Abnova - Annual Report 2023 | FinancialReports.eu

Stock Code ： 4133

Abnova (Taiwan) Corporation Parent Company Only Financial Statements

With Independent Auditors’ Report

For the Years Ended December 31, 2023 and 2022

Address ： 9th Fl., No. 108, Jhouzih St., Neihu District, Taipei City

Telephone ： (02)8751-1888

Notice to readers.

THIS IS A TRANSLATION OF THE FINANCIAL STATEMENTS (THE “FINANCIAL STATEMENTS”) OF ABNOVA (TAIWAN) CORPORATION (THE “COMPANY”). THIS TRANSLATION IS INTENDED FOR REFERENCE ONLY AND NOTHING ELSE, THE COMPANY HEREBY DISCLAIMS ANY AND ALL LIABILITIES WHATSOEVER FOR THE TRANSLATION. THE CHINESE TEXT OF THE FINANCIAL STATEMENTS SHALL GOVERN ANY AND ALL MATTERS RELATED TO THE INTERPRETATION OF THE SUBJECT MATTER STATED HEREIN.

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Table of Contents
Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Report 4. Balance Sheets 5. Statements of Comprehensive Income 6. Statements of Changes in Equity 7. Statements of Cash Flows 8. Notes to the Parent Company Only Financial Statements (1) Company history (2) Approval date and procedures of the financial statements (3) New standards, amendments and interpretations adopted (4) Summary of significant accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Pledged assets (9) Commitments and contingencies (10) Losses due to major disasters (11) Subsequent events (12) Other (13) Other disclosures 1. Information on significant transactions 2. Information on investees 3. Information on investment in Mainland China 4. Major shareholders (14) Segment information 9. Statements of major accounting items	Page
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Table of Contents

Contents
1. Cover Page
2. Table of Contents
3. Independent Auditors’ Report
4. Balance Sheets
5. Statements of Comprehensive Income
6. Statements of Changes in Equity
7. Statements of Cash Flows
8. Notes to the Parent Company Only Financial Statements
(1) Company history
(2) Approval date and procedures of the financial statements
(3) New standards, amendments and interpretations adopted
(4) Summary of significant accounting policies
(5) Significant accounting assumptions and judgments, and major sources of
estimation uncertainty
(6) Explanation of significant accounts
(7) Related-party transactions
(8) Pledged assets
(9) Commitments and contingencies
(10) Losses due to major disasters
(11) Subsequent events
(12) Other
(13) Other disclosures
1. Information on significant transactions
2. Information on investees
3. Information on investment in Mainland China
4. Major shareholders
(14) Segment information
9. Statements of major accounting items

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Independent Auditors’ Report

To the Board of Directors of Abnova (Taiwan) Corporation:

Opinion

We have audited the financial statements of Abnova (Taiwan) Corporation (“the Company”), which comprise the balance sheets as of December 31, 2023 and 2022, the statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statement section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matter

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The key audit matters we judge that shall be communicated in the audit report are as follows:

Inventory valuation

Please refer to Note 4(7) “Inventories”; Note 5(1) “Significant accounting assumptions and judgments, and major sources of estimation uncertainty”, and Note 6(5) “Inventories”.

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Description of key audit matter:

The major business of the Company is the manufacturing and sales of antibody, protein, test reagents and testing instruments. Inventories are measured at the lower of cost and net realizable value. Due to the longer life cycle of the products, the management considers factors such as product circulation, exposure, preservation and industry information to evaluate the net realizable value of inventories. As the Company has large amount of inventories and a large number of items, and the net realizable value used in the above-mentioned evaluation involves subjective judgment, the evaluation of loss allowance for inventory valuation has been listed as the key audit matter of the year.

Our principal audit procedures included:

The key audit procedures for the above-mentioned key audit matter based on the understanding of the industrial characteristics of the Company include obtaining statistical information on the sales time and sales status of the products on the shelves in each year provided by the management in the subsequent years to evaluate the rationality of the policy used to recognize the inventory valuation loss; understanding the Company’s inventory management process, reviewing the annual inventory plan and participating in the annual inventory check to evaluate the effectiveness of the management’s inventory control; obtaining the inventory net realizable value calculation sheet, and spot check the correctness of the calculation.

Responsibilities of management and those charged with governance for the financial statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with auditing standards, we exercise professional judgment and professional skepticism throughout the audit. We also:

A. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as

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fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

B. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
C. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
D. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company’s to cease to continue as a going concern.
E. Evaluate the overall presentation, structure and content of the financial reports, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
F. Obtain sufficient and appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on these financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

KPMG

Auditors ：

Securities ：Financial-Supervisory-Securities Competent -Auditing -1080303300 Authority Financial-Supervisory-Securities Approved-certi -Auditing-1070304941 fied No. February 27, 2024

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Abnova (Taiwan) Corporation

Balance Sheets

December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

December 31, 2023 Amount ％ $ 360,329 27 491 - 39,358 3 3,223 - 1,602 - 408,302 30 16,661 1	December 31, 2023 Amount ％ $ 360,329 27 491 - 39,358 3 3,223 - 1,602 - 408,302 30 16,661 1	December 31, 2022 Amount ％ 362,971 27 246 - 59,999 5 2,452 - - - 396,079 29 8,841 - 830,588 61 - - 97,564 7 252,134 18 10,422 1 68,815 5 98,278 7 11,715 1 538,928 39 1,369,516 100 Liabilities and equity Current liabilities: 2130 Contract liability-current (Note 6(15)) 2170 Accounts payable 2200 Other payables 2230 Current tax liabilities 2280 Current lease liabilities (Note 6(10)) 2300 Other current liabilities Total current liabilities Non-current liabilities: 2570 Deferred tax liabilities (Note 6(12)) 2580 Non-current lease liabilities (Note 6(10)) 2600 Other non-current liabilities (Note 6(6) and Note 7) Total non-current liabilities Total liabilities Equity (Note 6(13)) 3110 Ordinary share 3200 Capital surplus Retained earnings: 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings 3400 Other equity interest Total equity Total liabilities and equity	December 31, 2023 Amount % $ 2,349 - 14,935 2 31,630 3 - - 5,105 - 5,787 - 59,806 5 3,783 - 2,601 - 438 - 6,822 - 66,628 5 605,536 45 474,527 35 98,565 7 11,907 1 107,983 8 (12,199) (1) 1,286,319 95 $ 1,352,947 100	December 31, 2023 Amount % $ 2,349 - 14,935 2 31,630 3 - - 5,105 - 5,787 - 59,806 5 3,783 - 2,601 - 438 - 6,822 - 66,628 5 605,536 45 474,527 35 98,565 7 11,907 1 107,983 8 (12,199) (1) 1,286,319 95 $ 1,352,947 100	December 31,	2022 % - 1 3 - - -
Amount $ 360,329 491 39,358 3,223 1,602 408,302 16,661		Amount 362,971 246 59,999 2,452 - 396,079 8,841 830,588 - 97,564 252,134 10,422 68,815 98,278 11,715 538,928 1,369,516	Amount $ 2,349 14,935 31,630 - 5,105 5,787		Amount 2,622 14,995 36,541 2,015 6,778 4,555
			59,806	5	67,506	4
829,966	61		3,783 2,601 438	- - -	5,804 3,686 526	- - -
- 87,431 257,749 7,649 69,640 95,274 5,238	- 7 19 1 5 7 -
			6,822	-	10,016	-
			66,628	5	77,522	4
			605,536 474,527 98,565 11,907 107,983 (12,199)	45 35 7 1 8 (1)	605,536 474,527 85,642 - 138,196 (11,907)	45 35 7 - 10 (1)
522,981	39
			1,286,319	95	1,291,994	96
$ 1,352,947	100		$ 1,352,947	100	1,369,516	100

$ 1,352,947 100 1,369,516 100

(See accompanying notes to financial statements.) Manager: JIH PEI JU

Chairman: WILBER HUANG

Accounting supervisor: CHANG YA PING

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Abnova (Taiwan) Corporation Statements of Comprehensive Income For the years ended December 31, 2023 and 2022 (Expressed in Thousands of New Taiwan Dollars)

2023	％ 100 (55)	2022
Amount $ 380,593 (208,137)		Amount 410,320 (210,327)	％
			100 (51)
172,456	45	199,993	49
(45,261) (43,437) (38,396) 3,053	(12) (11) (10) 1	(40,349) (41,139) (48,740) (698)	(10) (10) (12) -
(124,041)	(32)	(130,926)	(32)
48,415	13	69,067	17
10,332 152 517 (140) (10,799)	3 - - - (3)	3,463 800 26,053 (132) (4,336)	1 - 6 - (1)
62	-	25,848	6
48,477 4,799	13 1	94,915 20,072	23 5
43,678	12	74,843	18
	- - -	304 28,730 -	- 7 -
(618)	-	29,034	7
(292) -	- -	4,216 -	1 -
(292)	-	4,216	1
(910)	-	33,250	8
$ 42,768	12	108,093	26
$	0.72		1.24
$	0.72		1.23

(See accompanying notes to financial statements.)

Chairman: WILBER HUANG Manager: JIH PEI JU

Accounting supervisor: CHANG YA PING

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Abnova (Taiwan) Corporation Statements of Changes in Equity For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

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Shares Retained earnings Other equity interest
Unrealized gains
(losses) from
financial assets
Exchange measured at
differences on fair value
Unappropriated translation of through other
retained foreign financial comprehensive
Ordinary shares Capital surplus Legal reserve Special reserve earnings statements income Total equity
Balance at January 1, 2022 $ 605,536 474,527 82,766 39,698 (11,178) 20,407 1,211,756
Profit - - - 74,843 - - 74,843
Other comprehensive income - - - 304 4,216 28,730 33,250
- - -
Total comprehensive income 75,147 4,216 28,730 108,093
Appropriation and distribution of
retained earnings:
- - - - -
Legal reserve 2,876 (2,876)
Cash dividends on ordinary - - - (27,855) - - (27,855)
shares
- - - - -
Effect on equity of disposal of 54,082 (54,082)
subsidiaries
Balance at December 31, 2022 605,536 474,527 85,642 138,196 (6,962) (4,945) 1,291,994
Profit - - - 43,678 - - 43,678
- - - -
Other comprehensive income (618) (292) (910)
- - - -
Total comprehensive income 43,060 (292) 42,768
Appropriation and distribution of
retained earnings:
- - - - -
Legal reserve 12,923 (12,923)
- - - - -
Special reserve 11,907 (11,907)
- - - - -
Cash dividends on ordinary (48,443) (48,443)
shares
Balance at December 31, 2023 $ 605,536 474,527 98,565 11,907 107,983 (7,254) (4,945) 1,286,319
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Accounting supervisor: CHANG YA PING

(See accompanying notes to financial statements.) Manager: JIH PEI JU

Chairman: WILBER HUANG

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Abnova (Taiwan) Corporation Statements of Cash Flows

For the years ended December 31, 2023 and 2022 (Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss) Depreciation expenses Amortization expenses Expected credit loss (reversal gains) Interest expense Interest income Share of subsidiaries, associates and joint ventures losses accounted for using equity method Gains on disposals of property, plant and equipment Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Changes in operating assets: Notes receivable Accounts receivable Other receivables Inventories Other current assets Total changes in operating assets Changes in operating liabilities: Contract liabilities Accounts payable Other payables Other current liabilities Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest received Interest paid Income taxes paid Net cash flows from operating activities Cash flows used in investing activities: Acquisition of investments accounted for using equity method Disposal of investments accounted for using equity method Cash refund from capital reduction of investees accounted for using equity method Acquisition of property, plant and equipment Disposal of property, plant and equipment Acquisition of intangible assets Other financial assets Other non-current assets Other non-current liabilities Net cash flows (outflows) used in investing activities Cash flows from financing activities: Repayment of lease principles Cash dividends paid Net cash flows from financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2023 $ 48,477 20,744 10,820 (3,053) 140 (10,332) 10,799 (160)	2022 94,915 21,324 10,739 698 132 (3,463) 4,336 -
	28,958	33,766
	(245) 23,694 (317) (14,548) (7,811)	194 (12,344) (300) 8,583 3,515
	773	(352)
	(273) (60) (4,911) 1,232	(16) 3,515 3,493 (17,884)
	(4,012)	(10,892)
	(3,239)	(11,244)
	25,719	22,522
	74,196 9,878 (140) (7,433)	117,437 3,016 (132) (5,212)
	76,501	115,109
	(1,300) 342 - (19,566) 160 (9,320) 791 5,059 (88)	- - 21,675 (1,390) - (5,240) (350) (7,165) (97)
	(23,922)	7,433
	(6,778) (48,443)	(7,421) (27,855)
	(55,221)	(35,276)
	(2,642) 362,971	87,266 275,705
	$ 360,329	362,971

(See accompanying notes to financial statements.) Manager: JIH PEI JU

Chairman: WILBER HUANG

Accounting supervisor: CHANG

YA PING

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

Abnova (Taiwan) Corporation Notes to the Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in thousands of New Taiwan Dollars, unless specified otherwise)

1. Company history

Abnova (Taiwan) Corporation (the “Company”) was legally established with the approval of the Ministry of Economic Affairs (R.O.C.) on January 4, 2002, with registered address at 9th Fl., No. 108, Jhouzih St., Neihu District, Taipei City, Taiwan (R.O.C.). The Company has been actively developing, manufacturing, and selling monoclonal antibody, polyclonal antibody, proteins, medical inspection instruments and testing reagents, which are mainly antibody reagents, antibody chips or related products provided to and used by academic, research institutions or pharmaceutical factories, etc. Antibodies are the most important means for understanding proteins and their functions. The products of the Company help to study the relationship between protein changes in the process of cancer, infectious diseases, metabolism and endocrine diseases, and then apply to the development of medical inspection reagents and drugs.

2. Approval date and procedures of the financial statements

These parent company only financial statements were authorized for issue by the Board of Directors on February 27, 2024.

3. New standards, amendments and interpretations adopted

(1) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. (“FSC”) which have already been adopted. The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from January 1, 2023.
‧Amendments to IAS 1 “Disclosure of Accounting Policies”
‧Amendments to IAS 8 “Definition of Accounting Estimates”
‧Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”
The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from May 23, 2023.
‧Amendments to IAS 12 “International Tax Reform — Pillar Two Model Rules”
(2) The impact of IFRS issued by the FSC but not yet effective
The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2024, would not have a significant impact on its financial statements.
‧Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”
‧Amendments to IAS 1 “Non-current Liabilities with Covenants
‧Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements”
‧Amendments to IFRS 16 “Lease Liability in Sale and Leaseback”
(3) The impact of IFRS issued by IASB but not yet endorsed by the FSC
The Company assesses that the adoption of the following new or amended standards, not yet endorsed by the FSC, would not have a significant impact on its financial statements.
‧Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”
‧IFRS 17 “Insurance Contracts” and amendments to IFRS 17 “Insurance Contracts”

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

‧Amendments to IFRS 17 "Initial Application of IFRS 17 and IFRS 9 - Comparative Information"
‧Amendments to IAS 21 “Lack of Exchangeability”

4. Summary of significant accounting policies

The significant accounting policies presented in the financial statements are summarized below. Except for those specifically indicated, the following accounting policies were applied consistently throughout the periods presented in the financial statements.

(1) Statement of compliance

These financial statements have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” (hereinafter referred to as the Regulations).

(2) Basis of preparation
A. Basis of measurement

Except for the following significant accounts, the financial statements have been prepared on a historical cost basis:

(a) Financial assets at fair value through other comprehensive income are measured at fair value; and
(b) The defined benefit liabilities (assets) are measured at fair value of the plan assets less the present value of the defined benefit obligation, limited as explained in Note 4(15).
B. Functional and presentation currency
The functional currency of each entity of the Company is determined based on the primary economic environment in which the entity operates. The financial statements are presented in New Taiwan Dollars, which is the Company’s functional currency. All financial information presented in New Taiwan Dollars has been rounded to the nearest thousand.
(3) Foreign currency
A. Foreign currency transactions
Transactions in foreign currencies are translated into the respective functional currencies of Company entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.
Exchange differences are generally recognized in profit or loss, except for those differences relating to the following, which are recognized in other comprehensive income:
(a) an investment in equity securities designated as at fair value through other comprehensive income;
(b) a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or
(c) qualifying cash flow hedges to the extent that the hedges are effective.

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

B. Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the New Taiwan Dollars at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into the New Taiwan Dollars at the average exchange rate. Exchange differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Company disposes only a part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Company disposes only a part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, Exchange differences arising from such a monetary item that are considered to form part of the net investment in the foreign operation are recognized in other comprehensive income.

(4) Classification of current and non-current assets and liabilities
An asset is classified as current under one of the following criteria, and all other assets are classified as non-current:
A. It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;
B. It is held primarily for the purpose of trading;
C. It is expected to be realized within twelve months after the reporting period; or
D. The asset is cash or cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current:
A. It is expected to be settled in the normal operating cycle;
B. It is held primarily for the purpose of trading;
C. It is due to be settled within twelve months after the reporting period; or
D. The Company does not have any unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments that do not affect its classification.
(5) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits which meet the above definition and are held for the purpose of meeting short term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

(6) Financial instruments

Accounts receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is an accounts receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. An accounts receivable without a significant financing component is initially measured at the transaction price.

A. Financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

On initial recognition, a financial asset is classified as measured at: amortized cost; Fair value through other comprehensive income (FVOCI) – debt investment; FVOCI – equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

(a) Financial assets measured at amortized cost
A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:
‧It is held within a business model whose objective is to hold assets to collect contractual cash flows; and
‧Its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

(b) Financial assets measured at fair value through other comprehensive income On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis. Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income is recognized in profit or loss on the date on which the Company’s right to receive payment is established (usually the ex-dividend date).

The Company recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, notes and accounts receivables, other receivable, guarantee deposit paid and other financial assets) and contract assets. The Company measures loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL:

‧Debt securities that are determined to have low credit risk at the reporting date; and
‧Other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

Loss allowance for accounts receivables and contract assets are always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company’s historical experience and informed credit assessment as well as forward-looking information.

ECLs are probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Company assesses whether financial assets carried at amortized cost are credit-impaired. A financial asset is 'credit-impaired' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data:

‧Significant financial difficulty of the borrower or issuer;

‧A breach of contract such as a default or being some time past due;

‧The lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;

‧It is probable that the borrower will enter bankruptcy or other financial reorganization; or ‧The disappearance of an active market for that financial assets because of financial difficulties. Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate accounts, the Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

(d) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Company enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

B. Financial liabilities and equity instruments
(a) Classification of liabilities and equity

The Company shall classify the debt and equity instruments issued by the Company as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definition of a financial liability and an equity instrument.

(b) Financial liabilities

Financial liabilities are measured at amortized costs.

Other financial assets are measured at amortized costs by effective interest rate method subsequently. The interest expenses and exchange gains or losses are recognized in profit or loss. Any gains or losses at derecognition are recognized in profit or loss as well.

～12～

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

The Company shall remove a financial liability from its statement of financial position when the obligation specified in the contract is discharged or cancelled or expires. A substantial modification of the terms of an existing financial liability and significant difference in cash flows after the modification shall be accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability by fair value based on the modified contractual terms.

At derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid (including any non-cash assets transferred or liabilities assumed), shall be recognized in profit or loss.

(7) Inventories
A. The perpetual inventory system is adopted, and the acquisition costs are recorded in the account. The costs are determined by the weighted average method, and the fixed production overheads are allocated according to the normal operating capacity of the production equipment. Inventories at the end of period except for obsolete and slow-moving inventories are provided for loss allowance. Inventories are measured at the lower of cost and net realizable value. When comparing the lower of cost and net realizable value, the item-by-item comparison method is adopted. The market price of raw materials is the replacement cost (that is, the latest purchase price); the market price of work in progress, semi-finished goods, finished goods and commodity inventories is the net realizable value.
B. The basis for the loss allowance for each obsolete and slow-moving inventory is explained as follows:
(a) 100% loss allowance provisions for protein inventory over two years (entering the third year); 2% to 50% loss allowance provisions for the stock age within two years (exclusive).
(b) 1% to 3% loss allowance provisions for testing instruments within two years (exclusive) according to the stock age; 10% to 70% loss allowance provisions for the stock age over two years (entering the third year) to five years (exclusive); 100% loss allowance provisions for the stock age reaches five years (entering the sixth year).
(c) 0.1% to 20% loss allowance provisions for the stock age of inventories other than protein and testing instruments within four years (exclusive); 40% to 80% loss allowance provisions for the stock age reaches five years (entering the sixth year) to six years (exclusive); 100% loss allowance provisions for the stock age reaches six years (entering the seventh year).
(8) Invest in associates

Associates are that in which the Company has significant influence over their financial and operating policies but is not controlling or jointly controlling.

The Company adopts the equity method to handle the interests of the associates. Under the equity method, the original acquisition is recognized at cost, and investment costs include transaction costs. The carrying amount of investments in an associate includes the goodwill identified at the time of the original investment, less any accumulated impairment loss.

The financial report includes from the date of significant influence to the date of loss of significant influence; after the adjustments made consistent with the accounting policy of the Company, the Company recognizes the profit and loss and the amount of other comprehensive income of each investment in associates based on the equity ratio. When the equity changes in non- profit or loss and other comprehensive income of an associate does not affect the shareholding ratio of the Company, the Company will recognize all changes in equity as capital reserves according to the shareholding ratio.

Unrealized gains and losses arising from transactions between the Company and associates are recognized in the corporate financial statements only within the scope of non-related party investors’ interests in associates. When the Company shall recognize the loss share of an associate proportionally equal to or exceeds its equity in the associate, it shall stop recognizing the losses, and

～13～

Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

only within the scope of a legal obligation, a constructive obligation, or a payment made on behalf of the invested company, additional losses and related liabilities shall be recognized.

(9) Invest in subsidiaries

When preparing the parent company only financial statements, investment in subsidiaries which are controlled by the Company is accounted for using the equity method. Under the equity method, an investment in a subsidiary is initially recognized at cost and adjusted thereafter to recognize the Company's share of profit or loss and other comprehensive income of the subsidiary as well as the distribution received. The Company also recognized its share in the changes in the equity of subsidiaries.

Changes in a parent’s ownership interest in a subsidiary that do not result in the loss of control are accounted for within equity.

(10) Property, plant and equipment
A. Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

B. Subsequent cost

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

C. Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

(a) Buildings and structures 9 to 50 years (b) Machinery and equipment 3 to 15 years (c) Office equipment 3 to 8 years (d) Leasehold improvements 3 to 10 years (e) Other equipment 1 to 7 years Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(11) Leases

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

A. As a lessee

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if

～14～

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

(a) fixed payments;

(b) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

(d) payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

(a) there is a change in future lease payments arising from the change in an index or rate;

(b) there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee;

(c) there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset;
(d) there is a change of its assessment on whether it will exercise a purchase, extension or termination option;

(e) there is any lease modification.

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Company presents right-of-use assets and lease liabilities that do not meet the definition of investment property as a separate line item respectively in the statement of financial position.

The Company has elected not to recognize right-of-use assets and lease liabilities for office equipment with short-term leases that have a lease term of 12 months or less and leases of low-value assets. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

B. As a lessor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, the Company applies IFRS 15 to allocate the consideration in the contract.

～15～

Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

(12) Intangible assets
A. Recognition and measurement

Expenditure on research activities is recognized in profit or loss as incurred.

Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Company intends to, and has sufficient resources to, complete development and to use or sell the asset. Otherwise, it is recognized in profit or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost, less accumulated amortization and any accumulated impairment losses.

Other intangible assets, including computer software, patent rights and customer relationships, are acquired by the Company and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

B. Subsequent expenditure
Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, is recognized in profit or loss as incurred, including internally developed goodwill and brands.
C. Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use.

The estimated useful lives of intangible assets for current and comparative periods are as follows:

(a)Royalty
(b)Intangible assets internally generated
(c)Customer relationships
5 to 30 years
3 years
3 years
(d)Computer software 5 to 10 years

Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(13) Impairment of non-derivative financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories, contract assets and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

(14) Revenue recognition
A. Revenue from contracts with customers

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring goods to a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good to a customer. The description of main income items is as follows:

(a) Sales of goods

The Company recognizes revenue when control of the products has transferred, being when the products are delivered to the customer upon the transaction terms, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation

～16～

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied.

The Company offers volume discounts to customers. The Company recognizes revenue on the basis of the net amount of the contract price minus the estimated volume discount. The amount of the volume discount is estimated based on the expected value based on past cumulative experience, and revenue is recognized only in the range where there is a high probability that no significant reversal will occur.

(15) Employee benefits
A. Defined contribution plans
Obligations for contributions of pension to defined contribution plans are expensed as the related service is provided.
B. Defined benefit plans

The Company’s net obligation is calculated by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

C. Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(16) Income taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences

～17～

Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

when they reserve, using tax rates enacted or substantively enacted at the reporting date. Deferred income tax shall be recognized for the temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, except to the extent that:

A. the initial recognition of an asset or liability in a transaction which is not a business combination, and at the time of the transaction, (i) affects neither accounting profit (ii) nor taxable profit (tax loss) and (ii) does not give rise to equal taxable and deductible temporary differences, or
B. the temporary differences associated with investments in subsidiaries, and it is probable that the temporary differences will not reverse in the foreseeable future, or
C. the deferred tax liabilities arise from the initial recognition of goodwill.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves.

Deferred income tax is measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates or tax laws that have been enacted or substantively enacted at the reporting date.

The Company shall offset current tax assets and current tax liabilities, only if:

A. the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and
B. the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:
(a) The same taxable entity; or
(b) Different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
(17) Earnings per share

The Company discloses the Company’s basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares.

(18) Segment information

The Company discloses the operating segments information in the consolidated financial statements. Therefore, the Company does not disclose such information in the parent company only financial statements.

～18～

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

5. Significant accounting assumptions and judgments, and major sources of estimation uncertainty

The preparation of the consolidated financial report requires management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates. The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the following period.

Accounting policies involve critical judgments and have no significant impact on the amount recognized in this parent company only financial report.

Information about uncertainties of the following assumptions and estimates which have significant risks of causing critical adjustments to the carrying amount of assets and liabilities in the next fiscal year is as follows:

(1) Valuation of inventories

As inventories are stated at the lower of cost or net realizable value, the Company estimates the net realizable value of inventories for normal loss and unmarketable items at the end of the reporting period and then writes down the cost of inventories to net realizable value. In addition, the Company has also considered the industry characteristics and the liquidity of inventories to assess the loss allowance for slow-moving inventories. The net realizable value of the inventory is mainly determined based on assumptions as to future demand within a specific time horizon. Due to the changes in industrial application technology, there may be significant changes in the net realizable value of inventories.

6. Explanation of significant accounts

(1) Cash and cash equivalents

ation of significant accounts ash and cash equivalents
Cash Checking account Demand deposits Time deposits	December 31, 2023 $ 466 487 68,454 290,922	December 31, 2022 566 716 159,784 201,905
	$ 360,329	362,971

The term of the Company’s time deposits is three months It is used as a short-term fund that can be converted momentarily for any fund demand, and the risk of value changes is low, so it is classified under cash and cash equivalents. Please refer to Note 6(18) for the interest rate risk, and sensitivity analysis of the financial assets and liabilities.

(2) Financial assets measured at fair value through other comprehensive income

ty instruments measured at fair value through her comprehensive income: reign non-listed (non-OTC-listed) stocks `－`Hukui Biotechnology Corporation (Samoa)	December 31, 2023 $ -	December 31, 2022 -

Equity instruments measured at fair value through other comprehensive income: Foreign non-listed (non-OTC-listed) stocks

～19～

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

A. Investments in equity instruments measured at fair value through other comprehensive income

The Company designated the investment shown above as equity securities at fair value through other comprehensive income because these equity securities represent those investments that the Company intends to hold for long-term strategic purpose.

Please refer to Note 6(18) for information on the carrying amount, fair value and market risks of the foreign non-listed (non-OTC-listed) stocks of Hukui Biotechnology Corporation (Samoa) held by the Company.

The Company did not dispose strategic investments in 2023 and 2022, and the accumulated profits and losses during these periods have not been made for any transfer within the equity.

B. The aforementioned financial assets were not pledged as long-term loans and financing facilities.
(3) Notes and accounts receivable

facilities. otes and accounts receivable
Notes receivable Accounts receivable Less: Loss allowance	December 31, 2023 $ 491 44,605 (5,247) $ 39,849	December 31, 2022 246 68,151 (8,152)
		60,245

The Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, accounts receivables have been grouped based on shared credit risk characteristics and the days past due, as well as the incorporated forward-looking information.

The loss allowance provisions for notes and accounts receivable of the series products of circulating tumor cell testing were determined as follows:

Current and less than 30 days past due

mined as follows:	mined as follows:
December 31, 2023		Loss allowance provision -
Gross carrying amount $ -	Weighted-aver age loss rate
		Loss allowance provision -
Gross carrying amount $ 26	Weighted-aver age loss rate
	1.51%

～20～

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

The loss allowance provisions for notes and accounts receivable for the series products of non-circulating tumor cell testing were determined as follows:

December 31, 2023	December 31, 2023	Loss allowance provision 584 245 179 283 1,058 1,590 1,308
Gross carrying amount Weighted-aver age loss rate $ 37,295 1.57% 1,276 19.20% 563 31.74% 582 48.68% 1,962 53.91% 2,110 75.37% 1,308 100.00% $ 45,096 December 31, 2022	Weighted-aver age loss rate
		5,247
		Loss allowance provision 539 1,749 474 1,418 1,161 1,899 912
Gross carrying amount $ 45,339 12,486 1,888 3,350 2,066 2,330 912 $ 68,371	Weighted-aver age loss rate
	1.19% 14.01% 25.11% 42.32% 56.21% 81.47% 100.00%
		8,152

The movement in the loss allowance for notes and accounts receivable were as follows:

Balance at January 1 Impairment losses Irrecoverable amount written-off in the current year Reversal of impairment losses Others Balance at December 31	2023	2023	2022 14,449 698 (6,995) - - 8,152
	$ 8,152 - - (3,053) 148 $ 5,247
		$ 5,247

The aforementioned financial assets were not pledged as long-term loans and financing facilities.

(4) Other receivables

Other receivables Other receivables-related parties	December 31, 2023	December 31, 2022 2,452 - 2,452
	$ 3,109 114 $ 3,223

～21～

Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

(5) Inventories

Raw materials and supplies Semi-finished goods Work in progress Finished goods Merchandise Testing instruments	December 31, 2023 $ 23,680 250,513 9,954 118,303 5,163 689	December 31, 2022 21,973 239,258 6,503 119,329 6,364 2,652
	$ 408,302	396,079

The components of cost of sales for the years ended December 31, 2023 and 2022 are as follows:

Sales of inventories transferred Inventory disposal loss Gain from price recovery of inventory valuation and obsolescence Total	2023 $ 160,359 60,126 (12,348)	2022 163,554 60,016 (13,243)
	$ 208,137	210,327

As of December 31, 2023 and 2022, the inventories were not pledged as collateral. (6) Investments accounted for using equity method

The equity method adopted by the Company at the reporting date was as follows:

Subsidiary Abnova Holding Corporation AxleBio Ventures Abnova-GmbH (Note) Associate Citil Pharma Incorporated	December 31, 2023 $ 86,277 1,154 (2,809) -	December 31, 2022 97,014 - (2,809) 550 94,755
	$ 84,622

Note: The net amount deducted from receivables as of December 31, 2023 and 2022 were listed in “other non-current liabilities.” Please refer to Note 7.

Since Abnova GmbH’s capital equivalent to NT$1,210 thousand (0.2% of the Group’s capital), its total assets were less than 1% of the Group’s total assets, and it had no operating income, the consolidated financial report with this subsidiary had not been prepared.

The Board of Directors of the Company approved the dissolution and liquidation proposal of Abnova GmbH on November 11, 2016, and the dissolution and liquidation was on December 31, 2016, as the base date. The liquidation has not completed by December 31, 2022.

Abnova Holding Corporation executed capital reduction to cover the deficit and repaid paid-up capital amounting to NT$5,711 thousand and NT$21,675 thousand, respectively. The legal registration procedures have been completed.

The Company established AxleBio Ventures in July, 2023 by NT$1,300 thousand with 100% of percentage of ownership.

～22～

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

The Company sold the shares of the associate, Citil Pharma Incorporated, by NT$342 thousand to the subsidiary, AxleBio Ventures. As the transaction is the restructure under joint control, the unrealized gains on disposal of NT$68 thousand is recognized as the deduction of investments accounted for using equity method.

Share attributable to the Company: Net loss from continuing operations	2023 $ (10,799)	2022
		(4,336)

For information on the Company’s subsidiaries, please refer to the 2023 consolidated financial statements.

As of December 31, 2023 and 2022, the investment accounted for using equity method were not pledged as collateral.

(7) Property, plant and equipment

The movements of costs and depreciation of the property, plant and equipment as of and for the years ended December 31, 2023 and 2022 were as follows:

Land	Buildings and structures	Machinery and equipment	Office equipment	Leasehold improvem ents	Other equipment	Total
$ 137,911 - -	101,747 - -	183,264 11,913 (11,945)	25,833 173 (734)	11,386 6,980 -	9,094 200 475 25 (927) -	469,435 19,566 (13,606)
$ 137,911	101,747	183,232	25,272	18,366	8,642 225	475,395
$ 137,911 - - -	101,747 - - -	183,423 1,390 352 (1,901)	25,922 - - (89)	11,386 - - -	9,094 992 - - - (792) - -	470,475 1,390 (440) (1,990)
$ 137,911	101,747	183,264	25,833	11,386	9,094 200	469,435
$ - - -	29,801 5,998 -	141,622 7,049 (11,945)	25,753 49 (734)	11,386 447 -	8,739 - 408 - (927) -	217,301 13,951 (13,606)
$ -	35,799	136,726	25,068	11,833	8,220 -	217,646
$ - - -	23,804 5,997 -	136,025 7,498 (1,901)	25,745 97 (89)	11,384 2 -	8,395 - 344 - - -	205,353 13,938 (1,990)
$ -	29,801	141,622	25,753	11,386	8,739 -	217,301
$ 137,911	65,948	46,506	204	6,533	422 225	257,749
$ 137,911	77,943	47,398	177	2	699 992	265,122
$ 137,911	71,946	41,642	80	-	355 200	252,134

As of December 31, 2023 and 2022, the property, plant and equipment were not pledged as collateral.

～23～

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

(8) Right-of-use assets

The movements of costs and depreciation of the buildings and structures and transportation equipment rented by the Company were as follows:

Buildings and structures	Transportation equipment	Total 40,584 4,020
$ 37,630 4,020	2,954 -
$ 41,650	2,954	44,604
$ 26,600 11,030	2,954 -	29,554 11,030
$ 37,630	2,954	40,584
27,753 6,325	2,409 468 2,877	30,162 6,793
$ 34,078		36,955
$ 20,834 6,919	1,942 467 2,409	22,776 7,386
$ 27,753		30,162
$ 7,572	77 1,012	7,649
$ 5,766		6,778
$ 9,877	545	10,422

～24～

Notes to the Financial Statements (Cont.)

Abnova (Taiwan) Corporation

(9) Intangible assets

The movements of costs, amortization and impairment of the intangible assets for the years ended December 31, 2023 and 2022 were as follows:

Cost: Balance at January 1, 2023 Separately acquired Internally developed Inventories transferred to intangible assets Balance at December 31, 2023 Balance at January 1, 2022 Internally developed Inventories transferred to intangible assets Balance at December 31, 2022 Amortization and impairment loss: Balance at January 1, 2023 Amortization Balance at December 31, 2023 Balance at January 1, 2022 Amortization Balance at December 31, 2022 Carrying amount: Balance at December 31, 2023 January 1, 2022 Balance at December 31, 2022	Development expenditure of monoclonal antibody hybridoma $ 318,105 - 1,549 2,325 $ 321,979 $ 306,210 5,240 6,655 $ 318,105 $ 303,497 8,213 $ 311,710 $ 295,167 8,330 $ 303,497 $ 10,269 $ 11,043 $ 14,608		Royalty 75,616 - - - 75,616 75,616 - - 75,616 21,409 2,409 23,818 19,000 2,409 21,409 51,798 56,616 54,207	Others - 7,771 - - 7,771 - - - - - 198 198 - - - 7,573 - -	Total 393,721 7,771 1,549 2,325
					405,366
					381,826 5,240 6,655
					393,721
					324,906 10,820
					335,726
					314,167 10,739
					324,906
					69,640
					67,659
					68,815

The amortization expenses of intangible assets for the years ended December 2023 and 2022 were presented in the following items in the statements of comprehensive income:

Operating costs Operating expenses	2023 $ 8,214 2,606	2022 8,331 2,408
	$ 10,820	10,739

～25～

Notes to the Financial Statements (Cont.)

Abnova (Taiwan) Corporation

(10) Lease liabilities

The carrying amount of lease liabilities were as follows:

Lease liabilities The carrying amount of lease liabilities were as follows:
Current Non-current	December 31, 2023 $ 5,105	December 31, 2022 6,778
	$ 2,601	3,686

For the maturity analysis, please refer to Note 6(18) Financial instruments. The amount recognized in profit or loss were as follows:

2023 2022 Interest on lease liabilities $ 136 132 Expenses relating to short-term leases $ 2,203 2,825 The amount recognized in the statements of cash flows for the Company were as follows: 2023 2022 Total cash outflow for leases $ 9,117 10,378	2023 $ 136	2022 132
	$ 2,203	2,825

The amount recognized in the statements of cash flows for the Company were as follows:

A. Buildings and structures leases

The Company leases buildings and structures for its office space for the year ended December 31, 2023, which typically run for a period of one to five years.

B. Other leases

The Company leases transportation equipment with contract terms of three years.

In addition, the Company leases copy machines with contract terms of five years. As these leases are short-term and/or of low-value, the Company elects the recognition exemption and does not recognize the relevant right-of-use assets and lease liabilities.

(11) Employee benefits

A. Defined benefit plans

Reconciliation of defined benefit obligation at present value and plan asset at fair value were as follows:

Present value of defined benefit obligations Fair value of plan assets Net defined benefit assets	December 31, 2023 $ 5,609 (6,460)	December 31, 2022 5,743 (7,191)
	$ (851)	(1,448)

The Company makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for employees upon retirement. Plans (covered by the Labor Standards Law) entitle retired employees to receive retirement benefits based on their years of service and average monthly salary for the six months prior to retirement.

The Company received the approval letters from the Department of Labor, Taipei City Government No. 1106083461, No. 1116069618, and No. 1126041943 of September 27, 2021, August 15, 2022, and August 29,2023, respectively which approved to suspend the appropriation of pension fund from September 2021 to August 2022, from September 2022 to August 2023, and from September 2023 to August 2024.

～26～

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

(a) Composition of plan assets

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

The Company’s Bank of Taiwan labor pension reserve account balance amounted to NT$6,460 thousand as of the reporting date. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

(b) Movements in present value of defined benefit obligations

The movement in the present value of the defined benefit obligations for the years ended December 31, 2023 and 2022 were as follows:

Defined benefit obligations at January 1 Current service cost and interest cost Remeasurements of net defined benefit obligations `－`Actuarial gains or losses arising from experience adjustments `－`Actuarial gains or losses arising from changes in financial assumptions Benefits paid Defined benefit obligations at December 31	2023 $ 5,743 80 575 67 (856)	2022 5,725 40 743 (530) (235)
	$ 5,609	5,743

(c) Movements in fair value of plan assets

The movements in the fair value of the plan assets for the years ended December 31, 2023 and 2022 were as follows:

2023 and 2022 were as follows:	2023 and 2022 were as follows:
2023 Fair value of plan assets at January 1 $ (7,191) Interest income (101) Remeasurements of net defined benefit obligations `－`Return on plan assets excluding interest income (24) Benefits paid 856 Fair value of plan assets at December 31 $ (6,460)		2022 (6,862) (48) (516) 235
	$ (6,460)	(7,191)

(d) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the years ended December 31, 2023 and 2022 were as follows:

Net interest of net defined benefit liabilities (assets) Operating costs Operating expenses	2023 $ (21)	2022 (8)
	$ (16) (5)	(6) (2)
	$ (21)	(8)

～27～

Notes to the Financial Statements (Cont.)

Abnova (Taiwan) Corporation

(e) Actuarial assumptions

The principal actuarial assumptions for determining present value of defined benefit obligations at the reporting date were as follows:

Discount rate Future salary increase rate	December 31, 2023 1.30% 3.00%	December 31, 2022 1.40% 3.00%

The expected allocation payment to be made by the Company to the defined benefit plans for the one-year period after the reporting date was $0.

The weighted average lifetime of the defined benefit plans was 12 years.

(f) Sensitivity analysis

When calculating the present value of defined benefit obligations, the Company must practice judgments and estimates to determine relevant actuarial assumptions at the balance sheets date, including discount rates and future salary changes. Any changes in actuarial assumptions may cause significant impacts on the amount of defined benefit obligations.

As of December 31, 2023 and 2022, if the actuarial assumptions had changed, the impact on the present value of the defined benefit obligations shall be as follows:

December 31, 2023 Discount rate Future salary increase rate December 31, 2022 Discount rate Future salary increase rate	Influences of defined benefit obligations	Influences of defined benefit obligations
	Increase 0.25% (166) 156 (175) 166	Decrease 0.25%
		172 (151) 182 (161)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions remain constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis was consistent with the calculation of net defined benefit liabilities in the balance sheets.

There were no changes in the method and assumptions used in the preparation of sensitivity analysis for 2023 and 2022.

B. Defined contribution plans

The Company allocates 6% of each employee’s monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under these defined contribution plans, the Company allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation.

～28～

Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to NT$3,686 thousand and NT$3,857 thousand for the years ended December 31, 2023 and 2022, respectively.

(12) Income taxes

A. Tax expense

The components of the income tax in the years 2023 and 2022 were as follows:

Current tax expense Current period Adjustment for prior periods Deferred tax expense Origination and reversal of temporary differences Income tax for the continuing operations	2023	2022 6,520 (3,646)
	$ 5,325 (1,509)
	3,816 983	2,874 17,198 20,072
	$ 4,799

The reconciliation of income tax expenses recognized in other comprehensive income were as below:

Profit from continuing operations before tax Income tax using the Company’s domestic tax rate Nondeductible expenses Tax incentive Overestimation for prior periods Surtax on undistributed earnings of the prior year Tax expense	2023	2022 94,915 18,983 9,182 (4,447) (3,646) -
	$ 48,477
	$ 9,695 91 (5,326) (1,509) 1,848
	$ 4,799	20,072

B. Deferred tax assets and liabilities

Changes in the amount of deferred tax assets for the years ended December 31, 2023 and 2022 were as follows:

Deferred tax liabilities: Balance at January 1, 2023 Recognized in profit or loss Balance at December 31, 2023 Balance at January 1, 2022 Recognized in profit or loss Balance at December 31, 2023	Other $ 5,804 (2,021)
	$ 3,783
	$ - 5,804
	$ 5,804

～29～

Notes to the Financial Statements (Cont.)

Abnova (Taiwan) Corporation

Allowance for inventory valuation and obsolescence $ 95,758 (2,470)	Other 2,520 (534)	Total 98,278 (3,004)
$ 93,288	1,986	95,274
$ 98,406 (2,648)	11,266 (8,746)	109,672 (11,394)
$ 95,758	2,520	98,278

C. Assessment of tax

The Company’s tax returns for the years through 2021 were assessed by the National Taiwan Bureau.

(13) Capital and other equity

A. Ordinary shares

The Company had authorized capital of NT$800,000 thousand (80,000 thousand shares) as of December 31, 2023 and 2022, of which 60,554 thousand shares with par value of NT$10 were issued. Payments for all issued shares had been received.

B. Capital surplus

The balances of capital surplus were as follows:

Share premium	December 31, 2023 $ 474,527	December 31, 2022 474,527

According to the R.O.C. Group Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, capital increases by transferring capital surplus in excess of par value should not exceed 10% of the total common stock outstanding.

C. Retained earnings

The Company’s article of incorporation stipulates that any Company’s profit for the period should first be used to offset the prior years’ deficits (including the adjustments of the unappropriated retained earnings), allocate 10% of the remaining balance as legal reserve, unless such legal reserve has amounted to the paid-in capital, then set aside or reverse a special reserve in accordance with the laws and regulations or competent authorities. The remainder, if any, together with any undistributed retained earnings (including the adjustments of the unappropriated retained earnings) should be proposed earnings distribution by the Company’s Board of Directors. Wherein the distributable dividend and bonus may be paid by cash after a resolution has been adopted by a majority vote at a meeting of the Board of Directors attended by two-thirds of the total number of directors, and in addition thereto, a report of such distribution shall be submitted to the shareholders’

～30～

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

meeting. Wherein the distributable dividend and bonus may be paid by issuing new shares after a resolution has been adopted in the shareholders’ meeting.

The dividend distribution policy of the Company is to coordinate with the current and future development plans, consider the investment environment, capital needs, and domestic and foreign competition conditions, and take into consideration factors such as shareholders’ interests. The dividends and bonus to shareholders each year shall not be less than 10% of the distributable earnings, but when the accumulated distributable earnings are lower than 3% of the paid-in capital, the distribution may not be done. When distributing dividends and bonus to shareholders, it can be done in the form of cash or stocks, and the cash dividends should not be less than 10% of the total dividends.

(a) Legal reserve

When a company incurs no loss, it may, pursuant to a resolution by a shareholders’ meeting, distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of capital may be distributed.

(b) Special reserve

According to the laws and regulations, special earnings shall be set aside from the net reduction of other shareholders’ equity in current-period balance sheets during earnings distribution. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions.

The amount of cash dividends on the appropriations of earnings for 2022 and 2021 had been approved during the board meetings on February 24, 2023 and March 16, 2022, respectively. The relevant dividend distributions to shareholders were as follows:

Dividends distributed to ordinary shareholders: Cash	2022 Amount per share Amount $ 0.80 48,443	2021 Amount per share Amount 0.46 27,855	2021 Amount per share Amount 0.46 27,855
	Amount per share	Amount per share
	$ 0.80	0.46

The amount of dividends on the appropriation of earnings for 2023 had been approved during the board meetings on February 20, 2024. The distribution to shareholders was as follows:

as follows:
Dividends distributed to ordinary shareholders: Cash	2023
	Amount per share	Amount 43,599
	$ 0.72

～31～

Notes to the Financial Statements (Cont.)

Abnova (Taiwan) Corporation

D. Other equity interest

Balance at January 1, 2023 Exchange differences on foreign operations Balance at December 31, 2023 Balance at January 1, 2022 Exchange differences on foreign operations Share of unrealized gains and losses from financial assets measured at fair value through other comprehensive income in subsidiaries accounted for using equity method Effect on equity of disposal of subsidiaries Balance at December 31, 2022	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income (4,945) - (4,945) 20,407 - 28,730 (54,082) (4,945)	Total (11,907) (292)
	$ (6,962) (292) $ (7,254) $ (11,178) 4,216 - - $ (6,962)
			(12,199)
			9,229 4,216 28,730 (54,082)
			(11,907)

(14) Earnings per share

A. Basic earnings per share

The basic earnings per share of the Company in 2023 and 2022 were calculated based on the net profit attributable to the ordinary shareholders of the Company according to the weighted average number of ordinary shares outstanding. The calculations were as follows:

(a) Profit attributable to ordinary shareholders of the Company

2023 Profit attributable to ordinary shareholders of the Company $ 43,678 Weighted average number of ordinary shares (in thousands) 2023 Weighted average number of ordinary shares at December 31 (in thousands) (the number of shares at January 1) 60,554	2023	2022 74,843
	$ 43,678
		2022
		60,554

(b) Weighted average number of ordinary shares (in thousands)

B. Diluted earnings per share

The diluted earnings per share in 2023 and 2022 were calculated based on the net profit attributable to the ordinary shareholders of the Company according to the weighted average number of ordinary shares outstanding after all potential ordinary shares adjusted to be diluted. The calculations were as follows:

～32～

Notes to the Financial Statements (Cont.)

Abnova (Taiwan) Corporation

(a) Profit attributable to ordinary shareholders of the Company (diluted)

2023 Profit attributable to ordinary shareholders of the Company (diluted) $ 43,678 Weighted average number of ordinary shares (diluted) (in thousands) 2023 Weighted average number of ordinary shares (basic) 60,554 Effect of employee share remuneration 78 Weighted average number of ordinary shares at December 31 (diluted) 60,632	2023 $ 43,678	2022 74,843
		2022 60,554 110
	60,632	60,664

(b) Weighted average number of ordinary shares (diluted) (in thousands)
(15) Revenue from contracts with customers
A. Details of revenue

December 31, 2023	2023 $ 192,568 94,885 12,387 80,753	2022 196,828 112,624 29,325 71,543
	$ 380,593	410,320
	$ 121,011 76,590 63,250 24,502 7,343 87,897	132,754 93,223 66,825 30,701 (1,908) 88,725
	$ 380,593	410,320
	December 31, 2022 68,397 (8,152)	January 1, 2022 63,242 (14,449)
$ 45,096 (5,247)
$ 39,849	60,245 2,622	48,793
$ 2,349		2,638

B. Contract balances

For details on accounts receivable and its loss allowance, please refer to Note 6(3). The balance of contract liabilities at January 1, 2023 and 2022 recognized as revenue for the years 2023 and 2022 were NT$706 thousand and NT$864 thousand, respectively.

～33～

Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

(16) Remuneration to employees and directors

The Company’s articles of incorporation, which were authorized by the Board of Directors but has yet to be approved by the shareholders, require that earnings shall first be offset against any deficit, then, a minimum of 1% will be distributed as employee remuneration, and a maximum of 3% will be allocated as remuneration to directors. Employees who are entitled to receive the abovementioned employee remuneration, in share or cash, include the employees of the Company’s subsidiaries who meet requirements set by the Board of Directors. The aforesaid remuneration to directors shall be distributed in cash only.

For the years ended December 31, 2023 and 2022, the Company recognized its employee remuneration amounting to NT$2,155 thousand and NT$4,179 thousand respectively; as well as its remuneration to directors and supervisors amounting to NT$411 thousand and NT$795 thousand, respectively. These amounts were calculated by using the Company’s pre-tax net profit for the period before deducting the amounts of the remuneration to employees and directors and supervisors, multiplied by the distribution of ratio of the remuneration to employees and directors and supervisors based on the Company’s articles of incorporation, and expensed under operating costs or expenses. If any discrepancy occurred between the actual distributions and the accrued amount for the following year, it shall be treated as a change in accounting estimates, and the difference shall be recognized as profit or loss for the next year. Related information would be available at the Market Observation Post System website.

The amounts, as stated in the financial statements are identical to those of the actual distributions for 2023 and 2022.

(17) Non-operating income and expenses
A. Interest income

The details of interest income were as follows:

Interest income from bank deposits B. Other income The details of other income were as follows: Other income C. Other gains and losses The details of other gains and losses were as follows: Gains on disposals of property, plant and equipment Foreign exchange gains (losses) D. Finance costs The details of finance costs were as follows: Other finance expenses	2023 $ 10,332	2022 3,463
	2023 $ 152	2022 800 2022 - 26,053
	2023 $ 160 357
	$ 517	26,053
	2023 $ 140	2022 132

～34～

Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

(18) Financial instruments
A. Credit risk
(a) Credit risk exposure

The carrying amount of financial assets represents the maximum amount exposed to credit risk.

(b) Concentration of credit risk

Except for the biggest customers, the Company has no significant credit risk exposure to any single counterparty or any group of counterparties with similar characteristics. For the years ended December 31, 2023 and 2022, 13% and 31%, respectively, of accounts receivable were concentrated on the biggest customer, and 87% and 69%, respectively, of accounts receivable were concentrated on other counterparties’ transactions.

For credit risk exposure of notes and accounts receivable, please refer to Note 6(3). Other financial assets measured at amortized cost, including other receivables are with low credit risk and which loss allowance for the period is measured by the twelve-month expected credit loss amount. As of December 31, 2023, the Company had no impairment on other receivables.

B. Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements.

Carrying amount	Contractua lcash flow	Within 1 year	1 to 2years	2 to 5 years	Over 5 years
$ 14,935 31,630 7,706 5,787	14,935 31,630 7,867 5,787	14,935 31,630 5,203 5,787	- - 2,664 -	- - - -	- - - -
$ 60,058	60,219	57,555	2,664	-	-
$ 14,995 36,541 10,464 4,555	14,995 36,541 10,725 4,555	14,995 36,541 6,914 4,555	- - 3,811 -	- - - -	- - - -
$ 66,555	66,816	63,005	3,811	-	-

The Company does not expect the cash flows included in the maturity analysis to occur significantly earlier or at significantly different amounts.

～35～

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

C. Currency risk (a) Exposure to foreign currency risk

The Company’s significant exposure to foreign currency risk was as follows:

Financial assets Monetary items USD EUR GBP Non-monetary items USD EUR Financial liabilities Monetary items USD EUR Financial assets Monetary items USD EUR GBP JPY Non-monetary items USD EUR Financial liabilities Monetary items USD EUR JPY	December 31, 2023 Foreign currency (inthousands) Exchange rate $ 11,048USD：TWD 30.705 373EUR：TWD 33.98 88GBP：TWD 39.15 2,810USD：TWD 30.705 (83)EUR：TWD 33.98 321USD：TWD 30.705 86EUR：TWD 33.98 December 31, 2022		December 31, 2023	New Taiwan Dollars 339,214 12,682 3,464 86,277 (2,809) 9,844 2,909 New Taiwan Dollars 354,194 22,132 6,906 3,407 97,564 (2,809) New Taiwan Dollars 10,211 3,463 1,029
	Foreign currency (in thousands) Exchange rate $ 11,533USD：TWD 30.71 676EUR：TWD 32.72 186GBP：TWD 37.09 14,659JPY：TWD 0.2324 3,177USD：TWD 30.710 (86)EUR：TWD 32.72 December 31, 2022
	Foreign currency (in thousands) Exchange rate 333USD：TWD 30.71 106EUR：TWD 32.72 4,426JPY：TWD 0.23

～36～

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

(b) Sensitivity analysis

The Company’s monetary items of exposure to foreign currency risk arises from the conversion of the foreign currency exchange gains and losses on cash and cash equivalents, accounts and other receivables, accounts and other payables and financial assets measured at fair value through other comprehensive income that are denominated in foreign currency. A strengthening (weakening) of 1% of the NTD against the USD as of December 31, 2023 and 2022 would have increased (decreased) the net profit after tax by NT$2,741 thousand and NT$2,975 thousand, respectively.

Since the Company transacts in different functional currencies, the information on foreign exchange gains (losses) on monetary items is disclosed by total amount. For the years ended December 31, 2023 and 2022, the foreign exchange gains (losses) (including realized and unrealized portions) amounted to NT$357 thousand and NT$26,053 thousand, respectively.

D. Interest rate analysis
Please refer to the notes on liquidity risk management and interest rate exposure of the Company’s financial assets and liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding assets with variable interest rates, the analysis is based on the assumption that the amount of assets outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 1% when reporting to the management internally, which also represents the Company management’s assessment of the reasonably possible interest rate change.

If the interest rate had increased or decreased by 1% basis points, the Company’s net income would have increased or decreased by NT$685 thousand and NT$1,598 thousand for the years ended December 31, 2023 and 2022, assuming all other variable factors remain constant. This is mainly due to the Company’s deposits and investments in floating variable rates.

E. Fair value of financial instruments
(a) Fair value hierarchy

The Company’s financial assets at fair value through other comprehensive income are measured at fair value on a recurring basis. The carrying amount and fair value of financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value and lease liabilities, disclosure of fair value information is not required:

～37～

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

	December 31, 2023	December 31, 2023	December 31, 2023
Carrying amount $ -		Fair value		Total -
	Level 1 -	Level 2 -	Level 3 -
360,329 39,849 3,223 858 1,781	- - - - -	- - - - -	- - - - -	- - - - -
406,040	-	-	-	-
$ 406,040	-	-	-	-
$ 14,935 31,630 5,787 7,706	- - - -	- - - -	- - - -	- - - -
$ 60,058	-	-	-	-
	December 31, 2022
Carrying amount $ -		Fair value		Total -
	Level 1 -	Level 2 -	Level 3 -
362,971 60,245 2,452 849 2,581	- - - -	- - - -	- - - -	- - - -
429,098	-	-	-	-
$ 429,098	-	-	-	-

～38～

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

	December 31, 2022	December 31, 2022	December 31, 2022
Carrying amount $ 14,995 36,541 4,555 10,464		Fair value		Total - - - -
	Level 1 - - - -	Level 2 - - - -	Level 3 - - - -
$ 66,555	-	-	-	-

(b) Valuation techniques for financial instruments measured at fair value
(2.1) Non-derivative financial instruments

The fair values of financial instruments other than those in an active market are acquired through valuation technique or referring to quotations from counterparties. The fair value acquired through valuation technique can refer to the current fair value of other financial instruments with substantial conditions and similar characteristics, discounted cash flow method or other valuation techniques.

(19) Financial risk management
A. Overview

The Company has exposures to the following risks from its financial instruments:

(a) Credit risk
(b) Liquidity risk
(c) Market risk

The following likewise discusses the Company’s objectives, policies and processes for measuring and managing the abovementioned risks. For more disclosures about the quantitative effects of these risk exposures, please refer to the respective notes in the accompanying financial statements.

B. Risk management framework

The Board of Directors is fully responsible for the development and control of the risk management policy of the Company, which its establishment is to identify and analyze the risks faced by the Company, set adequate risk limits and controls and supervise the risks and compliance with risk limits. Risk management policies and systems are regularly reviewed to reflect changes in market conditions and operations of the Company. The Company develops a disciplined and constructive control environment through training, management principles and operating procedures so that all employees understand their roles and responsibilities.

The Board of Directors oversees how the managements supervision is in compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Company is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, and reports the reviews to the Board of Directors.

～39～

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

C. Credit risk

Credit risk is the risk of financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations. A credit policy of the Company is stipulated internally to assess the credit quality of customers through the internal risk controls of considering their financial conditions, past experience and other factors, and periodically monitor the use of credit lines. The main credit risk arises principally from cash and cash equivalents, deposits in banks and financial institutions and outstanding accounts receivable from customers’ sales. The credit quality of the financial institutions that the Company contacts is stable, and deals with multiple institutions to diversify credit risks. The possibility of default is expected to be very low. The maximum amount of exposure to credit risk on the balance sheet date is the carrying amount of cash and deposits in banks.

D. Liquidity risk
Cash flow forecasts are summarized by the Company’s finance department. The management regularly monitors rolling forecasts of working capital needs to ensure sufficient funds to cover daily operating activities and appropriate financial flexibility to maintain a balance between funding continuity and agility.
E. Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices that will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

(a) Currency risk

The Company operates transnationally, so it is subject to currency risks arising from transactions that are relatively different from the functional currency of the Company and its subsidiaries, mainly the US dollar and Euro. The related currency risk arises from future commercial transactions, assets and liabilities recognized and net investments in foreign operating institutions.

The management of the Company has established a policy, managing currency risk arises from future commercial transactions and assets and liabilities recognized, and based on the principal of natural hedging, the Company considers the funding needs and net positions in the Company and its subsidiaries’ currency to hedge risks in accordance with market foreign exchange conditions. Currency risks arise when future commercial transactions and assets or liabilities recognized are denominated in a foreign currency that is not the Company’s functional currency.

(b) Interest rate risk

The measures taken by the Company to respond to the risk of interest rate changes are mainly to regularly assess loan interest rates from banks and each currency and maintain good relationships with financial institutions to obtain lower financing costs, meanwhile practice methods such as strengthening working capital management to reduce the dependence on bank loans and diversify the risk of interest rate changes.

(20) Capital management

The goal of the Company’s capital management is to ensure for continuing operating, maintain an optimal capital structure to reduce capital costs, and provide remuneration to shareholders. The Company achieves the goal of capital management through monitoring whether the capital position is sufficient to meet the debt repayments.

～40～

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

7. Related-party transactions

(1) Names of related parties and their relationships

The transactions between the Company and subsidiaries and other related parties within the period of this financial report were as follows:

Name of related party Abnova-GmbH Abnova Holding Corporation AxleBio Ventures Abnova (Cayman) Corporation Abnova (HK) Limited Abnova Diagnostics Citil Pharma Incorporated Wellconn Genomics	Relationship with the Company
	Subsidiary of the Company Subsidiary of the Company Subsidiary of the Company Subsidiary indirectly owned by the Company Subsidiary indirectly owned by the Company Subsidiary indirectly owned by the Company Investee accounted for using equity method of subsidiary of the Company (associate) Other related party

(2) Significant transactions with related parties
A. Operating revenue

The significant sales amount of the Company to related parties were as follows:

Associate	2023 $ 448	2022 -

The sales between the Company and its associates have no other counterparty for comparison but is negotiated. The collection period is one to four months, and the receivables between the related parties have not collateral.

B. Receivables from related parties

Receivables from related parties were as follows:

Account Relationship Other receivables Subsidiary . Loans to related parties Related parties Abnova-GmbH Less: Investment additions accounted for using equity method Other non-current liabilities	December 31, 2023 $ 114 December 31, 2023 $ 2,371 (2,809)	December 31, 2022 -
		December 31, 2022 2,283 (2,809)
	$ (438)	(526)

C. Loans to related parties
(a) The Company did not charge interest for the above-mentioned transactions of loans to related parties.
(b) The Company’s maximum limit of fund lent to related parties in 2023 and 2022 were both NT$5,000 thousand.

D. Other

(a) The Company entrusted other related parties to provide cell testing services. Since there was no similar type of transaction for reference, the transaction price and payment terms were agreed according to the contract signed by both parties. The commissioned

～41～

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

research expenses (as R&D expenses) in 2023 and 2022 were NT$360 thousand and NT$1,575 thousand respectively.

(b) The Company signed an office leasing contract with other related parties, which has been expired in March, 2023. The leasing price was negotiated by both parties, and the Company collects rent on a monthly basis according to the contract. The rent income in 2023 and 2022 were NT$135 thousand and NT$648 thousand, respectively.
(3) Key management personnel transaction

Key management personnel compensation comprised:

Short-term employee benefits

d:
2023 $ 11,651	2022
	9,606

8. Pledged assets

The carrying values of pledged assets were as follows:

Pledged assets	Object	December 31, 2023 $ 858 1,781	December 31, 2022 849 2,581
Pledged time deposits (as other current assets) Guarantee deposits paid (as other non-current assets)	Customs duty pledged, Deposits for office and plant
		$ 2,639	3,430

9. Commitments and contingencies

The Company’s significant contractual commitments were as follows:

The Company and Louisiana State University of the United States signed an exclusive license for CHP technology on September 20, 2018, and the first payment was paid in 2018. Since the follow-up payments of the above contract must meet the requirements of conditions stipulated in the contract and the outcome obtained, whether and when it will be paid are uncertain. The Company’s contractual commitments for the acquisition of intangible assets that were not recognized in 2023 and 2022 were NT$33,315 thousand and NT$33,320 thousand, respectively. In addition, the Company paid the maintenance fee on an annual basis according to the contract, and paid royalty after the income was generated.

10. Losses due to major disasters `：` None.

11. Subsequent events `：` None.

12. Other

The employee benefits, depreciation, and amortization expenses categorized by function, were as follows:

==> picture [439 x 127] intentionally omitted <==

----- Start of picture text -----

By function 2023 2022
Operating Operating Total Operating Operating Total
By item costs expenses costs expenses
Employee benefits
Salaries and wages 34,285 41,333 75,618 36,480 45,568 82,048
Labor and health insurance 3,893 3,588 7,481 3,977 3,695 7,672
Pension 1,895 1,770 3,665 1,983 1,866 3,849
Remuneration to directors - 2,451 2,451 - 2,835 2,835
Other 1,872 1,606 3,478 1,854 1,756 3,610
Depreciation expenses 7,038 13,706 20,744 8,037 13,287 21,324
Amortization expenses 8,214 2,606 10,820 8,331 2,408 10,739
----- End of picture text -----

～42～

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

The complementary information on the number of employees and employee benefits for the years ended December 31, 2023 and 2022 was as follows:

nded December 31, 2023 and 2022 was as follows:
Number of employees Number of non-employee directors Average employee benefits Average salaries and wages Adjustments of average salaries and wages Remuneration to supervisors	2023 105 6 $ 912 $ 764 (3.17)% $ -	2022 110
		6
		934
		789
		8.68% -

The remuneration policy (including directors, managers and employees) is as follows:

(1) Directors
A. Remuneration to directors is paid monthly in accordance with the Company’s Articles of Incorporation, and is allocated according to the annual income and the ratio specified in the Articles of Incorporation. The appropriation is reviewed by the Remuneration Committee and reported to the shareholders’ meeting after resolved by the Board of Directors.
B. According to Article 24 of the Company’s Articles of Incorporation, remuneration to directors are not more than 3% of the current year net profit (the profit refers to the profit before tax deducting the distribution of remunerations to employees and directors). When allocating the net profits, including the adjustments of unappropriated retained earnings, for each fiscal year, the Company shall first offset its losses in previous years. The aforesaid directors’ remuneration shall be paid in cash only.

According to Article 25 of the Articles of Incorporation, the Company’s directors may be paid traveling expenses on a case-by-case basis, and the amount is authorized to the Board of Directors to determine in accordance with the general standards in the industry. According to Article 26 of the Articles of Incorporation, the Company’s directors may be paid remuneration monthly, and the amount is authorized to the Board of Directors to determine in accordance with the general standards in the industry. Remuneration to independent directors may be set a reasonable amount different from general directors.

(2) Managers

The rule of remuneration to managers (including salary, bonus and employee remuneration) is based on the regulations of the Company, and salary and bonus are reviewed by the Remuneration Committee and approved by the Board of Directors. The appropriation of employee remuneration is reviewed by the Remuneration Committee and reported to the shareholders’ meeting after resolved by the Board of Directors according to the annual income and the ratio specified in the Articles of Incorporation.

(3) Employees
A. Assess by the appointment of position, education, work ability, experience and professional knowledge and skills.
B. According to Article 24 of the Company’s Articles of Incorporation, remuneration to employees is not more than 1% of the current year net profit (the profit refers to the profit before tax deducting the distribution of remunerations to employees and directors). When allocating the net profits, including the adjustments of unappropriated retained earnings, for each fiscal year, the Company shall first offset its losses in previous years. Employees who are entitled to receive the abovementioned employee remuneration, in

～43～

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

share or cash, include the employees of the Company’s subsidiaries who meet requirements set by the Board of Directors.

(4) The Company’s remuneration policy is regularly reviewed by the Remuneration Committee. In addition to evaluating the Company’s overall operating performance, future industry operating risks and development trends, and peer industry conditions, the remuneration policy sets reasonable remuneration with reference to the personal performance and contribution of directors and managers to the Company, and is reviewed in due time depending on the actual operating conditions and laws and regulations.

13. Other disclosures

(1) Information on significant transactions

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Company:

A. Loans to other parties ：

(Expressed in Thousands of New Taiwan Dollars)

==> picture [436 x 108] intentionally omitted <==

----- Start of picture text -----

Name of Name of Account Related Highest Ending Actual Range Nature of Transactio Reasons Allowance Collateral Individual Maximum
Number lender borrower name party balance of balance usage of financing n amount for for bad funding limit of
financing amount interest for short-term debt loan limits fund
to other during the rates business financing Amount financing
parties period during between
during the the two
period period parties
Name Value
0 Abnova Abnova- Other Yes 5,000 5,000 2,371 - 2 - Operating - - 128,631 514,527
(Taiwan) GmbH receivables turnover
Corporation － related for
party insufficient
working
capital
----- End of picture text -----

Note 1 ： The numbers filled in were as follows:

The Company is ‘0’.
The investee companies are numbered in order starting from ‘1’.

Note 2 ： Financing purpose:

‘1’ for entities the Company has business transactions with.
‘2’ for entities that have short-term financing needs.

Note 3 ： Limit of fund financing:

The total amount available for financing purposes shall not exceed 40% of the Company’s net worth in the latest financial statements.
The individual financing amount to one entity shall not exceed 10% of the Company’s net worth in the latest financial statements.
B. Guarantees and endorsements for other parties: None.
C. Securities held as of December 31, 2023 (excluding investment in subsidiaries, associates and joint ventures):

and joint ventures):	and joint ventures):	and joint ventures):
			(Expressed	in Thousands of New Taiwan Dollars / Share)
Name of holder Category and name of security Relationship with company				Ending balance
			Account name	Shares Carrying amount		Percentage of ownership Fair value		Note
The Company	Hukui Biotechnology Corporation (Samoa)	-	Financial assets measured at fair value through other comprehensive income	50,000	-	1.32%	-

D. Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock: None.
E. Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.
F. Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.
G. Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: None.

～44～

Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

H. Receivables from related parties with amounts exceeding the lower of NT$100 million or
- 20% of the capital stock: None.
I. Trading in derivative instruments: None.
(2) Information on investees (excluding information on investees in Mainland China): The following is the information on investees for the years ended December 31, 2023

(Expressed in Thousands of New Taiwan Dollars / Share)

Name of investor	Name of investee	Location	Main businesses and products	Original i am	nvestment ount	Balance as	of December 31, 2023 Net income (loss) of investee Investment profit (loss) recognized by investor Percentage of ownership Carrying amount Note	of December 31, 2023 Net income (loss) of investee Investment profit (loss) recognized by investor Percentage of ownership Carrying amount Note	of December 31, 2023 Net income (loss) of investee Investment profit (loss) recognized by investor Percentage of ownership Carrying amount Note	of December 31, 2023 Net income (loss) of investee Investment profit (loss) recognized by investor Percentage of ownership Carrying amount Note	of December 31, 2023 Net income (loss) of investee Investment profit (loss) recognized by investor Percentage of ownership Carrying amount Note
				December 31, 2023	December 31, 2022	Shares
The Company `〞` `〞` `〞` AxleBio Ventures Abnova Holding Corporation Abnova (Cayman) Corporation	Abnova GmbH (Note 4) Abnova Holding Corporation AxleBio Ventures Citil Pharma Incorporated Citil Pharma Incorporated Abnova (Cayman) Corporation Abnova (HK) Limited	Germany British Virgin Islands Taiwan USA USA Cayman Islands Hong Kong	Distribution of biological products Investment business Investment business R&D of cell therapy technology R&D of cell therapy technology Investment business Investment business	850 80,908 1,300 - 342 79,987 51,277	850 80,908 - 888 - 79,987 51,277	(Note 3) 52,700 130,000 - 2,890,000 2,605,000	100.00% 100.00% 100.00% - 40.00% 100.00% 100.00%	(2,809) - - Subsidiary 86,277 (10,504) (10,504) `〞` 1,154 (65) (65) `〞` - (491) (230) Associate (Note 5) 251 (491) (9) `〞` 86,284 (10,394) (10,394) Second-tier subsidiary 84,527 (5,968) (5,968) `〞`
	Abnova Diagnostics	Japan	R&D, manufacturing and sales of medical device, etc., testing services	19,548	19,548	1,800,000	100.00%	1,086	(4,210)	(4,210)	`〞`

Note 1 ： The original investment amount of investees was calculated at USD1:TWD30.705 of December 31, 2023.

Note 2 ： The original investment amount of investees was calculated at JPY1:TWD0.2172 of December 31, 2023. Note 3 ： The investee is a limited company with no shares issued.

Note 4 ： The investee is a subsidiary of the Company, and the net amount after deducting its receivables was listed in “Other non-current liabilities”. Note 5 ： Please refer to the explanation in Note 6(6).

(3) Major shareholders:

Unit: Shares

Major shareholders:	Unit: Shares	Unit: Shares
Shareholding Shareholder’s name	Shares Percentage
Wilber Huang	3,651,144	6.02%

14. Segment information

Please refer to the 2023 consolidated financial statements.

～45～

Abnova (Taiwan) Corporation Statement of cash and cash equivalents December 31, 2023

Item Cash Cash in banks Total	December 31, 2023 Description Petty cash Checking account Demand deposits Foreign demand deposits (USD1,402 thousand and EUR165 thousand, etc.) Time deposits (USD8,400 thousand and NT$33,000 thousand)	(Expressed in Thousands of New Taiwan Dollars) Amount $ 466 487 15,756 52,698 290,922
		$ 360,329

Statement of accounts receivable

Item Non-related party Client A Client B Client C Client D Client E Other Less: Loss allowance Total	Description	Amount $ 5,665 5,645 5,294 2,814 2,603 22,584 (5,247) $ 39,358	Note
			The amount of each item does not exceed 5% of the account balance.

～46～

Abnova (Taiwan) Corporation Statement of inventories December 31, 2023

(Expressed in Thousands of New Taiwan Dollars)

Item	Amount Cost Net realizable value $ 63,404 23,680 586,351 250,513 9,954 9,954 198,268 118,303 8,378 689 8,388 5,163 874,743 408,302 (466,441) $ 408,302	Amount Cost Net realizable value $ 63,404 23,680 586,351 250,513 9,954 9,954 198,268 118,303 8,378 689 8,388 5,163 874,743 408,302 (466,441) $ 408,302	Amount Cost Net realizable value $ 63,404 23,680 586,351 250,513 9,954 9,954 198,268 118,303 8,378 689 8,388 5,163 874,743 408,302 (466,441) $ 408,302	Note
	Cost $ 63,404 586,351 9,954 198,268 8,378 8,388
Raw materials and supplies Semi-finished goods Work in progress Finished goods Testing instruments Merchandise inventory Subtotal Less: Allowance for inventory valuation and impairment loss
	874,743 (466,441)

	$ 408,302

～47～

Abnova (Taiwan) Corporation Statement of movements in non-current financial assets measured at fair value through other comprehensive income For the year ended December 31, 2023

(Expressed in Thousands of New Taiwan Dollars)

Beginning balance Shares Fair value 50,000$ -	Acquisition Shares Amount - -	Disposal Shares Amount - -	Ending balance Shares Fair value 50,000 -
Shares	Shares	Shares	Shares
50,000	-	-	50,000

～48～

Abnova (Taiwan) Corporation Statement of Other Current Assets December 31, 2023

(Expressed in Thousands of New Taiwan Dollars)

Item	Description	Amount $ 14,469 858 1,334	Note
Prepayments Restricted assets Others
		$ 16,661

Statement of Other Non-current Assets

Item	Description	Amount $ 1,781 851 2,606	Note
Guarantee deposits paid Net defined benefit assets Others Total
		$ 5,238

～49～

Abnova (Taiwan) Corporation Statement of movements in investments accounted for using equity method For the year ended December 31, 2023

(Expressed in Thousands of New Taiwan Dollars)

Balance at January 1 Shares Amount 52,700$ 97,014 2,890,000 550 - - $ 97,564	Acquisition Shares Amount - - - - 130,000 1,300 1,300	Acquisition Shares Amount - - - - 130,000 1,300 1,300	Disposal Shares Amount - 10,737 2,890,000 550 - 146 11,433	Disposal Shares Amount - 10,737 2,890,000 550 - 146 11,433	Balance at December 31 Shares Percentage of ownership Amount 52,700 100.00% 86,277 - - % - 130,000 100.00% 1,154 87,431	Balance at December 31 Shares Percentage of ownership Amount 52,700 100.00% 86,277 - - % - 130,000 100.00% 1,154 87,431	Balance at December 31 Shares Percentage of ownership Amount 52,700 100.00% 86,277 - - % - 130,000 100.00% 1,154 87,431	Market value or net assets value Unit price Total amount 1,637 86,277 0.11 800 9.4 1,222 88,299	Market value or net assets value Unit price Total amount 1,637 86,277 0.11 800 9.4 1,222 88,299	Note
	Shares		Shares - 2,890,000 -		Shares 52,700 - 130,000	Percentage of ownership		Unit price 1,637 0.11 9.4
	- - 130,000					100.00% - % 100.00%				Note
$ 97,564		1,300		11,433			87,431		88,299

Note: Please refer to the explanation in Note 6(6).

～50～

Abnova (Taiwan) Corporation Statement of accounts payable December 31, 2023

(Expressed in Thousands of New Taiwan Dollars)

Name		Amount $ 2,679 1,431 859 9,966	Amount $ 2,679 1,431 859 9,966
Company A Company B Company C Other Total Item
		$ 14,935
Salaries and wages payable Labor and health insurance and pension payable Other Total	Salaries and wages, overtime pay and bonus Accrued labor and health insurance and pension payable Accrued expenses payables
			$ 31,630

～51～

Abnova (Taiwan) Corporation Statement of operating costs For the year ended December 31, 2023

(Expressed in Thousands of New Taiwan Dollars)

Item Raw materials and supplies, beginning of year Add: Materials purchased Less: Inventory, end of year Scrapped raw materials and supplies Transferred to expenses Transferred to intangible assets Transferred to other expenses Supplies consumed Direct labor Manufacturing expenses Manufacturing cost Add: Work in process, beginning of year Semi-finished goods, beginning of year Materials purchased Less: Work in process, end of year Semi-finished goods, end of year Scrapped semi-finished goods Transferred to expenses Transferred to other expenses Cost of finished goods Add: Finished goods, beginning of year Testing instruments, beginning of year Merchandise inventory, beginning of year Inventory purchased Less: Finished goods, end of year Testing instruments, end of year Merchandise inventory, end of year Transferred to expenses Transferred to other expenses Scrapped finished goods Cost of inventory sold Inventory disposal loss Loss on price recovery of inventory valuation and obsolescence Total operating costs	Amount Subtotal Total $ 60,253 56,287 (63,404) (2,178) (1,058) (2,325) (2,786) 44,789 11,581 86,061 142,431 6,503 600,608 6,646 (9,954) (586,351) (57,546) (40) (4,274) 98,023 189,195 9,243 9,066 71,905 (198,268) (8,378) (8,388) (27) (1,610) (402) 160,359 60,126 (12,348) $ 208,137	Amount Subtotal Total $ 60,253 56,287 (63,404) (2,178) (1,058) (2,325) (2,786) 44,789 11,581 86,061 142,431 6,503 600,608 6,646 (9,954) (586,351) (57,546) (40) (4,274) 98,023 189,195 9,243 9,066 71,905 (198,268) (8,378) (8,388) (27) (1,610) (402) 160,359 60,126 (12,348) $ 208,137	Amount Subtotal Total $ 60,253 56,287 (63,404) (2,178) (1,058) (2,325) (2,786) 44,789 11,581 86,061 142,431 6,503 600,608 6,646 (9,954) (586,351) (57,546) (40) (4,274) 98,023 189,195 9,243 9,066 71,905 (198,268) (8,378) (8,388) (27) (1,610) (402) 160,359 60,126 (12,348) $ 208,137
			142,431 6,503 600,608 6,646 (9,954) (586,351) (57,546) (40) (4,274)
			98,023 189,195 9,243 9,066 71,905 (198,268) (8,378) (8,388) (27) (1,610) (402) 160,359 60,126 (12,348)
		$ 208,137

～52～

Abnova (Taiwan) Corporation Statement of marketing expenses For the year ended December 31, 2023

(Expressed in Thousands of New Taiwan Dollars)

Item	Description	Amount $ 11,671 13,350 3,468 4,641 12,131	Note
Salaries and wages Freight Advertisement expenses Packing expenses Other expenses	Salaries and wages, overtime pay and bonus		Each amount does not exceed 5% of the account balance.
		$ 45,261

Statement of administrative expenses

Item	Description	Amount $ 23,451 5,237 3,483 11,266	Note
Salaries and wages Services expenses Miscellaneous expenses Other expenses	Salaries and wages, overtime pay and bonus		Each amount does not exceed 5% of the account balance.
		$ 43,437

～53～

Abnova (Taiwan) Corporation Statement of research and development expenses For the year ended December 31, 2023

(Expressed in Thousands of New Taiwan Dollars)

Item	Description	Amount $ 8,662 7,680 10,043 2,497 9,514	Note
Salaries and wages Materials for R&D Depreciation Amortization Other expenses	Salaries and wages, overtime pay and bonus		Each amount does not exceed 5% of the account balance.
		$ 38,396

～54～

AI assistant

Abnova — Annual Report 2023

52384_rns_2023-11-09_60bc469f-24b1-49d4-9192-eeb85a09dbad.pdf

Abnova (Taiwan) Corporation Parent Company Only Financial Statements

With Independent Auditors’ Report

Table of Contents

Independent Auditors’ Report

Opinion

Basis for Opinion

Key audit matter

Description of key audit matter:

Our principal audit procedures included:

Responsibilities of management and those charged with governance for the financial statements

Auditor’s responsibilities for the audit of the financial statements

KPMG

Abnova (Taiwan) Corporation

Balance Sheets

December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

Abnova (Taiwan) Corporation Statements of Comprehensive Income For the years ended December 31, 2023 and 2022 (Expressed in Thousands of New Taiwan Dollars)

Abnova (Taiwan) Corporation Statements of Changes in Equity For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

Abnova (Taiwan) Corporation Statements of Cash Flows

For the years ended December 31, 2023 and 2022 (Expressed in Thousands of New Taiwan Dollars)

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

Abnova (Taiwan) Corporation Notes to the Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in thousands of New Taiwan Dollars, unless specified otherwise)

1. Company history

3. New standards, amendments and interpretations adopted

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

4. Summary of significant accounting policies

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

B. Foreign operations

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

5. Significant accounting assumptions and judgments, and major sources of estimation uncertainty

(1) Valuation of inventories

6. Explanation of significant accounts

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

(5) Inventories

(7) Property, plant and equipment

Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

(8) Right-of-use assets

Abnova (Taiwan) Corporation

(9) Intangible assets

Abnova (Taiwan) Corporation

(10) Lease liabilities

A. Buildings and structures leases

B. Other leases

(11) Employee benefits

A. Defined benefit plans

(a) Composition of plan assets

(b) Movements in present value of defined benefit obligations

(c) Movements in fair value of plan assets

(d) Expenses recognized in profit or loss

Abnova (Taiwan) Corporation

(e) Actuarial assumptions

(f) Sensitivity analysis

B. Defined contribution plans

Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

A. Tax expense

B. Deferred tax assets and liabilities

Abnova (Taiwan) Corporation

C. Assessment of tax

(13) Capital and other equity

A. Ordinary shares

Abnova (Taiwan) Corporation

Abnova Annual Report 2023

10. Losses due to major disasters `：` None.

11. Subsequent events `：` None.