable 6,631,184$ 7,696,593$ 8,013,960$ Less: Allowance for uncollectible accounts 21,197)( 19,331)( 20,268)( 6,609,987$ 7,677,262$ 7,993,692$
Page 22
~22~ A. The ageing analysis of accounts receivable and notes receivable is as follows: The above ageing analysis was based on past due date. B. As of September 30, 2025, December 31, 2024 and September 30, 2024 , the Group had outstanding discounted notes receivable amounting to $585,254, $728,506 and $ 413,965, respectively. The Group has payment obligations when the drawers of the notes refuse to pay for the notes at maturity. However, the credit rating of the aforesaid acceptance bank is extremely high, and the Group judges that the discounted notes receivable meets the requirements for delisting financial assets and will be deducted from notes receivable directly. The liabilities arising on discounted notes receivable are recognized in short-term borrowings, please refer to Note 6(13) for details. C. Details of the Group’s notes receivable pledged to others as collateral are provided in Note 8. D. The Group holds collateral including commercial papers and financial assets as security for accounts receivable. E. As of September 30, 2025, December 31, 2024 and September 30, 2024 , without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the notes receivable held by the Group was $1,184,761, $748,305 and $718,165, respectively ; the maximum exposure to credit risk in respect of the amount that best represents the accounts receivable held by the Group was $6,609,987, $7,677,262 and $7,993,692, respectively. F. Information on credit risk of accounts receivable and notes receivable is provided in Note 12(2). (6) Inventories Accounts receivable Notes receivable Accounts receivable Notes receivable Not past due 6,579,078$ 1,184,761$ 7,323,226$ 748,305$ Up to 30 days 18,822 - 208,234 - 31 to 90 days 5,909 - 138,802 - 91 to 180 days 49 - 6,707 - Over 180 days 27,326 - 19,624 - 6,631,184$ 1,184,761$ 7,696,593$ 748,305$ Accounts receivable Notes receivable Not past due 7,906,961$ 718,165$ Up to 30 days 73,014 - 31 to 90 days 8,475 - 91 to 180 days 4,475 - Over 180 days 21,035 - 8,013,960$ 718,165$ September 30, 2024 September 30, 2025 December 31, 2024 Allowance for Cost valuation loss Book value Raw materials 1,992,814$ 85,496)($ 1,907,318$ Work in progress 1,232,352 211,900)( 1,020,452 Finished goods 1,736,436 223,206)( 1,513,230 4,961,602$ 520,602)($ 4,441,000$ September 30, 2025
Page 23
~23~ The cost of inventories recognised as expense for the three months and nine months ended September 30, 2025 and 2024: For the three months and nine months ended September 30, 2024, the gain on reversal of decline in market value was caused by the increase in the utilization rate of the Group. Allowance for Cost valuation loss Book value Raw materials 1,894,529$ 87,035)($ 1,807,494$ Work in progress 1,247,000 156,154)( 1,090,846 Finished goods 1,978,387 147,043)( 1,831,344 5,119,916$ 390,232)($ 4,729,684$ Allowance for Cost valuation loss Book value Raw materials 1,906,098$ 141,010)($ 1,765,088$ Work in progress 1,315,051 199,001)( 1,116,050 Finished goods 1,923,497 194,633)( 1,728,864 5,144,646$ 534,644)($ 4,610,002$ September 30, 2024 December 31, 2024 Three months ended Three months ended September 30, 2025 September 30, 2024 Cost of goods sold 4,659,932$ 5,025,302$ Scrap loss 47,678 39,549 Loss on market price decline (recovery benefits in market value) 47,068 13,240)( Loss on idle capacity 502,121 606,869 Other 25,739 71,136)( 5,282,538$ 5,587,344$ Nine months ended Nine months ended September 30, 2025 September 30, 2024 Cost of goods sold 13,515,788$ 14,100,825$ Scrap loss 126,286 86,215 Loss on market price decline (recovery benefits in market value) 140,732 192,390)( Loss on idle capacity 1,716,819 2,189,150 Other 73,068 105,076)( 15,572,693$ 16,078,724$
Page 24
~24~ (7) Investments accounted for using equity method A. The carrying amount of the Group ’s interests in all individually immaterial associates and the Group’s share of the operating results are summarized below: As of September 30, 2025, December 31, 2024 and September 30, 2024, the carrying amount of the Group’s individually immaterial associates amounted to $2,880,034, $2,972,537 and $3,088,850, respectively. B. The fair value of the Group’s material associates with quoted market prices is as follows: C. LEDOLUX Sp. Zo. O. had completed liquidation in May 2025. D. Interlight Optotech (HK) Co., Limited had completed the cancellation of business registration in June 2025. E. Domi-Star Optoelectronics Corporation had completed dissolution in May 2025. September 30, 2025 December 31, 2024 September 30, 2024 Associates: Tyntek Corporation 1,041,114$ 1,035,709$ 1,040,394$ GCS Holdings, Inc. 887,174 783,236 778,413 LEADSTAR Micro-Crystal Display Corporation (Jiangsu) Ltd. 575,987 591,157 661,862 Changzhou Chemsemi Co., Ltd. 232,170 339,654 409,418 LEDAZ Co.,Ltd. 41,272 25,941 23,836 TE OPTO CORPORTATION 40,880 45,979 45,390 iReach Corporation 35,134 45,469 47,977 Yenrich Technology Corporation 26,303 38,022 46,450 LEDOLUX Sp. Zo.O. - 50,639 11,527 Chuzhou Bwin Technology Corp. - 8,635 15,536 Interlight Optotech (HK) Co., Limited. - 7,834 7,758 Domi-Star Optoelectronics Corporation - 262 289 2,880,034$ 2,972,537$ 3,088,850$ Three months ended Three months ended Attributable to the Group: September 30, 2025 September 30, 2024 Income (loss) for the period from continuing operations 9,446$ 105,486)($ Other comprehensive income 36,999 6,035 Total comprehensive income (loss) 46,445$ 99,451)($ Nine months ended Nine months ended Attributable to the Group: September 30, 2025 September 30, 2024 Loss for the period from continuing operations 174,855)($ 316,284)($ Other comprehensive (loss) income 69,008)( 71,571 Total comprehensive loss 243,863)($ 244,713)($ September 30, 2025 December 31, 2024 September 30, 2024 GCS Holdings, Inc. 3,872,418$ 3,340,296$ 1,032,790$ Tyntek Corporation 851,994 1,035,813 1,033,551 4,724,412$ 4,376,109$ 2,066,341$
Page 25
~25~ (8) Property, plant and equipment Buildings and Office Leasehold Construction in progress and equipment to Land structures Machinery equipment improvements Others be inspected Total At January 1, 2025 Cost 1,558,195$ 17,349,825$ 43,336,727$ 395,564$ 349,381$ 1,593,671$ 1,437,554$ 66,020,917$ Accumulated depreciation and impairment - 10,855,504)( 37,726,147)( 327,741)( 294,047)( 1,222,433)( - 50,425,872)( 1,558,195$ 6,494,321$ 5,610,580$ 67,823$ 55,334$ 371,238$ 1,437,554$ 15,595,045$ 2025 Opening net book amount at January 1 1,558,195$ 6,494,321$ 5,610,580$ 67,823$ 55,334$ 371,238$ 1,437,554$ 15,595,045$ Additions - 450 59,330 7,635 - 28,853 714,505 810,773 Transfers - 119,120 748,832 6,001 540 126,744 1,001,237)( - Disposals - 4,533)( 27,807)( - 173)( 3,024)( - 35,537)( Reclassifications - - 5,537)( - - 75)( 163)( 5,775)( Investment property reclassification - 61,622 - - - - - 61,622 Depreciation charge - 553,731)( 1,918,648)( 23,496)( 9,837)( 101,459)( - 2,607,171)( Disposals of subsidiary - - 42)( - - 7,656)( 75)( 7,773)( Net exchange differences - 77,366)( 89,948)( 855)( 318)( 10,972)( 9,589)( 189,048)( Closing net book amount at September 30 1,558,195$ 6,039,883$ 4,376,760$ 57,108$ 45,546$ 403,649$ 1,140,995$ 13,622,136$ At September 30, 2025 Cost 1,558,195$ 17,248,188$ 40,880,104$ 396,324$ 320,306$ 1,641,270$ 1,140,995$ 63,185,382$ Accumulated depreciation and impairment - 11,208,305)( 36,503,344)( 339,216)( 274,760)( 1,237,621)( - 49,563,246)( 1,558,195$ 6,039,883$ 4,376,760$ 57,108$ 45,546$ 403,649$ 1,140,995$ 13,622,136$ Buildings and Office Leasehold Construction in progress and equipment to Land structures Machinery equipment improvements Others be inspected Total At January 1, 2024 Cost 1,558,195$ 17,837,732$ 44,842,113$ 400,288$ 346,879$ 1,885,365$ 1,924,246$ 68,794,818$ Accumulated depreciation and impairment - 10,156,640)( 37,040,262)( 321,220)( 276,822)( 1,534,902)( - 49,329,846)( 1,558,195$ 7,681,092$ 7,801,851$ 79,068$ 70,057$ 350,463$ 1,924,246$ 19,464,972$ 2024 Opening net book amount at January 1 1,558,195$ 7,681,092$ 7,801,851$ 79,068$ 70,057$ 350,463$ 1,924,246$ 19,464,972$ Additions - 7,843 74,778 4,752 908 22,813 711,840 822,934 Transfers - 79,007 1,158,935 11,830 1,055 78,577 1,329,404)( - Disposals - 561,528)( 34,681)( 34)( 109)( 696)( - 597,048)( Reclassified to non-current assets held for sale - - 294,951)( 424)( - - - 295,375)( Reclassifications - 60,808 19,861 - - 80,669)( 121,911 121,911 Investment property reclassification - 4,323)( - - - - - 4,323)( Depreciation charge - 638,151)( 2,282,269)( 24,713)( 12,803)( 83,301)( - 3,041,237)( Impairment loss - 13,897)( 290,738)( - - - - 304,635)( Disposals of subsidiary - 55,385)( 92,402)( - - 7,312)( 429)( 155,528)( Net exchange differences - 74,134 100,382 908 427 5,946 6,750 188,547 Closing net book amount at September 30 1,558,195$ 6,629,600$ 6,160,766$ 71,387$ 59,535$ 285,821$ 1,434,914$ 16,200,218$ At September 30, 2024 Cost 1,558,195$ 17,222,792$ 44,022,760$ 408,436$ 350,408$ 1,619,664$ 1,434,914$ 66,617,169$ Accumulated depreciation and impairment - 10,593,192)( 37,861,994)( 337,049)( 290,873)( 1,333,843)( - 50,416,951)( 1,558,195$ 6,629,600$ 6,160,766$ 71,387$ 59,535$ 285,821$ 1,434,914$ 16,200,218$
Page 26
~26~ Information about the property, plant and equipment that were pledged to others as collateral is provided in Note 8. (9) Leasing arrangements－lessee A. The Group leases various assets includi ng land, buildings, machinery, transportation equipment and office equipment. Rental contracts are typically made for periods of 2 to 50 years. Lease terms are negotiated on an individual basis and c ontain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes. B. Short-term leases with a lease term of 12 months or less comprise of buildings, transportation equipment and office equipment. Low-value assets comprise of office equipment. C. The carrying amount of right-of-use assets and the depreciation charge are as follows: D. For the three months and nine months ended September 30, 2025 and 2024, the additions to right- of-use assets were ($8), $76, $4,226, and $61,406, respectively. September 30, 2025 December 31, 2024 September 30, 2024 Carrying amount Carrying amount Carrying amount Land 1,296,928$ 1,408,163$ 1,425,128$ Buildings 21,544 51,768 65,234 Machinery 21,132 26,714 48,004 Transportation equipment 4,113 6,932 5,107 Office equipment 16,299 22,909 24,605 Other equipment 656 - - 1,360,672$ 1,516,486$ 1,568,078$ Three months ended Three months ended September 30, 2025 September 30, 2024 Depreciation charge Depreciation charge Land $ 14,023 $ 14,556 Buildings 2,313 4,135 Machinery 1,414 1,922 Transportation equipment 1,257 1,042 Office equipment 2,411 2,474 Other equipment 38 - 21,456$ 24,129$ Nine months ended Nine months ended September 30, 2025 September 30, 2024 Depreciation charge Depreciation charge Land 42,215$ 46,119$ Buildings 9,351 14,541 Machinery 4,388 5,685 Transportation equipment 3,997 3,661 Office equipment 7,402 8,016 Other equipment 117 - 67,470$ 78,022$
Page 27
~27~ E. The information on profit and loss accounts relating to lease contracts is as follows: F. For the nine months ended September 30, 2025 and 2024, the Group’s total cash outflow for leases were $101,371 and $94,869, respectively. (10) Intangible assets Three months ended Three months ended September 30, 2025 September 30, 2024 Items affecting profit or loss Interest expense on lease liabilities 5,172$ 5,394$ Expense on short-term lease contracts 1,252 6,600 Expense on leases of low-value assets 1,858 741 Nine months ended Nine months ended September 30, 2025 September 30, 2024 Items affecting profit or loss Interest expense on lease liabilities 15,887$ 17,222$ Expense on short-term lease contracts 21,419 17,415 Expense on leases of low-value assets 5,263 2,389 Patents Goodwill Software Others Total At January 1, 2025 Cost 2,762,430$ 754,266$ 690,825$ 141,443$ 4,348,964$ Accumulated amortisation and impairment 2,241,500)( - 586,198)( 138,850)( 2,966,548)( 520,930$ 754,266$ 104,627$ 2,593$ 1,382,416$ 2025 Opening net book amount as at January 1 520,930$ 754,266$ 104,627$ 2,593$ 1,382,416$ Additions 4,297 - 38,698 4,009 47,004 Disposals 995)( - - - 995)( Reclassifications 50 - 250 - 300 Amortisation charge 101,574)( - 42,762)( 1,365)( 145,701)( Disposals of subsidiary 7,093)( - - - 7,093)( Net exchange differences 10)( - 414)( 36)( 460)( Closing net book amount as at September 30 415,605$ 754,266$ 100,399$ 5,201$ 1,275,471$ At September 30, 2025 Cost 2,761,867$ 754,266$ 725,514$ 145,416$ 4,387,063$ Accumulated amortisation and impairment 2,346,262)( - 625,115)( 140,215)( 3,111,592)( 415,605$ 754,266$ 100,399$ 5,201$ 1,275,471$
Page 28
~28~ Details of amortisation on intangible assets are as follows: (11) Impairment of non-financial assets For the nine months ended September 30, 2025: None. The Group assessed that production line adjustments and configurations resulted in idling or impairment of certain property, plant and equipment. The recoverable amount is the assets’ fair value less costs of disposal. The fair value is classified as a lev el 3 fair value. Details of impairment are as follows: Patents Goodwill Software Others Total At January 1, 2024 Cost 2,920,200$ 763,034$ 633,286$ 187,087$ 4,503,607$ Accumulated amortisation and impairment 2,206,784)( 8,768)( 518,340)( 129,113)( 2,863,005)( 713,416$ 754,266$ 114,946$ 57,974$ 1,640,602$ 2024 Opening net book amount as at January 1 713,416$ 754,266$ 114,946$ 57,974$ 1,640,602$ Additions 7,040 - 40,231 - 47,271 Disposals 580)( - - - 580)( Reclassifications 250)( - - - 250)( Amortisation charge 136,099)( - 39,496)( 9,306)( 184,901)( Disposals of subsidiary - - - 46,661)( 46,661)( Net exchange differences 1,044 - 258 1,017 2,319 Closing net book amount as at September 30 584,571$ 754,266$ 115,939$ 3,024$ 1,457,800$ At September 30, 2024 Cost 2,777,661$ 763,034$ 690,706$ 141,443$ 4,372,844$ Accumulated amortisation and impairment 2,193,090)( 8,768)( 574,767)( 138,419)( 2,915,044)( 584,571$ 754,266$ 115,939$ 3,024$ 1,457,800$ Three months ended Three months ended September 30, 2025 September 30, 2024 Operating costs 13,212$ 22,558$ Selling expenses 204 174 Administrative expenses 25,156 24,425 Research and development expenses 11,142 12,122 49,714$ 59,279$ Nine months ended Nine months ended September 30, 2025 September 30, 2024 Operating costs 37,487$ 66,081$ Selling expenses 604 508 Administrative expenses 73,105 81,642 Research and development expenses 34,505 36,670 145,701$ 184,901$
Page 29
~29~ (12) Non-current assets held for sale and discontinued operations A. The Company signed a contract for selling the Shandong factory and land use rights on March 5, 2024, so the amount of property, plant and equipment were recognized as non-current assets held for sale in the first quarter of 2024, and the transaction was completed in the first quarter of 2025. B. The Company’s Board of Directors resolved to dispose of microelectronic equipment to Global Communication Semiconductors, LLC on April 26, 2024 . The asset related to the transaction was recognized as non -current assets held for sale in the second quarter of 2024, and the transaction was completed in the third quarter of 2024. C. The Group entered into an order with FITTECH Co., Ltd. on December 24, 2024 . The amount of property, plant and equipment were recognized as non-current assets held for sale in the fourth quarter of 2024, and the transaction was completed in the first quarter of 2025. (13) Short-term borrowings Pursuant to the syndicated loan agreement, the Company and its subsidiaries should meet certain financial covenants which are calculated based on each of their annual audited consolidated financial statements. The Company and its subsidiaries agreed to mai ntain the current ratio, debt ratio, debt service coverage ratio and tangible net assets as defined in financial covenants. As of September 30, 2025, December 31, 2024 and September 30, 2024, Epistar Corporation has endorsements to ENNOSTAR Inc. totalling $0, $750,000 and $3,250,000, respectively. Three months ended Nine months ended September 30, 2024 September 30, 2024 Impairment loss－buildings and structure -$ 13,897$ Impairment loss－machinery 85,857 290,738 Impairment loss－office equipment 424)( - 85,433$ 304,635$ Recognised in profit or loss September 30, 2025 December 31, 2024 September 30, 2024 Property, plant and equipment -$ 131,173$ 99,094$ September 30, 2025 December 31, 2024 September 30, 2024 Bank borrowings-unsecured borrowings 196,566$ 566,428$ 117,598$ Liabilities on discounted notes receivable - - 59,054 196,566$ 566,428$ 176,652$ Interest rate range-NTD - 2.84% - Interest rate range-foreign currency 4.78% 3.20% 3.20% Interest rate range - discounted notes - - 1.25%~1.40%
Page 30
~30~ (14) Short-term notes and bills payable (15) Other payables Rate (%) Amount Name of bank Collaterals Payables for bankers’ acceptance - 174,376$ BANK OF COMMUNICATIONS CHINA CONSTRUCTION BANK (CCB) FUBON BANK (China) BANK OF CHINA Note 8 Rate (%) Amount Name of bank Collaterals Payables for bankers’ acceptance - 845,699$ AGRICULTURAL BANK OF CHINA BANK OF COMMUNICATIONS Industrial and Commercial Bank of China FUBON BANK (China) CHINA CONSTRUCTION BANK (CCB) Xiamen Bank BANK OF CHINA Note 8 Rate (%) Amount Name of bank Collaterals Payables for bankers’ acceptance - 925,126$ AGRICULTURAL BANK OF CHINA BANK OF JIANGSU BANK OF COMMUNICATIONS FUBON BANK (China) BANK OF CHINA HUISHANG BANK BANK OF CTBC Note 8 September 30, 2024 December 31, 2024 September 30, 2025 Items September 30, 2025 December 31, 2024 September 30, 2024 Payables on wages, salaries and bonus 881,833$ 1,146,834$ 989,486$ Payables on machinery and equipment 476,394 417,648 573,512 Payables on consumable goods and equipment repair expense 385,312 327,012 315,523 Payables on processing fees 352,634 461,023 491,860 Payables on personnel expense 241,070 205,965 271,551 Payables on gas expense 74,672 75,955 73,625 Payables on intangible assets 30,743 10,401 46,968 Payables on reticle expense 17,127 19,890 19,962 Payables on insurance expense 5,496 - 7,784 Compensation due to employees, directors and supervisors - 88,290 88,950 Others 565,504 674,555 593,101 3,030,785$ 3,427,573$ 3,472,322$
Page 31
~31~ (16) Long-term borrowings Pursuant to the bank loan agreements with Mega Bank, the Company and its subsidiaries should meet certain financial covenants which are calculated based on each of their annual audited consolidated financial statements or semi -annual reviewed consolidated financial statements. The Company and its subsidiaries agreed to maintain the current ratio, debt ratio as defined in financial covenants. Borrowing period and Type of borrowings repayment term Collaterals September 30, 2025 Bank borrowings Unsecured borrowings Before February 15, 2026 - 93,121$ Unsecured borrowings Before April 15, 2027 - 77,027 Unsecured borrowings Before January 22, 2030 - 2,844 Secured borrowings Before June 30, 2029 Note 8 120,000 292,992 Less: Current portion of long-term borrowings 162,054)( 130,938$ Interest rate range 0.925%~2.070% Borrowing period and Type of borrowings repayment term Collaterals December 31, 2024 Bank borrowings Unsecured borrowings Before September 15, 2025 - 228,483$ Unsecured borrowings Before September 15, 2025 - 221,938 Unsecured borrowings Before September 15, 2025 - 150,000 Unsecured borrowings Before September 15, 2025 - 200,569 Unsecured borrowings Before February 15, 2026 - 288,704 Unsecured borrowings Before April 15, 2027 - 113,513 Secured borrowings Before June 30, 2029 Note 8 185,000 1,388,207 Less: Current portion of long-term borrowings 1,130,416)( 257,791$ Interest rate range 0.925%~1.775% Borrowing period and Type of borrowings repayment term Collaterals September 30, 2024 Bank borrowings Unsecured borrowings Before September 15, 2025 - 304,643$ Unsecured borrowings Before September 15, 2026 - 348,700 Unsecured borrowings Before September 15, 2025 - 200,000 Unsecured borrowings Before September 15, 2025 - 267,426 Unsecured borrowings Before November 15, 2025 - 305,088 Unsecured borrowings Before February 15, 2026 - 369,435 Unsecured borrowings Before May 15, 2026 - 138,111 Unsecured borrowings Before April 15, 2027 - 125,676 Secured borrowings Before June 12, 2028 Note 8 56,250 Secured borrowings Before June 30, 2029 Note 8 190,000 2,305,329 Less: Current portion of long-term borrowings 1,809,566)( 495,763$ Interest rate range 0.925%~1.905%
Page 32
~32~ (17) Pensions A. (a) The Company and its domestic subsidiaries have defined benefit pension plans in accordance with the Labor Standards Law, covering all regular employees for services provided prior to July 1, 2005, and employees who choose to remain in the defined benefit pension plan subsequent to the enforcement of the Labor Pension Act on July 1 , 2005. Under the defined benefit pension plan, employees are entitled to two base points for every year of service for the first 15 years and one base point for each additional year thereafter, up to a maximum of 45 base points. The pension payment to employees is computed based on years of service and average salaries or wages of the last nine months prior to approved retirement. The Company contributes an amount equal to 2% of salaries and wages paid each month to a pension fund. The pension fund is administered by a pension fund monitoring committee and deposited under the Committee’s name in the Bank of Taiwan. Also, the Company would assess the balance in the aforementioned labor pension reserve account by the end of December 31, every year. If the acc ount balance is insufficient to pay the pension calculated by the aforementioned method, to the employees expected to be qualified for retirement next year, the Company will make contributions to cover the deficit by next March. (b) For the aforementioned pension plan, the Group (reversed) recognised pension costs of ($321), $74, ($880) and $222 for the three months and nine months ended September 30, 2025 and 2024 respectively. (c) Expected contributions to the defined benefit pension plans of the Company for the year ending September 30, 2026 amount to $9,155. B. (a) Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employ ees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribut e monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment. (b) The Group’s mainland China subsidiaries have funded defined contribution plans. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People ’s Republic of China (PRC) are based on a certain percentage stipulated by the government. Other than the monthly contributions, the Group does not have further obligations. (c) The pension costs under the defined contribution pension plans of the Group for the three months and the nine months ended September 30, 2025 and 2024 were $78,507, $96,982, $260,363 and $298,597, respectively. (18) Share-based payment A. Employee stock options: (a) For the nine months ended September 30, 2025, the Group’s restricted stocks to employees arrangement was as follows: Type of arrangement Grant date Quantity granted (thousand shares) Vesting conditions Employee stock option- United LED Corporation Hong Kong Limited 2010.08.01 1,500 Note 1 Employee stock option- Unikorn Semiconductor Corporation 2022.05.06 9,518 Note 2
Page 33
~33~ Note 1: 30% upon completion of 1 year’s service; 60% upon completion of 2 years’ service; 100% upon completion of 3 years’ service. Note 2: For 1 and 2 years from the date of issuance of stock options, the employees could exercise the stock options of 50% and 50% of the shares, respectively, which was based on the employees ’ individual performance indicators. Employees of the subsidiary, Unikorn Semiconductor Corporation, waived all their stock options in the second quarter of 2024. Note 3: Employees were able to exercise 30%, 30% and 40% of their stock options after 1 year, 2 years and 3 years from the grant date, respectively. Note 4: As Lextar Electronics Corp. and Wellybond Corporation transferred the shares of Hexawave, Inc. and resigned the director’s position, Hexawave, Inc. has been excluded from the consolidated entity since September 2025. (b) Details of the share-based payment arrangements are as follows: Type of arrangement Grant date Quantity granted (thousand shares) Vesting conditions Employee stock option- Unikorn Semiconductor Corporation 2023.04.27 1,482 Note 2 Employee stock option- Hexawave, Inc. 2022.08.10 3,000 Notes 3 and 4 Employee stock option- Hexawave, Inc. 2023.04.25 500 Notes 3 and 4 No.of shares Weighted-average exercise price No.of shares Weighted-average exercise price (in thousands) (in US dollars) (in thousands) (in US dollars) Options outstanding from beginning to the end of the period - United LED Corporation Hong Kong Limited 1,049 0.0001$ 1,049 0.0001$ Options exercisable at end of the period - United LED Corporation Hong Kong Limited 1,049 0.0001 1,049 0.0001 No.of shares Weighted-average exercise price - (in thousands) (in NTD ) Options outstanding at beginning of the period - Unikorn Semiconductor Corporation 5,688 5$ Options forfeited - Unikorn Semiconductor Corporation 5,688)( 5 Options outstanding at end of the period - Unikorn Semiconductor Corporation - - Options exercisable at end of the period - Unikorn Semiconductor Corporation - - 2024 2025 2024
Page 34
~34~ B. Expenses incurred on share-based payment transactions are shown below: (19) Long-term deferred revenue (shown under “Other non-current liabilities”) The Company and subsidiaries obtained government grants for acquisitions of equipment, technology investments and research projects and recognized such grants as revenue over the economic lives of those assets. Government grants revenue recognized for the three months and nine months ended September 30, 2025 and 2024 were $16,228, $18,547, $72,339 and $64,239 (shown under “Other income and expenses-net” and “Other revenue”), respectively. (20) Share capital A. As of September 30, 2025, the Company ’s authorized capital was $ 15,000,000, consisting of 1,500,000 th ousand shares of ordinary stock (including 5 0,000 thousand shares reserved for employee stock options), and the paid -in capital was $ 7,379,405 with a par value of $10 (in dollars) per share. Movements of the Company’s outstanding ordinary shares are as follows (expressed in thousands of shares): No.of shares Weighted-average exercise price - (in thousands) (in NTD ) Options outstanding at beginning of the period - Hexawave, Inc. 3,134 10$ Options granted - Hexawave, Inc. 53)( Options forfeited - Hexawave, Inc. - Options outstanding at end of the period - Hexawave, Inc. 3,081 10 Options exercisable at end of the period - Hexawave, Inc. - 10 2024 Three months ended Three months ended September 30, 2025 September 30, 2024 Equity-settled 2,515)($ 428$ Nine months ended Nine months ended September 30, 2025 September 30, 2024 Equity-settled 2,101)($ 1,219$ September 30, 2025 December 31, 2024 September 30, 2024 Deferred government grants revenue 149,948$ 135,275$ 138,552$ Deferred technical services revenue - 5,284 5,597 149,948$ 140,559$ 144,149$ 2025 2024 At January 1 736,658 751,658 Purchase of treasury shares - 15,000)( At September 30 736,658 736,658
Page 35
~35~ B. The stockholders at their annual stockholders’ meeting on May 31, 2022 adopted a resolution to raise additional cash through private placement with the effective date set on July 8, 2022, which will be used for capital expenditure of constructing/building a 6-inch wafer plant for Micro LEDs and purchasing the equipment related to epitaxy and LED chips, etc. The resolution resulted in the issuance of 70,000 thousand shares of ordinary shares at a price of NT$51.82 per share for a total amount of $3,627,400 through private placement and had been registered. Pursuant to the Securities and Exchange Act of the ROC, the common shares raised through the private placement are subject to certain transfer restrictions and cannot be listed on the stock exchange until three years after they have been issued and have applied for retroactive handling of public issuance procedures. Other than these restrictions, the rights and obligations of the ordinary shares raised through the private placement are the same as other issued common shares. C. Treasury shares (a) Reason for share reacquisition and movements in the number of the Company ’s treasury shares are as follows: (Unit: share in thousands/ dollars in thousands) (b) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid -in capital in excess of par value and realised capital surplus. (c) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged as collateral and is not entitled to dividends before it is reissued. (d) Pursuant to the rules governing share repurchase by the Group , treasury shares should be reissued to the employees within three years from the reacquisition date and shares not reissued within the three -year period are to be retired. Treasury shares to enhance the Company’s credit rating and the stockholders’ equity should be retired within six months of acquisition. (e) The retirement procedure of the 15,000 thousand treasury shares that were purchased by the Group to enhance the Company ’s credit rating and the stockholders ’ equity had been completed. In addition, the registration for the change had been completed on October 15, 2024. D. Information of the Company’s shares held by subsidiaries is as follows: Reason for reacquisition At January 1 Increase Decrease At September 30 Book value Held by subsidiaries 1,282 - - 1,282 135,163$ 2025 Reason for reacquisition At January 1 Increase Decrease At September 30 Book value Held by subsidiaries 1,282 - - 1,282 135,163$ Maintain the company's credit and shareholders' rights - 15,000 ( 15,000) - - 2024 September 30, 2025 December 31, 2024 September 30, 2024 Lighting Investment Corp. 1,282 thousand shares 1,282 thousand shares 1,282 thousand shares Book value 135,163$ 135,163$ 135,163$ Fair value 50,333$ 53,603$ 58,220$
Page 36
~36~ (21) Capital surplus Pursuant to the Company Act, capital surplus, including additional paid -in capital in excess of par and donation, shall be exclusively used to cover accumulated deficit or to issue new stock or cash to shareholders in proportion to their ownership when the Company has no accumulated deficit. However, pursuant to the R.O.C. Securities and Exchange Act, capital surplus arising from paid -in capital in excess of par value on issuance of common stock and donations can be capitalized once a year, provided that the Company has no accumulated deficit and the amount to be capitalized does not exceed 10% of the paid-in capital. Treasury share Changes in ownership interests in subsidiaries accounted for using Change in net equity of associates and joint ventures accounted for Share premium transactions equity method using equity method At January 1, 2025 37,876,528$ 270,407$ 53,606$ 202,516$ Cash dividends 664,146)( - - - Offset deficit 1,422,637)( - - - Change in equity of associates and joint ventures accounted for using equity method - - - 102,720 Difference between consideration and carrying amount of subsidiaries acquired or disposed - - 2,987)( - Changes in ownership interests in subsidiaries accounted for using equity method - - 7,076 - Adjustments of capital surplus for the Company's cash dividends received by subsidiaries - 1,154 - - Employee Stock Ownership Trust cancellation return 1,242 - - - Return of unclaimed overdue dividends by shareholders 7,201 - - - At September 30, 2025 35,798,188$ 271,561$ 57,695$ 305,236$
Page 37
~37~ (22) Retained earnings A. In accordance with the Company ’s Articles of Incorporation, 10% of current year ’s earnings, after paying all taxes and dues and covering prior years ’ losses, shall be appropriated as legal reserve until the total equals the issued share capital. Special reserve shall be appropriated or reversed when needed. The remaining earnings along with the prior years ’ accumulated unappropriated earnings are considered as distributable earnings, and shall be distributed by the Board of Directors. When issuing new share s, the distribution shall be submitted through a resolution at the shareholders’ meeting. If the distribution is in cash, it shall be resolved by the Board of Directors. The distribution shall be based on the proportion of shares held by each shareholder. B. The Company appropriates earnings based on the factors such as current and future investment environment, capital needs, domestic and overseas competition and capital budget, along with the consideration of shareholders ’ interest and capital adequacy. The appropriation of cash dividends shall not be lower than 10% of the total dividend appropriated to shareholders. C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to sharehol ders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital. Treasury share Changes in ownership interests in subsidiaries accounted for using Change in net equity of associates and joint ventures accounted for Share premium transactions equity method using equity method At January 1, 2024 45,765,290$ 86,753$ 381,275$ 213,742$ Cash dividends 677,646)( - - - Offset deficit 6,442,833)( - - - Change in equity of associates and joint ventures accounted for using equity method - - - 13,811)( Difference between consideration and carrying amount of subsidiaries acquired or disposed - - 19,564)( - Changes in ownership interests in subsidiaries accounted for using equity method - 86,753)( 314,242)( - Proceeds from treasury - - - - Adjustments of capital surplus for the Company's cash dividends received by subsidiaries 1,178 Retirement of treasury shares 769,879)( 269,229 - - Employee Stock Ownership Trust cancellation return 49 - - - At September 30, 2024 37,874,981$ 270,407$ 47,469$ 199,931$
Page 38
~38~ D. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the special reserve is reversed accordingly and could be included in the distributable earnings. E. The appropriations of 2023 loss and dividends had been resolved at the shareholders’ meeting on May 24, 2024. It was decided to offset the loss with capital surplus and distribute cash dividends of $677,646 (approximately $0.9 dollars per share). F. The appropriation of 2024 loss had been resolved at the shareholders’ meeting on May 23, 2025. It was decided to offset the loss with capital surplus. On the same day, the Board of Directors approved the cash dividends distribution from capital surplus of $664,146 (approximately $0.9 dollars per share). (23) Other equity items (24) Operating revenue Currency translation Unrealized gain or loss Total At January 1 443,401$ 1,507,764$ 1,951,165$ Revaluation - gross - 539,250)( 539,250)( Revaluation - tax - 53,826 53,826 Disposal of equity investments measured at fair value through other comprehensive income - 23,953)( 23,953)( Currency translation –Group 829,448)( - 829,448)( –Tax on Group 1,316 - 1,316 At September 30 384,731)($ 998,387$ 613,656$ 2025 Currency translation Unrealized gain or loss Total At January 1 208,746)($ 184,450$ 24,296)($ Revaluation - gross - 740,487)( 740,487)( Revaluation - tax - 143,378 143,378 Disposal of equity investments measured at fair value through other comprehensive income - 44,347 44,347 Currency translation –Group 650,399 - 650,399 –Tax on Group 436)( - 436)( At September 30 441,217$ 368,312)($ 72,905$ 2024 Three months ended Three months ended September 30, 2025 September 30, 2024 Revenue from contracts with customers: Sales revenue 5,552,848$ 6,593,234$ Services revenue 16,416 58,972 Other operating revenue 33,727 39,192 5,602,991$ 6,691,398$
Page 39
~39~ Disaggregation of revenue from contracts with customers The Group derives revenue from the transfer of goods and services at a point in time in the following major product lines and geographical regions: (25) Other income and expenses– net Nine months ended Nine months ended September 30, 2025 September 30, 2024 Revenue from contracts with customers: Sales revenue 16,749,264$ 18,616,683$ Services revenue 143,055 138,476 Other operating revenue 82,766 125,461 16,975,085$ 18,880,620$ Three months ended September 30, 2025 Epi/Chip Packages/ Modules Other Total Sales revenue 3,446,355$ 1,957,501$ 148,992$ 5,552,848$ Services revenue - - 16,416 16,416 Other operating revenue - - 33,727 33,727 5,602,991$ Three months ended September 30, 2024 Epi/Chip Packages/ Modules Other Total Sales revenue 4,273,622$ 2,146,096$ 173,516$ 6,593,234$ Services revenue - - 58,972 58,972 Other operating revenue - - 39,192 39,192 6,691,398$ Nine months ended September 30, 2025 Epi/Chip Packages/ Modules Other Total Sales revenue 10,357,230$ 5,907,885$ 484,149$ 16,749,264$ Services revenue - - 143,055 143,055 Other operating revenue - - 82,766 82,766 16,975,085$ Nine months ended September 30, 2024 Epi/Chip Packages/ Modules Other Total Sales revenue 12,194,526$ 5,807,667$ 614,490$ 18,616,683$ Services revenue - - 138,476 138,476 Other operating revenue - - 125,461 125,461 18,880,620$ Three months ended Three months ended September 30, 2025 September 30, 2024 Other income Royalty income 5,082$ 53,121$ Government grants revenue 74)( 7,630 Total 5,008$ 60,751$
Page 40
~40~ (26) Interest income (27) Other income Nine months ended Nine months ended September 30, 2025 September 30, 2024 Other income Royalty income 27,351$ 54,850$ Government grants revenue 34,531 25,209 Total 61,882$ 80,059$ Three months ended Three months ended September 30, 2025 September 30, 2024 Interest income from bank deposits 64,914$ 54,294$ Other interest income 2,418 2,981 67,332$ 57,275$ Nine months ended Nine months ended September 30, 2025 September 30, 2024 Interest income from bank deposits 185,673$ 167,811$ Other interest income 7,960 8,349 193,633$ 176,160$ Three months ended Three months ended September 30, 2025 September 30, 2024 Rental revenue 42,066$ 66,201$ Dividend income 19,373 20,403 Government grant revenues 16,302 10,917 Other income-other 64,160 60,313 141,901$ 157,834$ Nine months ended Nine months ended September 30, 2025 September 30, 2024 Rental income 127,932$ 162,664$ Dividend income 19,499 20,526 Government grant revenues 37,808 39,030 Other income-other 150,655 157,422 335,894$ 379,642$
Page 41
~41~ (28) Other gains and losses (29) Finance costs Three months ended Three months ended September 30, 2025 September 30, 2024 Gain on disposal of property, plant and equipment 27,615$ 13,883$ (Loss) gain on disposal of non-current assets held for sale 799)( 141,483 Loss on disposal of intangible assets 403)( 421)( Gain on disposal of investments 68,313 19,033 Profit from lease modification 303 18 Net currency exchange gain (loss) 93,615 96,107)( Net (loss) gain on financial assets at fair value through profit or loss 105,595)( 55,334 Impairment loss on non-financial assets - 85,433)( Miscellaneous losses 38,901)( 48,732)( 44,148$ 942)($ Nine months ended Nine months ended September 30, 2025 September 30, 2024 Gain on disposal of property, plant and equipment 75,187$ 127,283$ Gain on disposal of non-current assets held for sale 58,900 148,692 Loss on disposal of intangible assets 995)( 580)( Gain (loss) on disposal of investments 70,070 105,590)( Profit from lease modification 580 1,231 Net currency exchange (loss) gain 211,442)( 78,689 Net gain (loss) on financial assets at fair value through profit or loss 85,441 73,622)( Impairment loss on non-financial assets - 304,635)( Miscellaneous losses 114,208)( 123,126)( 36,467)($ 251,658)($ Three months ended Three months ended September 30, 2025 September 30, 2024 Interest expense 4,963$ 10,088$ Other interest expense 6,789 15,280 11,752$ 25,368$ Nine months ended Nine months ended September 30, 2025 September 30, 2024 Interest expense 17,317$ 40,045$ Other interest expense 34,193 60,744 51,510$ 100,789$
Page 42
~42~ (30) Expenses by nature Note: Depreciation amounting to $ 7,307, $26,885, $ 29,161 and $72,423 were recognized as miscellaneous expenses for the three months and nine months ended September 30, 2025 and 2024, respectively. (31) Employee benefit expenses A. According to the Articles of Incorporation of the Company, the Company shall distribute employees’ compensation and directors’ remuneration based on 0.1%~15% and no higher than 2% of the distributable profit of the current year, respectively. If the Company has accumulated deficit, earnings should be reserved to cover losses. For the aforementioned distributed employees’ compensation, the Company shall distribute no less than 20% for rank -and-file employees’ compensation. B. For the three months and nine months ended September 30, 2025 and 2024 , the employees ’ compensation and directors’ remuneration was not estimated, because the Company incurred a loss during this period. C. Information about employees ’ compensation and directors ’ remuneration of the Company as resolved by the Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange. Three months ended Three months ended September 30, 2025 September 30, 2024 Employee benefit expenses 1,693,697$ 1,882,677$ Depreciation (Note) 875,771$ 994,296$ Amortisation 79,828$ 124,609$ Nine months ended Nine months ended September 30, 2025 September 30, 2024 Employee benefit expenses 5,353,480$ 5,805,330$ Depreciation (Note) 2,687,598$ 3,133,093$ Amortisation 238,698$ 250,231$ Three months ended Three months ended September 30, 2025 September 30, 2024 Wages and salaries 1,405,286$ 1,568,761$ Labor and health insurance expenses 88,822 98,562 Pension costs 78,236 97,111 Other personnel expenses 121,353 118,243 1,693,697$ 1,882,677$ Nine months ended Nine months ended September 30, 2025 September 30, 2024 Wages and salaries 4,433,399$ 4,841,972$ Labor and health insurance expenses 281,936 307,267 Pension costs 259,634 298,334 Other personnel expenses 378,511 357,757 5,353,480$ 5,805,330$
Page 43
~43~ (32) Income tax A. Income tax expense (benefits) (a) Components of income tax expense (benefits): (b) The income tax relating to components of other comprehensive (income) loss is as follows: Three months ended Three months ended September 30, 2025 September 30, 2024 Current tax: Current tax on profits for the period 20,939$ 5,149$ Tax withheld at source from foreign income 26 6,844 Prior year income tax (overestimation) underestimation 9,514)( 1,393 Total current tax 11,451 13,386 Deferred tax: Origination and reversal of temporary differences 3,476)( 24,151)( Total deferred tax 3,476)( 24,151)( Income tax expense (benefit) 7,975$ 10,765)($ Nine months ended Nine months ended September 30, 2025 September 30, 2024 Current tax: Current tax on profits for the period 38,449$ 49,281$ Tax withheld at source from foreign income 52 15,939 Prior year income tax underestimation 8,032)( 15,219)( Total current tax 30,469 50,001 Deferred tax: Origination and reversal of temporary differences 14,021 48,888 Total deferred tax 14,021 48,888 Income tax expense 44,490$ 98,889$ Three months ended Three months ended September 30, 2025 September 30, 2024 Change in fair value of financial assets at 82,770)($ 44,658$ fair value through other comprehensive (income) loss Currency translation differences 503 228 Share of other comprehensive (income) loss of associates 1,025)( 15 Total 83,292)($ 44,901$
Page 44
~44~ B. The Company’s income tax returns through 202 3 have been assessed and approved by the Tax Authority. Income tax returns of the Company ’s significant subsidiaries, Epistar and Lextar through 2023 have been assessed and approved by the Tax Authority. (33) Earnings (loss) per share Nine months ended Nine months ended September 30, 2025 September 30, 2024 Change in fair value of financial assets at 53,619)($ 143,505)($ fair value through other comprehensive income Currency translation differences 563)( 395 Share of other comprehensive (income) loss of associates 960)( 168 Remeasurement of defined benefit obligations - 5 Total 55,142)($ 142,937)($ Weighted average number of outstanding Amount ordinary shares Loss per share after tax (share in thousands) (in dollars) Basic and diluted loss per share Loss attributable to ordinary shareholders of the parent 613,232)($ 736,658 0.83)($ Weighted average number of outstanding Amount ordinary shares Earnings per share after tax (share in thousands) (in dollars) Basic and diluted earnings per share Profit attributable to ordinary shareholders of the parent 7,492$ 736,658 0.01$ Weighted average number of outstanding Amount ordinary shares Loss per share after tax (share in thousands) (in dollars) Basic and diluted loss per share Loss attributable to ordinary shareholders of the parent 1,933,320)($ 736,658 2.62)($ Weighted average number of outstanding Amount ordinary shares Loss per share after tax (share in thousands) (in dollars) Basic and diluted loss per share Loss attributable to ordinary shareholders of the parent 762,002)($ 743,675 1.02)($ Nine months ended September 30, 2024 Three months ended September 30, 2025 Three months ended September 30, 2024 Nine months ended September 30, 2025
Page 45
~45~ (34) Supplemental cash flow information A. Investing activities with partial cash payments B. Investing activities with partial cash received C. Financing activities with partial cash payments D. Cash received from disposal of ownership interests in subsidiaries and associates Nine months ended Nine months ended September 30, 2025 September 30, 2024 Purchase of property, plant and equipment 810,773$ 822,934$ Add: Opening balance of payable on equipment 421,648 683,775 Less: Ending balance of payable on equipment 476,394)( 577,373)( Less: Net cash changes of prepayment for equipment 2,714 18,905 Cash paid during the period 758,741$ 948,241$ Nine months ended Nine months ended September 30, 2025 September 30, 2024 Purchase of intangible assets 47,004$ 47,271$ Add: Opening balance of payables (including non-current portion) 10,401 51,527 Less: Ending balance of payables (including non-current portion) 30,743)( 46,968)( Add: Net cash changes of prepayments 43,651 - Cash paid during the period 70,313$ 51,830$ Nine months ended Nine months ended September 30, 2025 September 30, 2024 Sale of property, plant and equipment 110,724$ 724,331$ Add: Opening balance of receivables 1,084 32 Less: Ending balance of receivables 5,198)( - Add: Ending balance of advances - 252)( Cash collected during the period 106,610$ 724,111$ Nine months ended Nine months ended September 30, 2025 September 30, 2024 Cash dividends from capital surplus declared 664,146$ 677,646$ Less：dividends paid to subsidiaries 1,154)( 1,178)( Cash paid during the period 662,992$ 676,468$ Nine months ended Nine months ended September 30, 2025 September 30, 2024 Disposal proceeds 59,149$ 135,552$ Less: Ending balance of receivables 249)( - Net cash provided by disposal of subsidiaries and associates 58,900$ 135,552$
Page 46
~46~ (35) Changes in liabilities from financing activities 7. RELATED PARTY TRANSACTIONS (1) Names of related parties and relationship Short-term Short-term notes and bills Long-term Lease Guarantee deposits Liabilities from financing activities borrowing payable borrowing liabilities received gross At January 1, 2025 566,428$ 845,699$ 1,388,207$ 1,351,230$ 49,526$ 4,201,090$ Changes in cash flow from financing activities 365,523)( 648,161)( 1,095,188)( 74,161)( 5,419 2,177,614)( Effect of interest - - - 15,887 - 15,887 Changes in other non-cash items - - - 76,504)( 10,417)( 86,921)( Impact of changes in foreign exchange rate 4,339)( 23,162)( 27)( 2,753)( 1,631)( 31,912)( At September 30, 2025 196,566$ 174,376$ 292,992$ 1,213,699$ 42,897$ 1,920,530$ Short-term Short-term notes and bills Long-term Lease Guarantee deposits Liabilities from financing activities borrowing payable borrowing liabilities received gross At January 1, 2024 747,136$ 1,295,140$ 3,723,610$ 1,503,284$ 26,403$ 7,295,573$ Changes in cash flow from financing activities 559,895)( 326,532)( 1,418,281)( 81,246)( 1,205)( 2,387,159)( Effect of interest - - - 17,222 - 17,222 Changes in other non-cash items 22,225)( 78,621)( - 42,643)( 46,122 97,367)( Impact of changes in foreign exchange rate 11,636 35,139 - 1,654 999 49,428 At September 30, 2024 176,652$ 925,126$ 2,305,329$ 1,398,271$ 72,319$ 4,877,697$ Relationship Names of related parties with the Group Note LEDAZ Co., Ltd. Associates Yenrich Technology Corporation Associates LEADSTAR Micro-Crystal Display Corporation (Jiangsu) Ltd. Associates GCS Holdings, Inc. Associates Changzhou Chemsemi Co., Ltd. Associates iReach Corporation Associates Chuzhou Bwin Technology Corp. Associates Tyntek Corporation Associates TE OPTO Corporation Associates Domi-Star OPTO Corporation Associates AUO (Vietnam) Company Limited Other related parties D-Tech Optoelectronics, Inc. Other related parties Global Communication Semiconductors, LLC Other related parties Seoul Semiconductor Co., Ltd. Other related parties AUO (Kunshan) Co., Ltd. Other related parties AUO Corporation Other related parties AUO (Xiamen) Co., Ltd. Other related parties AUO (Suzhou) Co., Ltd. Other related parties AU Optronics(Shanghai) Co., Ltd. Other related parties AUO Crystal Corp. Other related parties
Page 47
~47~ Note 1: The liquidation was completed in September 2025. Note 2: AUO Envirotech Inc. was renamed as AET Corporation. starting from September 2025. Note 3: Because the company’s shares held by the Company were sold and the Company resigned the director’s position, the relationship between two companies was changed from other related party to non-related party since August 2025. (2) Significant related party transactions and balances A. Operating revenue: All product sales prices and payment terms have no significant difference between related parties and third parties. B. Purchases: Relationship Names of related parties with the Group Note AUO Megainsight Smart Manufacturing (Suzhou) Corp., Ltd Other related parties AUO Digitech Taiwan Inc. Other related parties Note 1 AUO Envirotech Inc. Other related parties Note 2 Anhui Inter-Mei Lighting Co., Ltd. Other related parties Note 3 Intermate Co., Ltd. (Suzhou) Other related parties Note 3 Bridgelux Optoelectronics (Xiamen) Co., Ltd. Other related parties Note 3 Ronly Venture Corp. Other related parties AUO Education Service Corp. Other related parties Darwin Precisions Corporation Other related parties Darwin Precision (Xiamen) Corporation Other related parties AUO Display Plus Corporation Other related parties Fortech Electronics (Suzhou) Co., Ltd. Other related parties Play Nitride Display Co., Ltd. Other related parties Three months ended Three months ended September 30, 2025 September 30, 2024 Other related parties 197,639$ 187,077$ Associates 88,431 139,502 Total 286,070$ 326,579$ Nine months ended Nine months ended September 30, 2025 September 30, 2024 Other related parties 555,879$ 657,755$ Associates 342,030 414,801 Total 897,909$ 1,072,556$ Three months ended Three months ended September 30, 2025 September 30, 2024 Other related parties 67$ 1,340$ Associates 63,795 110,461 Total 63,862$ 111,801$ Nine months ended Nine months ended September 30, 2025 September 30, 2024 Other related parties 4,679$ 2,895$ Associates 255,353 261,808 Total 260,032$ 264,703$
Page 48
~48~ All product purchases prices and payment term s have no significant difference between related parties and third parties. C. Receivables from related parties (Notes receivable and accounts receivable): The receivables from related parties arise mainly from sale transactions. The receivables are unsecured in nature and bear no interest. D. Other receivables from related parties: The other receivables from related parties arise mainly from rent and service. E. Payables from related parties: The payables to related parties arise mainly from purchase transactions. The payables bear no interest. F. Property transactions: (a) Acquisition of property, plant and equipment: September 30, 2025 December 31, 2024 September 30, 2024 Other related parties 277,214$ 261,513$ 285,247$ Associates 135,486 157,282 194,755 Total 412,700$ 418,795$ 480,002$ September 30, 2025 December 31, 2024 September 30, 2024 Other related parties 35,646$ 26,757$ 26,815$ Associates 6,574 25,644 13,561 Total 42,220$ 52,401$ 40,376$ September 30, 2025 December 31, 2024 September 30, 2024 Other related parties -$ 3,730$ 1,505$ Associates 260,082 127,853 264,982 Total 260,082$ 131,583$ 266,487$ Acquisition proceeds Accrued payable Acquisition proceeds Accrued payable Play Nitride Display Co., Ltd. -$ -$ 130,990$ 112,437$ Other related parties 6,869 - 17 - Associates 2,253 - 5,671 - 9,122$ -$ 136,678$ 112,437$ Acquisition proceeds Accrued payable Acquisition proceeds Accrued payable Play Nitride Display Co., Ltd. -$ -$ 133,335$ 112,437$ Other related parties 35,485 - 995 - Associates 55,605 - 5,671 - 91,090$ -$ 140,001$ 112,437$ September 30, 2025 September 30, 2024 Three months ended Three months ended Nine months ended Nine months ended September 30, 2024September 30, 2025
Page 49
~49~ (b) Disposal of property, plant and equipment: (c) Acquisition of financial assets: (3) Key management compensation Disposal proceeds Gain (loss) on disposal Disposal proceeds Gain (loss) on disposal Global Communication Semiconductors, LLC -$ -$ 436,400$ 141,430$ Associates - - 240 240 -$ -$ 436,640$ 141,670$ Disposal proceeds Gain (loss) on disposal Disposal proceeds Gain (loss) on disposal Global Communication Semiconductors, LLC -$ -$ 436,400$ 141,430$ Associates - - 240 240 -$ -$ 436,640$ 141,670$ September 30, 2025 September 30, 2024 Three months ended Three months ended September 30, 2025 September 30, 2024 Nine months ended Nine months ended Nine months ended Number of shares September 30, 2025 Accounts (thousands) Objects Consideration Ronly Venture Corp. Investments accounted for using equity method 3 ,500 Stock 288,750$ For the three months ended September 30, 2025: None. Three months and nine months ended Number of shares September 30, 2024 Accounts (thousands) Objects Consideration GCS Holdings, Inc. Investments accounted for using equity method 131,400 Stock 450,000$ Three months ended Three months ended September 30, 2025 September 30, 2024 Salaries and other short-term employee benefits 34,887$ 78,838$ Post-employment benefits 431 836 Total 35,318$ 79,674$
Page 50
~50~ 8. PLEDGED ASSETS The Group’s assets pledged as collateral are as follows: 9. SIGNIFICANTCONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS Capital expenditure contracted for at the balance sheet date but not yet incurred is as follows: 10. SIGNIFICANT DISASTER LOSS None. 11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DA TE None. 12. OTHERS (1) Capital risk management The Group ’s capital management policy is established taking into account the industry characteristics, the Group’s future development and changes in external environm ents. The Group plans the working capital, capital expenditures, investments and dividend s required for the future based on the capital management policy, makes financial analysis, and examines its capital structure periodically and makes appropriate adjustments to ensure that every company within the Group may grow and operate indefinitely. Nine months ended Nine months ended September 30, 2025 September 30, 2024 Salaries and other short-term employee benefits 134,812$ 159,639$ Post-employment benefits 1,574 2,235 Total 136,386$ 161,874$ Pledgred assets September 30, 2025 December 31, 2024 September 30, 2024 Purpose Bank deposits (shown in "Current financial assets at amortised cost and non-current financial assets at amortised cost") 124,586$ 521,036$ 485,368$ Payables for bankers’ acceptance Time deposits (Shown in "Current financial assets at amortised cost, non-current financial assets at amortised cost and other non-current assets") 91,904 218,053 378,843 Long-term borrowings, lease deposit, customs deposit, factory deposit, dormitory security deposit, payables for bankers' acceptances Notes receivable 80,736 6,400 14,145 Payables for bankers’ acceptance Land, building and structures 541,633 543,802 324,933 Long-term borrowings Machinery and office equipment - - 439,552 Funding loan 838,859$ 1,289,291$ 1,642,841$ Carrying amounts September 30, 2025 December 31, 2024 September 30, 2024 Property, plant and equipment 969,504$ 824,117$ 636,117$
Page 51
~51~ (2) Financial instruments A. Financial instruments by category September 30, 2025 December 31, 2024 September 30, 2024 Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss 2,699$ -$ 46,797$ Financial assets at fair value through other comprehensive income Designation of equity instrument 2,701,900 5,272,388 3,268,451 Financial assets at amortised cost Cash and cash equivalents 14,327,601 14,677,812 14,379,151 Financial assets at amortised cost 244,472 896,514 1,185,711 Notes receivable 1,184,761 748,305 718,165 Accounts receivable 6,609,987 7,677,262 7,993,692 Accounts receivable - related parties 412,700 418,795 480,002 Other receivables 184,778 119,049 210,759 Other receivables - related parties 42,220 52,401 40,376 Guarantee deposits paid 43,016 51,257 41,940 Other financial assets 3 3 3 25,754,137$ 29,913,786$ 28,365,047$ Financial liabilities Financial liabilities at fair value through profit and loss Financial liabilities held for trading 70,084$ 75,337$ 236$ Financial liabilities at amortised cost Short-term borrowings 196,566 566,428 176,652 Short-term notes and bills payable 174,376 845,699 925,126 Notes payable 9,500 10,877 1,857 Accounts payable 2,880,194 2,850,161 2,930,013 Accounts payable - related parties 260,082 131,583 266,487 Other payables 3,030,785 3,427,573 3,472,322 Long-term borrowings (including current portion) 292,992 1,388,207 2,305,329 Long-term accounts payable - 4,000 3,861 Guarantee deposits received 42,897 49,526 72,319 6,957,476$ 9,349,391$ 10,154,202$ Lease liabilities (including current portion) 1,213,699$ 1,351,230$ 1,398,271$
Page 52
~52~ B. Financial risk management policies (a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The purpose of risk management is to minimise potential adverse effects arising from uncertainty on the Group’s financial performance. The Group hedges foreign exchange rate by undertaking forward exchange contracts and exchange rate options ; it also undertakes interest rate exchange contracts to convert future variable cash flows into fixed ones. The derivatives undertaken by the Group ar e used exclusively for hedging purposes and not as trading or speculative instruments. (b) Risk management is carried out by treasury and finance departments of the Group under policies approved by the Board of Directors. Treasury and finance departments of the Group identifies, evaluates and hedges financial risks in close co -operation with the Group’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial in struments and non -derivative financial instruments, and investment of excess liquidity. C. Significant financial risks and degrees of financial risks (a) Market risk Foreign exchange risk i. The Group operates internationally and is exposed to exchange rate risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to the US D, RMB and JPY. Exchange rate risk arises from future commercial transactions and recognised assets and liabilities. ii. Management has set up a policy to require the Group to manage their foreign exchange risk against their functional currency. The companies are required to hedge their entire foreign exchange risk exposure with the Group treasury. iii. The Group’s businesses involve some non-functional currency operations (the functional currency of the Company and certain subs idiaries is NTD while that of other subsidiaries are USD and RMB). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows: Foreign currency Exchange Book value amount (in thousands) rate (in thousands of NTD) (Foreign currency: functional currency) Financial assets Monetary items USD:NTD 154,352$ 30.4450 4,699,247$ RMB:NTD 114,196 4.2710 487,731 Non-monetary items USD:NTD 55,787 30.4450 1,698,435 Financial liabilities Monetary items USD:NTD 37,466 30.4450 1,140,652 RMB:NTD 140,318 4.2710 599,298 September 30, 2025
Page 53
~53~ iv. Please refer to the following table for the details of unrealized exchange gain (loss) arising from significant foreign exchange variation on the monetary items held by the Group. Foreign currency Exchange Book value amount (in thousands) rate (in thousands of NTD) (Foreign currency: functional currency) Financial assets Monetary items USD:NTD 169,026$ 32.7850 5,541,517$ RMB:NTD 98,644 4.4780 441,728 Non-monetary items USD:NTD 57,823 32.7850 1,895,727 Financial liabilities Monetary items USD:NTD 33,253 32.7850 1,090,200 RMB:NTD 129,501 4.4780 579,905 Foreign currency Exchange Book value amount (in thousands) rate (in thousands of NTD) (Foreign currency: functional currency) Financial assets Monetary items USD:NTD 190,478$ 31.6500 6,028,629$ RMB:NTD 115,990 4.5230 524,623 Non-monetary items USD:NTD 57,823 31.6500 1,830,098 Financial liabilities Monetary items USD:NTD 41,111 31.6500 1,301,163 RMB:NTD 138,036 4.5230 624,337 September 30, 2024 December 31, 2024
Page 54
~54~ v. Analysis of foreign currency market risk arising from significant foreign exchange variation: Foreign currency Exchange Book value amount (in thousands) rate (in thousands of NTD) (Foreign currency: functional currency) Financial assets Monetary items USD:NTD -$ 30.4450 24,837$ RMB:NTD - 4.2710 6,403 Financial liabilities Monetary items USD:NTD - 30.4450 6,368)( RMB:NTD - 4.2710 10,331)( Unrealized exchange gain (loss) Nine months ended September 30, 2025 Foreign currency Exchange Book value amount (in thousands) rate (in thousands of NTD) (Foreign currency: functional currency) Financial assets Monetary items USD:NTD -$ 31.6500 62,830)($ RMB:NTD - 4.5230 1,255 Financial liabilities Monetary items USD:NTD - 31.6500 26,307 Nine months ended September 30, 2024 Unrealized exchange gain (loss) Degree of variation Effect on profit or loss Effect on other comprehensive income (Foreign currency: functional currency) Financial assets Monetary items USD:NTD 1% 46,992$ -$ RMB:NTD 1% 4,877 - Financial liabilities Monetary items USD:NTD 1% 11,407)( - RMB:NTD 1% 5,993)( - Nine months ended September 30, 2025 Sensitivity analysis
Page 55
~55~ Price risk i. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss, financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group. ii. The Group’s investments in equity securities comprise shares and open -end funds issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 10% with all other variables held constant, post-tax profit for the nine months ended September 30, 2025 and 2024 would have increased/decreased by $6,739 and $4,656, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $270,190 and $326,845, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income. Cash flow and interest rate risk i. The Group’s interest rate risk arises from bank deposits , short-term borrowings and long- term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk which is partially offset by cash and cash equivalents held at variable rates. Borrowings issued at fixed rates expose the Group to fair value i nterest rate risk. The Group’s borrowings at variable rate were denominated in the USD, RMB and NTD. ii. Based on the simulations performed on sensitivity analysis for interest rate risk , the maximum impact on post -tax profit of a 0. 1% shift would be increased/decreased of $13,838 and $11,897 for the nine months ended September 30, 2025 and 2024 , respectively. The simulation is done on a quarterly basis to ensure that the potential maximum loss is within the limit set by the management. (b) Credit risk i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows of debt instruments stated at amortised cost. Degree of variation Effect on profit or loss Effect on other comprehensive income (Foreign currency: functional currency) Financial assets Monetary items USD:NTD 1% 60,286$ -$ RMB:NTD 1% 5,246 - Financial liabilities Monetary items USD:NTD 1% 13,012)( - RMB:NTD 1% 6,243)( - Nine months ended September 30, 2024 Sensitivity analysis
Page 56
~56~ ii. The Group adopts the assumptions that the default occurs when the contract payments are overdue for 90 days. iii. The Group adopts the following assumptions to assess whether there has been a significant increase in credit risk on that instrument since initial recognition: If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition. iv. The following indicators are used to determine whether the credit impairment of debt instruments has occurred: (i) It becomes probable that the issuer will enter bankruptcy or other financial reorganization due to their financial difficulties; (ii) The disappearance of an active market for that financial asset because of financial difficulties; (iii) Default or delinquency in interest or principal repayments; (iv) Adverse changes in national or regional economic conditions that are expected to cause a default. v. The Group classifies customer s’ accounts receivable in accordance with credit rating of customer. The Group applies the simplified approach using pro vision matrix, loss rate methodology to estimate expected credit loss under the provision matrix basis. vi. The Group wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Group will continue executing the recourse procedures to secure their rights. As of September 30, 2025, December 31, 2024 and September 30, 2024, the Group’s written-off financial assets that are still under recourse procedures all amounted to $948,089, $945,844 and $949,854, respectively. vii. The Group used the forecastability to adjust historical and timely information to assess the default possibility of accounts receivable and other receivables. As of September 30, 2025, December 31, 2024 and September 30, 2024 , the provision matrix, loss rate methodology is as follows: Up to 30 days 31~90 days 91~180 days Over 180 days Not past due past due past due past due past due Total September 30, 2025 Expected loss rate 0% 0~5.27% 0~95.88% 0% 0%~100% Total book value 8,393,244$ 28,265$ 6,712$ 149$ 105,545$ 8,533,915$ Loss allowance -$ 107$ 93$ -$ 99,269$ 99,469$ Up to 30 days 31~90 days 91~180 days Over 180 days Not past due past due past due past due past due Total December 31, 2024 Expected loss rate 0~100% 0~15.6% 0~32.46% 0~40.31% 0~100% Total book value 8,644,972$ 209,607$ 152,119$ 9,818$ 99,208$ 9,115,724$ Loss allowance 4,022$ 62$ 1,716$ 149$ 93,963$ 99,912$ Up to 30 days 31~90 days 91~180 days Over 180 days Not past due past due past due past due past due Total September 30, 2024 Expected loss rate 0% 0~15.6% 0~100% 0~64.76% 0~100% Total book value 9,347,626$ 79,524$ 9,130$ 4,849$ 98,476$ 9,539,605$ Loss allowance -$ 548$ 1,265$ 1,742$ 93,056$ 96,611$
Page 57
~57~ viii. Movements in relation to the Group applying the simplified approach to provide loss allowance for accounts receivable, and other receivables are as follows: (c) Liquidity risk i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group ’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants on an y of its borrowing facilities. Such forecasting takes into consideration the Group ’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets and external regulatory or legal requirements. Individual provision Group provision Total September 30, 2025 Expected loss rate 100% 0%~100% Total book value 70,673$ 8,463,242$ 8,533,915$ Loss allowance 70,673$ 28,796$ 99,469$ December 31, 2024 Expected loss rate 100% 0%~100% Total book value 74,474$ 9,041,250$ 9,115,724$ Loss allowance 74,474$ 25,438$ 99,912$ September 30, 2024 Expected loss rate 100% 0%~100% Total book value 69,215$ 9,470,390$ 9,539,605$ Loss allowance 69,215$ 27,396$ 96,611$ Accounts receivable (including notes receivable) Other receivables At January 1 19,331$ 80,581$ Provision for impairment 15,305 160 Write-offs 12,594)( - Effect of exchange rate changes 845)( 2,469)( At September 30 21,197$ 78,272$ 2025 Accounts receivable (including notes receivable) Other receivables At January 1 12,155$ 75,082$ Provision for impairment 9,465 626 Disposal of subsidiaries 1,889)( - Effect of exchange rate changes 537 635 At September 30 20,268$ 76,343$ 2024
Page 58
~58~ ii. Surplus cash are invested in interest bearing current accounts, time deposits and money market deposits , with appropriate maturities or sufficient liquidity to provide sufficient headroom and meet the above-mentioned forecasts. As of September 30, 2025, December 31, 2024 and September 30, 2024, the Group held money market position of $14,327,601, $14,677,812 and $14,379,151, respectively, and those are expected to readily generate cash inflows for managing liquidity risk. iii. The Group has the following undrawn borrowing facilities: iv. The table below shows analysis of the Group ’s derivative and non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. September 30, 2025 December 31, 2024 September 30, 2024 Floating rate: Expiring within one year 10,210,196$ 11,725,544$ 8,525,826$ Expiring beyond one year 1,100,000 11,418,680 14,194,912 11,310,196$ 23,144,224$ 22,720,738$ Derivative financial liabilities: September 30, 2025 Less than 1 year Between 1 and 5 years Between 5 and 7 years Over 7 years Financial liabilities at fair value through profit or loss 70,084$ -$ -$ -$ Non-derivative financial liabilities: September 30, 2025 Less than 1 year Between 1 and 5 years Between 5 and 7 years Over 7 years Short-term borrowings 196,566$ -$ -$ -$ Short-term notes and bills payable 174,376 - - - Notes payable 9,500 - - - Accounts payable (including related parties) 3,140,276 - - - Other payables 3,030,785 - - - Lease liabilities 92,516 294,196 124,957 949,295 Long-term borrowings (including current portion) 162,842 137,770 - - Guarantee deposits received 40,913 1,260 - 724 Derivative financial liabilities: December 31, 2024 Less than 1 year Between 1 and 5 years Between 5 and 7 years Over 7 years Financial liabilities at fair value through profit or loss 75,337$ -$ -$ -$ Non-derivative financial liabilities: December 31, 2024 Less than 1 year Between 1 and 5 years Between 5 and 7 years Over 7 years Short-term borrowings 566,428$ -$ -$ -$ Short-term notes and bills payable 845,699 - - - Notes payable 10,877 - - - Accounts payable (including related parties) 2,981,744 - - - Other payables 3,427,573 - - - Lease liabilities 106,616 330,567 131,375 1,017,757 Long-term borrowings (including current portion) 1,137,520 261,363 - - Long-term payables - 4,000 - - Guarantee deposits received 46,876 1,926 - 724
Page 59
~59~ v. The Group does not expect the timing of the estimated cash outflows through the maturity date analysis will be significantly earlier, or expect the actual cash flow amount will be significantly different. (3) Fair value information A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with suf ficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks and beneficiary certificates is included in Level 1. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group ’s investment in convertible bonds and most derivative instruments is included in Level 2. Level 3: Unobservable inputs for the asset or liability. The fair value of the Group ’s investment in equity investment without active market is included in Level 3. B. Financial instruments not measured at fair value (a) Except for those listed in the table below, the carrying amounts of cash and cash equivalents, notes receivable, accounts receivable, other receivables, refundable deposits, other financial assets, short-term borrowings, short -term notes and bills payable, notes payable, accounts payable, other payables, lease liabilities, long-term accounts payable and guarantee deposits received are approximate to their fair value. Non-derivative financial liabilities: September 30, 2024 Less than 1 year Between 1 and 5 years Between 5 and 7 years Over 7 years Short-term borrowings 176,652$ -$ -$ -$ Short-term notes and bills payable 925,126 - - - Notes payable 1,857 - - - Accounts payable (including related parties) 3,196,500 - - - Other payables 3,472,322 - - - Lease liabilities 109,219 349,838 142,809 1,041,358 Long-term borrowings (including current portion) - 506,193 - - Long-term payables (including current portion) - 3,861 - - Guarantee deposits received 65,792 1,926 - 4,601 Book value Level 1 Level 2 Level 3 Financial liabilities: Long-term borrowings (including current portion) 292,992$ -$ 294,748$ -$ Book value Level 1 Level 2 Level 3 Financial liabilities: Long-term borrowings (including current portion) 1,388,207$ -$ 1,388,263$ -$ September 30, 2025 Fair value December 31, 2024 Fair value
Page 60
~60~ (b) The methods and assumptions of fair value estimate are as follows: Long-term borrowings: They are measured at present value, which is calculated based on the cash flow expected to be paid and discounted using a market rate prevailing at balance sheet date. C. The related information of financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities is as follows: (a) The related information of natures of the assets and liabilities is as follows: Book value Level 1 Level 2 Level 3 Financial liabilities: Long-term borrowings (including current portion) 2,305,329$ -$ 2,182,353$ -$ Fair value September 30, 2024 September 30, 2025 Level 1 Level 2 Level 3 Total Assets Recurring fair value measurements Financial assets at fair value through profit or loss Derivatives -$ 2,699$ -$ 2,699$ Financial assets at fair value through other comprehensive income Equity securities 1,187,017 - 1,514,883 2,701,900 Total 1,187,017$ 2,699$ 1,514,883$ 2,704,599$ Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Derivatives -$ 70,084$ -$ 70,084$ December 31, 2024 Level 1 Level 2 Level 3 Total Assets Recurring fair value measurements Financial assets at fair value through other comprehensive income Equity securities 1,779,641$ -$ 3,492,747$ 5,272,388$ Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Derivatives -$ 75,337$ -$ 75,337$
Page 61
~61~ (b) The methods and assumptions the Group used to measure fair value are as follows: i. The instruments the Group used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics: ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial ins truments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using m arket information available at the consolid ated balance sheet date. iii. When assessing non -standard and low -complexity financial instruments, for example, debt instruments without active market and foreign exchange swap contracts, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market. iv. For high -complexity financial instruments, the fair value is measured by using self - developed valuation model based on the valuation method and technique widely used within the same industry. The valuation model is normally applied to derivative financial instruments, debt instruments with embedded derivatives or securitised instruments. Certain inputs used in the valuation model are not observable at market, and the Group must make reasonable estimates based on its assumptions. The effect of unobservab le inputs to the valuation of financial instruments is provided in Note 12(3)E. v. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group ’s financial and non -financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk and etc. In accordance with the Group’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. The inputs and pricing information used during valu ation are carefully assessed and adjusted based on current market conditions. September 30, 2024 Level 1 Level 2 Level 3 Total Assets Recurring fair value measurements Financial assets at fair value through profit or loss Derivatives -$ 46,797$ -$ 46,797$ Financial assets at fair value through other comprehensive income Equity securities 1,052,666 - 2,215,785 3,268,451 Total 1,052,666$ 46,797$ 2,215,785$ 3,315,248$ Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Derivatives -$ 236$ -$ 236$ Listed stocks Closed-end fund Open-end fund Market quoted price Closing price Closing price Net asset value
Page 62
~62~ (c) The following chart is the movement of Level 3 for the nine months ended September 30, 2025 and 2024: D. Treasury department is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model and making any other necessary adjustments to the fair value. E. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement: 2025 2024 Financial instruments Financial instruments At January 1 3,492,747$ 3,101,227$ Losses recognised in other comprehensive income 750,392)( 726,615)( Disposals 1,119,352)( 277,018)( Effect of exchange rate changes 108,120)( 118,191 At September 30 1,514,883$ 2,215,785$ Significant Fair value at Valuation unobservable Range Relationship of September 30, 2025 technique input (weighted average) inputs to fair value Non-derivative equity instrument: Unlisted stocks 1,407,970$ Market comparable companies Price to book ratio multiple 1.98~2.24 The higher the multiple, the higher the fair value. Discount for lack of marketability 20%~30% The higher the discount for lack of marketability, the lower the fair value. Unlisted stocks 106,913 Market comparable companies Enterprise value multiple (EV/Revenue) on September 30, 2025 2.65 The higher the enterprise value multiple, the higher the fair value. Liquidity discount ratio on September 30, 2025 30% The higher the liquidity discount ratio, the lower the fair value. Significant Fair value at Valuation unobservable Range Relationship of December 31, 2024 technique input (weighted average) inputs to fair value Non-derivative equity instrument: Unlisted stocks 3,316,905$ Market comparable companies Price to book ratio multiple 1.85~2.56 The higher the multiple, the higher the fair value. Discount for lack of marketability 20% ~ 30% The higher the discount for lack of marketability, the lower the fair value. Unlisted stocks 173,342 Market comparable companies Enterprise value multiple (EV/Revenue) on December 31, 2024 3.05 The higher the enterprise value multiple, the higher the fair value. Liquidity discount ratio on December 31, 2024 30% The higher the liquidity discount ratio, the lower the fair value. Unlisted stocks 2,500 Net asset value N/A - N/A
Page 63
~63~ F. The Group has carefully assessed the valuation models and assumptions used to measure fair value. However, use of different valuation models or assumptions may result in different measurement. The following is the effect of profit or loss or of other comprehensive income from financial assets and liabilities categorised within Level 3 if the inputs used to valuation models have changed: Significant Fair value at Valuation unobservable Range Relationship of September 30, 2024 technique input (weighted average) inputs to fair value Non-derivative equity instrument: Unlisted stocks 2,157,029$ Market comparable companies Price to book ratio multiple 1.01~2.03 The higher the multiple, the higher the fair value. Discount for lack of marketability 20% ~30% The higher the discount for lack of marketability, the lower the fair value. Unlisted stocks 56,256 Market comparable companies Enterprise value multiple (P/B ratio) on September 30, 2024 2.03 The higher the enterprise value multiple, the higher the fair value. Liquidity discount ratio on September 30, 2024 30.00% The higher the liquidity discount ratio, the lower the fair value. Unlisted stocks 2,500 Net asset value N/A - N/A Favourable Unfavourable Favourable Unfavourable Input Change change change change change Financial assets Equity instrument Discount for lack of marketability ±1% -$ -$ 15,149$ 15,149)($ Favourable Unfavourable Favourable Unfavourable Input Change change change change change Financial assets Equity instrument Discount for lack of marketability ±1% -$ -$ 34,927$ 34,927)($ Favourable Unfavourable Favourable Unfavourable Input Change change change change change Financial assets Equity instrument Discount for lack of marketability ±1% -$ -$ 22,158$ 22,158)($ December 31, 2024 Recognised in profit Recognised in other or loss comprehensive income September 30, 2024 Recognised in profit Recognised in other or loss comprehensive income September 30, 2025 Recognised in profit Recognised in other or loss comprehensive income
Page 64
~64~ 13. SUPPLEMENTARY DISCLOSURES (1) Significant transactions information A. Loans to others: Please refer to table 1. B. Provision of endorsements and guarantees to others: Please refer to table 2. C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3. D. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid - in capital or more: Please refer to table 4. E. Receivables from related parties reaching NT$100 million or 20% of paid -in capital or more: Please refer to table 5. F. Significant inter-company transactions during the reporting periods: Please refer to table 6. (2) Information on investees Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 7. (3) Information on investments in Mainland China A. Basic information: Please refer to table 8. B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 9. 14. SEGMENT INFORMATION (1) General information: The Group is engaged in the research and development, design, manufacturing and sales of EPI wafers and chips of A1GaInP, AlGaAs and InGaN and LED packages and modules. The Chief Operating Decision-Maker assesses performance by each operating result of each sub-group within the consolidated report. (2) Segment information The accounting policy of operating segments is provided in Note 4. The Chief Operating Decision- Maker assesses the performance of the operating segments based on the financial statements of operating segments. The measurement of profit is based on the income from continuing operations. (3) Information about segment profit or loss, assets and liabilities: The segme nt information provided to the Chief Operating Decision -Maker for the reportable segments and reconciliations is as follows: Nine months ended September 30, 2025 Epistar Group Lextar Group Others Consolidated Revenues from external customers 10,436,934$ 6,538,151$ -$ 16,975,085$ Segment loss 1,665,174)( 245,701)( 35,622)( 1,946,497)( September 30, 2025 Segment assets 37,442,256$ 10,313,802$ 4,512,350$ 52,268,408$ Nine months ended September 30, 2024 Epistar Group Lextar Group Others Consolidated Revenues from external customers 12,012,679$ 6,596,244$ 271,697$ 18,880,620$ Segment loss 329,292)( 143,579)( 649,303)( 1,122,174)( September 30, 2024 Segment assets 41,966,254$ 12,191,069$ 4,537,848$ 58,695,171$
Page 65
General ledger Is a related Actual amount Interest Nature of Amount of transactions with the Reason for short-term Allowance for doubtful Limit on loans granted to a Ceiling on total No. Creditor Borrower account party drawn down rate loan borrower financing accounts Item Value single party loans granted Footnote 1 Epistar Corporation Unikorn Semiconductor Corporation Other receivables- related parties Y 1,100,000$ 800,000$ 750,000$ 1.585%~1.65% Short-term financing -$ Working capital -$ - -$ 3,020,442$ 9,061,326$ Note 1 2 Epicrystal Corporation (ChangZhou) Ltd. Episky Corporation (Xiamen) Ltd. Other receivables- related parties Y 1,624,320 768,780 768,780 0.98% Short-term financing - Working capital - Promissory Note 768,780 1,636,736 1,636,736 Note 2 3 United LED Shan Dong Corporation Episky Corporation (Xiamen) Ltd. Other receivables- related parties Y 146,336 - - Markup on short-term cost of capital Short-term financing - Working capital - - - 149,528 149,528 Note 3 4 Lextar Electronics (Chuzhou) Corp. Episky Corporation (Xiamen) Ltd. Other receivables- related parties Y 823,140 768,780 - Reference to short-term cost of capital Short-term financing - Working capital - Promissory Note 768,780 3,621,885 3,621,885 Note 4 5 Lextar Electronics Corp. Hexawave, Inc. Other receivables N 10,000 - - Reference to short-term cost of capital Short-term financing - Working capital - - - 737,567 2,212,702 Note 5 Note 1: Limit on loans granted by Epistar Corporation, the ceiling to total loasns granted is 30% of its net asset and to a single party is 10% of its net asset. Note 2: Limit on loans granted by the subsidiary of Epistar, Epicrystal Corp. (ChangZhou), limit on total loans is 40% of the Epicrystal Corp. (ChangZhou)’s net asset, and 30% of the net asset based on the latest financial statements of ENNOSTAR Inc., and to a single party is 40% of the Epicrystal Corp. (ChangZhou)'s net asset, and 10% of the net asset based on the latest financial statements of ENNOSTAR Inc. Note 3: Limit on loans granted by the subsidiary of Epistar, United LED Shan Dong, limit on total loans is 40% of the United LED Shan Dong’s net asset, and 30% of the net asset based on the latest financial statements of ENNOSTAR Inc., and to a single party is 40% of the United LED Shan Dong's net asset, and 10% of the net asset based on the latest financial statements of ENNOSTAR Inc. Note 4: Limit on loans granted by Lextar Electronics (Chuzhou) Corp. to ENNOSTAR Inc. and a fellow subsidiary that is 100% controlled by the ENNOSTAR Inc. located outside Taiwan, limit on total loans is net asset of the Company, and to a single party is net asset of the Company. The maximum term of the financing is three years. Note 5: Limit on loans granted by Lextar Electronics Corp., the ceiling to total loasns granted is 30% of its net asset and to a single party is 10% of its net asset. ENNOSTAR INC. Loans to others Nine months ended September 30, 2025 Table 1 Expressed in thousands of NTD (Except as otherwise indicated) Collateral Balance at September 30, 2025 Maximum outstanding balance during the nine months ended September 30, 2025 Table 1-1
Page 66
Number （Note 1） Endorser/ guarantor Company name Relationship with the endorser/ guarantor (Note 2) Limit on endorsements/ guarantees provided for a single party (Note 3) Maximum outstanding endorsement/ guarantee amount as of September 30, 2025 Outstanding endorsement/ guarantee amount at September 30, 2025 Actual amount drawn down Amount of endorsements /guarantees secured with collateral Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/ guarantor company Ceiling on total amount of endorsements/ guarantees provided (Note 3) Provision of endorsements /guarantees by parent company to subsidiary Provision of endorsements/ guarantees by subsidiary to parent company Provision of endorsements/ guarantees to the party in Mainland China Footnote 1 Epistar Corporation ENNOSTAR Inc. 3 9,061,326$ 750,000$ -$ -$ -$ - 9,061,326$ N Y N Note 3 Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows: (1) The Company is ‘0’. (2) The subsidiaries are numbered in order starting from ‘1’. Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories; fill in the number of category each case belongs to: (1) Having business relationship. (2) The endorser/guarantor parent company owns directly or indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary. (3) The endorser/guarantor parent company and its subsidiaries jointly own directly or indirectly more than 50% voting shares of the endorsed/guaranteed company. (4) The endorsed/guaranteed parent company directly or indirectly owns more than 90% voting shares of the endorser/guarantor subsidiary. (5) Mutual guarantee of the trade as required by the construction contract. (6) Due to joint venture, each shareholder provides endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership. (7) Companies in the same industry provide among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other. Note 3: In accordance with the Epistar’s Procedures for Provision of endorsements and guarantees to others: the ceiling on total endorsements/guarantees is 30% of the Company’s net asset, and the limit on endorsements/guarantees to a single party is 30% of its net asset. Party being endorsed/guaranteed ENNOSTAR INC. Provision of endorsements and guarantees to others Nine months ended September 30, 2025 Table 2 Expressed in thousands of NTD (Except as otherwise indicated) Table 2-1
Page 67
Securities held by Marketable securities Relationship with the securities issuer General ledger account Number of shares Book value Ownership (%) Fair value Footnote Epistar Corporation E&E Japan Co.Ltd. (Stock) None Non-current investments in equity instruments at fair value through other comprehensive income 140 2,143$ 17.07 2,143$ Epistar Corporation NATEC CORPORATION (Stock) None Non-current investments in equity instruments at fair value through other comprehensive income 120,000 1,748 7.50 1,748 Epistar Corporation BISSOL LED CO., LTD. (Stock) None Non-current investments in equity instruments at fair value through other comprehensive income 1,000 148 10.00 148 Epistar Corporation Lynk Labs, Inc. (Stock) None Non-current investments in equity instruments at fair value through other comprehensive income 92,523 - 7.39 - Epistar Corporation Advanced Photoelectronic Technology Limited (Stock) None Non-current investments in equity instruments at fair value through other comprehensive income 1,339,235 296,353 13.68 296,353 Epistar Corporation Dominant Opto Technologies Sdn. Bhd. (Stock) None Non-current investments in equity instruments at fair value through other comprehensive income 35,000,000 832,922 10.00 832,922 Epistar Corporation XENIO CORPORATION (Stock) None Non-current financial assets at fair value through profit or loss 7,878 - 0.06 - As of September 30, 2025 (Except as otherwise indicated) ENNOSTAR INC. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) Nine months ended September 30, 2025 Table 3 Expressed in thousands of NTD Table 3-1
Page 68
Securities held by Marketable securities Relationship with the securities issuer General ledger account Number of shares Book value Ownership (%) Fair value Footnote As of September 30, 2025 Epistar Corporation PlayNitride Inc. (Stock) None Non-current investments in equity instruments at fair value through other comprehensive income 7,577,338 1,163,121$ 6.44 1,163,121$ Epistar Corporation OSTENDO TECHNOLOGIES, INC. (Stock) None Non-current financial assets at fair value through profit or loss 67,500 - 0.04 - Epistar Corporation PHECDA TECHNOLOGY CO., LTD None Non-current investments in equity instruments at fair value through other comprehensive income 600,000 - 2.11 - Epistar Corporation ELIT FINE CERAMICS CO., LTD. None Non-current financial assets at fair value through profit or loss 2,200,000 - 4.49 - Epistar Corporation Nanocrystal Technology Inc. None Non-current financial assets at fair value through profit or loss 6,000,000 - 11.11 - Episky Corporation(Xiamen) Ltd. China Firstar Optoelectronic Materials Co., Ltd. (Stock) None Non-current investments in equity instruments at fair value through other comprehensive income Cash RMB 7,500,000 - 15.00 - Episky Corporation(Xiamen) Ltd. APT Electronics Co., Ltd.(Stock) None Non-current investments in equity instruments at fair value through other comprehensive income 4,678,240 81,721 0.87 81,721 Table 3-2
Page 69
Securities held by Marketable securities Relationship with the securities issuer General ledger account Number of shares Book value Ownership (%) Fair value Footnote As of September 30, 2025 Episky Corporation(Xiamen) Ltd. Zhongke Electric Material (Beijing) Co., Ltd.(Stock) None Non-current investments in equity instruments at fair value through other comprehensive income 8,064,516 33,410$ 3.72 33,410$ Lighting Investment Corp. Oree Advanced Illumination Solutions, Inc. (Stock) None Non-current financial assets at fair value through profit or loss 79,407 - 5.00 - Lighting Investment Corp. TERA XTAL TECHNOLOGY CORPORATION (Stock) None Non-current financial assets at fair value through profit or loss 795,000 - 0.42 - Lighting Investment Corp. XENIO CORPORATION (Stock) None Non-current financial assets at fair value through profit or loss 16,463 - 0.13 - Lighting Investment Corp. FormoLight Technologies, Inc. (Stock) None Non-current investments in equity instruments at fair value through other comprehensive income 2,038,230 12,679 10.00 12,679 Lighting Investment Corp. Advanced Photoelectronic Technology Limited (Stock) None Non-current investments in equity instruments at fair value through other comprehensive income 562,018 124,367 5.74 124,367 Lighting Investment Corp. iReach Corporation (Preferred stock) Investments accounted for using equity method of Epistar Corporation Non-current investments in equity instruments at fair value through other comprehensive income 370,000 1,891 - 1,891 Table 3-3
Page 70
Securities held by Marketable securities Relationship with the securities issuer General ledger account Number of shares Book value Ownership (%) Fair value Footnote As of September 30, 2025 Lighting Investment Corp. ENNOSTAR Inc. (Stock) Parent company of Epistar Corporation Current financial assets at fair value through profit or loss 1,282,377 50,333$ 0.17 50,333$ Note 1 Lighting Investment Ltd. Verticle Inc. (Stock) None Non-current financial assets at fair value through profit or loss 582,983 - 3.00 - Lighting Investment Ltd. Achrolux Inc. (Stock) None Non-current financial assets at fair value through profit or loss 987,500 - 6.91 - Lighting Investment Ltd. Advanced Photoelectronic Technology Limited (Stock) None Non-current investments in equity instruments at fair value through other comprehensive income 200,000 44,257 2.04 44,257 HUGA Holding (SAMOA) Ltd. Zhongke Electric Material (Beijing) Co., Ltd.(Stock) None Non-current investments in equity instruments at fair value through other comprehensive income 17,741,935 73,503 8.19 73,503 Jiangsu Canyang Optoelectronics Ltd. C-Star (Yangzhou) technology Co., Ltd None Non-current investments in equity instruments at fair value through other comprehensive income Cash RMB 5,000,000 9,741 13.96 9,741 Wellybond Corporation Wellysun Inc.(Stock) None Non-current investments in equity instruments at fair value through other comprehensive income 2,014,000 23,896 4.23 23,896 Note 1: Transferred from the Epistar’s stocks held as treasury shares. Table 3-4
Page 71
Purchases (sales) Amount Percentage of total purchases (sales) Credit term Unit price Credit term Balance Percentage of total notes/accounts receivable (payable) Footnote Episky Corporation (Xiamen) Ltd. Epistar Corporation Note 1 Sales ($ 748,385) ( 4.41) 90 days after monthend closing Normal Normal $ 277,575 3.38 Epistar Corporation Episky Corporation (Xiamen) Ltd. Note 1 Sales ( 851,374) ( 5.02) 90 days after monthend closing Normal Normal 235,978 2.88 Epicrystal Corporation (ChangZhou) Ltd. Episky Corporation (Xiamen) Ltd. Note 1 Sales ( 1,550,949) ( 9.14) 180 days after monthend closing Normal Normal 1,345,778 16.40 Epicrystal Corporation (ChangZhou) Ltd. Epistar Corporation Note 1 Sales ( 635,568) ( 3.74) 90 days after monthend closing Normal Normal 213,704 2.60 Jiangsu Canyang Optoelectronics Ltd. Episky Corporation (Xiamen) Ltd. Note 1 Sales ( 235,947) ( 1.39) 120 days after monthend closing Normal Normal 52,691 0.64 Jiangsu Canyang Optoelectronics Ltd. Epicrystal Corporation (ChangZhou) Ltd. Note 1 Sales ( 593,014) ( 3.49) 90 days after monthend closing Normal Normal 242,479 2.95 Jiangsu Canyang Optoelectronics Ltd. Epistar Corporation Note 1 Sales ( 120,551) ( 0.71) 90 days after monthend closing Normal Normal 44,785 0.55 Epistar Corporation LEDAZ Co., Ltd. Note 1 Sales ( 199,537) ( 1.18) 120 days after monthend closing Normal Normal 93,213 1.14 Epistar Corporation Lextar Electronics Corp. Note 1 Sales ( 140,840) ( 0.83) 90 days after monthend closing Normal Normal 52,756 0.64 Episky Corporation (Xiamen) Ltd. Lextar Electronics (Chuzhou) Corp. Note 1 Sales ( 132,503) ( 0.78) 90 days after monthend closing Normal Normal 53,439 0.65 Lextar Electronics Corp. AUO (Suzhou) Co., Ltd. Other related parties Sales ( 176,232) ( 1.04) 120 days after monthend closing Normal Normal 81,992 1.00 Relationship with the counterparty Transaction Differences in transaction terms Notes/accounts receivable (payable) Purchaser/seller Counterparty ENNOSTAR INC. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more Nine months ended September 30, 2025 Table 4 Expressed in thousands of NTD (Except as otherwise indicated) Table 4-1
Page 72
Purchases (sales) Amount Percentage of total purchases (sales) Credit term Unit price Credit term Balance Percentage of total notes/accounts receivable (payable) Footnote Relationship with the counterparty Transaction Differences in transaction terms Notes/accounts receivable (payable) Purchaser/seller Counterparty Lextar Electronics Corp. Fortech Electronics (Suzhou) Co., Ltd. Other related parties Sales ($ 139,298) ( 0.82) 120 days after monthend closing Normal Normal $ 71,691 0.87 Lextar Electronics (Chuzhou) Corp. Lextar Electronics Corp. Note 1 Sales ( 2,125,712) ( 12.52) 120 days after monthend closing Normal Normal 981,528 11.96 Episky Corporation (Xiamen) Ltd. Jiangsu Canyang Optoelectronics Ltd. Note 1 Purchases 235,947 2.28 120 days after monthend closing Normal Normal ( 52,691) ( 1.67) Episky Corporation (Xiamen) Ltd. Epicrystal Corporation (ChangZhou) Ltd. Note 1 Purchases 1,550,949 14.98 180 days after monthend closing Normal Normal ( 1,345,778) ( 42.73) Episky Corporation (Xiamen) Ltd. Epistar Corporation Note 1 Purchases 851,374 8.22 90 days after monthend closing Normal Normal ( 235,978) ( 7.49) Epistar Corporation Jiangsu Canyang Optoelectronics Ltd. Note 1 Purchases 120,551 1.16 90 days after monthend closing Normal Normal ( 44,785) ( 1.42) Epistar Corporation Episky Corporation (Xiamen) Ltd. Note 1 Purchases 748,385 7.23 90 days after monthend closing Normal Normal ( 277,575) ( 8.81) Epistar Corporation Epicrystal Corporation (ChangZhou) Ltd. Note 1 Purchases 635,568 6.14 90 days after monthend closing Normal Normal ( 213,704) ( 6.78) Epicrystal Corporation (ChangZhou) Ltd. Jiangsu Canyang Optoelectronics Ltd. Note 1 Purchases 593,014 5.73 90 days after monthend closing Normal Normal ( 242,479) ( 7.70) Lextar Electronics Corp. Lextar Electronics (Chuzhou) Corp. Note 1 Purchases 2,125,712 20.53 120 days after monthend closing Normal Normal ( 981,528) ( 31.16) Lextar Electronics Corp. Epistar Corporation Note 1 Purchases 140,840 1.36 90 days after monthend closing Normal Normal ( 52,756) ( 1.67) Lextar Electronics Corp. Tyntek Corporation Note 1 Purchases 155,275 1.50 120 days after monthend closing Normal Normal ( 73,735) ( 2.34) Lextar Electronics (Chuzhou) Corp. Episky Corporation (Xiamen) Ltd. Note 1 Purchases 132,503 1.28 90 days after monthend closing Normal Normal ( 53,439) ( 1.70) Note 1: Investee company accounted for using equity method directly and indirectly. Table 4-2
Page 73
Table 5 Accounts receivable Other receivable Amount Action taken Episky Corporation (Xiamen) Ltd. Epistar Corporation Note 2 $ 277,575 $ 6,901 $ 284,476 4.43 $ - - $ - $ - Epistar Corporation Episky Corporation (Xiamen) Ltd. Note 2 235,978 34,210 270,188 3.35 9,067 Note 1 13,674 - Epistar Corporation Unikorn Semiconductor Corporation Note 2 19,648 775,012 794,660 0.06 1,072 Note 1 10,059 - Epicrystal Corporation (ChangZhou) Ltd. Episky Corporation (Xiamen) Ltd. Note 2 1,345,778 769,408 2,115,186 1.88 - - - - Epicrystal Corporation (ChangZhou) Ltd. Epistar Corporation Note 2 213,704 - 213,704 0.81 - - - - Jiangsu Canyang Optoelectronics Ltd. Epicrystal Corporation (ChangZhou) Ltd. Note 2 242,479 1,357 243,836 2.39 - - 67,365 - Epistar Corporation LEDAZ Co., Ltd Note 2 93,213 7,038 100,251 1.03 7,038 - - 7,038 Lextar Electronics Corp. Lextar Electronics (Chuzhou) Corp. Note 2 102,489 - 102,489 5.45 - - - - Lextar Electronics (Chuzhou) Corp. Lextar Electronics Corp. Note 2 981,528 922 982,450 3.07 - - 279,452 - Note 1: All the overdue amounts are being actively collected. Epistar Corporation has recovered $50 overdue from Episky Corporation (Xiamen) Ltd. after the balance sheet date. Epistar corporation has recovered $1,072 overdue from Unikorn Semiconductor Corporation after the balance sheet date. Note 2: Investee company accounted for using the equity method directly and indirectly. Overdue receivablesBalance as at September 30, 2025 ENNOSTAR INC. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more September 30, 2025 Creditor Counterparty Relationship with the counterparty Total Turnover rate Amount collected subsequent to the balance sheet date Allowance for doubtful debts Expressed in thousands of NTD (Except as otherwise indicated) Table 5-1
Page 74
General ledger account Amount Transaction terms 0 ENNOSTAR Inc. Lextar Electronics Corp. 1 Other operating revenue $ 176,466 Based on contract terms 1.04 0 ENNOSTAR Inc. Epistar Corporation 1 Other operating revenue 334,846 Based on contract terms 1.97 1 Epistar Corporation Episky Corporation (Xiamen) Ltd. 3 Sales 851,374 Conducted in the ordinary course of business with terms similar to those with third parties 5.02 1 Epistar Corporation Lextar Electronics Corp. 3 Sales 140,840 Conducted in the ordinary course of business with terms similar to those with third parties 0.83 1 Epistar Corporation Episky Corporation (Xiamen) Ltd. 3 Accounts receivable 235,978 Conducted in the ordinary course of business with terms similar to those with third parties 0.45 1 Epistar Corporation Unikorn Semiconductor Corporation 3 Other receivable 775,012 Based on contract terms 1.48 2 Episky Corporation (Xiamen) Ltd. Epistar Corporation 3 Sales 748,385 Conducted in the ordinary course of business with terms similar to those with third parties 4.41 2 Episky Corporation (Xiamen) Ltd. Lextar Electronics (Chuzhou) Corp. 3 Sales 132,503 Conducted in the ordinary course of business with terms similar to those with third parties 0.78 ENNOSTAR INC. Significant inter-company transactions during the reporting periods Nine months ended September 30, 2025 Table 6 Expressed in thousands of NTD (Except as otherwise indicated) Transaction Percentage of consolidated total operating revenues or total assets (Note 3) Number (Note 1) Company name Counterparty Relationship (Note 2) Table 6-1
Page 75
General ledger account Amount Transaction terms Transaction Percentage of consolidated total operating revenues or total assets (Note 3) Number (Note 1) Company name Counterparty Relationship (Note 2) 2 Episky Corporation (Xiamen) Ltd. Epistar Corporation 3 Accounts receivable $ 277,575 Conducted in the ordinary course of business with terms similar to those with third parties 0.53 3 Epicrystal Corporation (ChangZhou) Ltd. Episky Corporation (Xiamen) Ltd. 3 Sales 1,550,949 Conducted in the ordinary course of business with terms similar to those with third parties 9.14 3 Epicrystal Corporation (ChangZhou) Ltd. Epistar Corporation 3 Sales 635,568 Conducted in the ordinary course of business with terms similar to those with third parties 3.74 3 Epicrystal Corporation (ChangZhou) Ltd. Episky Corporation (Xiamen) Ltd. 3 Accounts receivable 1,345,778 Conducted in the ordinary course of business with terms similar to those with third parties 2.57 3 Epicrystal Corporation (ChangZhou) Ltd. Epistar Corporation 3 Accounts receivable 213,704 Conducted in the ordinary course of business with terms similar to those with third parties 0.41 3 Epicrystal Corporation (ChangZhou) Ltd. Episky Corporation (Xiamen) Ltd. 3 Other receivable 769,408 Based on contract terms 1.47 4 Jiangsu Canyang Optoelectronics Ltd. Episky Corporation (Xiamen) Ltd. 3 Sales 235,947 Conducted in the ordinary course of business with terms similar to those with third parties 1.39 4 Jiangsu Canyang Optoelectronics Ltd. Epicrystal Corporation (ChangZhou) Ltd. 3 Sales 593,014 Conducted in the ordinary course of business with terms similar to those with third parties 3.49 4 Jiangsu Canyang Optoelectronics Ltd. Epistar Corporation 3 Sales 120,551 Conducted in the ordinary course of business with terms similar to those with third parties 0.71 4 Jiangsu Canyang Optoelectronics Ltd. Epicrystal Corporation (ChangZhou) Ltd. 3 Accounts receivable 242,479 Conducted in the ordinary course of business with terms similar to those with third parties 0.46 Table 6-2
Page 76
General ledger account Amount Transaction terms Transaction Percentage of consolidated total operating revenues or total assets (Note 3) Number (Note 1) Company name Counterparty Relationship (Note 2) 5 Lextar Electronics Corp. Lextar Electronics (Chuzhou) Corp. 3 Accounts receivable $ 102,489 Conducted in the ordinary course of business with terms similar to those with third parties 0.20 6 Lextar Electronics (Chuzhou) Corp. Lextar Electronics Corp. 3 Sales 2,125,712 Conducted in the ordinary course of business with terms similar to those with third parties 12.52 6 Lextar Electronics (Chuzhou) Corp. Lextar Electronics Corp. 3 Accounts receivable 981,528 Conducted in the ordinary course of business with terms similar to those with third parties 1.88 Note 1: Parent company is ‘0’.The subsidiaries are numbered in order starting from ‘1’. Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to (If transactions between parent company and subsidiaries or between subsidiaries refer to the same transaction, it is not required to disclose twice. For example, if the parent company has already disclosed its transaction with a subsidiary, then the subsidiary is not required to disclose the transaction; for transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction.): (1) Parent company to subsidiary. (2) Subsidiary to parent company. (3) Subsidiary to subsidiary. Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts. Note 4: Disclosure of the transactions over 100 million New Taiwan dollars only and the related party transactions for counterparty are not disclosed. Table 6-3
Page 77
Investor Investee Location Main business activities Balance as at September 30, 2025 Balance as at December 31, 2024 Number of shares Ownership (%) Book value Net profit (loss) of the investee for the nine months ended September 30, 2025 Investment income (loss) recognised by the Company for the nine months ended September 30, 2025 Footnote ENNOSTAR Inc. Epistar Corporation Taiwan Resarching, developing, manufacturing and sales of LED wafers and chips $ 36,794,780 $ 36,794,780 1,207,079,188 100.00 $ 30,154,086 ($ 1,668,872) ($ 1,666,756) ENNOSTAR Inc. Lextar Electronics Corp. Taiwan Resarching, developing, manufacturing and sales of LED wafers, packages and modules 9,924,646 10,724,646 514,916,380 100.00 8,594,058 ( 228,835) ( 268,381) ENNOSTAR Inc. Harvestar Investment Corp. Taiwan General investment 1,440,000 1,150,000 144,000,000 100.00 901,234 ( 555) ( 555) ENNOSTAR Inc. Tyntek Corporation Taiwan Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor, photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade 584,583 584,583 23,799,000 7.92 615,369 ( 53,525) ( 4,495) Note 1 ENNOSTAR Inc. Amengine Corporation Taiwan Developing, manufacturing and sales of optical sensing modules - 40,212 - 0.00 - - ( 231) Shares held as at September 30, 2025Initial investment amount ENNOSTAR INC. Information on investees (Excluding Information on Investment in Mainland China) Nine months ended September 30, 2025 Table 7 Expressed in thousands of NTD (Except as otherwise indicated) Table 7-1
Page 78
Investor Investee Location Main business activities Balance as at September 30, 2025 Balance as at December 31, 2024 Number of shares Ownership (%) Book value Net profit (loss) of the investee for the nine months ended September 30, 2025 Investment income (loss) recognised by the Company for the nine months ended September 30, 2025 Footnote Shares held as at September 30, 2025Initial investment amount ENNOSTAR Inc. GCS Holding Inc. Cayman Islands OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics $ 431,990 $ 431,990 9,028,000 7.93 $ 282,323 ( 50,129) 3,480 Note 1 ENNOSTAR Inc. Calystar Investment Corp. Taiwan General investment 700,000 440,000 71,355,925 100.00 613,129 ( 209) ( 209) Harvestar Investment Corp. GCS Holding Inc. Cayman Islands OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics 433,099 433,099 9,013,000 7.92 333,123 ( 50,129) 3,271 Note 1 Harvestar Investment Corp. Tyntek Corporation Taiwan Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor, photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade 266,040 263,864 13,214,000 4.40 255,319 ( 53,525) ( 4,288) Note 1 Calystar Investment Corp. GCS Holding Inc. Cayman Islands OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics 265,135 265,135 6,500,000 5.71 178,999 ( 50,129) 2,359 Note 1 Table 7-2
Page 79
Investor Investee Location Main business activities Balance as at September 30, 2025 Balance as at December 31, 2024 Number of shares Ownership (%) Book value Net profit (loss) of the investee for the nine months ended September 30, 2025 Investment income (loss) recognised by the Company for the nine months ended September 30, 2025 Footnote Shares held as at September 30, 2025Initial investment amount Calystar Investment Corp. Tyntek Corporation Taiwan Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor, photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade $ 185,570 $ 151,238 10,070,000 3.35 $ 166,168 ($ 53,525) ($ 2,682) Note 1 Unikorn Semiconductor Corporation GCS Holding Inc. Cayman Islands OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics 1,051 1,051 20,000 0.02 855 ( 50,129) 8 Note 1 Epistar Corporation iReach Corporation Taiwan Manufacturing, sales, packaging and module design of semiconductor light emitting devices 70,000 70,000 7,000,000 34.30 35,134 ( 20,797) ( 10,568) Epistar Corporation Epistar JV Holding (BVI) Co., Ltd. British Virgin Islands General investment 14,960,129 14,960,129 48,278 100.00 8,301,789 233,949 223,340 Epistar Corporation Lighting Investment Corp. Taiwan General investment 1,561,814 1,561,814 191,478,518 100.00 2,015,908 115,193 115,910 Epistar Corporation Unikorn Semiconductor Corporation Taiwan Original equipment manufacturer of III-V semiconductor 1,340,825 826,083 336,485,000 100.00 ( 345,212) ( 168,755) ( 168,755) Epistar Corporation TE Opto Corporation Taiwan Sales of LED chips 9,200 9,200 920,000 40.00 40,880 1,234 493 Table 7-3
Page 80
Investor Investee Location Main business activities Balance as at September 30, 2025 Balance as at December 31, 2024 Number of shares Ownership (%) Book value Net profit (loss) of the investee for the nine months ended September 30, 2025 Investment income (loss) recognised by the Company for the nine months ended September 30, 2025 Footnote Shares held as at September 30, 2025Initial investment amount Epistar Corporation GaN Force Corporation Taiwan Design, manufacturing and sales of semiconductor materoals and modules $ 77,700 $ 77,700 1,118,600 64.32 $ 681 ($ 74) ($ 48) Epistar Corporation Tyntek Corporation Taiwan Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor, photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade 1,243 1,243 50,000 0.02 1,162 ( 53,525) ( 8) Note 1 Epistar Corporation Can Yang Investments Limited Hong Kong General investment 66,745 66,745 2,679,063 3.53 60,274 50,585 1,783 Epistar Corporation GCS Holding Inc. Cayman Islands OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics 288,750 - 3,500,000 3.08 91,874 ( 50,129) 1,391 Note 1 Epistar JV Holding (BVI) Co., Ltd. HUGA Holding (SAMOA) Limited Samoa General investment 334,967 334,967 12,551,035 100.00 76,916 47 47 Epistar JV Holding (BVI) Co., Ltd. LiteStar JV Holding (BVI) Co., Ltd. British Virgin Islands General investment 3,408,835 3,408,835 10,882 82.41 3,148,964 ( 85,464) ( 70,431) Epistar JV Holding (BVI) Co., Ltd. United LED Corporation Hong Kong Limited Hong Kong General investment 2,029,760 2,029,760 67,000,165 74.86 328,932 83,725 62,677 Epistar JV Holding (BVI) Co., Ltd. Episky (Hong Kong) Ltd. Hong Kong General investment 2,124,096 2,124,096 Cash USD 68,000,000 100.00 1,983,493 180,617 180,617 Epistar JV Holding (BVI) Co., Ltd. Can Yang Investments Limited Hong Kong General investment 4,391,621 4,391,621 67,045,899 88.21 1,508,277 50,585 44,621 Lighting Investment Ltd. LEDAZ CO., Ltd. Korea Engineering service of LED 48,166 48,166 88,460 28.13 27,548 49,451 10,369 Table 7-4
Page 81
Investor Investee Location Main business activities Balance as at September 30, 2025 Balance as at December 31, 2024 Number of shares Ownership (%) Book value Net profit (loss) of the investee for the nine months ended September 30, 2025 Investment income (loss) recognised by the Company for the nine months ended September 30, 2025 Footnote Shares held as at September 30, 2025Initial investment amount LiteStar JV Holding (BVI) Co., Ltd. Epicrystal (Hong Kong) Co. Ltd. Hong Kong General investment 4,403,034 4,403,034 146,600,000 100.00 3,820,960 ( 85,287) ( 85,287) Lighting Investment Corp. LEDAZ CO., Ltd. Korea Engineering service of LED 23,993 23,993 44,065 14.01 13,724 49,451 5,205 Lighting Investment Corp. Lighting Investment Ltd. British Virgin Islands General investment 152,701 152,701 45,643 100.00 1,069,874 122,926 122,925 Lighting Investment Corp. Can Yang Investments Limited Hong Kong General investment 72,436 72,436 5,218,605 6.87 117,468 50,585 3,475 Lighting Investment Corp. LEDOLUX Sp.Zo.O. Poland Manufacturing and sales of LED products - 133,455 - 0.00 - ( 4,232) ( 2,536) Lighting Investment Corp. Tyntek Corporation Taiwan Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor, photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade 1,276 1,276 50,000 0.02 755 ( 53,525) ( 8) Note 1 Lighting Investment Corp. GaN Force Corporation Taiwan Design, manufacturing and sales of semiconductor materoals and modules 641 641 620,400 35.68 698 ( 74) ( 26) Lighting Investment Corp. Domi-Star Optoelectronics Corporation Taiwan Design and sales of LED lighting product - 490 - - - ( 10) ( 5) Table 7-5
Page 82
Investor Investee Location Main business activities Balance as at September 30, 2025 Balance as at December 31, 2024 Number of shares Ownership (%) Book value Net profit (loss) of the investee for the nine months ended September 30, 2025 Investment income (loss) recognised by the Company for the nine months ended September 30, 2025 Footnote Shares held as at September 30, 2025Initial investment amount Episky Corporation (Xiamen) Ltd. Epicrystal Corporation (ChangZhou) Ltd. China Manufacturing and sales of LED wafers and chips $ 147,472 $ 147,472 Cash USD 5,200,000 3.31 $ 135,440 ($ 91,333) ($ 3,023) Epicrystal Corporation (ChangZhou) Ltd. Changzhou Chemsemi Co., Ltd. China OEM manufacturing of compound semiconductor RFID wafers and optoelectronic wafers 469,590 469,590 Cash RMB 63,685,809 9.87 232,170 ( 1,472,094) ( 166,500) Episky Corporation (Xiamen) Ltd. LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. China Developing, manufacturing and sales of LED packages, modules and related applications 164,862 164,862 Cash RMB 38,800,000 9.70 123,941 131,266 3,630 Episky Corporation (Xiamen) Ltd. Shenzhen Epikylin Optoelectronics Co.,Ltd. China Sales of LED chips - 43,770 - - - ( 2,476) ( 2,476) Lextar Electronics Corp. LEXTAR (SINGAPORE) PTE. LTD. Sinapore General investment 2,709,310 2,709,310 90,270,000 100.00 2,523,332 ( 25,716) ( 25,716) Lextar Electronics Corp. Wellypower Optronics Corporation British Virgin Islands General investment 44,898 44,898 5,153,061 100.00 165,835 ( 2,001) ( 2,001) Lextar Electronics Corp. Apower Optronics Corporation British Virgin Islands General investment 381,638 381,638 31,600,000 100.00 1,189,307 ( 15,355) ( 15,355) Lextar Electronics Corp. Liang Li Venture Corp. Taiwan General investment 175,374 175,374 18,000,000 100.00 98,565 ( 3,368) ( 3,368) Lextar Electronics Corp. Wellybond Corporation Taiwan General investment 1,096,484 746,484 110,000,000 100.00 762,633 ( 39,367) ( 39,367) Lextar Electronics Corp. Trendylite Corporation Taiwan Sales of LED products 21,245 21,245 3,150,000 53.84 25,583 ( 8,437) ( 4,543) Lextar Electronics Corp. Hexawave, Inc. Taiwan Manufacturing and sales of compound semiconductor materials and modules - 147,506 - - - ( 24,899) ( 7,837) Lextar Electronics Corp. Yenrich Technology Corporation Taiwan Research, development and sales of electronic component 541,341 541,341 7,538,471 39.37 26,303 ( 29,767) ( 11,719) Table 7-6
Page 83
Investor Investee Location Main business activities Balance as at September 30, 2025 Balance as at December 31, 2024 Number of shares Ownership (%) Book value Net profit (loss) of the investee for the nine months ended September 30, 2025 Investment income (loss) recognised by the Company for the nine months ended September 30, 2025 Footnote Shares held as at September 30, 2025Initial investment amount Lextar Electronics Corp. ProLight Opto Technology Corporation Taiwan Manufacturing and sales of LED packages $ - $ 99,081 - - $ - ($ 38,821) ($ 3,478) Lextar Electronics Corp. Tyntek Corporation Taiwan Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor, photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade 1,304 1,304 50,000 0.02 787 ( 53,525) ( 98) Note 1 LEXTAR (SINGAPORE) PTE. LTD. Lextar Electronics Korea Ltd. Korea Sale of LED and after-sales service 3,025 3,025 22,000 100.00 5,337 359 359 LEXTAR (SINGAPORE) PTE. LTD. Aurora International Lighting Corporation Limited Hong Kong Sales of lighting 204,136 204,136 2,000,000 20.00 - - - Wellybond Corporation Vogito Innovation Co., Ltd. Taiwan Design,developing, reasearching and sales of health care products 1,000 1,000 250,000 50.00 6,366 3,461 1,731 Wellybond Corporation Hexawave, Inc. Taiwan Manufacturing and sales of compound semiconductor materials and modules - 147,494 - - - ( 24,899) ( 7,837) Wellybond Corporation Trendylite Corporation Taiwan Sales of LED products 18,312 18,312 2,361,538 40.37 19,179 ( 8,437) ( 3,406) Wellybond Corporation ProLight Opto Technology Corporation Taiwan Manufacturing and sales of LED packages 691,345 326,817 63,643,517 93.51 616,985 ( 38,821) ( 22,980) Table 7-7
Page 84
Investor Investee Location Main business activities Balance as at September 30, 2025 Balance as at December 31, 2024 Number of shares Ownership (%) Book value Net profit (loss) of the investee for the nine months ended September 30, 2025 Investment income (loss) recognised by the Company for the nine months ended September 30, 2025 Footnote Shares held as at September 30, 2025Initial investment amount Wellybond Corporation Tyntek Corporation Taiwan Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor, photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade $ 1,288 $ 1,288 50,000 0.02 $ 770 ($ 53,525) ($ 99) Note 1 Liang Li Venture Corp. ProLight Opto Technology Corporation Taiwan Manufacturing and sales of LED packages - 96,604 - - - ( 38,821) ( 3,478) Liang Li Venture Corp. Tyntek Corporation Taiwan Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor, photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade 1,293 1,293 50,000 0.02 784 ( 53,525) ( 96) Note 1 ProLight Opto Technology Corporation Prolight Opto Holding Corporation Seychelles General investment 4,402 4,402 150,000 100.00 12,348 7,614 7,614 Prolight Opto Holding Corporation ProLight Opto Technology Corporation Seychelles General investment 4,403 4,403 150,000 100.00 12,375 7,615 7,615 Table 7-8
Page 85
Investor Investee Location Main business activities Balance as at September 30, 2025 Balance as at December 31, 2024 Number of shares Ownership (%) Book value Net profit (loss) of the investee for the nine months ended September 30, 2025 Investment income (loss) recognised by the Company for the nine months ended September 30, 2025 Footnote Shares held as at September 30, 2025Initial investment amount Lextar Electronics (Suzhou) Corp. Lextar Electronics (Chuzhou) Corp. China Manufacturing and sales of LED and modules $ 3,094,825 $ 3,094,825 Cash RMB 700,000,000 100.00 $ 3,621,886 ($ 30,497) ($ 30,497) Lextar Electronics (Suzhou) Corp. Chuzhou Bwin Technology Corp. China Developing, manufacturing, sales of metal and plastic technical products. 138,913 138,913 Cash RMB 30,500,000 30.50 - ( 40,945) ( 8,313) Note 1: The Group is the director of the investee, which indicates that the Group has significant influence over the investee. Accordingly, the Group listed the investee as an associate. Table 7-9
Page 86
Remitted to Mainland China Remitted back to Taiwan LEADSTAR Micro- Crystal Display Corporation (JiangSu) Ltd. Developing, manufacturing and sales of LED packages, modules and related applications $ 1,708,400 1 $ 583,428 $ - $ - $ 583,428 $ 131,266 33.63 $ 6,354 $ 452,046 $ - 2(3)、6 Episky Corporation (Xiamen) Ltd. Manufacturing and sales of LED chips 1,905,068 2 2,124,096 - - 2,124,096 180,617 100.00 180,617 1,983,486 - 2(2) United LED Shan Dong Corporation Information technology consulting services 2,194,671 2 1,824,844 - - 1,824,844 83,342 74.86 62,390 341,649 - 2(3) Epicrystal Corporation (ChangZhou) Ltd. Manufacturing and sales of LED wafers and chips 4,331,639 2 3,423,550 - - 3,423,550 ( 91,333) 76.95 ( 70,285) 3,148,852 - 2(2) Bridgelux Optelectronice (Xiamen) Co., Ltd. Manufacturing and sales of LED wafers, chips, packages and modules 1,281,300 2 1,461,593 - (1,461,593) - - - - - - 2(3)、9 Investment income (loss) recognised by the Company for the nine months ended September 30, 2025 Book value of investments in Mainland China as of September 30, 2025 Accumulated amount of investment income remitted back to Taiwan as of September 30, 2025 Footnote Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the nine months ended September 30, 2025 Accumulated amount of remittance from Taiwan to Mainland China as of September 30, 2025 Net income of investee for the nine months ended September 30, 2025 Ownership held by the Company (direct or indirect) ENNOSTAR INC. Information on investments in Mainland China Nine months ended September 30, 2025 Table 8 Expressed in thousands of NTD (Except as otherwise indicated) Investee in Mainland China Main business activities Paid-in capital Investment method （Note 1） Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2025 Table 8-1
Page 87
Remitted to Mainland China Remitted back to Taiwan Investment income (loss) recognised by the Company for the nine months ended September 30, 2025 Book value of investments in Mainland China as of September 30, 2025 Accumulated amount of investment income remitted back to Taiwan as of September 30, 2025 Footnote Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the nine months ended September 30, 2025 Accumulated amount of remittance from Taiwan to Mainland China as of September 30, 2025 Net income of investee for the nine months ended September 30, 2025 Ownership held by the Company (direct or indirect) Investee in Mainland China Main business activities Paid-in capital Investment method （Note 1） Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2025 APT Electronics Co., Ltd. Developing, manufacturing and sale of LED extension and chip, module and light instrument $ 2,294,154 3 $ 296,108 $ - $ - $ 296,108 $ - 8.09 $ - $ - $ - 2(3) Zhongke Electric Material (Beijing) Co.,Ltd. Developing, manufacturing and sale of gallium arsenide single crystal and wafers 925,099 2 96,084 - - 96,084 - 8.19 - - - 2(3) Jiangsu Canyang Optoelectronics Ltd. Manufacturing and sales of LED wafers and chips 5,360,129 2 2,592,697 - - 2,592,697 50,418 98.61 49,717 1,740,034 - 2(2) Lextar Electronics (Suzhou) Corp. Manufacturing and sales of LED and modules 3,695,226 2 3,585,860 - - 3,585,860 ( 44,830) 100.00 ( 44,830) 3,504,195 - 2(3) Shanghai Welight Electronic Co., LTD. Wholesale and export and import of LED and related electronic products 3,991 2 4,695 - - 4,695 5,434 93.51 4,573 9,863 - 2(2) Table 8-2
Page 88
Company name Accumulated amount of remittance from Taiwan to Mainland China as of September 30, 2025 Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA) Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA ENNOSTAR Inc. $ 436,383 $ 306,962 $ 42,140,965 Epistar Corporation $ 10,357,379 $ 13,824,398 $ 30,204,419 Lextar Electronics Corp. $ 3,737,600 $ 4,198,743 $ 7,375,672 Note 1: The investments are classified in three types; they are numbered as follows: 1. Direct investment in Mainland China companies; 2. Through investing in an existing company in the third area, which then invested in the investee in Mainland China. 3. Other ways. Note 2: Investment income or loss in this period: The bases for recognition of investment income or loss are classified into four types; they are numbered as follows: 1. The financial statements that are reviewed by the international accounting firm which has a cooperative relationship with the R.O.C. accounting firm; 2. The financial statements that are reviewed by the R.O.C. parent company’s independent auditors; 3. The financial statements that are not reviewed by the independent auditors; 4. Others. Note 3: The amount disclosed was based on Investment Commission, MOEA Regulation No. 09704604680 announced on August 29, 2008. Note 4: The numbers in the table shall be expressed in NTD. Foreign currencies shall be translated into NTD at the exchange rate prevailing on the financial reporting date. Note 5: The ‘amounts’ are expressed in thousands of New Taiwan dollars. Note 6: In September 2023, Yenrich Technology Corporation transferred all the equity interests in LEADSTAR Micro-Crystal Display Corporation (Jiangsu) Ltd. to ENNOSTAR Inc. Pursuant to the Jing-Shen-II-Zi Letter No.11200120910 on September 11, 2023, the original approval of the investment of Yenrich Technology Corporation was cancelled as the transfer of LEADSTAR Micro-Crystal Display Corporation (Jiangsu) Ltd. was implemented and approved by the Investment Commission. ENNOSTAR Inc. acquired the equity interests in EADSTAR Micro-Crystal Display Corporation (Jiangsu) Ltd. in the amount of NT$ 306,962 thousand, which was the investment amount of Yenrich Technology Corporation as originally approved by the Investment Commission. Note 7: Ningbo Formosa Epitaxy Incorporation, and Lextar Electronics (Xiamen) Co., Ltd. had cancelled business registration and remitted the remaining amount of liquidation in 2020 and 2023, respectively. The above mentioned amount has not yet been remitted back from the third area to Taiwan. Note 8: Luxlite (Shenzhen) Corporation Limited had cancelled business registration and remitted the remaining amount of liquidation. The above mentioned amount has not yet been remitted back from the third area to Taiwan. Note 9: Epistar JV Holding (BVI) Co., Ltd. disposed of all its equity interest in Bridgelux (Xiamen) Co., Ltd. in August 2025. The above mentioned amount has not yet been remitted back from the third area to Taiwan. Table 8-3
Page 89
Investee in Mainland China Amount % (Purchase) sale amount (Loss) gain Balance at September 30, 2025 % Balance at September 30, 2025 Purpose Maximum balance during the nine months ended September 30, 2025 Balance at September 30, 2025 Interest rate Interest during the nine months ended September 30, 2025 Episky Corporation (Xiamen) Ltd. $ 851,374 ( 5.02) $ 36,538 $ 6,133 $ 235,978 2.88 $ - - $ - $ - - $ - - Episky Corporation (Xiamen) Ltd. ( 748,385) 7.23 ( 6,196) - ( 277,575) (8.81) - - - - - - - Epicrystal Corporation (ChangZhou) Ltd. ( 635,568) 6.14 42,304 ( 4,643) ( 213,704) (6.78) - - - - - - - Jiangsu Canyang Optoelectronics Ltd. ( 120,551) 1.16 - - ( 44,785) (1.42) - - - - - - - Lextar Electronics (Chuzhou) Corp. ( 2,125,712) 20.53 1,376 ( 14) ( 981,528) (31.16) - - - - - - - Note 1: Disclosure of the transactions over 100 million New Taiwan dollars only Sale (purchase) Property transaction Accounts receivable (payable) Provision of endorsements/guarantees or collaterals Financing (Except as otherwise indicated) ENNOSTAR INC. Significant transactions conducted with investees in Mainland China directly or indirectly through other companies in the third areas Nine months ended September 30, 2025 Table 9 Expressed in thousands of NTD Others Table 9-1