Abnova - Annual Report 2022 | FinancialReports.eu

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Stock Code: 4133

Abnova （ Taiwan ） Corporation

2022 Annual Report

Taiwan Stock Exchange Market Observation Post System: http://mops.twse.com.tw Abnova（Taiwan）Corporation Annual Report is available at: http://www.abnova.com

Printed on Mar. 31, 2023

Notice to readers.

THIS IS A TRANSLATION OF THE 2022 ANNUAL REPORT (THE “ANNUAL REPORT”) 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 ANNUAL REPORT SHALL GOVERN ANY AND ALL MATTERS RELATED TO THE INTERPRETATION OF THE SUBJECT MATTER STATED HEREIN.

Spokesperson

Name: Jih Pei Ju Title: President Tel: 886-2-87511888 E-mail: [email protected]

Headquarters, Branches and Plant

Headquarters Address: 9th Fl., No.108, Jhouzih St. Neihu District. Taipei Taiwan Tel: 886-2- 87511888

Deputy Spokesperson

Name: Tung I Ling Title: Chairman Office Special Assistant Tel: 886-2-87511888 E-mail: [email protected]

Taoyuan Plant

Address: No. 326-8, Sec. 4, Zhongzheng Rd. Zhongli Dist., Taoyuan Taiwan Tel: 886-3-4989228

Stock Transfer Agent

KGI Address: 5F., No. 2, Sec. 1, Chongqing S. Rd., Zhongzheng Dist., Taipei City Tel: 886-2-23892999 Website: http://www. kgieworld.com.tw

Neihu Plant

Address: 9th Fl., No.112 & 114, Jhouzih St. Neihu District. Taipei Taiwan Tel: 886-2- 87511888

Auditors

KPMG Accounting Firm Auditors: Hsu Shu Min,Kuo, Rou Lan Address: 68F., No. 7, Sec. 5, Xinyi Rd., Xinyi Dist., Taipei City Tel.: 886-2-81016666 Website: http://www. kpmg.com.tw

Overseas Securities Exchange

None

Corporate Website

http://www. abnova.com

Page number

I. Letter to Shareholders ............................................................................................................................................... 1 II. Company Profile 2.1 Date of Incorporation ........................................................................................................................................... 4 2.2 Company History ............................................................................................................................................... 4 III. Corporate Governance Report 3.1 Organization ......................................................................................................................................................... 5 3.1.1 Organization Chart ............................................................................................................................................ 5 3.1.2Major Corporate Functions ................................................................................................................................ 6 3.2 Information on the Directors, Supervisors and Management Team ................................................................... ..7 3.2.1 Directors and supervisors .................................................................................................................................. ..7 3.2.2 Information on the company's President, assistant Presidents, Senior managers, and the chiefs of all the company's divisions and branch units .............................................................................................................. 15 3.2.3 Remuneration of Directors, Independent Directors, Supervisors, President, and Vice Presidents .................... 16 3.2.4 Separately compare and describe total remuneration, as a percentage of net income stated in the parent company only financial reports or individual financial reports, as paid by this company and by each other company included in the consolidated financial statements during the past 2 fiscal years to directors, supervisors, Presidents, and assistant Presidents, and analyze and describe remuneration policies, standards, and packages, the procedure for determining remuneration, and its linkage to operating performance and future risk exposure ........................................................................................................................................................................... 19 3.3 Corporate Governance ............................................................................................................................... ……21 3.3.1 Board of Directors ............................................................................................................................................. 21 3.3.2 Performance Evaluation of the Board of Directors ........................................................................................... 25 3.3.3 Audit Committee ............................................................................................................................................... 25 3.3.4 Corporate Governance Implementation Status and Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” ................................................................................................ 27 3.3.5 If the company has a remuneration committee or nomination committee in place, the composition and operation of such committee shall be disclosed ................................................................................................................. 35 3.3.6 Fulfillment of CSR and Deviations from the "Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies ...................................................................................................................... 36 3.3.7 Fulfillment of Ethical Corporate Management and Deviations from the "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies .................................................................................. 43 3.3.8 If the company has adopted corporate governance best-practice principles or related bylaws, disclose how these are to be searched .............................................................................................................................................. 44 3.3.9 Other significant information that will provide a better understanding of the state of the company's implementation of corporate governance may also be disclosed ....................................................................... 44 3.3.10 Internal Control System .................................................................................................................................. 45

3.3.11 If there has been any legal penalty against the company or its internal personnel, or any disciplinary penalty by the company against its internal personnel for violation of the internal control system, during the most recent fiscal year or during the current fiscal year up to the publication date of the annual report, where the result of such penalty could have a material effect on shareholder equity or securities prices, the annual report shall disclose the penalty, the main shortcomings, and condition of improvement ................................................... 46
3.3.12 Material resolutions of a shareholders meeting or a board of directors meeting during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report ................................... 46
3.3.13 Where, during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, a director or supervisor has expressed a dissenting opinion with respect to a material resolution passed by the board of directors, and said dissenting opinion has been recorded or prepared as a written declaration, disclose the principal content thereof ............................................................................................. 47
3.3.14 A summary of resignations and dismissals, during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, of the company's chairperson, President, chief accounting officer, chief financial officer, chief internal auditor, chief corporate governance officer, and chief research and development officer ........................................................................................................................................... 47
3.4 Information Regarding the Certified Public Accountants' Audit Fee ................................................................... 48
3.4.1 The securities firm shall disclose the amounts of the audit fees and non-audit fees paid to the attesting CPAs and to the accounting firm to which they belong and to any affiliated enterprises as well as the details of non-audit services .............................................................................................................................................................. 48
3.4.2 When the securities firm changes its accounting firm and the audit fees paid for the financial year in which the change took place are lower than those paid for the financial year immediately preceding the change, the amount of the audit fees before and after the change and the reason shall be disclosed ................................................ 48
3.4.3 When the audit fees paid for the current financial year are lower than those paid for the immediately preceding financial year by 10 percent or more, the amount and percentage of and reason for the reduction in audit fees shall be disclosed ............................................................................................................................................... 48
3.5 Information on replacement of certified public accountant .................................................................................. 48
3.5.1 Regarding the former certified public accountant ............................................................................................. 48
3.5.2 Regarding the successor certified public accountant ......................................................................................... 48
3.5.3 The reply of former CPAs on Article 10.6.1 and Article 10.6.2.3 of the Standards ........................................ 48
3.6 Where the company's chairperson, President, or any managerial officer in charge of finance or accounting matters has in the most recent year held a position at the accounting firm of its certified public accountant or at an affiliated enterprise of such accounting firm, the name and position of the person, and the period during which the position was held, shall be disclosed ........................................................................................................... 49

3.7 Any transfer of equity interests and/or pledge of or change in equity interests (during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report) by a director, supervisor, managerial officer, or shareholder with a stake of more than 10 percent during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report.............................................................. 49 3.7.1 Change in shareholding by directors, supervisors, managerial officers, or major shareholders ........................ 49 3.7.2 Stock trade with related party by directors, supervisors, managerial officers, or major shareholders .............. 49 3.7.3 Stock pledge with related party ......................................................................................................................... 49 3.8 Relationship information, if among the company's 10 largest shareholders any one is a related party or a relative within the second degree of kinship of another .................................................................................................... 50 3.9 The total number of shares and total equity stake held in any single enterprise by the company, its directors and supervisors, managerial officers, and any companies controlled either directly or indirectly by the company and total shareholding ................................................................................................................................................. 50 IV. Capital Overview 4.1 Capital and Shares ................................................................................................................................................ 51 4.1.1 Source of capital stock ...................................................................................................................................... 51 4.1.2 Composition of Shareholders ............................................................................................................................ 52 4.1.3 Distribution of Shareholding ............................................................................................................................. 52 4.1.4 List of major shareholders ................................................................................................................................. 52 4.1.5 Information on share prices, net worth per share, earnings per share, dividends per share for the past 2 fiscal years ................................................................................................................................................................... 53 4.1.6 Company's dividend policy and its state of implementation ............................................................................. 53 4.1.7 Effect upon business performance and earnings per share of any stock dividend distribution proposed or adopted at the most recent shareholders' meeting ........................................................................................................... 55 4.1.8 Profit-sharing compensation of employees and directors .................................................................................. 55 4.1.9 Share repurchases by the Company................................................................................................................... 56 4.2 Issuance of corporate bonds ................................................................................................................................. 56 4.3 Preferred shares .................................................................................................................................................... 56 4.4 Global depository receipts .................................................................................................................................. 56 4.4 Employee share subscription warrants ................................................................................................................. 56 4.6 New restricted employee shares ........................................................................................................................... 56 4.7 Issuance of new shares in connection with mergers or acquisitions or with acquisitions of shares of other companies ........................................................................................................................................................................... 56 4.8 Capital allocation plans ........................................................................................................................................ 56 V. Operational Highlights 5.1 Business Activities ............................................................................................................................................... 57 5.1.1 Business Scope ................................................................................................................................................ 57 5.1.2 Overview of the industry ................................................................................................................................... 59 5.1.3 Overview of technologies and research and development work ....................................................................... 72 5.1.4 Long- and short-term business development plans ........................................................................................... 72 5.2 Market and Sales Overview ................................................................................................................................. 74 5.2.1 Market analysis ................................................................................................................................................. 74 5.2.2 Usage and manufacturing processes for the company's main products ............................................................. 78 5.2.3 Supply situation for the company's major raw materials ................................................................................... 79 5.2.4 List of suppliers and clients accounting for 10 percent or more of the company's total procurement (sales) amount in either of the 2 most recent fiscal years, the amounts bought from (sold to) each, the percentage of total procurement (sales) accounted for by each, and an explanation of the reason for increases or decreases ........... 79 5.2.5 Production in the Last Two Years ..................................................................................................................... 80 5.2.6 The volume of units sold for the 2 most recent fiscal years .............................................................................. 80 5.3 The number of employees employed for the 2 most recent fiscal years, and during the current fiscal year up to the date of publication of the annual report, their average years of service, average age, and education levels ........ 81 5.4 Environmental Protection Expenditure ................................................................................................................ 81 5.5 Labor Relations .................................................................................................................................................... 81 5.5.1 Employee benefit plans, continuing education, training, retirement systems, and the status of their implementation, and the status of labor-management agreements and measures for preserving employees' rights and interests .......................................................................................................................................................... 81 5.5.2 Any losses suffered by the company in the most recent fiscal year and up to the annual report publication date due to labor disputes, and disclosing an estimate of possible expenses that could be incurred currently and, in the future, and measures being or to be taken ............................................................................................................ 82 5.6 Important Contracts .............................................................................................................................................. 83 VI. Financial Information 6.1 Financial summary for the past 5 fiscal years. ..................................................................................................... 84 6.1.1 Consolidated condensed balance sheets and statements of comprehensive income.......................................... 84 6.1.2 Parent company only condensed balance sheets and statements of comprehensive income ............................. 85 6.1.3 Name of the certified public accountant and the auditor's opinion for the past 5 fiscal years ...................................................................................................................................... 86 6.2 Financial analysis for the past 5 fiscal years ........................................................................................................ 86 6.2.1 Analysis of Consolidated Financial Statements ................................................................................................ 86 6.2.2 Analysis of individual financial statements ....................................................................................................... 88 6.3 Inspection Report of Supervisors or Audit Committee for the most recent year's financial statement ................ 90 6.4 Financial statement for the most recent fiscal year .............................................................................................. 90 6.5 Parent company only financial statement for the most recent fiscal year ............................................................ 90 6.6 If the company or its affiliates have experienced financial difficulties in the most recent fiscal year or during the

current fiscal year up to the date of publication of the annual report, the annual report shall explain how said difficulties will affect the company's financial situation ...................................................................................... 91 VII. Review of Financial Conditions, Operating Results, and Risk Management

7.1 Analysis of Financial Status ................................................................................................................................. 91 7.2 Analysis of Operation Results .............................................................................................................................. 91 7.2.1 Analysis of Financial Performance ................................................................................................................... 91 7.2.2 Sales volume forecast and the basis therefor, and describe the effect upon the company's financial operations as well as measures to be taken in response .............................................................................................................. 91 7.3 Analysis of Cash Flow ......................................................................................................................................... 92 7.3.1 Analysis of cash flow changes during the most recent fiscal year .................................................................... 92 7.3.2 Corrective measures to be taken in response to illiquidity ................................................................................ 92 7.3.3 Solvency analysis for the coming year .............................................................................................................. 92 7.4 Effect upon financial operations of any major capital expenditures during the most recent fiscal year .............. 92 7.5 Reinvestment policy for the most recent fiscal year, the main reasons for the profits/losses generated thereby, the plan for improving re-investment profitability, and investment plans for the coming year ................................. 92 7.5.1 Reinvestment policy for the most recent fiscal year ......................................................................................... 92 7.5.2 The main reasons for the profits/losses generated thereby, the plan for improving re-investment profitability, and investment plans for the coming year ................................................................................................................... 92 7.6. Risk analysis in the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report ......................................................................................................................................................... 93 7.6.1 Effect upon the company's profits (losses) of interest and exchange rate fluctuations and changes in the inflation rate, and response measures to be taken in the future ........................................................................................... 93 7.6.2 The company's policy regarding high-risk investments, highly leveraged investments, loans to other parties, endorsements, guarantees, and derivatives transactions; the main reasons for the profits/losses generated thereby; and response measures to be taken in the future ................................................................................................... 94 7.6.3 Research and development work to be carried out in the future, and further expenditures expected for research and development work ......................................................................................................................................... 94 7.6.4 Effect on the company's financial operations of important policies adopted and changes in the legal environment at home and abroad, and measures to be taken in response .................................................................................. 94 7.6.5 Effect on the company's financial operations of developments in science and technology as well as industrial change, and measures to be taken in response ...................................................................................................... 94 7.6.6 Effect on the company's crisis management of changes in the company's corporate image, and measures to be taken in response .................................................................................................................................................. 94 7.6.7 Expected benefits and possible risks associated with any merger and acquisitions, and mitigation measures being or to be taken ........................................................................................................................................................ 94 7.6.8 Expected benefits and possible risks associated with any plant expansion, and mitigation measures being or to be taken ................................................................................................................................................................ 95 7.6.9 Risks associated with any consolidation of sales or purchasing operations, and mitigation measures being or to be taken ................................................................................................................................................................ 95 7.6.10 Effect upon and risk to the company in the event a major quantity of shares belonging to a director, supervisor, or shareholder holding greater than a 10 percent stake in the company has been transferred or has otherwise changed hands, and mitigation measures being or to be taken ............................................................................. 95 7.6.11 Effect upon and risk to company associated with any change in governance personnel or top management, and mitigation measures being or to be taken ............................................................................................................. 95 7.6.12 Litigious and non-litigious matters.................................................................................................................. 95 7.6.13 Other important risks, and mitigation measures being or to be taken ............................................................. 95 7.7 Other important matters ....................................................................................................................................... 95 VIII. Special Disclosure 8.1 Information of the Affiliates ................................................................................................................................ 96 8.1.1 Consolidated Business Report of the Affiliates................................................................................................. 96 8.1.2 Consolidated Financial Statements of Affiliated Enterprises ........................................................................ …98 8.2 Private placement of securities during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, and the status of use of the capital raised through the private placement of securities, the implementation progress of the plan, and the realization of the benefits of the plan ............... …..98 8.3 Holding or disposal of shares in the company by the company's subsidiaries during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report ............................................ …..98 8.4 Other matters that require additional description ............................................................................................. …98 IX. If any of the situations listed in Article 36, paragraph 3, subparagraph 2 of the Securities and Exchange Act, which might materially affect shareholders' equity or the price of the company's securities, has occurred during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report ............................................................................................................................................................................... …98

I. Letter to Shareholders

Appreciate shareholders’ support to Abnova. The following is Abnova's 2022 achievement sharing and 2023 outlook report:

I. 2022 Operating Results: (Consolidated Financial Statements)

Implementation overview and business plan implementation results: The operating revenue in 2022 was NTD411,756,000, which is 8.8% lower than the 2021 operating income of NTD451,487,000. The net income after tax in 2022 was NTD74,843,000, which is an increase of 163.82% compared with the net profit after tax of NTD28,369,000 in 2021. 2022 EPS is NTD1.24.
Analysis of financial balance and profitability: Please refer to the attached financial statements for the financial overview of 2022.
Research Development Overview: The expenses invested in research and development in 2022 was NTD48,740,000, which is 8.28% lower than the 2021 expenses of NTD53,141,000. Mainly accelerate the development of COVID-19 related test reagents, SAM vaccine platform, cell therapy products etc.

II. 2023 Business Plan:

1. Business Marketing:

The sales of Abnova biological reagent products for scientific research are mainly through large global distributors and regional distributors in various countries. In 2022, Abnova has started to build a new version of the official website to optimize the customer's online order placement process and the design of the membership center and incorporate the functions into the design of mobile phone interface operation. It is expected to improve the user experience and the willingness of end customers to place orders directly on the website platform with a better visual and intuitive new look and perfect user browsing privacy protection. The new version of Abnova website is estimated to be launched in the second quarter of 2023.

2. Product Development:

(1) Abnova COVID-19 & Flu A/B Rapid antigen test and Flu A/B & RSV Rapid antigen test: In 2022, Abnova successfully developed COVID-19 & Flu A/B Rapid antigen test and Flu A/B & RSV Rapid antigen test, provide a complete detection scheme for collecting respiratory virus in the elderly, children, and people with low immunity. Abnova COVID19 & Flu A/B Rapid antigen test and Flu A/B & RSV Rapid antigen test has obtained excellent data in the detection of deactivated virus, and it is currently cooperating with clinical laboratories in the United States to apply for LDTs (Laboratory developed tests) detection.
(2) Circular RNA (circRNA) infection vaccine:
During the rapid spread of the epidemic, the COVID-19 mRNA vaccine provides the protection of the population against the virus with the advantage of rapid development, so that the epidemic can be controlled. However, the mRNA vaccine suffers from intrinsic instability, susceptibility to rapid degradation, immunogenicity issues necessitating nucleoside modification, and limited duration of protein expression. Compared with linear mRNA, Circular RNA (circRNA) is a single-stranded, covalently closed coding RNA that does not require nucleoside modification and has advantages of higher stability and resistance to nucleic acid exonuclease decomposition. Abnova has successfully
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established a technical platform for the efficient preparation of circular RNA in vitro, which has been used in the development of COVID-19 vaccine to verify its effectiveness in mouse model tests.

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(3) miRNA Sponge (circRNA Sponge):
miRNA Sponge (circRNA Sponge) is an artificial non-coding cyclic RNA, which can increase the diversity of miRNA sponge adsorption by integrating multiple miRNA targeted fragments onto the miRNA sponge. Compared with linear miRNA sponges, circular miRNA sponges lack 5 'and 3' ends, have low immunity without nucleoside modification and are resistant to the degradation of nucleic acid exonuclease, improving the adsorption stability and efficiency. The miRNA sponge overcomes the toxicity of traditional anti-miRNA oligonucleotides (AMO) and the dose limit of plasmid-based miRNA sponge. Abnova has launched a new product line of miRNA sponges in 2023 to provide efficient tools for in vivo and in vitro miRNA research, with stable expression of the miRNA sponge products.

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(4) Circulating Tumor Cell:
In 2022, cooperated with partners in Japan, Abnova assisted in setting up a one-stop circulating tumor detection laboratory in Tokyo, Japan, to provide screening services for circulating tumor cells in healthy people. Abnova supplies its CytoQuest™ CR platform, including instruments, chips, bioreagents and an advanced microscopy system that analyzes captured images with artificial intelligence (AI) capabilities to Japanese partners. The service is expected to be officially launched in the second quarter of 2023.

(http://www.abnova.com/products/CytoQuest-CR-M0014.html,

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(5) mRNA cancer therapy:
Abnova’s mRNA cancer therapy platform is a non-viral vector platform based on LNP delivery technology, providing an alternative to lentivirus systems that are costly to manufacture and challenging to expand in the market. In 2022, Abnova collaborated with Citil Pharma to complete mouse model testing for liver cancer, prostate cancer, and triplenegative breast cancer, the R&D process is described as follows:
(a) Liver Cancer Cytokine Immunotherapy:
- i. Potential antigens have been identified for designing an effective mRNA vaccine.
- ii. Efficacy validation has been conducted in syngeneic mouse HCC tumor models.
(b) Prostate Cancer Vaccine:
- i. Potential antigens have been identified for designing an effective mRNA vaccine.
- ii. Validation of cytotoxic T-lymphocyte (CTL) response has been performed in the HLA-A2 transgenic mouse models.
(c) Triple-Negative Breast Cancer Vaccine:
- i. Potential antigens have been identified for designing an effective mRNA vaccine.
- ii. Validation of cytotoxic T-lymphocyte (CTL) response has been performed in
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syngeneic mouse TNBC tumor models.

Abnova has outsourced the non-GLP preclinical trial in the first quarter of 2023, and evaluated and planned the GLP preclinical trial according to the test toxicological analysis report.

III. The effect of external competition, the legal environment, and the overall business environment

1. External Competition:

The situation of COVID-19 epidemic in 2022 was still severe, and the common global challenge is to control the epidemic as soon as possible and return to normal life. The economy has been slowly recovering, and the biotechnology and medical industry has gradually received more attention. Various countries have introduced incentive policies, which will attract many competitors to join, but also promote the vigorous development of the biotechnology and medical industry, cultivating more outstanding talents, which is expected to contribute to the long-term development of the whole industry.

2. Legal Environment:

Abnova strictly controls product quality and has ISO9001, ISO13485 and GMP certification of Neihu Plant. In response to the needs of different products and countries, relevant laws and regulations of various countries shall be followed. To meet the above specifications, it will increase the management and application costs, but at the same time, it can also guarantee the product quality and improve customer recognition.

3. Overall Business Environment:

About 93% of Abnova's products are exported, and the main sales areas are America, Europe, Japan, etc. The transaction currency is mainly USD, followed by Euro. Since the recent fluctuations in the US dollar exchange rate has an impact on the Company, the financial department closely observes the exchange rate trend and timely assess whether to conduct hedging derivative financial commodity transactions to reduce the exchange rate risk.

In 2023, Abnova will adhere to the original intention of professionalism, focus and quality, and continue to push itself for deeper technological innovation. Looking forward to the future, it may face variable operational opportunities and challenges. Abnova will continue to strengthen its competitive strength and accumulate more growth momentum to create better operating results.

Chairman: Wilber Huang President: Jih Pei Ju Accounting Officer: Chang Ya Ping

II. Company Profile

2.1. Date of Incorporation:

January 4, 2002

2.2 Company History

(1) Merger and acquisition activities during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report: None.
(2) Strategic investments in affiliated enterprises during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report The strategic investments in affiliated enterprises during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, including Abnova GmbH, Abnova Holding Corporation, Abnova (Cayman) Corporation, Abnova (HK) Limited, Abnova (Dongguan) Limited and Abnova Diagnostics (Japan). For details, please see affiliated enterprises (Page 96).
(3) Corporate reorganization during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report: None.
(4) A major quantity of shares belonging to directors, supervisors, or shareholders holding greater than a 10 percent stake in the company is transferred or otherwise changes hands during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report: None.
(5) Any change in managerial control; any material change in operating methods or type of business; and any other matters of material significance that could affect shareholders' equity during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report: None.
(6) Significant Historical Events:

2018:

Qingpu, Zhongli plant registration has been approved in April 2018.
Obtained the exclusive license for Carcinoma Homing Peptide (CHP) technology from Louisiana State University (LSU), USA in September 2018.

2019:

Abnova integrates CARlike-IL12 technology and set up a IL-12 patent portfolio strategy for gene modified T cell therapy in November 2019.

2020:

-The COVID-19 viral Extraction kit has been approved by the U.S. FDA for Emergency Use Authorization (EUA) in June 2020.

-The COVID-19 Human IgM IgG antibody rapid test gains CE-IVD certification in July 2020. -The COVID-19 viral antigen rapid test gains CE-IVD certification in December 2020.

2021

-The COVID-19 antigen rapid test kits have been granted "EUA for manufacture of COVID19 antigen test kits” by the Taiwan Food and Drug Administration (TFDA) in January 2021.

2022

Omicron mRNA vaccine has developed, and its efficacy is verified using a mouse model.
COVID-19 circular RNA vaccine has developed, and its efficacy is verified using a mouse model.
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III. Corporate Governance Report

3.1. Organization

3.1.1 Organization Chart

Date: February 28, 2023

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3.1.2 Major Corporate Functions

Departments	Functions
Chairman Office	Stock administration, board of directors’ operation, and investor relations maintenance
President & CEO Office	Assist the President with relevant matters in business processing.
Auditing Office	Audit and evaluate the functional operations of each division, and the implementation of internal control systems and relevant administrative provisions.
Legal Office	Review and control matter relevant to intellectual property and contracts, provide legal advice services.
Administration HQ	1. Plan and maintain hardware and software of IT equipment, design and maintain web pages. 2. Financial and tax planning and management, fund scheduling, investment planning and management. 3. Procurement of raw materials, consumables, and capital expenditures at home and abroad.
Sales and Marketing Division	Sales and marketing management, provide technical support related to products, and customer service.
System Business Division	Engage in R&D, produce and manufacture of system-related products and technologies.
Taipei GMP Division	Management related to production, quality control, warehousing, logistics, etc. of a GMP certified plant.
Bio-Reagent Division, Zhongli	1. Produce and manufacture of antibody reagent related products, as well as improve the technology used in the manufacturing process. 2. Manage animals for immunization purposes and establish experimental animal models. 3. Arrange and manage production schedules, plan and control raw material use. 4. Issue and return as well as store raw materials, semi-finished and finished products.
Quality Assurance Division	Verify the quality of raw materials, work in progress, and finished products.
Environmental & Security Department	Inspection, supervision, and reporting of environmental and occupational safety matters.
Human Resources Department	Planning and management of human resources, education and training, and related businesses.

2023/03/17

3.2 Information on the Directors, Supervisors and Management Team 3.2.1 Directors and Supervisors 1. Basic Information

Title	Nationality/ Place of Incorporation	Name	Gender Age	Date Elected	Term (Years)	Date First Elected	Shareholding when Elected	Shareholding when Elected	Current Shareholding	Current Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience（Education）	Other Position	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Remark
							Shares	％	Shares	％	Shares	％	Shares	％			Title	Name	Relation
Chairman	U.S.	Wilber Huang	Male 56	2020. 06.17	3	2011. 06.17	3,651,144	6.03	3,651,144	6.03	－	－	－	－	1. North-western University Medical School (MD) 2. President of Abnova (Taiwan) Corporation 3. Chairman of Abnova (Taiwan) Corporation 4. Director of Abnova Holding Corporation 5. Director of Abnova (Cayman) Corporation 6. Director of Abnova Diagnostics (Japan) 7. Director of Abnova Diagnostics (Dongguan) Limited 8. Director of Citil Pharma Incorporated	1. Chairman of Abnova (Taiwan) Corporation 2. Director of Abnova Holding Corporation 3. Director of Abnova (Cayman) Corporation 4. Director of Abnova Diagnostics (Japan) 5. Director of Abnova Diagnostics (Dongguan) Limited 6. Director of Citil Pharma Incorporated	Chairman of Harmony Investment Co., Ltd.	Chiu Chi Ching	Spouse	none
Director	R.O.C	Harmony Investment Co., Ltd.		2020. 06.17	3	2003. 11.28	2,448,294	4.04	2,448,294	4.04	－	－	－	－	N/A	N/A		none		none
		Representative Chiu Chi Ching	Female 51	2020. 06.17	3	2012. 12.14	－	－	－	－	－	－	－	－	1. Bachelor’s degree in Housing and Architecture, Japan Women's University 2. Chairman of Harmony Investment Co., Ltd. 3. Director of Lasertech Holding International Ltd. 4. Director of Attebury Investments International Ltd. 5. Supervisor of Pan Pacific Investment Corp. 6. Director of (HK) Limited 7. Supervisor of Abnova Diagnostics (Dongguan) Limited	1.Chairman of Harmony Investment Co., Ltd. 2.Director of Lasertech Holding International Ltd. 3.Director of Attebury Investments International Ltd. 4.Supervisor of Pan Pacific Investment Corp. 5.Director of Abnova (HK) Limited 6.Supervisor of Abnova Diagnostics (Dongguan) Limited	Chairman	Wilber Huang	Spouse	none

Title	Nationality/ Place of Incorporation	Name	Gender Age	Date Elected	Term (Years)	Date First Elected	Shareholding when Elected	Shareholding when Elected	Current Shareholding	Current Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience（Education）	Other Position	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Remark
							Shares	％	Shares	％	Shares	％	Shares	％			Title	Name	Relation
Director	R.O.C	Rong How Investment Co., Ltd.		2020. 06.17	3	2008. 02.29	1,079,551	1.78	540,000	0.89%	－	－	－	－	N/A	N/A	none			none
		Representative Chen Fang Wen	Female 37	2020. 06.17	3	2020. 06.17	－	－	－	－	－	－	－	－	Taipei Medical University Medical School Chief Resident, Department of Family Medicine Taipei City Hospital		none			none
																Director of Le Clinic

Director	R.O.C	China Wire & Cable Co., Ltd		2020. 06.17	3	2008. 02.29	1,037,017	1.71	1,037,017	1.71	－	－	－	－	N/A	N/A	none			none
		Representative Chen Yueh Hung	Male 58	2020. 06.19	3	2020. 06.19	－	－	－	－	－	－	－	－	1. Bachelor’s degree, University of Toronto 2. Deputy Chairman of LiBAiDAi Construction & Development Co., Ltd. 3. Director of Kai Tse Co., Ltd. 4. Director of Great Universe Metal Building Materials Corp. 5. Director of Great Universe Enterprises Co., Ltd. 6. Director of Taiwan Sun Clutch Co., Ltd. 7. Director of Herzu Real Estate Development Co., Ltd. 8. Director of Tai Hsu Construction & Development Co., Ltd. 9. Supervisor of Great Universe Development Corp.	1.Deputy Chairman of LiBAiDAi Construction & Development Co., Ltd. 2.Director of Kai Tse Co., Ltd. 3.Director of Great Universe Metal Building Materials Corp. 4.Director of Great Universe Enterprises Co., Ltd. 5.Director of Taiwan Sun Clutch Co., Ltd 6.Director of Herzu Real Estate Development Co., Ltd. 7. Director of Tai Hsu Construction & Development Co., Ltd. 8.Supervisor of Great Universe Development Corp.	none			none

Title	Nationality/ Place of Incorporation	Name	Gender Age	Date Elected	Term (Years)	Date First Elected	Shareholding when Elected	Shareholding when Elected	Current Shareholding	Current Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience（Education）	Other Position	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Remark
							Shares	％	Shares	％	Shares	％	Shares	％			Title	Name	Relation
Independent Director	R.O.C	Lin Jia Hsie	Male 71	2020. 06.17	3	2017. 06.23	208,688	0.34	208,688	0.34	－	－	－	－	1. Master’s degree in Electronics, NCTU 2. Chairman of Zero One Technology Co., Ltd. 3. Chairman of Zerone Win Investment Co., Ltd. 4. Director of Citpo Tech. Co., Ltd. 5. Director of Maverick Digital Co., Ltd. 6. Director of JOIIUP Technology Inc. 7. Supervisor of Iweecare Co., Ltd. 8. Supervisor of IJOING, Inc. 9. Supervisor of Taiwan Insto Technologies Co., Ltd.	1. Chairman of Zero One Technology Co., Ltd. 2. Chairman of Zerone Win Investment Co., Ltd. 3. Director of Citpo Tech. Co., Ltd. 4. Director of Maverick Digital Co., Ltd. 5. Director of JOIIUP Technology Inc. 6. Supervisor of Iweecare Co., Ltd. 7. Supervisor of IJOING, Inc. 8. Taiwan Insto Technologies Co., Ltd.	none			none
Independent Director	R.O.C	Ye Shao De	Male 55	2020. 06.17	3	2017. 06.23	－	－	－	－	－	－	－	－	1. Ph.D. in Medical Sciences, Taipei Medical University 2. Chief of Cancer Center,Taipei Medical University Hospital 3. Chief of Department of Urology, Chief of Outpatient Department, and Chief of Medical Affairs, Taipei Medical University Hospital	Chairman of Cancer Center,Taipei Medical University Hospital	none			none
Independent Director	R.O.C	Su Jin Jun	Male 53	2020. 06.17	3	2017. 06.23	－	－	－	－	－	－	－	－	.1. PhD. in Business Administration Department, National Sun Yat –sen University 2. Professor and Dean of School of International Business, TKK College, Xiamen University 3. Associate professor and Chairman of International Tourism and Hospitality Department, I-Shou University 4. Assistant Professor and Deputy Director of the Department of Business Administration, -Shou University	Professor and Dean of School of International Business, TKK College, Xiamen University.	None			none

2. For directors and supervisors acting as the representatives of institutional shareholders, indicate the names of the institutional shareholders, and the names of its 10 largest shareholders and the holding percentage of each.

Table1: Major shareholders of the institutional shareholders

2023/03/17

	2023/03/17
Name of Institutional Shareholders	Major Shareholders
HarmonyInvestment Co., Ltd.	AtteburyInvestments International Ltd. (100%)
Rong How Investment Co., Ltd.	Li Huan Hsin(51.97%)、Li I Ting (24%)、Li Chih Yu (24%)、Chih Peng Investment Co., Ltd. (0.03%)
China Wire & Cable Co., Ltd	Chen Ho Yuan (11.98%), Great Universe Metal Building Materials Corp. (9.55%)、Chen Yueh Hung (8.66%)、Great Universe Development Corp. (7.17%)、Taiwan Sun Clutch Co., Ltd (5.64%)、Kai Tse Co., Ltd. (4.33%)、Chen Liang Yin (3.82%)、Chen Yu Shu (3.76%)、Chen Chin Tsuan(3.43%)、Chen Hsu Li Ming (3.31%)

Note 1: For directors and supervisors acting as the representatives of institutional shareholders, it shall indicate the names of the institutional shareholders.
Note 2: It shall fill in the names of the institutional shareholders which are the major
shareholders (the 10 largest shareholders) and its shareholdings. If any of those 10 largest shareholders are institutional shareholders, it shall fill in Table 2.
Note 3: For non-institutional shareholders, it shall disclose the names of the shareholders and their shareholdings, which are the names of investors or donors and their contribution or donation ratios.

Table2: Major shareholders of the Company’s major institutional shareholders

	2023/03/17
Name of Institutional Shareholders	Major Shareholders
Attebury Investments International Ltd.	Chiu Chi Ching (100%)
Chih Peng Investment Co., Ltd.	Li Huan Hsin (43%)、Li I Ting (24%)、Li Chih Yu (24%)、RongHow Investment Co., Ltd. (9%)
Great Universe Metal Building Materials Corp.	Chen Chin Tsuan（4.34%）、Chen Ho Yuan（47.42%）、Chen Yueh Hung（39.50%）、Chen Hsu Li Ming（3.79%）、Chen Liang Yin （2.32%）、Chen Chao Jung（2.32%）、Tai ChungChieh（0.31%）
Great Universe Development Corp.	China Wire & Cable Co., Ltd (93.26%)、ChenHo Yuan (0.77%)、Chen Hsu Li Ming (0.25%)、Chen Chin Tsuan (0.68%)、Chen Yueh Hung (3.06%)、 Chen Chao Jung (1.11%)、Chen LiangYin(0.87%)
Taiwan Sun Clutch Co., Ltd	China Wire & Cable Co., Ltd (96.94%)、ChenHo Yuan (1.19%)、Chen Hsu Li Ming (0.20%)、Chen Chin Tsuan (0.30%)、Chen Yueh Hung (1.17%)、 Chen Chao Jung (0.10%)、Chen LiangYin(0.10%)
Kai Tse Co., Ltd.	China Wire & Cable Co., Ltd (99.95%)、Chen Yueh Hung (0.03%)、 ChenHo Yuan (0.02%)

Note 1: If the major shareholder listed in Table 1 is an institutional shareholder, it shall indicate the names of the institutional shareholders.
Note 2: It shall fill in the names of the institutional shareholders which are the major shareholders (the 10 largest shareholders) and its shareholdings.
Note 3: For non-institutional shareholders, it shall disclose the names of the shareholders and their shareholdings, which are the names of investors or donors and their contribution or donation ratios.
10 -

3. Disclosure of Professional Qualifications of Directors and Independence Analysis of Independent Directors:

Criteria Name	Professional Qualifications and Experience	Status of Independence
Wilber Huang	1. Professional Qualifications � Holds a medical license in the US � Expertise: Board leadership experience, global market experience, risk and regulatory knowledge, relevant industry experience (healthcare/biotech/marketing). 2. Experiences: � Academic qualification: Northwestern University Medical School (MD) � President of Abnova (Taiwan) Corporation � Chairman of Abnova (Taiwan) Corporation � Director of Abnova Holding Corporation � Director of Abnova (Cayman) Corporation � Director of Abnova Diagnostics (Japan) � Director of Abnova Diagnostics (Dongguan) Limited � Director of Citil Pharma Incorporated	There are no circumstances listed in Article 30 of the Company Act.
Harmony Investment Co., Ltd. Representative: Chiu Chi Ching	1. Professional Qualifications � N1 level Japanese proficiency � Expertise: Board leadership experience, fluent in Japanese, risk and regulatory knowledge, relevant industry experience (architectural design/ investment). 2. Experiences: � Academic qualification:Bachelor Degree in Housing and Architecture, Japan Women's University � Chairman of Harmony Investment Co., Ltd. � Director of Lasertech Holding International Ltd. � Director of Attebury Investments International Ltd. � Supervisor of Pan Pacific Investment Corp. � Director of Abnova (HK) Limited � Supervisor of Abnova Diagnostics(Dongguan)Limited	There are no circumstances listed in Article 30 of the Company Act.
Rong How Investment Co., Ltd. Representative: Chen Fang Wen	1. Professional Qualifications � Holds a medical license in the R.O.C � Expertise: Clinical medicine experience, risk and regulatory knowledge, relevant industry experience (healthcare/biotech) 2. Experiences: � Academic qualification: Taipei Medical University Medical School � Director of Le Clinic � Chief Resident, Department of Family Medicine Taipei CityHospital	There are no circumstances listed in Article 30 of the Company Act.
China Wire & Cable Co., Ltd Representative: Chen Yueh Hung	1. Professional Qualifications � Expertise: Global market experience, risk and regulatory knowledge, relevant industry experience (construction/marketing) 2. Experiences: � Academic qualification: Bachelor’s degree, University of Toronto � Deputy Chairman of LiBAiDAi Construction & Development Co., Ltd. � Director of Kai Tse Co., Ltd. � Director of Great Universe Metal Building Materials Corp. � Director of Great Universe Enterprises Co., Ltd. � Director of Taiwan Sun Clutch Co., Ltd. � Director of Herzu Real Estate Development Co., Ltd. � Director of Tai Hsu Construction & Development Co., Ltd. � Supervisor of Great Universe Development Corp.	There are no circumstances listed in Article 30 of the Company Act.

11 -

Criteria Name	Professional Qualifications and Experience	Status of Independence
Lin Jia Hsie	1. Professional Qualifications � Expertise: Board leadership experience, global market experience, risk and regulatory knowledge, relevant industry experience (electronics/ software design/ marketing/ investment) 2. Experiences: � Academic qualification: Master Degree in Electronics, NCTU � Chairman of Zero One Technology Co., Ltd. � Chairman of Zerone Win Investment Co., Ltd. � Director of Citpo Tech. Co., Ltd. � Director of Maverick Digital Co., Ltd. � Director of JOIIUP Technology Inc. � Supervisor of Iweecare Co., Ltd. � Supervisor of IJOING, Inc. � Supervisor of Taiwan Insto Technologies Co. ,Ltd.	1. Serve as an independent director the Company 2. Met the following independence criteria: (1) A natural person, the person's spouse, relative within the second degree of kinship do not serve as a director, supervisor or an employee of the Company’s affiliates (2) Holds the total number of issued shares of the Company of 208,688 (shareholdings of 0.34% which is not exceeded 1%, and who is not ranked as top 10 non- institutional shareholder) (3) Not a director, supervisor or an employee of a company that has specific relationship with the Company (4) Not a director, supervisor, or employee of a company of which the majority of board seats or voting shares is controlled by a company that also controls the same of the company (5) Not a director, supervisor, or employee of a company of which the chairman or President (or equivalent) themselves or their spouse also serve as the company’s chairman or President (or equivalent) (6) Not a director, supervisor, officer, or shareholder holding five percent or more of the shares of a specified company or institution that has a financial or business relationshipwith the company
Ye Shao De	1. Professional Qualifications � Holds a medical license in the R.O.C � Expertise: Clinical medicine experience, risk and regulatory knowledge, relevant industry experience (healthcare/biotech/marketing) 2. Experiences: � Academic qualification: Ph.D. in Medical Sciences, Taipei Medical University � Chief of Cancer Center,Taipei Medical University Hospital � Chief of Department of Urology, Chief of Outpatient Department, and Chief of Medical Affairs, Taipei Medical University Hospital	1. Serve as an independent director the Company 2. Met the following independence criteria: (1) A natural person, the person's spouse, relative within the second degree of kinship do not serve as a director, supervisor or an employee of the Company’s affiliates (2) Does not holds any of shares of the Company (3) Not a director, supervisor or an employee of a company that has specific relationship with the Company (4) Not a director, supervisor, or employee of a company of which the majority of board seats or voting shares is controlled by a company that also controls the same of the company (5) Not a director, supervisor, or employee of a company of which the chairman or President (or equivalent) themselves or their spouse also serve as the company’s chairman or President (or equivalent) (6) Not a director, supervisor, officer, or shareholder holding five percent or more of the shares of a specified company or institution that has a financial or business relationshipwith the company
Su Jin Jun	1. Professional Qualifications � Possesses the qualifications in business and financial accounting, and qualified to serve as a university professor � Expertise: Business, corporate management, financial accounting, risk and regulatory knowledge, relevant industry experience (business/ corporate management/ education). 2. Experiences: � Academic qualification: PhD. in Business Administration Department, National Sun Yat–Sen University (Accounting Regulatory Department) � Professor and Dean of School of International Business, TKK College, Xiamen University � Associate professor and Chairman of International Tourism and Hospitality Department, I-Shou University � Assistant Professor and Deputy Director of the Department of Business Administration, -Shou University	1. Serve as an independent director the Company 2. Met the following independence criteria: (1) A natural person, the person's spouse, relative within the second degree of kinship do not serve as a director, supervisor or an employee of the Company’s affiliates (2) Does not holds any of shares of the Company (3) Not a director, supervisor or an employee of a company that has specific relationship with the Company (4) Not a director, supervisor, or employee of a company of which the majority of board seats or voting shares is controlled by a company that also controls the same of the company (5) Not a director, supervisor, or employee of a company of which the chairman or President (or equivalent) themselves or their spouse also serve as the company’s chairman or President (or equivalent) (6) Not a director, supervisor, officer, or shareholder holding five percent or more of the shares of a specified company or institution that has a financial or business relationshipwith the company

12 -

4. The diversity policy and status of independence of the board of directors: (1) The diversity policy of the board of directors:

I. Pursuant to Article 20 of the "Corporate Governance Best Practice Principles” of the Company, the board of directors of the Company shall direct company strategies, supervise the management, and be responsible to the company and shareholders. The various procedures and arrangements of its corporate governance system shall ensure that, in exercising its authority, the board of directors complies with laws, regulations, its articles of incorporation, and the resolutions of its shareholders meetings. The structure of the Company's board of directors shall be determined by choosing an appropriate number of board members, in consideration of its business scale, the shareholdings of its major shareholders, and practical operational needs.

The composition of the board of directors shall be determined by taking diversity into consideration. It is advisable that directors concurrently serving as company officers not exceed one-third of the total number of the board members, and that an appropriate policy on diversity based on the Company's business operations, operating dynamics, and development needs be formulated and include, without being limited to, the following two general standards:

Basic requirements and values: Gender, age, nationality, and culture, etc.
Professional knowledge and skills: A professional background (e.g., law, accounting, industry, finance, marketing, technology), professional skills, and industry experience, etc.
All members of the board shall have the knowledge, skills, and experience necessary to perform their duties.

To achieve the ideal goal of corporate governance, the board of directors shall possess the following abilities:

(i) Ability to make operational judgments.
(ii) Ability to perform accounting and financial analysis.
(iii) Ability to conduct management administration.
(iv) Ability to conduct crisis management.
(v) Knowledge of the industry.
(vi) An international market perspective.
(vii) Ability to lead.
(viii)Ability to make policy decisions.
II. Article 17 of the Company's "Articles of Incorporation” specified that the election of directors shall adopt a candidate nomination system. The "Procedures for Election of Directors” stated that the composition of the board of directors shall be determined by taking diversity into consideration, directors and independent directors shall have the qualifications and capabilities as required by laws and regulations, with a view to ensuring an effective selection of appropriate director candidates. The quality of decision-making will be enhanced with the diverse viewpoints and insights of the board of directors, which is beneficial to the Company's shareholders and stakeholders.
III.At the same time, the "Rules for Performance Evaluation of Board of Directors” of the Company specified that the criteria for evaluating the performance of the board of directors, including alignment of the goals and missions of the Company, awareness of the duties of a director, participation in the operation of the Company, management of internal relationship and communication, the director's professionalism and continuing education, internal control, and ability to express specific opinions, etc., with a view to ensuring an effective operation of board of directors. The performance evaluations of directors will be conducted annually, which will be served as a reference for director selection in the future. The Eighth Session of the Board of Directors of the Company is made up of 7 directors, including 4 directors and 3 independent directors, covering different nationalities, genders, and ages. The areas of expertise covering different fields, such as biotechnology, medicine, financial accounting, technology, operation management, etc., achieving the goal of diversification. The key areas of diversity are described as follows:
13 -

Key areas of diversity / Name of directors	Key areas of diversity / Name of directors		Directors	Directors	Directors	Independent Directors	Independent Directors	Independent Directors
		Wilber Huang	Chiu ChiChing	Chen Yueh Hung	Chen Fang Wen	Lin JiaHsie	Ye ShaoDe	Su JinJun
Basic requirements and values	Gender	Male	Female	Male	Female	Male	Male	Male
	Nationality	USA	TW	TW	TW	TW	TW	TW
	Age range	51-60	41-50	51-60	31-40	61-70	51-60	51-60
	Concurrently serving as employee ofthe Company	None	None	None	None	None	None	None
	Tenure of board of directors	9 years or more	3-9 years	Less than 3 years	Less than 3 years	3-9 years	3-9 years	3-9 years
Industry experience	Medicaland biotechnology	V			V		V
	Operation management	V	V	V	V	V	V	V
	Financial accounting							V
Professional knowledge and capabilities	Able to make operational judgments	V	V	V	V	V	V	V
	Able to perform accounting and financialanalysis							V
	Able to conduct management administration	V	V	V	V	V	V	V
	Able to conduct crisis management	V	V	V	V	V	V	V
	Biotech industry knowledge	V			V		V
	International market perspective	V	V	V	V	V	V	V
	Able to lead	V	V	V	V	V	V	V
	Able tomake policy decisions	V	V	V	V	V	V	V

The specific goals of diversification of board of directors and its attainment status

The management goal of diversification of board of directors	Attainment status
Emphasis on gender equality on the board of directors, with the board of directors composing at least one female director	100%. At present, there are 2 female directors, which accounting for 28% of the directorships
The board of directors requires at least 1 director with medical and biotechnology related background in response to the Company's operational and drug development needs.	100%. At present, there are 3 directors have the medical and biotechnology background, which accounting for 43% of the directorships, of these there are 2 directors are practicing medical practitioners that accounting for 28% of the directorships.
Taking the independence status of the independent directors into consideration, their consecutive terms shall not exceed 3 terms.	100%. All 3 independent directors of the Company have not exceeded 3 consecutive terms.

14 -

3.2.2 Information on the company's President, assistant Presidents, Senior managers, and the chiefs of all the company's divisions and branch units

													March 17, 2023	March 17, 2023	March 17, 2023	March 17, 2023
Title	Nationality	Name	Gender	Date of election (Assumption of office)	Shareholding		Spouse & Minor Shareholding Shareholding		Shareholding in the name of others Shareholding		Main Experience (Academic Qualification)	Current Concurrent Position at Other Companies	Managerial personnel who is the spouse or relative within the second degree of kinship			Remark
					Shares	%	Shares	%	Shares	%			Title	Name	Relationship
President	ROC	Jih Pei Ju	Female	2023.02.24	86,188	0.14%	－	－	－	－	1. Master in Plant Science, National Taiwan University 2. President of Abnova (Taiwan) Corporation	None	None			Note
Senior Manager	ROC	Huang Shi Xuan	Male	2008.07.01	－	－	－	－	－	－	1. Master in Plant Science, National Chung Hsing University 2. Manager (Factory Director) of BioLASCO Taiwan Co., Ltd.	None	None
Senior Manager	ROC	Zheng Mei Hui	Female	2020.11.03	16,388	0.03%	－	－	－	－	1. International Trade Program, Hsing Wu High School 2. Executive Assistant to the CEO of Momentum Digital Technology Co., Ltd.	1. Supervisor of Harmony Investment Co., Ltd. 2. Director of Pan Pacific Investment Corp.	None
Senior Manager	ROC	Chen Si Xian	Male	2013.08.01	4,388	0.01%	－	－	－	－	1. Master in Agricultural Chemistry, National Taiwan University 2. Senior Manager of System R&D Department of Abnova (Taiwan) Corporation	None	None
Senior Manager	ROC	Tung I Ling	Female	2015.09.01	－	－	－	－	－	－	1. Master in Science and Technology Management, National Normal University 2. Audit Assistant Manager of Radium Life Tech Co., Ltd. 3. Executive Assistant to the Chairman Office of Abnova (Taiwan) Corporation	None	None
Senior Manager	ROC	Zhou Yun Jin	Male	2015.09.01	129	－	129	－	－	－	1. Master in Biology, Fu Jen Catholic University 2. Senior Manager of Bio-Reagent Division, Zhongli of Abnova (Taiwan) Corporation	None	None
Senior Manager	ROC	Chang Ya Ping	Female	2019.11.13	－	－	－	－	－	－	1. Department of Accounting, Tamkang University 2. Manager of KPMG Taiwan	None	None
Senior Manager	ROC	Tung Kai Chiang	Male	2018.11.13	－	－	－	－	－	－	1. Master of Law in Business Administration, National Taiwan University. Master in Microbiology, National Taiwan University. 2. Patent Engineer of Wenping & Co. 3. Senior Manager of Legal Affairs Office of Abnova (Taiwan) Corporation	None	None

Note: Jih Pei Ju has served as Senior Manager of the Company since July 1, 2018. The Board of Directors has passed the resolution to change President on February 24, 2023, and she has assumed the position of President.

15 -

3.2.3 Remuneration of Directors, Independent Directors, Supervisors, President, and Vice Presidents 1. Remuneration of Directors and Independent Directors

												Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands
Title	Name	Remuneration								Ratio of Total Remuneration (A+B+C+D) to Net Income(%)		Relevant Remuneration Received by Directors Who are Also Employees								Ratio of Total Compensation (A+B+C+D+E+F+G) to Net Income(%)		Remuneration from ventures other than subsidiaries or from the parent company
		Base Compensation (A)		Severance Pay (B)		Directors Compensation (C)		Allowances (D)				Salary, Bonuses, and Allowances (E)		Severance Pay (F)		Employee Compensation (G)
		The compa ny	All compan ies in the consoli dated financi al stateme nts	The compa ny	All compa nies in the consoli dated financi al statem ents	The compa ny	All compan ies in the consoli dated financi al stateme nts	The compa ny	All compa nies in the consoli dated financi al statem ents	The company	All compa nies in the consoli dated financi al statem ents	The company	All compa nies in the consoli dated financi al statem ents	The company	All compa nies in the consoli dated financi al statem ents	The company		Companies in the consolidated financial statements		The company	All companies in the consolidate d financial statements
																Cash	Stock	Cash	Stock
Chairman	Wilber Huang (Note)	240	240	0	0	113.6	113.6	0	0	0.47%	0.47%	6,270	6,270	0	0	719	0-	719	0	9.81%	9.81%	None
Director	Harmony Investment Co., Ltd. Representative : Chiu Chi Ching	240	240	0	0	113.6	113.6	0	0	0.47%	0.47%	0	0	0	0	0	0	0	0	0.47%	0.47%
Director	Rong How Investment Co., Ltd. Representative : Chen Fang Wen	240	240	0	0	113.6	113.6	0	0	0.47%	0.47%	0	0	0	0	0	0	0	0	0.47%	0.47%
Director	China Wire & Cable Co., Ltd Representative : Chen Yueh Hung	240	240	0	0	113.6	113.6	0	0	0.47%	0.47%	0	0	0	0	0	0	0	0	0.47%	0.47%
Independent Director	Lin Jia Hsie	360	360	0	0	113.6	113.6	0	0	0.63%	0.63%	0	0	0	0	0	0	0	0	0.63%	0.63%	None
Independent Director	Ye Shao De	360	360	0	0	113.6	113.6	0	0	0.63%	0.63%	0	0	0	0	0	0	0	0	0.63%	0.63%
Independent Director	Su Jin Jun	360	360	0	0	113.6	113.6	0	0	0.63%	0.63%	0	0	0	0	0	0	0	0	0.63%	0.63%
(Note) Wilber Huang has concurrently served as the Chairman and President in FY 2022, and the Board of Directors has passed the resolution to change President on February 24, 2023, and he has resigned from the position of President. 1. Please describe the policy, system, standard, and structure of remuneration to independent directors, and the correlation between duties, risk, and time input with the amount of remuneration: (1) Pursuant to Article 26 of the Articles of Incorporation of the Company, directors will receive a monthly remuneration, and the amount of remuneration is determined based on the remuneration standards of the industry. The Company shall provide reasonable remuneration for independent directors that may be different from directors. (2) Remuneration to each director is determined by the Board of Directors based on their respective involvement in the Company’s operations, contribution, responsibilities, and risks, as well as referring to the remuneration standards of the industry. Each regular director receives a monthly remuneration of NT$20,000. All independent directors are concurrently served as members of the Audit Committee and Remuneration Committee, considering their responsibilities to participate committee meetings that requiring to devote more time and effort; therefore, their remuneration is higher than directors, with each independent director receiving a monthly remuneration of NT$30,000. (3) If the Company makes a profit in the current fiscal year, pursuant to Article 24 of the Articles of Incorporation of the Company, after deducting the pretax income for remuneration to employees and directors, and setting aside an amount to make up accumulated losses, if there is any remaining balance, the Company shall set aside not less than 1% of its annual profit to employees as a profit sharing and not more than 3% as a compensation for directors. The correlation between remuneration paid to directors and performance review results: (1) Directors’ remuneration: It is determined by the Board of Directors based on their respective involvement in the Company’s operations, contribution, responsibilities, and risks, as well as referring to the remuneration standards of the industry. (2) Directors’ compensation: Allocation is made in accordance with Article 24 of the Articles of Incorporation of the Company. The actual distribution of compensation to directors in FY 2022 was NT$ 795,200 (at the provision rate of approximately 0.8%). The compensation paid to directors is determined according to the statistics of the board meeting attendance rate and the duration of continuing education/training of all Directors, as well as the self-assessment of each director (including independent directors) based on the criteria such as understanding of the Company’s goals and mission, awareness of director’s duties, involvement in the Company’s operations, management of internal relationship and communication, the director's professionalism and continuing knowledge development, internal controls, etc. in accordance with the "Rules for Performance Evaluation of Board of Directors” of the Company. Based on the 2022 self-assessment of the Company's board members, the evaluation result of the aforementioned assessment items was 85-98 marks. All board members have a good understanding of the Company's operations and are committed to fulfilling their respective duties as directors. The directors’ compensation Managers was reviewed by the Remuneration Committee on February 23, 2023, and passed by the Board of Directors on February 24, 2023. The amount of individual director's compensation is as shown in the table above. 2. In addition to the above remuneration, director remuneration shall be disclosed as follows when received from companies included in the consolidated financial statements in the most recent year to compensate directors for their services, such as being independent contractors.: None

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Range of Remuneration

	Range of Remuneration	Range of Remuneration	Range of Remuneration	Range of Remuneration
Range of Remuneration	Name of Directors
	Total of (A+B+C+D)		Total of (A+B+C+D+E+F+G)
	The company	Companies in the consolidated financial statements	The company	Companies in the consolidated financial statements (I)
Less than NT$ 1,000,000	Wilber Huang, Harmony Investment Co., Ltd. Representative: Chiu Chi Ching, Rong How Investment Co., Ltd. Representative: Chen Fang Wen, China Wire & Cable Co., Ltd Representative: Chen Yueh Hung	Wilber Huang, Harmony Investment Co., Ltd. Representative: Chiu Chi Ching, Rong How Investment Co., Ltd. Representative: Chen Fang Wen, China Wire & Cable Co., Ltd Representative: Chen Yueh Hung	Harmony Investment Co., Ltd. Representative: Chiu Chi Ching, Rong How Investment Co., Ltd. Representative: Chen Fang Wen, China Wire & Cable Co., Ltd Representative: Chen Yueh Hung	Harmony Investment Co., Ltd. Representative: Chiu Chi Ching, Rong How Investment Co., Ltd. Representative: Chen Fang Wen, China Wire & Cable Co., Ltd Representative: Chen Yueh Hung
NT$1,000,000~NT$1,999,999	-	-	-	-
NT$2,000,000~NT$3,499,999	-	-	-	-
NT$3,500,000~NT$4,999,999	-	-	-	-
NT$5,000,000~NT$9,999,999	-	-	Wilber Huang	Wilber Huang
NT$10,000,000~NT$14,999,999	-	-	-	-
NT$15,000,000~NT$29,999,999	-	-	-	-
NT$30,000,000~NT$49,999,999	-	-	-	-
NT$50,000,000~NT$99,999,999	-	-	-	-
Greater than or equal to NT$100,000,000	-	-	-	-
Total	4	4	4	4

Range of Remuneration	Name of Independent Directors	Name of Independent Directors	Name of Independent Directors	Name of Independent Directors
	Total of (A+B+C+D)		Total of (A+B+C+D+E+F+G)
	The company	Companies in the consolidated financial statements	The company	Companies in the consolidated financial statements (I)
Less than NT$ 1,000,000	Lin Jia Hsie, Ye Shao De, Su Jin Jun	Lin Jia Hsie, Ye Shao De, Su Jin Jun	Lin Jia Hsie, Ye Shao De, Su Jin Jun	Lin Jia Hsie, Ye Shao De, Su Jin Jun
NT$1,000,000~NT$1,999,999	-	-	-	-
NT$2,000,000~NT$3,499,999	-	-	-	-
NT$3,500,000~NT$4,999,999	-	-	-	-
NT$5,000,000~NT$9,999,999	-	-	-	-
NT$10,000,000~NT$14,999,999	-	-	-	-
NT$15,000,000~NT$29,999,999	-	-	-	-
NT$30,000,000~NT$49,999,999	-	-	-	-
NT$50,000,000~NT$99,999,999	-	-	-	-
Greater than or equal to NT$100,000,000	-	-	-	-
Total	3	3	3	3

(Note)The board members of the Company are complied with the "Rules for Performance Evaluation of Board of Directors” of the Company to complete the self-assessment based on the criteria such as understanding of the Company’s goals and mission, awareness of director’s duties, involvement in the Company’s operations, management of internal relationship and communication, the director's professionalism and continuing knowledge development, internal controls, etc. in accordance with the "Rules for Performance Evaluation of Board of Directors” of the Company. Based on the statistics of the board meeting attendance rate and the duration of continuing education/training of all Directors in 2022 conducted by the Company, as well as the 2022 self-assessment of the Company's board members, the score for the aforementioned assessment items is 85-98. The allocation of directors' remuneration in 2022 was reviewed by the Remuneration Committee on February 23, 2023 with reference to the aforementioned assessment results, and passed by the board of directors on February 24, 2023, the amount was received individually.

2. The remuneration paid to supervisors in the most recent fiscal year (2022): (Not applicable) The Company has set up an Audit Committee on June 23, 2017, to replace the functions of the supervisors.

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3. The remuneration paid to President and Vice Presidents in the most recent fiscal year (2022):

Unit: NT$ thousands; thousand shares

Title	Name	Salary (A)	Salary (A)	Severance Pay (B)	Severance Pay (B)	Bonuses and Allowances (C)	Bonuses and Allowances (C)	Employee Compensation (D)	Employee Compensation (D)	Employee Compensation (D)	Employee Compensation (D)	Ratio of total compensation (A+B+C+D) to net income (%)	Ratio of total compensation (A+B+C+D) to net income (%)	Remunerat ion from ventures other than subsidiarie s or from the parent company
		The company	Companies in the consolidated financial statements	The company (Note1)	Companies in the consolidated financial statements (Note1)	The company	Companies in the consolidated financial statements	The company		Companies in the consolidated financial statements		The company	Companies in the consolidated financial statements
								Cash	Stock	Cash	Stock
President	Wilber Huang (Note2)	5,370	5,370	0	0	900	900	719	0	719	0	9.34%	9.34%	None

Note 1: The pension system applicable to the "The Enforcement Rules of the Labor Pension Act", that is, the new pension system. The Company has made monthly contributions equal to 6% of each employee’s monthly salary to employees’ pension accounts.

Note 2: Wilber Huang has concurrently served as the Chairman and President in FY 2022, and the Board of Directors has passed the resolution to change President on February 24, 2023, and he has resigned from the position of President.

Range of Remuneration

Range of Remuneration	Name of President	and Vice Presidents
	The company	Companies in the consolidated financial statements (E)
Less thanNT$1,000,000	-	-
NT$1,000,000~NT$1,999,999	-	-
NT$2,000,000~NT$3,499,999	-	-
NT$3,500,000~NT$4,999,999	-	-
NT$5,000,000~NT$9,999,999	Wilber Huang	Wilber Huang
NT$10,000,000~NT$14,999,999	-	-
NT$15,000,000~NT$29,999,999	-	-
NT$30,000,000~NT$49,999,999	-	-
NT$50,000,000~NT$99,999,999	-	-
Greater than or equal to NT$100,000,000	-	-
Total	1	1

4. Names and acquisition status of managerial personnels who have acquired new restricted employee shares:

				2023/03/31 Unit: NT$ thousands	2023/03/31 Unit: NT$ thousands	2023/03/31 Unit: NT$ thousands
	Title	Name	Stock (Fair Market Value)	Cash Amount	Total	Total Profit Sharing Paid to Management Team as a % of Net Income
Managers	President	Wilber Huang (Note)	0	1,701	1,701	2.27%
	Senior Manger	Jih Pei Ju (Note)
	Senior Manger	Huang Shi Xuan
	Senior Manger	ZhengMei Hui
	Senior Manger	Chen Si Xian
	Senior Manger	Tung I Ling
	Senior Manger	Zhou Yun Jin
	Senior Manger	Dong Kai Qiang
	Senior Manger	ChangYaPing

Note: Wilber Huang has concurrently served as the Chairman and President in FY 2022, and the Board of Directors has passed the resolution to change President on February 24, 2023, Wilber Huang has resigned from the position of President and succeeded by Jih Pei Ju.

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3.2.4 Separately compare and describe total remuneration, as a percentage of net income stated in the parent company only financial reports or individual financial reports, as paid by this company and by each other company included in the consolidated financial statements during the past 2 fiscal years to directors, supervisors, Presidents, and assistant Presidents, and analyze and describe remuneration policies, standards, and packages, the procedure for determining remuneration, and its linkage to operating performance and future risk exposure
The total remuneration paid to Directors, Supervisors, Presidents and Assistant Presidents in FY 2021 and 2022 were NT$8,513 thousand and NT$9,824 thousand, respectively, which accounted for 30.01% and 13.13% of the net income of the Company, respectively
Remuneration policies, standards, and packages, the procedure for determining remuneration, and its linkage to operating performance and future risk exposure
- (1) The remuneration paid to the directors of the Company includes remuneration and compensation to directors. The remuneration policies are as follows:
  - I. Remuneration:
  - Pursuant to Article 26 of the Articles of Incorporation of the Company, directors will receive a monthly remuneration, and the amount of remuneration is determined based on the remuneration standards of the industry. The Company shall provide reasonable remuneration for independent directors that may be different from directors. Remuneration to each director is determined by the Board of Directors based on their respective involvement in the Company’s operations, contribution, responsibilities, and risks, as well as referring to the remuneration standards of the industry. Each regular director receives a monthly remuneration of NT$20,000. All independent directors are concurrently served as members of the Audit Committee and Remuneration Committee, considering their responsibilities to participate committee meetings that requiring to devote more time and effort; therefore, their remuneration is higher than directors, with each independent director receiving a monthly remuneration of NT$30,000.
  - II. Compensation to directors:
  - If the Company makes a profit in the current fiscal year, pursuant to Article 24 of the Articles of Incorporation of the Company, after deducting the pretax income for remuneration to employees and directors, and setting aside an amount to make up accumulated losses, if there is any remaining balance, the Company shall set aside not less than 1% of its annual profit to employees as a profit sharing and not more than 3% as the compensation for directors. The actual distribution of compensation to directors in FY 2022 was NT$ 795,200 (at the provision rate of approximately 0.8%).
- (2) The correlation between remuneration paid to directors and performance review results: I. Remuneration to directors:
  - Based on the level of involvement, contribution value, responsibilities, and risks borne by individual directors in the operation of the Company, the Board of Directors shall consider the industry standards in determining their compensation.
  - II. Compensation to directors:
  - The distribution of director compensation is measured based on the statistics of the board meeting attendance rate and the duration of continuing education/training of all Directors, as well as the self-assessment of each director (including independent directors) based on the criteria such as understanding of the Company’s goals and mission, awareness of director’s duties, involvement in the Company’s operations, management of internal relationship and communication, the director's professionalism and continuing knowledge development, internal controls, etc. in accordance with the "Rules for Performance Evaluation of Board of Directors” of the Company. Based on the 2022 self-assessment of the Company's board members, the evaluation result of the aforementioned assessment items showed that 7 directors have obtained 85-98 marks. All board members have a good understanding of the Company's operations and are committed to fulfilling their respective duties as directors. The remuneration paid to Directors, Supervisors, Presidents and Assistant Presidents was reviewed by the Remuneration Committee on February 23, 2023, and passed by the board of directors on February 24, 2023. For the individual director's remuneration,
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please refer to “(3) The Remuneration Paid to Directors, Supervisors, Presidents and Assistant Presidents in the Most Recent Fiscal Year”.

(3) The remuneration paid to the managerial personnels (at or above the level of Senior Manager) of the Company includes salary, year-end bonus, and employee compensation. The remuneration policies are as follows:
I. Salary, year-end bonus: Salary refers to the compensation employees receive for their work, which is determined based on the Company's employment rules, relevant regulations governing the human resources such as job band, etc., at the time of appointment, and approved by the Remuneration Committee and the Board of Directors, and individual amounts are reviewed regularly every year. In accordance with the Company’s work rules, if the Company makes profits after year-end settling, after paying tax, making up losses, and setting aside a legal reserve, the year-end bonus will be distributed prior to the Chinese New Year that would depend on the actual circumstances. The amount of year-end bonus for each managerial personnel will be reviewed by the Remuneration Committee and the Board of Directors at the end of each year.
II. For the compensation to employees, pursuant to Article 24 of the Articles of Incorporation of the Company: "If the Company makes profits (after deducting the pretax income for remuneration to employees and directors), it shall set aside not less than 1% of its annual profit to employees as a profit sharing and not more than 3% as the compensation for directors”. The provision rate will be reviewed by the Remuneration Committee and approved by the Board of Directors, as well as reported in the Board meeting. The actual distribution of compensation to employees in FY 2022 was NT$ 4,178,700 (at the provision rate of approximately 4.18%). For the expected amount of compensation for the managerial personnels, please refer to "4. Names and acquisition status of managerial personnels who have acquired new restricted employee shares." The distribution of compensation to managerial personnels is referred to the regular performance review results and calculated based on the standards governing the distribution of employee compensation.
(4) The correlation between remuneration paid to managerial personnels and performance review results:
For the remuneration payable to managerial personnels by the Company, in addition to evaluating the Company's overall operational performance, future business risks, and development trends, a reasonable compensation is determined with reference to the individual's attendance and job performance. The Company conducts managerial personnels’ performance review in January and July every year. The performance evaluation for managerial personnels includes three aspects: work attitude (including cooperation, learning ability, teamwork) with a weight of 40%, leadership and management (including cost control, communication and coordination, and work standards) with a weight of 30%, and job performance (including department management, planning and judgment ability, and decision-making and execution ability) with a weight of 30%. In addition, rewards and punishments are evaluated based on the special contributions or performance of employees. The performance review is divided into the following grades: A (90% or above) for outstanding performance, B (80%-90%) for good performance, C (70%-80%) for acceptable performance but requires improvement, and D (below 70%) for poor performance that fails to meet job requirements.
The Company is fully complied with the provisions of the "Remuneration Committee Charter": Regularly review the annual and long-term performance goals, as well as the policies, systems, standards, and structures of salary and remuneration for directors and managerial personnels. The compensation for each managerial personnel has been reviewed by the Remuneration Committee and the Board of Directors on August 10, 2022.Whilethe year-end bonus for each managerial personnel has been reviewed by the Remuneration Committee and the Board of Directors on November 9, 2022.
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3.3 Corporate Governance 3.3.1 Board of Directors

A total of 6 (A) meetings of the Board of Directors were held in the previous period. The attendance of director and supervisor were as follows:

Title	Name	Attendance in Person (B)	By Proxy	Attendance Rate (%) (Ｂ/Ａ)	Remarks
Chairman	Wilber Huang	6	0	100%	None
Director	Harmony Investment Co., Ltd. Representative: Chiu Chi Ching	6	0	100%	None
Director	Rong How Investment Co., Ltd. Representative: Chen Fang Wen	3	1	50%	None
Director	China Wire & Cable Co., Ltd Representative: Chen Yueh Hung	5	1	83%	None
Independent director	Lin Jia Hsie	6	0	100%	None
Independent director	Ye Shao De	4	2	67%	None
Independent director	Su Jin Jun	6	0	100%	None
Other mentionable items: 1. If any of the following circumstances occur, the dates of the meetings, sessions, contents of motion, all independent directors’ opinions and the company’s response should be specified: None (1) Matters referred to in Article 14-3 of the Securities and Exchange Act. (2) Other matters involving objections or expressed reservations by independent directors that were recorded or stated in writing require a resolution by the board of directors. 2. If there are directors’ avoidance of motions in conflict of interest, the directors’ names, contents of motion, causes for avoidance and voting should be specified: (1). Board Meeting of March 16, May 4, August 10, November 9, 2022 � Content of the motion: To discuss the changes in the financing provided to the German subsidiary, Abnova GmbH. � Directors who are abstaining from voting due to conflicts of interest: Wilber Huang, Chiu Chi Ching � Reasons for abstention from voting due to conflicts of interest and voting: The Chairman, Wilber Huang is also concurrently served as a director of Abnova GmbH, and the Director, Chiu Chi Ching is the spouse of the Chairman, who shall be deemed to have a personal interest in the matter pursuant to Article 206 of the Articles of Incorporation, therefore they are abstaining from voting due to conflicts of interest. The motion is passed with no objection after the acting Chairman’s consultation by the remaining attending directors. (2). Board Meeting of March 16, 2022 � Content of the motion: To discuss the allocation of compensation for employees and directors for FY 2022. � Directors who are abstaining from voting due to conflicts of interest: Wilber Huang, Chiu Chi Ching � Reasons for abstention from voting due to conflicts of interest and voting: The Chairman, Wilber Huang is also concurrently served as managerial personnel of the Company, and the Director, Chiu Chi Ching is the spouse of the Chairman, who shall be deemed to have a personal interest in the matter pursuant to Article 206 of the Articles of Incorporation, therefore they are abstaining from voting due to conflicts of interest. The motion is passed with no objection after the acting Chairman’s consultation by the remaining attending directors. (3). Board Meeting of March 16, August 10, 2022 � Content of the motion: To discuss the salary adjustment for the managerial personnels of the Company. � Directors who are abstaining from voting due to conflicts of interest: Wilber Huang, Chiu Chi Ching � Reasons for abstention from voting due to conflicts of interest and voting: The Chairman, Wilber Huang is also concurrently served as managerial personnel of the Company, and the Director, Chiu Chi Ching is the spouse of the Chairman, who shall be deemed to have a personal interest in the matter pursuant to Article 206 of the Articles of Incorporation, therefore they are abstaining from voting due to conflicts of interest. The motion is passed with no objection after the acting Chairman’s consultation by the remaining attending directors. (4). Board Meeting of November 9, 2022 � Content of the motion: To discuss the proposal to provide a loan facility of NT$ 5 million to the German subsidiary, Abnova GmbH. � Directors who are abstaining from voting due to conflicts of interest: Wilber Huang, Chiu Chi Ching � Reasons for abstention from voting due to conflicts of interest and voting: The Chairman, Wilber Huang is also concurrently served as a director of Abnova GmbH, and the Director, Chiu Chi Ching is the spouse of the Chairman, who shall be deemed to have a personal interest in the matter pursuant to Article 206 of the Articles of Incorporation, therefore they are abstaining from voting due to conflicts of interest. The motion is passed with no objection after the acting Chairman’s consultationby theremaining attending directors.

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(5). Board Meeting of November 9, 2022
� Content of the motion: To discuss the remuneration for the directors and managerial personnels for the year 2023, and
the distribution of year-end bonus for the managerial personnels for FY 2022.
� Directors who are abstaining from voting due to conflicts of interest: Wilber Huang, Chiu Chi Ching
� Reasons for abstention from voting due to conflicts of interest and voting: The Chairman, Wilber Huang is also
concurrently served as managerial personnel of the Company, and the Director, Chiu Chi Ching is the spouse of the
Chairman, who shall be deemed to have a personal interest in the matter pursuant to Article 206 of the Articles of
Incorporation, therefore they are abstaining from voting due to conflicts of interest. The motion is passed with no
objection after the acting Chairman’s consultation by the remaining attending directors.
3. The implementation status of self-assessments of Board performance
In accordance with the "Rules for Performance Evaluation of Board of Directors” of the Company, the Board of Directors
and the members of the functional committees will complete the performance review after the end of the assessment year
and prior to the most recent regular Board meeting (as described below). The summary of the performance review results
has been submitted to the Remuneration Committee on February 23, 2023, and the Board of Directors on February 24,
2023, prior to the regular Board of Directors meeting. The results of the performance evaluation of the Board of Directors
were submitted to the competent authority within the time limit as required by laws and regulations.
(1). Scope of Evaluation: Board meeting
� Evaluation frequency: Once a year
� Evaluation period: 2022.1.1-2022.12.31
� Evaluation method: Internal self-assessment of the Board of Directors
Evaluation content: Involvement in the Company’s operation, enhancement of the quality of the Board of Directors’
decision-making, composition and structure of Board of Directors, election of board members and continuing
knowledge development, internal controls, etc.
� Evaluation result: The score of the self-assessment result is 92 marks, with the lowest scoring items are the
involvement and extent of participation in the Company’s operation.
� Improvement plan: In 2022, the average Board Meeting attendance rate was 86%. The Company will continue to
improve the attendance rate in order to achieve the attendance rate of 85% or above for each of the individual director.
(2).Scope of Evaluation: Individual Board member
� Evaluation frequency: Once a year
� Evaluation period: 2022.1.1-2022.12.31
� Evaluation method: Self-assessment of the Board members
� Evaluation content: Understanding of the Company’s goals and mission, awareness of director’s duties, involvement
in the Company’s operations, management of internal relationship and communication, the director's professionalism
and continuing knowledge development, internal controls, etc.
� Evaluation result: The score of the self-assessment result is85-98 marks, with the lowest scoring item is the
involvement in the Company’s operation.
� Improvement plan: The Company will strengthen the commitment of Board members to the Board of Directors and
reduce the number of directors who concurrently serve as supervisors.
(3).Scope of Evaluation: Individual functional committee member
� Evaluation frequency: Once a year
� Evaluation period: Evaluation period:
� Evaluation method: Self-assessment of the functional committee members
� Evaluation content: Involvement in the Company’s operation, awareness of the functional committees’ duties,
enhancement of the quality of the functional committees’ decision-making, composition and election of functional
committee members, internal controls, etc.
� Evaluation result: The score of the self-assessment result is93-99 marks, with the lowest scoring items are the
involvement and extent of participation in the Company’s operation.
� Improvement plan: The Company will improve the attendance rate of functional committee members.
4. The goals of enhancing the functions of the Board of Directors in the current and the most recent fiscal year and its
implementation status:
Year Goals of enhancing the functions of the Board Implementation status
of Directors
FY 2022 1. Professional instructors are arranged to Professional instructors were arranged to provide
provide directors with at least 6 hours of training for the directors, and all directors were
continuing education/training in the participated in continuing education/training for
Company, and various courses are provided, more than 6 hours, with 5 directors received 6
and directors are encouraged to participate, hours of continuing education/training, and 1
with a view to enhancing the knowledge of director received 12 hours of continuing
diverse courses beyond their professional education/training.
expertise.
2. The attendance rate of all directors present in There are 7 directors in total, with 4 directors
person reached 85% having a 100% attendance rate, but the
attendance rate for the remaining 3 directors
present in person has not reached 85%. The
average attendance rate of all directors present in
person was 86%.

22 -

3. Formulate a succession plan for the Board of	The Company has reported the succession plan	The Company has reported the succession plan
Directors	and operation for the Board of Directors and top
	management in the board meeting on November
	9, 2022, as described below.
As of the 1. Professional instructors are arranged to	The continuing education/training for directors
date of the provide directors with at least 6 hours of	are scheduled to be arranged in Q2 and Q3,
publication continuing education/training in the	which have not yet been held.
of this annual Company, newly appointed directors are
report required to complete at least 12 hours of
continuing education/training, and various
courses are provided to encourage directors
to participate, with a view to enhancing the
knowledge of diverse courses beyond their
professional expertise.
2. The attendance rate of all directors present in	As of the date of the publication of this annual
person reached 85%	report, only one Board meeting was held, with an
	attendance rate of 86%.
3. The attendance rate of directors in person at	The 2023 shareholder meeting will be held on
shareholder meetings shall reach 50%	May 15, 2023, and it has not yet been held.
(including the convener of the Audit
Committee)
5. Succession planning for the board members and top management and its implementation status:
(1). Succession planning and operation for board members
For the succession planning for board, the selection of board members is based on the following standards:
A. Recognize the core values and business philosophy of the Company, possess the personality traits of integrity and
accountability, and able to provide the professional expertise and experience required for the company's operations,
and fulfill the duties and responsibilities of the Board of Directors.
B. The analysis of the overall competencies required for the Board of Directors is taken into consideration. It			is
expected that the addition of newly appointed members can still continue to provide a Board of Directors that			is
professional, harmonious, diverse, and lead the Company to	grow steadily.
C. The qualifications of all director candidates must meet requirements as required by laws and regulations. The
selection process must also comply with relevant regulations to ensure that the director selection process can be
effectively identified, and suitable new board members can be elected.
The Company has "Rules for Performance Evaluation of Board of Directors”, where self-assessment will be regularly
conducted every year based on the evaluation criteria such as understanding of the Company’s goals and mission,
awareness of director’s duties, involvement in the Company’s operations, management of internal relationship and
communication, the director's professionalism and continuing knowledge development, internal controls, etc. in order
to ensure effective operation of Board of Directors, and the performance review results are used to serve as a reference
for the nomination and reappointment of directors.
Regarding the succession plan for the Board of Directors, the Company arranges senior managers to attend Board
meetings in order to familiarize themselves with the operations of the Board of Directors and various business units.
They are listed as potential candidates for future directors. The	Company also ensures that the number of directors
concurrently serving as managerial personnels does not exceed one-third of the total number of the board members.
Gender equality and diversity in the composition of the board members also taken into considerations, with a view to
complementing the professional talents from various fields that required for the Board of Directors. The Company		has
reported the succession plan and operation for the Board of Directors and top management in the board meeting on
November 9, 2022. The re-election of Directors will be held on May 15, 2023, at the shareholder meeting, implementing
the succession plan.
(2). Succession plan and operation for the top management
The top management of the Company is responsible for business management within the organization, achieving various
financial objectives and executing operational development plans. In addition to possessing essential professional
competency and experience, the values and personality traits of	the top management must also meet the Company's
business philosophy.
A. For the succession planning for the top management, potential candidates are selected and they are given
opportunities to expose themselves to different roles and responsibilities through appointment of acting managers,
job rotation or promotion. Also, they are arranged to attend relevant important meetings, on-the-job trainings,
practical workshops, etc. to gradually enhance their execution, management, decision-making, problem
identification, and problem-solving skills, cultivating talents that needed for the Company's long-term development.
It can effectively enhance the succession abilities and shorten the time needed for adaptation during succession in
accordance with the personal development plans.
B. In addition to continuously nurturing potential middle and senior-level management, in response to the needs of
organizational development and growth momentum, the Company also plans to recruit suitable talents at home and
abroad to strengthen management team, ensuring the sustainable operation and robust growth of the Company.
C. For the succession plan for President, the potential successors are arranged to participate in apprenticeship program
with the Board of Directors, attending monthly business	management meetings, and participating in annual
education and training courses that cover important topics such as R&D in biotech industry, marketing

The top management of the Company is responsible for business management within the organization, achieving various financial objectives and executing operational development plans. In addition to possessing essential professional competency and experience, the values and personality traits of the top management must also meet the Company's business philosophy. A. For the succession planning for the top management, potential candidates are selected and they are given opportunities to expose themselves to different roles and responsibilities through appointment of acting managers, job rotation or promotion. Also, they are arranged to attend relevant important meetings, on-the-job trainings, practical workshops, etc. to gradually enhance their execution, management, decision-making, problem identification, and problem-solving skills, cultivating talents that needed for the Company's long-term development. It can effectively enhance the succession abilities and shorten the time needed for adaptation during succession in accordance with the personal development plans.
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management, cross-departmental communication and coordination, financial analysis, etc., cultivating all-round management talents. The time course for a succession plan is 1-3 years. The succession plan and operation for the Board of Directors and top management were reported in the board meeting on November 9, 2022. The change of President has been reviewed by the Remuneration Committee on February 23, 2023, and approved by the Board of Directors on February 24, 2023, and the succession plan has completed.

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3.3.2 Performance Evaluation of the Board of Directors

(The details are described in the aforementioned any other matters that require reporting under 3. The implementation status of self-assessments of Board performance)

3.3.3 Audit Committee

A total of 4(A) Audit Committee meetings were held in the previous period. The attendance of

the independent directors was as follows:

Title	Name	Attendance in Person(B)	By Proxy	Attendance Rate (%) (Ｂ/Ａ)	Remarks
Independent Director	Lin Jia Hsie	4	0	100%	None
Independent Director	Ye Shao De	3	1	75%	None
IndependentDirector	Su JinJun	4	0	100%	None
Other mentionable items: 1. If any of the following circumstances occur, the dates of meetings, sessions, contents of motion, resolutions of the Audit Committee and the Company’s response to the Audit Committee’s opinion should be specified: (1) Matters referred to in Article 14-5 of the Securities and Exchange Act. The state of operations of the Audit Committee in FY 2022 Date of Meeting Major Resolutions Matters Listed under Article 14- 5 of the Securities and Exchange Act Securities and Exchange Act Results of Audit Committee's Resolution The Company’s Response to the Audit Committee’s Opinion 2022.3.16 2nd Session, 9th Meeting 1. To discuss the "Statement of Internal Control System” of the Company for FY 2021. v The resolution is passed with no objection by all attending members. The resolution is passed with no objection by all attending directors. 2. To discuss the amendment of the "Handling Procedures for Acquisition or Disposal of Assets”. v 3. To discuss the changes in the financing provided to the German subsidiary,Abnova GmbH fromOctober 2021toFebruary2022. v 4. To audit the compensationpaid to attestingCPAs. v 5. To review the Company's 2021 business report and financial statements. v 6. To discuss theprofit distribution for FY 2021. 7. To discuss the disposal of 100% share for re-investment in Abnova Diagnostics (Dongguan) Limited. 2022.5.4 2nd Session, 10th meeting 1. To discuss the changes in the financing provided to the German subsidiary,Abnova GmbH in March 2022. v The resolution is passed with no objection by all attending members. The resolution is passed with no objection by all attending directors. 2. To review the Q1 2022 consolidated financial statements of the Company. 2022.8.10 2nd Session, 11th meeting 1. To discuss the changes in the financing provided to the German subsidiary,Abnova GmbH in March 2022. v The resolution is passed with no objection by all attending members. The resolution is passed with no objection by all attending directors. 2. To review the Q1 2022 consolidated financial statements of the Company. 2022.11.9 2nd Session, 12th meeting 1. To discuss the changes in the financing provided to the German subsidiary,Abnova GmbH from Aprilto June,2022. v The resolution is passed with no objection by all attending members. The resolution is passed with no objection by all attending directors. 2. To discuss the proposal to provide a loan facility of NT$ 5 million to the German subsidiary,Abnova GmbH. v 3. To review the Q3 2022 consolidated financial statements of the Company. The Audit Committee convened a total of 4 meetings in FY 2022, and the main considering matters discussed including: 1. Quarterly and annual financial reports. 2. Assessment of the effectiveness of the internal control system. 3. Amendment on the "Handling Procedures for Acquisition or Disposal of Assets”. 4. Material asset transactions. 5. Loans and advances to related parties. 6. The hiring of an attesting CPA, and the compensation given thereto. 7. Legal compliance and risk management, etc. (2) Other matters which were not approved by the Audit Committee but were approved by two-thirds or more of all directors: None 2. If there are independent directors’ avoidance of motions in conflict of interest, the directors’ names, contents of motion, causes for avoidance and voting should be specified: None 3. Communications between the independent directors, the Company's chief internal auditor and CPAs: Description regarding the communications between the Independent Directors and the Internal Auditors: 1. The Internal Audit Manager of the Company regularly submits audit reports and follow-up audit reports to all independent directors monthly. If any independent director raises questions regarding the audit content, immediate clarification and discussion will be conducted. The independent directors and the Internal Audit Manager will convene at least one meeting every year to discuss the effectiveness of audit

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operations and the design and execution of internal control systems for a full communication and it will be recorded. The Internal Audit Manager also attends every Board meeting for report presentation.

The auditors of the Company will report on the Company's financial position, operating results, and the status of internal control audits at least once a quarter to the independent directors. If there is any enactment or amendment of a decree and International Financial Reporting Standards (IFRS) which might materially affect the Company, explanations and discussions will be provided to the independent directors. The attesting CPAs attends Board meetings and Audit Committee meetings to provide professional explanations if committee members have any inquiries.

Dates of Meeting	Communication Topics	Communication Results
March 16, 2022 Pre-Board Meeting	� Report on the execution of Annual Audit Plan � To discuss the effectiveness of the design and execution of the internal control system as well as the "Statement of Internal Control System"for FY 2021.	The independent directors had no opinions or suggestions after communication and discussion.
November 9, 2022 Pre-BoardMeeting	� Report on the execution of Annual Audit Plan � To discuss the arrangement of AuditPlan for FY 2023.	The independent directors had no opinions or suggestions aftercommunicationand discussion.
) Summary of communications between independent directors and CPAs:
Dates of Meeting	Communication Topics	Communication Results
March 16, 2022 Pre-Board Meeting	To provide explanations on audit and Q&A to the independent directors regarding the consolidated and single entity financial statements for FY 2021.	The independent directors had no opinions or suggestions, and it was submitted to the competent authority within the time limit as required by laws and regulations after reviewed by theBoard of Directors.
May 4, 2022 Pre-Board Meeting	To provide explanations on review and Q&A to the independent directors regarding the Q1 2022 consolidated financial statements.	The independent directors had no opinions or suggestions, and it was submitted to the competent authority within the time limit as required by laws and regulations after reviewed by the Board of Directors.
August 10, 2022 Pre-Board Meeting	To provide explanations on review and Q&A to the independent directors regarding the Q2 2022 consolidated financial statements.	The independent directors had no opinions or suggestions, and it was submitted to the competent authority within the time limit as required by laws and regulations after reviewed by the Board of Directors.
November 9, 2022 Pre-Board Meeting	1. To provide explanations on review and Q&A to the independent directors regarding the Q3 2022 consolidated financial statements. 2. The International Ethics Standards Board for Accountants (IESBA) has revised the provisions of Non-Assurance Services (NAS).	The independent directors had no opinions or suggestions, and it was submitted to the competent authority within the time limit as required by laws and regulations after reviewed by the Board of Directors.

The state of participation in board meetings by the supervisors: (Not applicable)
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3.3.4 Corporate Governance Implementation Status and Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”

Evaluation Item			Implementation Status	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
1. Does the company establish and disclose the Corporate Governance Best-Practice Principles based on “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”?	�		The Company has established "Corporate Governance Best Practice Principles", and the information are disclosed on Market Observation Post System (MOPS) and the Company website.	None
2. Shareholding structure & shareholders’ rights (1) Does the company establish an internal operating procedure to deal with shareholders’ suggestions, doubts, disputes and litigations, and implement based on the procedure? (2) Does the company possess the list of its major shareholders as well as the ultimate owners of those shares? (3) Does the company establish and execute the risk management and firewall system within its conglomerate structure? (4) Does the company establish internal rules against insiders trading with undisclosed information?	� � � �		(1) The Company has internal control mechanism to govern the equity-related operations, and it is implemented in compliance with the operating procedures. (2) Some of the directors are also major shareholders, and the Company possesses the list of major shareholders who are controlling the Company as well as the list of the actual controllers of the major shareholders. (3) The business and the financial accounting of affiliated enterprises of the Company operate independently. The Company has established specifications such as "Regulations Governing Group Enterprises, Specific Companies and Related-Party Transactions”, "Regulations for Supervising and Managing Subsidiaries”, etc., to effectively implement risk control and firewall mechanisms. (4) The Company has established specifications such as "Procedures for Handling Material Inside Information” etc., to ensure that all internal personnel are fully informed and strictly comply with the regulations. Any securities trading using material nonpublic information is not allowed. In addition, the Company will conduct education and training sessions from time to time for internal personnels to advocate the relevant laws and regulations and common pitfalls, with a view to improving their awareness ofsecurities trading.	None
3. Composition and Responsibilities of the Board of Directors (1) Does the Board develop and implement a diversified policy for the composition of its members? (2) Does the company voluntarily establish other functional committees in addition to the Remuneration Committee and the Audit Committee?	� �		(1) The Company has established "Procedures for Election of Directors” that specified the diversity policy of the Board of Directors, and the Article 20 of the "Corporate Governance Best Practice Principles” of the Company has stipulated the board membership diversification criteria and the competencies of Board of Directors must possess as a whole. The areas of expertise of the Board members covering different fields, such as biotechnology, medicine, financial management, accounting, business management, etc., achieving the goal of diversification. For more details regarding diversity policy of the Board of Directors of the Company and the specific goals of diversity management and its implementation status, please see4. The diversity policy and status of independence of the board of directors(Page 13) (2) The Company has voluntarily established an Audit Committee during the re-election of board in 2017. In the future, the Company will evaluate the necessity of establishing other functional committees based on actual operational requirements.	None Under evaluation None
(3) Does the company establish a standard to measure the performance of the Board and implement it annually, and are performance evaluation results submitted to the Board of Directors and referenced when determining the remuneration of individual directors and nominations for reelection?	�		(3) In accordance with the "Rules for Performance Evaluation of Board of Directors” of the Company, the Board of Directors and the members of the functional committees will complete the self- performance review after the end of the assessment year and prior to the most recent regular Board meeting. The statistics of performance review results for FY 2022 has been submitted to the Remuneration Committee on February 23, 2023 and the Board of Directors on February 24, 2023 for discussion, and were submitted to the competent authority within the time limit as required by laws and regulations. The performance review results are used to serve as a reference to determine the remuneration for individual directors and for the nomination and reappointment ofdirectors.

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Evaluation Item			Implementation Status	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
(4) Does the company regularly evaluate the independence of CPAs?	�		1. Scope of Evaluation: Board meeting � Evaluation frequency: Once a year � Evaluation period: 2022.1.1-2022.12.31 � Evaluation method: Internal self-assessment of the Board of Directors � Evaluation content: Involvement in the Company’s operation, enhancement of the quality of the Board of Directors’ decision-making, composition and structure of Board of Directors, election of board members and continuing knowledge development, internal controls, etc. � Evaluation result: The score of the self-assessment result is 92 marks, with the lowest scoring items are the involvement and extent of participation in the Company’s operation. � Improvement plan: In 2022, the average Board Meeting attendance rate was 86%. The Company will continue to improve the attendance rate in order to achieve an attendance rate of 85% or above for each of the individual directors. 2. Scope of Evaluation: Individual Board member � Evaluation frequency: Once a year � Evaluation period: 2022.1.1-2022.12.31 � Evaluation method: Self-assessment of the Board members � Evaluation content: Understanding of the Company’s goals and mission, awareness of director’s duties, involvement in the Company’s operations, management of internal relationship and communication, the director's professionalism and continuing knowledge development, internal controls, etc. � Evaluation result: The score of the self-assessment result is85-98 marks, with the lowest scoring item is the involvement in the Company’s operation. � Improvement plan: The Company will strengthen the commitment of Board members to the Board of Directors and reduce the number of directors who concurrently serve as supervisors. 3. Scope of Evaluation: Individual functional committee member � Evaluation frequency: Once a year � Evaluation period: 2022.1.1-2022.12.31 � Evaluation method: Self-assessment of the functional committee members � Evaluation content: Involvement in the Company’s operation, awareness of the functional committees’ duties, enhancement of the quality of the functional committees’ decision-making, composition and election of functional committee members, internal controls, etc. � Evaluation result: The score of the self-assessment result is93-99 marks, with the lowest scoring items are the involvement and extent of participation in the Company’s operation. � Improvement plan: The Company will improve the attendance rate of functional committee members. (4) The Company regularly evaluates the independence and suitability of the CPA once a year. In addition to obtaining the "Statement of Auditor Responsibilities and Functions and Independence" and Audit Quality Indicator (AQIs), the Company also conducts a CPA evaluation in reference to the independence evaluation standards for accountants as specified in the Bulletin of Norm of Professional Ethics for Certified Public Accountant of the Republic of China No.10 "Independence in Audit and Review “and 13 AQI indicators (for details, see notes 1-2). After evaluation, it has been confirmed that the CPA all meet the independent criteria and have no other financial interest relationship with the Company except for the audit and tax fees. With reference to the AQIs, it is believed that the CPAs and the accounting firm are averagely superior to peers in the industry from the aspects of professionalism, quality control, independence, supervision, and innovation, that can provide good audit services. The most recent evaluation of independence and suitability of CPA was discussed and approved by the Audit Committee on February 23, 2023, and was submitted to the Board of Directors for approval on February 24, 2023. Note 1: CPA independence evaluation items:	None

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		Implementation Status	Implementation Status	Implementation Status	Implementation Status
Yes	No	Abstract Illustration
		Evaluation Item				Result	Independe nt
		The CPA has no direct or significant indirect financial interest relationship with the Company.				Yes	Yes
		The CPA has no financing or guarantees with the Company or the Company’s directors.				Yes	Yes
		The CPA has no close business relationship or potential employment relationship with the Company.				Yes	Yes
		The CPA and the audit team members have not served as directors, managerial personnels or positions that have significant influence on audit work in the Company at present or in the last two years.				Yes	Yes
		The CPA has no non-audit service items that may directly affect the audit work have been provided to the Company.				Yes	Yes
		The CPA has no intermediation of stocks or other securities issued by the Company.				Yes	Yes
		The CPA has not act as a defense attorney for the company or act as a representative on behalf of the Company to coordinate conflicts with third parties.				Yes	Yes
		The CPA is not a relative of the Company's directors, managerial personnel, or persons who have a significant influence on the audit matters.				Yes	Yes
		Does the CPA have regular rotation				Yes	Yes
		Note 2:AQIs
		Aspect	No	Indicator	Definition
		Professional ism	1	Audit experience	Do the CPA and auditing personnel have sufficient audit experience to perform the audit work?
			2	Number of hours of training	Have the CPA and auditing personnel received sufficient education and training to acquire professional knowledge and skills?
			3	Turnover rate	Does the firm maintain a sufficient number of senior human resources?
			4	Professional support	Does the firm have sufficient non- audit professional staff, including computer auditors and evaluators, to support the audit team?
		Quality control	5	CPA workload	Is the number of audit cases accepted by the CPA and the amount of time spent on audit work excessive?
			6	Number of audit hours	Is the percentage of audit hours carried out by the audit team appropriate at each stage of the audit?
			7	Quality control review	Has the EQCR accountant spent sufficient time on the quality control review of the audit cases?
			8	Capability of quality control support	Does the firm have sufficient quality control resources, including risk management and audit professional consultants, to support the audit team?
		Independen ce	9	Non-audit services	Does the proportion of non-audit services provided by the firm to individual clients affect independence?
			10	Client familiarity	Could the cumulative number of years that the firm has provided audit services to individual clients affect independence?
		Supervision	11	External inspection deficiencies and disciplinary actions	Whether the quality control and audit cases of the firm are carried out in accordance with relevant laws and standards.
			12	Improvement letter issued by competent authorities

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Evaluation Item					Implementation Status	Implementation Status	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No			Abstract Illustration
			Innovation	13	Innovative plan or initiative	The firm's commitment to enhancing audit quality, including the adoption or planning of relevant plans or engagements to enhance audit quality.

4. Does the company appoint a suitable number of competent personnel and a supervisor responsible for corporate governance matters (including but not limited to providing information for directors and supervisors to perform their functions, assisting directors and supervisors with compliance, handling work related to meetings of the board of directors and the shareholders' meetings, and producing minutes of board meetings and shareholders' meetings)?	�		The Board meeting on February 24, 2023, has passed the resolution to appoint the Executive Assistant to the Chairman Office, Dong Yi Ling as the Chief of Corporate Governance Officer, protecting the rights and interests of shareholders and strengthening the functions of the Board of Directors, and responsible for corporate governance related matters. She has expertise in financial accounting and more than 20 years of experience in internal audit, equity, and corporate governance in TWSE/TPEx Listed Companies. Her main scope of duties and authority include: 1.Handling matters relating to Board meetings, Remuneration Committees meetings, Audit Committees meetings, and Shareholder meetings in accordance with laws and regulations (including meeting notices, agendas and relevant information, minutes record and compilation, etc.). 2.Assist in matters related to changes in the Board of Directors and provide continuing education and training. 3.Furnishing information required for business execution by directors. 4.Assisting directors with legal compliance. 5.Purchase Directors and Officers (D&O) Liability insurance. 6.Report the examination results of the qualifications of independent directors during nomination, appointment, and during their tenure of office in accordance with relevant laws and regulations to Board of Directors. 7. Other matters set out in the Company's Articles of Incorporation or contract. The business execution status for FY 2022 are as follows: 1. Handle the matters related to convening Board meetings in accordance with laws and regulations: Arrange the Board meetings and functional committees’ meetings of the year, notify the directors and provide agendas and relevant information seven days before the meeting, and complete the Board meeting minutes record and compilation within one week after the meeting and send. A total of 6 Board meetings, 4 Audit Committee meetings, and 3 Remuneration Committees meetings were held in FY 2022, 2. Convene the annual general meeting (AGM) in accordance with laws and regulations: Handle matters related to the shareholders' meeting, handle change of registration and report to the stock exchange after the re-election of directors. The 2022 AGM was held on May 31, 2022. 3. Assist in arranging meetings between independent directors, Internal Audit Manager, and attesting CPAs to understand the state of implementation of Company's internal audit, financial position, newly revised laws and regulations, etc. For the details regarding communications between independent directors and Internal Audit Manager as well as CPAs for FY 2022, please refer to the Company website. 4. Revise the Company's relevant regulations and handle alteration of registration in response to the Company's operational needs and amendments to corporate governance related laws and regulations. 5. Assist to arrange continuing education and training courses for directors and ensure that all directors have completed at least 6 hours of training. For the details regarding relevant training, please refer to MOPS. 6. During the period of 30 days before the publication of the annual financial report and 15 days before the publication of the quarterly financial report, all directors and managerial personnels are prohibited from trading the Company's stocks. The Chief of Corporate Governance Officer will notify all directors and managerial personnels via email prior to the aforementioned periods in order to prevent internal personnels from inadvertently violating this regulation. In FY 2022, all directors and managerial personnels of the Company complied with regulations and no violation is reported. 7. Purchase liability insurance for directors and key executives. The relevant information, including the insured amount, coverage scope, and insurance premium, was reported to the Board of Directors on May 31, 2022. 8. The Board meeting and the performance review for functional committees’ members for FY 2022 have been reviewed by the Remuneration Committee on February 23, 2023, and discussed by the Board of Directors on February 24, 2023.				None

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The Company and all stakeholders have established transparent and None

Does the company establish a communication channel and build a designated section on its website for stakeholders (including but not limited to shareholders, employees, customers, and suppliers), as well as handle all the issues they care for in terms of corporate social responsibilities?

�

effective communication channels in order to promptly understand and respond to stakeholders' concerns. The Company will continuously improve the Company's policies and systems. The main stakeholders are identified through understanding of the groups of people interacting with all departments within their scope of business, which are 1. Government and competent authorities, 2. Customers, 3. Suppliers, 4. Investors, and 5. Employees. The Company will regularly report on the state of communication with stakeholders to the Board of Directors. The following is the communications between the Company and the stakeholders, that was reported in the Board meeting on November 9, 2022.

was reported in the Board meeting on November 9, 2022.	was reported in the Board meeting on November 9, 2022.	was reported in the Board meeting on November 9, 2022.	was reported in the Board meeting on November 9, 2022.
1. Stakeholder: Government and competent authorities
Issues of concern		Communicati on channel	Response methods and communication frequency
Regulatory compliance Corporate governance Risk management		Assign a contact person Government documents Regulatory conferences and seminars	Assign a contact person for all business, and maintain good interaction with competent authorities, proactively understand the latest laws and regulations and promptly adjust company systems (on an ad hoc basis) Cooperate with competent authorities in various supervision and review operations (on regular and ad hoc basis). Cooperate to complete the matters within the deadline as required by competent authorities for official correspondence (on an ad hoc basis)
2. Stakeholder: Customers
Issues of concern	Communication channel		Response methods and communication frequency
Quality of products/ services Marketing plan Customer satisfaction Protection of rights and interests of customer	Exclusive customer service/technica l support department Company website Customer satisfaction questionnaire Personal data protection policy		Customer complaint mailbox is provided, and the customers’ inquiries will be managed and responded by dedicated personnel (on an ad hoc basis) The product information and promotional materials and advertisement are continuously updated on the Company website (on an ad hoc basis) Regular analysis is made based on customer complaint reports (on a monthly basis) Regularly collect and analyze customer satisfaction questionnaire results to understand customer needs (on a six- month basis) Establish a "Code of Practice for the Personal Data Protection” to protect customer privacy and rights (on an ad hoc basis) Each unit conducts a personal data inventory (on a 12-month basis)

3. Stakeholder:	Suppliers
Issues of concern	Communicati on channel	Response methods and communication frequency
Supply chain managemen t Maintenanc e of supplier relationship	Procurement department Procurement contract Supplier evaluation	Set up a procurement department, and maintain day-to-day liaison with supplier, handle evaluation related matters (on an ad hoc basis) Implement supplier rating system, and sign procurement contracts with important suppliers (on an ad hoc basis) Regularly conduct supplier evaluations to ensure the quality of the products and services provided by suppliers (on a six-month basis)

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Evaluation Item			Implementation Status	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract			Illustration
			4. Stakeholder:	Investors
			Issues of concern	Communicati on channel		Response methods and communication frequency
			Shareholder s’ equity Corporate governance Sustainable development Corporate image	Spokesperson/ proxy spokesperson Company website Shareholders' meeting Investor conference. MOPS		KGI Securities Co., Ltd. is appointed as the proxy for handling stock-related matters (on an ad hoc basis) Set up a spokesperson and proxy spokesperson, as well as investor mailbox to respond the issues of concern of investors (on an ad hoc basis) Convene AGM (on a 12-month basis) Convene investor conference to brief about the financial position and business conditions, as well as future prospects (at least once a year) Disclose financial and business information as well as significant information of the Company on the MOPS (on regular and ad hoc basis)
			5. Stakeholder: Employees
			Issues of concern	Communica tion channel	Response methods and communication frequency
			Labor relations Employee remuneration and welfare Talent cultivation Environment al health and safety in workplace	Labor- managemen t meeting Employee compliant mailbox Remunerati on Committee/ Human Resource Department Intranet site Internal/ bulletin board	The Company has formulated work rules and relevant regulations governing the personnel-related matters for compliance, and regularly convene labor-management meetings (once a quarter) Establish a smooth channel for employees to express their suggestions and complaints (on an ad hoc basis) Regularly conduct performance review (on a six-month basis) Establish an Employee Welfare Committee, providing employees with various subsidies, annual free health examination, and organizing various activities (on an ad hoc basis) Provide internal training courses for employees (on a monthly basis) and provide external training courses as needed (on an ad hoc basis)
6. Does the company appoint a professional shareholder service agency to deal with shareholder affairs?	�		The Company has appointed KGI Securities Co., Ltd. as the proxy for handlingstock-related matters.				None
7.Information Disclosure (1) Does the company have a corporate website to disclose both financial standings and the status of corporate governance? (2) Does the company have other information disclosure channels (e.g. building an English website, appointing designated people to handle information collection and disclosure, creating a spokesman system, webcasting investor conferences)? (3) Does the company announce and report annual financial statements within two months after the end of each fiscal year, and announce and report Q1, Q2, and Q3 financial statements, as well as monthly operation results, before the prescribed time limit?	� �		(1) The Company has established a website (http://www.abnova.com) and Investor Relations session is established in the Company website to provide relevant information on the Company's financial and business information as well as corporate governance related information for public access. (2) The company has both Chinese and English version websites, information collection and disclosure are performed by dedicated personnel, and spokesperson system is implemented that spokesperson responsible for external communication. If the Company convenes an investor conference, the relevant information will be disclosed on MOPS as well as the Company website as required by laws and regulations. (3) The Company published the financial reports for FY 2022 on February 24, 2023, that is, within two months after the end of the accounting year. The Company has also published the Q1, Q2, Q3 financial reports as well as monthly business operational status ahead the specified deadlines.				None
8. Has the Company disclosed other information to facilitate a better understanding of its corporate governance practices (e.g. including but not limited to employee rights, employee wellness, investor relations, supplier relations, rights of stakeholders, directors’ training records, the implementation of risk management policies and risk evaluation measures, the implementation of customer relations policies,	�		(1) Employee rights, employee wellness: The Company has established an Employee Welfare Committee to regularly organize various activities (e.g. Chinese New Year banquet, departmental gatherings, etc.) as a token of appreciation all the employees, and provide subsidies, gifts, and allowances during festival seasons. The company also contributes pension to employees as required by laws and regulations, provides national health insurance, and annual free				None

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Evaluation Item			Implementation Status	Implementation Status	Implementation Status
	Yes	No	Abstract Illustration
and purchasing insurance for directors)?			health examination. Moreover, the Company provides free coffee and beverages. The measures governing labor- management relations follow relevant laws and regulations, and it is implemented well. (2) Investor relations: The Company convenes an annual shareholders’ meeting as required by laws and regulations, and a spokesperson system is established to handle matters related to investors. In addition, the Company handles the information disclosure in accordance with the regulations of the competent authorities, and an investor relations section is established on the Company website, providing a channel for exchange of opinions. (3) Supplier relations: The Company has established "Supplier Management Procedures" and "Procurement Management Procedures" to carefully select business partners and suppliers who emphasis on the stability of product quality and price reasonableness and establish long-term collaborations with suppliers based on mutual trust and mutual benefit, achieving a win-win situation. (4) Rights of stakeholders: The Company maintains open communication and good cooperative relationships with bankers, customers, and stakeholders, as well as protecting their entitled rights. (5) Continuing education/ training of directors: The directors of the Company are regularly participated in corporate governance and regulatory related continuing education/ trainings, the directors’ training records are as follow:
			List of directors	Training unit	Titles of training courses
			Wilber Huang, representative of Harmony Investment Co., Ltd., Chiu Chi Ching, representative of Rong How Investment Co., Ltd., Chen Fang Wen, representative of China Wire & Cable Co., Ltd, Chen Yueh Hung, Lin Jia Hsie, Ye Shao De, Su Jin Jun	Taiwan Corporate Governance Association	Trends and current situation of corporate sustainable development (3 hours)
			Wilber Huang, representative of Harmony Investment Co., Ltd., Chiu Chi Ching, representative of Rong How Investment Co., Ltd., Chen Fang Wen, representative of China Wire & Cable Co., Ltd, Chen Yueh Hung, Lin Jia Hsie, Ye Shao De, Su Jin Jun	Taiwan Corporate Governance Association	Keys to Business Transformation and Succession - Talent Development and Succession Planning for Management (3 hours)
			Lin Jia Hsie	Securities and Futures Institute (SFI)	Legality of Cyber Security Management Act Under Ransomware Threats (3 hours)
			Lin Jia Hsie	SFI	Trends in Carbon Management Towards Net-Zero Emissions and Response (3 hours)
			(6) Implementation of risk management policies and risk evaluation measures: The Company has established internal control systems and various management procedures that serve as a standard for risk control and risk measurement standards for operational units, and it is implemented well. (7) Implementation of customer relations policies: The Company has set up a Customer Service Department and a Technical Support Department to fully understand customer needs and provide relevant services and assistance, with a view to achieving customer satisfaction.

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Evaluation Item	Implementation Status	Implementation Status	Implementation Status
	Yes	No	Abstract Illustration
			(8) Purchasing insurance for directors: The Company has consistently purchased D&O Liability insurance for directors (including managerial personnels) since June 2011. The amount of insurance coverage for this year is NT$ 85 million. Information relating to liability insurance such as the insured parties, coverage amount, scope, period, premium, etc. has been reported to the Board of Directors on May 31, 2022. The insurance policy has not yet been expired as of the publicationdate ofthe annual report.
9. With respect to the results of the annual Corporate Governance Evaluation most recently issued by the Corporate Governance Center of Taiwan Stock Exchange, please describe the improvements, and provide priority and measures to enhance those matters that have not yet been improved. (It is not applicable as no improvement is required) The results of the corporate governance evaluation for FY 2021 reported that not all directors of the Company had fulfilled the specified training hours. However, in FY 2022, all directors had completed 6 hours or above continuing education/ training. The results of corporate governance evaluation for FY 2021 reported that the English version of annual report, shareholder meeting notices, and financial reports have not yet been uploaded. The Company has prepared the English version of 2022 annual report, 2022 financial report, and 2023 shareholder meeting agenda. The results of corporate governance evaluation in the most recent fiscal year (FY 2022) showed that the Chairman and the President of the Company are not the same person. The Company has implemented succession planning for top management, and the resolution of changing President was passed in the Board meeting on February 24, 2023. At present, the Chairman and the President are not the same person. The results of corporate governance evaluation in the most recent fiscal year (FY 2022) showed that the Chief of Corporate Governance Officer has not yet been appointed. The appointment of Chief of Corporate Governance Officer was passed in the Board meeting on February 24, 2023.

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3.3.5 If the company has a remuneration committee or nomination committee in place, the composition and operation of such committee shall be disclosed

(1) Information of Members of the Remuneration Committee

The Remuneration Committee of the Company is composed of three independent directors. For more details about their work experience, professional qualifications, and experience, as well as independence status, please refer to Page 11, Appendix - Disclosure of Professional Qualifications of Directors and Independence Analysis of Independent Directors.

(2) Attendance of Members at Remuneration Committee Meetings

There are three members of the Remuneration Committee.
The term of office for this committee is from July 1st, 2010 to June 16th, 2023. A total of 3 (A) Remuneration Committee meetings were held in the previous period. The attendance record of the Remuneration Committee members was as follows:

Title	Title	Name	Attendance in Person(B)	By Proxy	Attendance Rate (%) (Ｂ/Ａ)	Remarks
Convener		LinJiaHsie	3	0	100%	None
Committee Member		Ye Shao De	2	1	66.67%	None
Committee Member		Su Jin Jun	3	0	100%	None
Other mentionable items: The state ofoperations of RemunerationCommitteein FY 2022
						The Company’s Response
Date of					Results of Remuneration
	Major Resolutions					to the Remuneration
Meeting					Committee's Resolution
						Committee’s Opinion

	1. To discuss the allocation of compensation for employees
2022.3.16					The resolution is passed with	The resolution is passed
	and directors for FY 2021.
4th Session,					no objection by all attending	with no objection by all
	2. To discuss the salary adjustment for the managerial
6th Meeting					members.	attending directors.
	personnels of the Company.

2022.5.4					The resolution is passed with	The resolution is passed
	1. To discuss the salary adjustment for the managerial
4th Session,					no objection by all attending	with no objection by all
	personnels of the Company.
7th Meeting					members	attending directors.

	1. To discuss the remuneration for the directors and
2022.11.9					The resolution is passed with	The resolution is passed
	managerial personnels for the year 2023.
4th Session,					no objection by all attending	with no objection by all
	2. To discuss the distribution of year-end bonus for the
8th Meeting					members.	attending directors.
	managerialpersonnels for FY 2022.

Duties of the Remuneration Committee of the Company: The remuneration committee shall exercise the care of a good administrator in faithfully performing the official powers listed below, and shall submit its recommendations for deliberation by the Board of Directors: (1) Prescribe and periodically review the performance evaluation standards, annual and long-term performance goals as well as remuneration policy, system, standards, and structure for directors and managerial officers. (2) Periodically evaluate the status of attainment of goal of directors and managerial officers and prescribe the content and amount of remuneration individually based on the evaluation results. 1. If the board of directors declines to adopt or modifies a recommendation of the remuneration committee, it should specify the date of the meeting, session, content of the motion, resolution by the board of directors, and the Company’s response to the remuneration committee’s opinion (e.g., the remuneration passed by the Board of Directors exceeds the recommendation of the remuneration committee, the circumstances and cause for the difference shall be specified): None. 2. Resolutions of the remuneration committee objected to by members or expressed reservations and recorded or declared in writing, the date of the meeting, session, content of the motion, all members’ opinions and the response to members’ opinion should be specified: None.

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3.3.6 Fulfillment of CSR and Deviations from the "Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies"

Implementation Status Deviations from “the Corporate Social Responsibility BestEvaluation Item Practice Principles for Yes No Abstract Explanation TWSE/TPEx Listed Companies” and Reasons 1. Does the company assess ESG risks associated with � The Company has established a Sustainable Development None its operations based on the principle of materiality, Committee that headed by the Chairman and composed of and establish related risk management policies or managerial personnels with different professional expertise, strategies? jointly planning the Company's short, medium, and long-term plans as well as a sustainable development blueprint, and to be driven by the Chairman Office. The Sustainable Development Committee responsible for crossdepartmental communication and planning, with the primary tasks of identifying business risks and sustainable development issues of concern to stakeholders, analyzing the resources and manpower of the Company, prioritizing urgent and important plans, conducting risk assessments on issues related to the environment, society, and corporate governance, etc. according to the principle of importance, discussing response plans, and regularly monitoring and reviewing the implementation status The key points of the Sustainable Development Committee meeting for the year 2022 are:1. Identify the sustainable issues that need to be addressed and develop corresponding action plans; 2. Discuss the goals and policy adjustments related to sustainability issues; 3. Supervise the sustainable development program and its implementation performance. The Sustainable Development Committee will report to the Board of Directors at least once a year. The progress plan and specific performance of promoting sustainable development has been reported in the Board meeting on November 9, 2022. The Board of Directors continuously concerns about the feasibility and necessity of the plan and provides professional advice as a reference for adjustments as needed, as well as monitoring the - progress of team for adjustment making. 2. Does the company establish exclusively (or � This disclosure covers the sustainable business performance None concurrently) dedicated first-line managers from January to December 2022, with the boundary of risk authorized by the board to be in charge of proposing assessment mainly focused on the Company, including the Japan and China subsidiaries.

Does the company establish exclusively (or � concurrently) dedicated first-line managers authorized by the board to be in charge of proposing the corporate social responsibility policies and reporting to the board?

The Sustainable Development Committee communicates with internal stakeholders on the issues of concern and performs literature review to evaluate significant sustainable development issues in accordance with laws and regulations. The "Risk Management Policy and Procedures" was passed in the Board meeting on November 10, 2021, for compliance in handling matters related to risk identification, risk assessment, risk control and risk monitoring.

and risk monitoring.	and risk monitoring.	and risk monitoring.	and risk monitoring.
Description on promotion of sustainable development:
	Issues	Risk	Risk Management Strategy
		Assessment
		Item
	Environ mental	Environmental impact and management 1.The production environment and manufacturing process of Qingpu plant of the Company is certified with ISO9001 and ISO13485
			certification, while the
			Neihu plant is certified with GMP. Various internal
			management measures related to the environment
			are established for
			compliance. 2.The Company has established an
			Environmental Health and
			Safety (EHS) Department and appointed dedicated personnel to manage the operations related to EHS, environmental protection, occupational safety and health, etc. In addition, the
			Company regularly conducts fire drills and
			educational and
			promotional campaigns, providing a safe and healthy working environment for employees. 3.The Company regularly conducts audits on
			greenhouse gas emissions

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		Implementation Status	Implementation Status	Implementation Status
Yes	No	Abstract Explanation
				(CO2), as well as electricity and water usage, and waste generation, etc. The Company will continue to implement energy-saving and carbon-reduction policy and comply with various environmental regulations. The Company also regularly submits reports, and the implementation status will be verified by the Internal Audit Unit.
		Social	Product safety	1.The products of the Company are produced in accordance with the relevant production regulations in various countries and are strictly controlled and inspected by the Quality Control Department to ensure stable and safe product quality, as well as the labeling is in compliance with regulations. 2.The Company strictly complies with the relevant laws and regulations related to trade, intellectual property management, and import/export control of different countries. All export products also meet local standards, ensuring all products and services comply with laws and regulations. 3.The Company has established a Customer Service Department and a Technical Support Department, providing customers with professional consultation and after-sales services. The Company emphases on customer satisfaction.
		Corpora te governa nce	Legal compliance Strengthen the functions of directors Stakeholders’ communication	1.The Company has established "Sustainable Management Best Practice Principles" and related regulations to promote sustainable development and review the effectiveness of implementation. Personnel related regulations and remuneration policy are meeting the reasonable standards in the industry, and employee performance review is integrated with sustainable management policy, and "Regulations Governing Reward and Punishment” also established for compliance. 2. The Company has set up a Legal Office, a Quality Assurance, Audit, Certification Department, and an Auditing Office to provide relevant regulatory consultations and regularly ensure compliance with all operation-related laws and regulations. 3. The Company has purchased D&O Liability insurance for directors (including managerial personnels). The amount of insurance coverage for FY 2022 is NT$ 85 million.

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Evaluation Item				Implementation Status	Implementation Status	Deviations from “the Corporate Social Responsibility Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No		Abstract Explanation
					Information relating to liability insurance such as the insured parties, coverage amount, scope, period, premium, etc. has been reported to the Board of Directors on May 31, 2022. 4. The Company has arranged various types of training courses for directors, and all directors have completed 6 hours or more continuing education/ training. The latest information on amendment of regulations or promotional matters will also be regularly provided. 5. The Company provides communication channels and reporting methods for stakeholders on the Company website and has appointed a spokesperson who responsible for external communication.
3. Environmental issues (1) Does the company establish proper environmental management systems based on the characteristics of their industries? (2) Does the company endeavor to utilize all resources more efficiently and use renewable materials which have low impact on the environment? (3) Does the company evaluate the potential risks and opportunities in climate change with regard to the present and future of its business, and take appropriate action to counter climate change issues? (4) Does the company take inventory of its greenhouse gas emissions, water consumption, and total weight of waste in the last two years, and implement policies on energy efficiency and carbon dioxide reduction, greenhouse gas reduction, water reduction, or waste management?	� � � �		(1) The Company has established relevant environmental management systems based on medical biotech industry characteristics for compliance, such as "Management Procedures Governing the Operational Environment Assessment", "Environmental Management Procedures Governing the Manufacturing Process", "Regulations Governing the GMP Facility and Environmental Management", etc. to effectively prevent and avoid environmental pollution. (2) The Company is committed to promoting energy conservation, encouraging employees to reduce unnecessary energy waste, as well as promoting waste recovery and separation, recycling wastepaper and packaging materials, and using eco-friendly products as much as possible, etc. in order to strengthen its effort in protecting environment, minimizing ecological damage. (3) Climate change may result in global resource shortages, transportation disruptions, or environmental impacts that could increase business operating costs. The Company has adopted countermeasures such as maintaining good cooperative relationships with multiple air cargo companies over a long period of time, improving resource utilization efficiency, etc. In response to the trend that global attention has been accorded to the climate change, the EHS Department alerts at all times to amendments to environmental regulations, and promptly updates the Company's regulations and procedures to ensure compliance with legal requirements. (4) The purchased electricity is the main contributor to energy consumption of the Company. Carbon dioxide sensors are installed in specific plants to monitor the concentration of carbon dioxide. The Company is committed to implementing energy-saving and carbon-reduction as well as greenhouse gas (GHG) reduction by practicing temperature control for air-conditioners, setting power-save mode for all machines, and regularly reviewing electricity usage. In 2022, the GHG emission has decreased by 0.63% compared to 2021. The water conservation plan of the Company includes installing water-saving devices for domestic water, as well as maximizing the effectiveness of available water resources utilization. In 2022, water usage has decreased by 10.19% compared to 2021. The Company aims to reduce waste and waste reuse by adopting management measures such as process optimization, improving packaging, etc., reducing waste generation, reusing wastepaper, using recycled materials, etc. The statistics for GHG emissions, water usage, and total weight of waste for the most recent two fiscal years are as follows: Scope of information coverage: All manufacturing sites of the Company (Do not include subsidiaries which located in overseas with no substantial operations)			No major deviation

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Evaluation Item						Implementation Status	Implementation Status		Deviations from “the Corporate Social Responsibility Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No				Abstract Explanation
			FY 2021 FY 2022 FY 2021 GHG emissions (CO2) 946,978kg (Note) 941,032kg 941,928kg (Note) Water usage 6,064 m³ 5,446 m³ 6,058 m³ Waste 5.38 metric tons 5.74 metric tons 6.05 metric tons (Note 1) Based on the operational boundary that was used to identify emission sources, the GHG emissions of the Company are categorized as other indirect emissions (Category Two): An indirect emission resulting from other activities of the Company. This information is estimated using water and electricity tariffs due to the Company not required to be verified by a professional agency. (Note 2) All of them are non-hazardous waste.			FY 2021	FY 2022	FY 2021
				GHG emissions (CO2)		946,978kg (Note)	941,032kg	941,928kg (Note)
				Water usage		6,064 m³	5,446 m³	6,058 m³
				Waste		5.38 metric tons	5.74 metric tons	6.05 metric tons
4. Social issues (1) Does the company formulate appropriate management policies and procedures according to relevant regulations and the International Bill of Human Rights? (2) Does the company have reasonable employee benefit measures (including salaries, leave, and other benefits), and do business performance or results reflect on employee salaries?	� �		(1) (2)		The Company complies with relevant Labor Standards Act, regulations like Act of Gender Equality in Employment, etc., as well as International Bill of Human Rights, formulates work rules and relevant regulations governing the personnel- related matters, emphasizing on human rights and protecting legitimate interests of employees. Workplace Diversity Policy: The Company is committed to promoting workplace diversity and gender equality, providing a working environment that respects the dignity, safe and equal for all people, ensuring that employees are not discriminated against, harassed, or treated unfairly due to gender, age, race, nationality, religion, politic affiliation, etc. The Company has a balanced ratio of male and female employees and follows the principle of equal pay for equal work. The Company hires employees of different ages and nationalities, adhering to the principle of talent selection based on professionalism and suitability, implementing workplace equality. Indicator % Number of female employees out of the total number of employees 59% Number of female employees out of the total number of managers 40.6% Number of female employees out of the total number of senior executives 44.4% Number of employees aged 21-30 out of the total number of employees 9% Number of employees aged 31-40 out of the total number of employees 28% Number of employees aged 41-50 out of the total number of employees 55% Number of employees aged 51-60 out of the total number of employees 6% Number of employees aged 61 and above out of the total number of employees 2% Employee who are a ROC citizen 99% Employee who are a non-ROC citizen 1% The Company emphasizes on employee rights and welfare and the employee benefit plans are as follow: � In addition to leave entitlement as required by laws and regulations, an additional 3 days of paid sick leave are provided to employees, which is superior to the Labor Standards Law. � The Company has established an Employee Welfare Committee to regularly organize various activities, provide monetary gifts/ gifts during festival seasons as well as various allowances and subsidies. � The Company provides free coffee and beverages. � The Company arranges a free health examination once a year. � The Company provides group insurance for employees. � During the peak of COVID-19 outbreak, the Company provides employees with COVID-19 rapid tests, alcohol, antibacterial hand sanitizers, etc., providing best-in-class safety protection measures. � The Company provides education and training for new employees, and internal/external training sessions at least once a month for existing employees. In FY 2022, a total of 28 internal training courses are provided. Also, the latest legal information, health education knowledge sharing, etc. are provided from time to time. The Company emphasizes talent cultivation and enhancement of professionalism.				No major deviation

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Evaluation Item			Implementation Status
	Yes	No	Abstract Explanation
(3) Does the company provide a healthy and safe working environment and organize training on health and safety for its employees on a regular basis?	�		The Company has established a policy to appropriately reflect business performance and results in employee remuneration: � In accordance with the Company’s work rules, if the Company makes profits after year-end settling, after paying tax, making up losses, and setting aside a legal reserve, the year-end bonus will be distributed prior to the Chinese New Year that would depend on the actual circumstances. � Pursuant to Article 24 of the Articles of Incorporation of the Company: "If the Company makes profits (after deducting the pretax income for remuneration to employees and directors), it shall set aside not less than 1% of its annual profit to employees as a profit sharing and not more than 3% as the compensation for directors”. In 2022, the actual provision rate was approximately 4.18%. � Employee performance review is conducted twice a year, and the state of the Company’s operation and employee job performance are taken into consideration when evaluating salary adjustment and salary increment rate for each individual. Implementation of the retirement system: Old pension scheme New pension scheme Sources of law Labor Standards Act The Enforcement Rules of the Labor Pension Act Contribution method Sufficient pension fund has contributed to the pension fund account with Bank of Taiwan for employees who are eligible for old pension scheme. Therefore, it was approved that no further contribution is needed on September 27, 2021, At least 6% of each employee’s monthly salary is contributed to the employee's individual pension account according to the grades of labor insurance salary. Contribution amount The account balance of the Labor Retirement Reserve Fund is NT$ 7,241,981. A total of NT$ 3,948,930 was contributed in FY 2022. (3)Occupational safety and health (OSH) policy: The design of the Company's offices and plants are complied with regulations relating to fire safety and labor safety. Also, regular disinfection and cleaning are performed, and vendor is appointed to regularly measure the concentration of carbon dioxide. The Company complies with the OSH regulations, promotes workplace safety. No occupational accident reported in 2022, achieving the goal of zero occupational accidents. Implementation of fire safety training: Implementation of fire safety training: The EHS Department will conduct fire and evacuation drills at Qingpu plant every year. In FY 2022, a total of 46 people attended the firefighting training, with 4 hours of training each person, a total of 184 hours of training. In cooperation with the building management committee, the Taipei head office also conducts fire safety inspection and drill every quarter. Facility safety management: The EHS Department is responsible for reporting and managing the toxic chemicals used in the manufacturing process. The toxic chemicals are stored in a locked storage cabinet, and the safe use of the toxic chemicals is monitored, where application to use and reporting are required in accordance with the regulations. The reported use of toxic chemicals and its amounts in 2022 are as follow:
			0.0394 kilograms of Acetonitrile
			0.1076 kilograms of Formamide
			Regular maintenance and inspection of equipment used for manufacturing process and R&D are performed according to their importance, and detailed operation manuals are provided to ensure safety. In addition, inspections will be performed by the Internal Audit Unit every year. In 2022, a total of 3 environmental monitoring and inspections have been outsourced. The Qingpu, Zhongli plant was inspected on June 15, 2022, and December 9, 2022, while the Taipei plant was inspected on June 13, 2022. The monitoring results showed no significant deficiencies or anomalies.

40 -

Implementation Status Deviations from “the Corporate Social Responsibility BestEvaluation Item Practice Principles for Yes No Abstract Explanation TWSE/TPEx Listed Companies” and Reasons Company verification status: The Company's products and manufacturing process are certified with ISO9001, ISO13485, and the products of Neihu plant are certified with GMP. (4) Does the company provide its employees with � (4) The Company has established “Management Procedures career development and training sessions Governing the Education and Training" to arrange training for new employees, accelerating their understanding of the Company's regulations and the required skills for fulfilling their duties and responsibilities. Internal continuing education and training will be arranged based on job requirements during their employment. In FY 2022, the Company provided various types of courses including biotechnology, manufacturing process management, finance and accounting knowledge, legal compliance, etc., providing employees with channels for continuous learning and professional skill enhancement. In FY 2022, a total of 28 internal training courses were provided, with 262 participants attended and a total of 607 hours of training. Employees can also apply to attend external education and training courses based on legal requirements or job requirements (e.g., labor safety, accounting management, internal audit, etc.), effectively enhancing their professional competencies as well as improving their career development.

(5) Do the company's products and services comply with relevant laws and international standards in relation to customer health and safety, customer privacy, and marketing and labeling of products and services, and are relevant consumer protection and grievance procedure policies implemented?

(6) Does the company implement supplier management policies, requiring suppliers to observe relevant regulations on environmental protection, occupational health and safety, or labor and human rights? If so, describe the results.

(5) The marketing and labeling of all products of the Company complied with relevant laws and regulations at home and host countries, as well as the Personal Data Protection Act to protect customer privacy. The Company has established a policy to protect the rights and interests of consumers. Also, a Customer Service Department and a Technical Support Department have been established to provide a quick solution to the customers’ problems as well as professional consultation. In addition, an investor relations section is established on the Company website, providing stakeholders with a channel for communication and exchange of opinions to ensure that protection of consumer rights is in place.
� (6) The Company has established "Supplier Management Procedures" and "Procurement Management Procedures" to carefully select qualified suppliers. Suppliers are required to put emphasis on the environmental protection, OSH, labor rights, etc., and carefully evaluated for professionalism, integrity, and have any record of environmental and social impact, promoting ethical business practices.
In FY 2022, all suppliers of the Company 100% met the supplier selection criteria. The suppliers have obtained ISO or other certifications based on the types of business and complied with the Supplier Code of Conduct or contractual provisions.
The Company conducts important supplier evaluations biannually. The supplier evaluation results for FY 2022 are as follow:
- A total of 93 raw material/product suppliers were evaluated, all of them performed well, and no suppliers failed or required observation.
- A total of 6 primary and secondary raw material suppliers for medical device products were evaluated, all of them performed well, and no suppliers failed or required observation.
- A total of 2 suppliers for fixed assets were evaluated, all of them performed well, and no suppliers failed or required observation.

5.Does the company reference internationally accepted reporting standards or guidelines, and prepare reports that disclose non-financial information of the company, such as corporate social responsibility

A total of 9 suppliers for facility engineering were evaluated, all of them performed well, and no suppliers failed or required observation.
A total of 36 service suppliers were evaluated, among which 1 supplier was requiring observation, and the deployed department is responsible to continuously observe the supplier's improvement.

The Company audits the operation of supplier management annually to ensure the selection and management of suppliers are in compliance with regulations. The Procurement Department communicates with suppliers through different types of channels and provides suppliers with appropriate education and quality control training as needed, ensuring the quality and service provided meeting the Company's requirements and on-time delivery, thereby achieving winwin cooperative relationship between supply and demand.

The Company has not yet been required to prepare a No major deviation as sustainability report. However, the Company has disclosed the Company has not yet relevant and reliable information on sustainable development on been required to prepare the Company website, MOPS, and annual reports for public a sustainability report.
41 -

Evaluation Item	Implementation Status	Implementation Status	Implementation Status
	Yes	No	Abstract Explanation
reports? Do the reports above obtain assurance from a third party verification unit?			access.
6. Describe the difference, if any, between actual practice and the corporate social responsibility principles, if the company has implemented such principles based on the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies: The Company has established the “Sustainable Management Best Practice Principles", and all operations are carried out in accordance with the principles and relevant regulations. No major deviation reported.
7. Other useful information for explaining the status of corporate social responsibility practices: The Company's products and manufacturing process are certified with ISO9001, ISO13485, and the products of Neihu plant are certified with GMP. In addition, permit/ license from agency like Food and Drug Administration (FDA) of different countries will be applied in accordance with the specific requirements of each product.

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3.3.7 Fulfillment of Ethical Corporate Management and Deviations from the "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies"

Implementation Status Deviations from the “Ethical Corporate Management Best Practice Principles
Evaluation Item Yes No Abstract Illustration for TWSE/GTSM Listed Companies” and Reasons
1. Establishment of ethical corporate management None policies and programs
(1)Does the company have a Board-approved ethical � (1) The Company established the "Procedures for Ethical corporate management policy and stated in its Management and Guidelines for Conduct” on March 27, regulations and external correspondence the ethical 2015. In response to the amendment of regulations and corporate management policy and practices, as well operational requirements of the Company, it was revised as the active commitment of the Board of Directors and approved by the Board of Directors on March 29, and management towards enforcement of such 2017, and March 26, 2020, and was also reported in the policy? AGMs for the year and disclosed on the MOPS and the Company website. Integrity is clearly set out in the procedures and guidelines, commitments and practices are in compliance with the regulations. The Board of Directors and management team have also actively monitored its implementation.
(2) Does the company have mechanisms in place to � (2) The Company has established the "Procedures for assess the risk of unethical conduct, and perform Ethical Management and Guidelines for Conduct” for regular analysis and assessment of business activities compliance, which clearly stipulates that violations with higher risk of unethical conduct within the scope such as provision or acceptance of improper benefits, of business? Does the company implement programs provision or promise of any facilitating payment, to prevent unethical conduct based on the above and provision of illegal political contributions, disguised ensure the programs cover at least the matters form of bribery, engagement in unfair competition that described in Paragraph 2, Article 7 of the Ethical may cause harm to the rights and interests of Corporate Management Best Practice Principles for stakeholders, insider trading, etc. will be handled in TWSE/TPEx Listed Companies? accordance with "Regulations Governing Reward and Punishment”.
(3)Does the company provide clearly the operating � (3) The Company has established the "Procedures for procedures, code of conduct, disciplinary actions, and Ethical Management and Guidelines for Conduct” and appeal procedures in the programs against unethical "Codes of Ethical Conduct". For business activities that conduct? Does the company enforce the programs pose a higher risk of unethical behavior, in addition to above effectively and perform regular reviews and adhering to the corporate culture of integrity, job amendments?
(3) The Company has established the "Procedures for Ethical Management and Guidelines for Conduct” and "Codes of Ethical Conduct". For business activities that pose a higher risk of unethical behavior, in addition to adhering to the corporate culture of integrity, job rotation for the relevant position is adopted, and stakeholder mailbox for whistleblowing and complaints is established in order to prevent unethical behavior. The "Procedures for Ethical Management and Guidelines for Conduct” and "Codes of Ethical Conduct” are consistently reviewed and revised in accordance with the amendment of regulations and operational requirements of the Company.

2.Fulfill operations integrity policy

None

�

(1)Does the company evaluate business partners’ ethical records and include ethics-related clauses in business contracts?
(1) The Company has established "Supplier Management Procedures" and "Procurement Management Procedures" to carefully select partners and suppliers to avoid engaging in transactions with unethical suppliers. Clauses related to integrity shall be included in trading partner agreements, as needed, and the rights and obligations of both parties, as well as the transaction terms, shall be clearly stipulated in the contracts or relevant commercial agreements.
(2)Does the company have a unit responsible for ethical � corporate management on a full-time basis under the Board of Directors which reports the ethical corporate management policy and programs against unethical conduct regularly (at least once a year) to the Board of Directors while overseeing such operations?
(2) In accordance with the “Procedures for Ethical Management and Guidelines for Conduct” and "Codes of Ethical Conduct”, Chairman Office is appointed as the dedicated unit to promote and implement integrity management policy, preventing various types of unethical behavior, including provision or acceptance of improper benefits, unfair competition, insider trading, etc. The integrity management policy and the plan to prevent unethical behavior and its monitoring and implementation were reported in the Board meeting on November 9, 2022.
Implementation of Integrity management execution for FY 2022:
The Company has established the "Procedures for Ethical Management and Guidelines for Conduct”, the relevant regulations are published on the intranet for compliance. In addition, integrity management is included in the human resource policy, preventing various types of unethical behavior, and an effective corrections system has been established. No employee dishonesty is reported in FY 2022.
The Legal Office provided a 2-hour advocacy training course, with a total of 100 participants.
A total of 7 directors and 9 managerial personnels
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Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies” and Reasons
	Yes	No	Abstract Illustration
(3) Does the company establish policies to prevent conflicts of interest and provide appropriate communication channels, and implement it? (4) Does the company have effective accounting and internal control systems in place to implement ethical corporate management? Does the internal audit unit follow the results of unethical conduct risk assessments and devise audit plans to audit the systems accordingly to prevent unethical conduct, or hire outside accountants to perform the audits? (5) Does the company regularly hold internal and external educational trainings on operational integrity?	� � �		have signed the statement of compliance with the integrity management policy, achieving a 100% signing rate. 4. A total of 100 employees have signed the confidentiality agreement upon employment, achieving a 100% signing rate. 5.The Company has established communication channels for all stakeholders and a whistleblowing mailbox. No complaint or misconduct reporting received in FY 2022. (3) The Company has established various stakeholder mailboxes, providing internal and external channels for complaints and whistleblowing, and it is implemented accordingly. The "Procedures for Ethical Management and Guidelines for Conduct” and "Codes of Ethical Conduct” of the Company have clearly defined policy of preventing conflicts of interest, and employees and stakeholders are required to implement accordingly. Abstention from voting due to conflicts of interest is applicable to all motions in the Board meeting. (4) The Company has set rigorous and effective critical control points in the accounting system, internal control system, and related procedures for business activities or operating procedures that may pose higher risks. In accordance with the annual risk assessment, annual audit plan is arranged and carried out by the internal auditors, all units are required to conduct self- assessment, ensuring the appropriateness of the system design and actual implementation. (5) In addition to regularly organizing internal advocacy training on integrity management, the Company also sends employees to participate in external seminars in order to strengthen the concept of integrity management.
3. Operation of the integrity channel (1) Does the company establish both a reward/punishment system and an integrity hotline? Can the accused be reached by an appropriate person for follow-up? (2) Does the company have in place standard operating procedures for investigating accusation cases, as well as follow-up actions and relevant post-investigation confidentiality measures? (3) Does the company provide proper whistleblower protection?	� � �		(1) The Company has established the "Procedures for Ethical Management and Guidelines for Conduct” and "Codes of Ethical Conduct”, as well as whistleblowing channels for convenient and confidential reporting, which will be handled by dedicated independent personnel. (2) The Company has established a standard operating procedure for investigating reported matters and relevant confidentiality mechanisms. In FY 2022, no external and internal misconduct reporting was received, and no significant incident of unethical behavior was reported. (3) Confidentiality mechanism is adopted to handle the reported matters, ensuring the safety of the whistleblower. In FY 2022, no external and internal misconduct reporting was received, and no significant incident of unethical behavior was reported.	None
4. Strengthening information disclosure Does the company disclose its ethical corporate management policies and the results of its implementation on the company’s website and MOPS?	�		The Company has disclosed relevant information on integrity management policy and the effectiveness of its implementation on the Company website and MOPS for public access.	None
5. If the company has established the ethical corporate management policies based on the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies, please describe any discrepancy between the policies and their implementation. The Company has established the "Procedures for Ethical Management and Guidelines for Conduct” and "Codes of Ethical Conduct”, and all operations are carried out in accordance with relevant regulations. No major deviations reported.
6. Other important information to facilitate a better understanding of the company’s ethical corporate management policies (e.g., review and amend its policies). The "Procedures for Ethical Management and Guidelines for Conduct” is consistently reviewed and revised in accordance with the operational requirements of the Company. The aforementioned regulations is consistently revised in response to the amendment of government regulation and operational requirements of the Company. The most recent revision was made on March 26, 2020 and announced after it was reviewed by the Audit Committee and approved by the Board of Directors to ensure compliance by management and all employees. Also, the revision was reported in the AGM in 2020.

3.3.8 If the company has adopted corporate governance best-practice principles or related bylaws, disclose how these are to be searched.

The Company has established the corporate governance best-practice principles and relevant regulations, which are made available on the Company website (http://www.abnova.com)and MOPS (http://mops.twse.com.tw)for public access.

3.3.9 Other significant information that will provide a better understanding of the state of the company's implementation of corporate governance may also be disclosed: None.

44 -

3.3.10 Internal Control System 1. Statement of Internal Control System

Abnova (Taiwan) Corporation Statement of Internal Control System

Date: February 24, 2023

Based on the findings of a self-assessment, Abnova (Taiwan) Corporation states the following with regard to its internal control system during the year 2022:

The Company is aware that the establishment, implementation and maintenance of the internal control system is the responsibility of the Board of Directors and the managers of the Company. The Company has established the system for the purpose of guaranteeing the reliability, timeliness and transparency report of the effectiveness and efficiency of the operation (including profitability, performance, asset security, etc.) and ensuring all are in compliance with relevant laws and regulations.
An internal control system has inherent limitations. No matter how perfectly designed, an effective internal control system can only provide reasonable assurance of accomplishing the three aforementioned objectives. Moreover, the effectiveness of an internal control system may be subject to changes due to extenuating circumstances beyond our control. Nevertheless, our internal control system contains self-monitoring mechanisms, and the Company takes immediate remedial actions in response to any identified deficiencies.
The Company evaluates the design and operating effectiveness of its internal control system based on the criteria provided in the "Regulations Governing the Establishment of Internal Control Systems by Public Companies" (herein below, the Regulations). The criteria adopted by the Regulations identify five key components of managerial internal control: (1) control environment, (2) risk assessment, (3) control activities, (4) information and communication, and (5) monitoring activities. Each component also includes several items which can be found in the Regulations.
The Company has evaluated the design and operating effectiveness of its internal control system according to the aforesaid Regulations.
Based on the findings of such evaluation, the Company believes that, on December 31, 2022, it has maintained, in all material respects, an effective internal control system (that includes the supervision and management of our subsidiaries), to provide reasonable assurance on our operational effectiveness and efficiency, reliability, timeliness, transparency of reporting, and compliance with applicable rulings, laws and regulations
This Statement is an integral part of the Company’s annual report for the current period and prospectus, and will be made public. Any falsehood, concealment, or other illegality in the content made public will entail legal liability under Articles 20, 32, 171, and 174 of the Securities and Exchange Law.
This statement was approved by the Board of Directors in their meeting held on February 24, 2023, with all 6 attending directors affirming the content of this Statement.

Abnova (Taiwan) Corporation Chairman: Wilber Huang President: Wilber Huang

2. If CPA Was Engaged to Conduct a Special Audit of Internal Control System, Provide Its Audit Report: None.

45 -
3.3.11 If there has been any legal penalty against the company or its internal personnel, or any disciplinary penalty by the company against its internal personnel for violation of the internal control system, during the most recent fiscal year or during the current fiscal year up to the publication date of the annual report, where the result of such penalty could have a material effect on shareholder equity or securities prices, the annual report shall disclose the penalty, the main shortcomings, and condition of improvement: None.

3.3.12 Material resolutions of a shareholders meeting or a board of directors meeting during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report

1. Major Resolutions of Shareholders’ Meeting and Implementation Status

Date	Item	Major resolution	Implementation status of resolution
2022.5.31	1.	To approve the 2021 Business Report and Financial Statements.	The 2021 Business Report and Financial Statements were approved, which the consolidated revenue totaled NT$ 451,487 thousand and net profit after tax was approximately NT$ 28,369 thousand, with EPS of NT$ 0.47.
	2.	To approve the 2021 profit distribution plan.	The cash dividend of NT$ 0.46 per share was distributed. The ex-dividend date was set as June 22, 2022, and the cash dividend was distributed on July 1, 2022.
	3.	To discuss the amendment to the "Articles of Incorporation" of the Company.	The amendment has been announced for compliance and disclosed on the MOPS and the Company website. The alteration of registration has been approved by the Ministry of Economic Affairs (MOEA) on July 5, 2022 (Letter No.MOEA-Business-11101099400).
	3.	To discuss the amendment to the "Rules of Procedure for Shareholders Meetings”of the Company.	The amendment has been announced for compliance and disclosed on the MOPS and the Company website.
	4.	To discuss the amendment to the "Handling Procedures for Acquisition or Disposal of Assets”of the Company.	The amendment has been announced for compliance and disclosed on the MOPS and the Company website.

2. Board Meetings:

Date	Item	Major resolution
2022.3.16	1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.	To discuss the amendments to the "Corporate Governance Best Practice Principles” and the "Sustainable Development Best Practice Principles” of the Company. To discuss the amendments to the "Rules of Procedure for Shareholders Meetings” and the "Rules of Procedure for Shareholders Meetings” of the Company. To discuss the amendment to the "Handling Procedures for Acquisition or Disposal of Assets” of the Company. To discuss the 2021 “Statement of Internal Control System”. To discuss the changes in the financing provided to the German subsidiary, Abnova GmbH from October 2021 to February 2022. To discuss the disposal of 100% share for re-investment in Abnova Diagnostics (Dongguan) Limited. To discuss the independence and suitability of the CPAs. To discuss the compensation paid to CPAs. To discuss the allocation of compensation for employees and directors for FY 2021. To discuss the Company's 2021 business report and financial statements. To discuss the profit distribution for FY 2021. To discuss and determine the details of convening the 2022 AGM such as date, venue, and the general nature of the business to be considered at the meeting, etc. To discuss the 2022 salary adjustment for the managerial personnels of the Company.
2022.3.30	1.	To discuss the amendment to the"Articles of Incorporation"of the Company.
2022.5.4	1. 2.	To discuss the changes in the financing provided to the German subsidiary, Abnova GmbH in March 2022. To discuss the Q1 2022 consolidated financial statements of the Company.
2022.5.31	1.	To discuss and determine the ex-dividend date and the distribution date of cash dividends for FY 2021.
2022.8.10	1. 2. 3. 4.	To discuss the changes in the financing provided to the German subsidiary, Abnova GmbH from April to June 2022. To discuss the Q2 2022 consolidated financial statements of the Company. To discuss the renewal of the short-term lines of credits of the Company. To discuss the salary adjustment for the managerial personnels of the Company.

46 -

Date	Item	Major resolution
2022.11.9	1. 2. 3. 4. 5. 6. 7. 8. 9.	To discuss the amendment to the "Procedures for Handling Material Inside Information” of the Company. To discuss the amendment to the "Rules of Procedure for Board of Directors Meetings". To discuss the "2023 Annual Audit Plan". To discuss the changes in the financing provided to the German subsidiary, Abnova GmbH from July to September 2022. To discuss the proposal to provide a loan facility of NT$ 5 million to the German subsidiary, Abnova GmbH. To discuss the Q3 2022 consolidated financial statements of the Company. To discuss the 2023 budget. To discuss the remuneration for the directors and managerial personnels for the year 2023. To discuss the distribution of year-end bonus for the managerial personnels for FY 2022.
2023.2.24	1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17.	To discuss the amendment to the "Corporate Governance Best Practice Principles”. To discuss the 2022 “Statement of Internal Control System”. To discuss the changes in the financing provided to the German subsidiary, Abnova GmbH from October 2022 to January 2023. To discuss the change of CPAs. To discuss the independence and suitability of the CPAs. To discuss the compensation paid to CPAs. To discuss the formulation of general principles for the pre-approval policy of non- assurance services of the Company. To discuss the allocation of compensation for employees and directors for FY 2022. To discuss the Company's 2022 business report and financial statements. To discuss the profit distribution for FY 2022. To discuss the re-election of all directors of the Company. To discuss the director nomination period and venue. To discuss the nomination and review of candidates for directors and independent directors of the Company. To discuss the proposal to lift restrictions on non-compete competition for new directors of the Company. To discuss and determine the details of convening the 2022 AGM such as date, venue, and the general nature of the business to be considered at the meeting, etc. To discuss the appointment of Chief of Corporate Governance Officer of the Company. To discuss the change of President of the Company.

3.3.13 Where, during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, a director or supervisor has expressed a dissenting opinion with respect to a material resolution passed by the board of directors and said dissenting opinion has been recorded or prepared as a written declaration, disclose the principal content thereof: None.

3.3.14 A summary of resignations and dismissals, during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, of the company's chairperson, President, chief accounting officer, chief financial officer, chief internal auditor, chief corporate governance officer, and chief research and development officer:

Title	Name	Date of assumption of office	Date of resignation	Reason
President	Wilber Huang	January 1, 2002	February 24, 2023	Previously, the Chairman has concurrently served as President, therefore the Board of Directors approved the change of President to strengthen corporate governance and implement succession planning for top management.

47 -

3.4 Information Regarding the Certified Public Accountants' Audit Fee

Unit: NT$ 1,000

Accounting firm	CPA	Audit Period	Audit Fee	Non-audit Fee	Total	Remark
KPMG Taiwan	Hsu Shu Min	2022.01.01-2022.12.31	2,620	Tax Returns 300	2,920
	Kuo Rou Lan	2022.01.01-2022.12.31

3.4.1 The securities firm shall disclose the amounts of the audit fees and non-audit fees paid to the attesting CPAs and to the accounting firm to which they belong and to any affiliated enterprises as well as the details of non-audit services: None.
3.4.2 When the securities firm changes its accounting firm and the audit fees paid for the financial year in which the change took place are lower than those paid for the financial year immediately preceding the change, the amount of the audit fees before and after the change and the reason shall be disclosed: None.
3.4.3 When the audit fees paid for the current financial year are lower than those paid for the immediately preceding financial year by 10 percent or more, the amount and percentage of and reason for the reduction in audit fees shall be disclosed: None.

3.5 Information on replacement of certified public accountant:

The Company has changed its CPAs since 2023 due to an internal job adjustment of the accounting firm and was approved by the Board of Directors on February 24, 2023.

3.5.1. Regarding the former certified public accountant:

Date ofChange	February24,2023	February24,2023	February24,2023	February24,2023
Reasons and Explanation of Changes	The Company originally appointed Hsu Shu Min and Kuo Rou Lan from KPMG Taiwan for financial statement auditing and has changed to appoint Chiang Hsiao Ling and Kuo Rou Lan from KPMG Taiwan starting from the year 2023 due to an internaljob adjustment ofthe accountingfirm.
State Whether the Appointment is Terminated or rejected by the Consignor or CPAs	Persons involved Situation		CPA	Consignor
	Appointment terminated automatically		V	－
	Appointment rejected (discontinued)		－	－
The Opinions Other than Unmodified Opinion Issued in the Last Two Years and the Reasons for the Said Opinions	None
Is There Any Disagreement in Opinion with the Issuer	Yes	X	Accounting principle orpractice
		X	Disclosure of financialstatements
		X	Auditing scope orprocedures
		X	Others
	No	V
	Explanation: None
Supplementary Disclosure (Disclosures Specified in Article 10.6.1.4~7 of the Standards)	None

3.5.2 Regarding the successor certified public accountant:

AccountingFirm	KPMGTaiwan
CPA	Hsu ShuMin,KuoRouLan
Date of Engagement	February24,2023
Prior to the Formal Engagement, Any Inquiry or Consultation on the Accounting Treatment or Accounting Principles for Specific Transactions, and the Type of Audit OpinionthatMight beRendered ontheFinancial Report	None
Written Opinions from the Successor CPAs that are Different from the Former CPA’s Opinions	None

3.5.3 The reply of former CPAs on Article 10.6.1 and Article 10.6.2.3 of the Standards: Not applicable

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3.6 Where the company's chairperson, President, or any managerial officer in charge of finance or accounting matters has in the most recent year held a position at the accounting firm of its certified public accountant or at an affiliated enterprise of such accounting firm, the name and position of the person, and the period during which the position was held, shall be disclosed: None.
3.7 Any transfer of equity interests and/or pledge of or change in equity interests (during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report) by a director, supervisor, managerial officer, or shareholder with a stake of more than 10 percent during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report
3.7.1 Change in shareholding by directors, supervisors, managerial officers, or major shareholders

shareholders
				Unit: Share
Title	Name	FY 2022		Current fiscal year up to March 17, 2023
		Net Change in Shareholding	Net Change in Shares Pledged	Net Change in Shareholding	Net Change in Shares Pledged
Chairman	Wilber Huang (Note)	-	-	-	-
Directors	Harmony Investment Co., Ltd.	-	-	-	-
Institutional director Representative	Chiu Chi Ching	-	-	-	-
Directors	Rong How Investment Co., Ltd.	(417,000)	-	-	-
Institutional director Representative	Chen Fang Wen	-	-	-	-
Directors	China Wire & Cable Co., Ltd	-	-	-	-
Institutional director Representative	Chen Yueh Hung	-	-	-	-
Independent Directors	Lin Jia Hsie	-	-	-	-
Independent Directors	Ye Shao De	-	-	-	-
Independent Directors	Su Jin Jun	-	-	-	-
President	Jih Pei Ju (Note)	-
Senior Manager	Huang Shi Xuan	-	-	-	-
Senior Manager	Zheng Mei Hui	-	-	-	-
Senior Manager	Chen Si Xian	-	-	-	-
Senior Manager	Dong Yi Ling	-	-	-	-
Senior Manager	Zhou Yun Jin	-	-	-	-
Senior Manager	Chang Ya Ping	-	-	-	-
Senior Manager	Tung Kai Chiang	-	-	-	-

Note: Wilber Huang has concurrently served as the Chairman and President in FY 2022, and the Board of Directors has passed the resolution to change President on February 24, 2023, Wilber Huang has resigned from the position of President and succeeded by the Senior Manager, Jih Pei Ju.
3.7.2 Stock trade with related party by directors, supervisors, managerial officers, or major shareholders: None.

3.7.3 Stock pledge with related party: None.

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3.8 Relationship information, if among the company's 10 largest shareholders anyone is a related party or a relative within the second degree of kinship of another.

					March 17, 2023; Unit: Share; %	March 17, 2023; Unit: Share; %	March 17, 2023; Unit: Share; %	March 17, 2023; Unit: Share; %	March 17, 2023; Unit: Share; %
Name	Shares Held		Shares Held by Spouse & Minors		Shares Held in the Name of Others		Name and relationship for those who are the related party of or are the spouses of or are related to the top-10 shareholders within the second degree of kinship		Remark
	Shares	%	Shares	%	Shares	%	Name	Relationship
Wilber Huang	3,651,144	6.03%	-	-	-	-	1. Harmony Investment Co., Ltd. 2. Lasertech Holding International Ltd.	1. Spouse of the representative 2. Spouse of the representative	-
TCI Co., Ltd. Representative: Lin Yong Siang	3,097,000	5.11%	-	-	-	-	None	None	-
Harmony Investment Co., Ltd. Representative: Chiu Chi Ching	2,448,294	4.04%	-	-	-	-	1.Wilber Huang 2. Lasertech Holding International Ltd. 3. Pan Pacific Investment Corp.	1.Spouse of the representative 2. The same person who is the representative 3. The representative is the same as the supervisor.	-
Lasertech Holding International Ltd. Representative: Chiu Chi Ching	2,248,786	3.71%	-	-	-	-	1.Wilber Huang 2. Harmony Investment Co., Ltd. 3. Pan Pacific Investment Corp.	1. Spouse of the representative 2. The same person who is the representative 3. The representative is the same as the supervisor.	-
Pan Pacific Investment Corp. Representative: Wu Cong Lin	1,839,014	3.04%	-	-	-	-	1.Harmony Investment Co., Ltd. 2. Lasertech Holding International Ltd.	The supervisor is the same as the representative of company 1. and 2.	-
China Wire & Cable Co., Ltd Representative: Chen Zhao Rong	1,037,017	1.71%	-	-	-	-	None	None	-
HSBC (Taiwan) in custody for Morgan Stanley Investment Fund	975,352	1.61%	-	-	-	-	None	None	-
Rong How Investment Co., Ltd. Representative:LeeHuan Xin	540,000	0.89%	-	-	-	-	None	None	-
E.SUN Bank in custody for Lasertech Investment Fund	510,374	0.84%	-	-	-	-	Lasertech Holding International Ltd.	Trust account	-
Hong Zhen Mei	461,386	0.76%	-	-	-	-	None	None	-

3.9 The total number of shares and total equity stake held in any single enterprise by the company, its directors and supervisors, managerial officers, and any companies controlled either directly or indirectly by the company and total shareholding

			December 31, 2022; Unit: Share; %	December 31, 2022; Unit: Share; %	December 31, 2022; Unit: Share; %	December 31, 2022; Unit: Share; %
Affiliated Company (Note)	Shareholding by the Company		Shareholding of directors, supervisors, managers, or enterprises under their direct or indirect control		Total Shareholding
	Shares	%	Shares	%	Shares	%
Abnova -GmbH	(Note 1)	100％	None		(Note 1)	100％
Abnova Holding Corporation	52,700	100%	None		52,700	100%
Abnova (Cayman) Corporation	0	0%	2,605,000	100%	2,605,000	100%
Abnova (HK) Limited	0	0%	1,670,000	100%	1,670,000	100%
Abnova Diagnostics (Japan)	0	0%	1,800,000	100%	1,800,000	100%
Abnova Diagnostics (Dongguan) Limited	(Note 2)	0%	(Note 2)	0%	(Note 2)	0%
Citil Pharma Incorporated	2,890,000	40%	4,335,000	60%	7,224,000	100%

Note 1: Affiliated enterprise which is a subsidiary established in Germany, that is a limited liability company without issued shares.

Note 2: It was sold in 2022.

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IV. Capital Overview

4.1. Capital and Shares 4.1.1 Source of capital stock

		Unit: 1000 shares; NT$ 1,000	Unit: 1000 shares; NT$ 1,000	Unit: 1000 shares; NT$ 1,000	Unit: 1000 shares; NT$ 1,000	Unit: 1000 shares; NT$ 1,000	Unit: 1000 shares; NT$ 1,000	Unit: 1000 shares; NT$ 1,000
Year/ Month	Par Value (NT$)	Authorized share capital		Paid-in capital		Remark
		Shares	Amount	Shares	Amount	Sources of capital stock	Capital increased by assets other than cash	Others
2002.01	10	3,000	30,000	1,200	12,000	Incorporation	－	Approval letter No. Government-Construction- Commercial-09013830700
2002.11	10	23,000	230,000	10,759	107,586	Capital increase by cash of NT$ 95,586 thousand	－	Approval letter No. MOEA- Business-09101451900
2003.06	12	23,000	230,000	16,697	166,974	Capital increase by cash of NT$ 59,388 thousand	－	Approval letter No. Government-Construction- Commercial-09211610410
2003.12	12	23,000	230,000	21,424	214,241	Capital increase by cash of NT$ 47,267 thousand	－	Approval letter No. Government-Construction- Commercial-09226503310
2004.03	－	21,424	214,241	21,424	214,241	Reduction of authorized share capital	－	Approval letter No. Government-Construction- Commercial-09307359410
2004.10	12	60,000	600,000	32,543	325,428	Capital increase by cash of NT$ 111,187 thousand	－	Approval letter No. Government-Construction- Commercial-09317037340
2004.12	12	60,000	600,000	38,669	386,692	Capital increase by cash of NT$ 61,264 thousand	－	Approval letter No. Government-Construction- Commercial-09326631600
2005.10	12	60,000	600,000	44,272	442,724	Capital increase by cash of NT$ 56,032 thousand	－	Approval letter No. Government-Construction- Commercial-09417987820
2006.06	12	60,000	600,000	50,795	507,946	Capital increase by cash of NT$ 65,222 thousand	－	Approval letter No. Government-Construction- Commercial-09579697300
2007.04	－	60,000	600,000	30,000	300,000	Reduction of paid-in capital	－	Approval letter No. Government-Construction- Commercial-09683490120
2007.05	20	60,000	600,000	38,240	382,399	Capital increase by cash of NT$ 82,399 thousand	－	Approval letter No. Government-Construction- Commercial-09684761500
2007.10	10	60,000	600,000	41,907	419,071	Capital increase by issuance of stock warrants of NT$ 36,672 thousand	－	Approval letter No. Government-Construction- Commercial-09690441110
2008.01	37	60,000	600,000	50,825	508,251	Capital increase by cash of NT$ 89,180 thousand	－	Approval letter No. MOEA- Business-09601321130
2008.01	10	60,000	600,000	52,899	528,989	Capital increase by issuance of stock warrants of NT$ 20,738 thousand	－	Approval letter No. MOEA- Business-09701009470
2008.07	10	80,000	800,000	54,058	540,579	Capital increase by issuance of stock warrants of NT$ 11,590 thousand	－	Approval letter No. MOEA- Business-09701160610
2008.12	10	80,000	800,000	54,158	541,579	Capital increase by issuance of stock warrants of NT$ 1,000 thousand	－	Approval letter No. MOEA- Business-09701325300
2010.01	68	80,000	800,000	59,547	595,469	Capital increase by cash of NT$ 53,890 thousand	－	Approval letter No. MOEA- Business-09901004550
2015.08	－	80,000	8 00,000	58,047	580,469	Capital reduction by reduction of treasury shares of NT$ 15,000 thousand	－	Approval letter No. MOEA- Business-10401153090
2016.09	－	80,000	800,000	58,790	587,899	Recapitalization of retained earnings of NT$ 7,430 thousand	－	Approval letter No. MOEA- Business-10501235390
2017.09	－	80,000	800,000	60,554	605,536	Recapitalization of retained earnings of NT$ 17,637 thousand	－	Approval letter No. MOEA- Business-10601130440

	March 17, 2023; Unit: Share	March 17, 2023; Unit: Share	March 17, 2023; Unit: Share	March 17, 2023; Unit: Share
Types of Shares	Authorized share capital Issued shares (Note) Unissued Shares Total			Remark
		Unissued Shares	Total
Common stock	60,553,594	19,446,406	80,000,000	－

Note: The shares of a listed company.

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4.1.2 Composition of Shareholders

4.1.2 Composition of Shareholders	4.1.2 Composition of Shareholders	4.1.2 Composition of Shareholders
				March 17, 2023; Unit: Person; Share; %
Type of Shareholders Quantity	Government Agencies	Domestic Financial Institutions	Domestic Securities Investment Trust Funds	Other Domestic Juridical Persons	Domestic Natural Persons	Foreign Institutions and Natural Persons	Total
Number of Shareholders	－	－	－	239	31,330	44	31,613
Shareholding	－	－	－	9,110,163	42,705,706	8,737,725	60,553,594
ShareholdingPercentage	－	－	－	15.04%	70.53%	14.43%	100.00%

4.1.3 Distribution of Shareholding

Common Share March 17, 2023; Unit: Person; Share; %

Shareholding Range	Number of Shareholders	Shareholding	Shareholding Percentage
1-999	20,242	542,188	0.90%
1,000-5,000	9,958	18,030,529	29.78%
5,001-10,000	822	6,517,997	10.76%
10,001-15,000	203	2,620,698	4.33%
15,001-20,000	145	2,698,673	4.46%
20,001-30,000	107	2,732,846	4.51%
30,001-40,000	45	1,616,805	2.67%
40,001-50,000	17	781,533	1.29%
50,001-100,000	36	2,516,780	4.16%
100,001-200,000	15	2,110,135	3.48%
200,001-400,000	12	3,172,043	5.24%
400,001-600,000	4	1,916,760	3.17%
600,001-800,000	0	0	0.00%
800,001-1,000,000	1	975,352	1.61%
800,001-1,000,000	6	14,321,255	23.64%
Total	31,613	60,553,594	100.00%

Preferred Share: The Company does not issue preferred shares.

4.1.4 List of major shareholders

4.1.4 List of major shareholders	4.1.4 List of major shareholders	4.1.4 List of major shareholders
March 17, 2023; Unit: Share; %
Shares Major Shareholders	Shareholding	Shareholding Percentage
Wilber Huang	3,651,144	6.03%
TCI Co., Ltd.	3,097,000	5.11%
Harmony Investment Co., Ltd.	2,448,294	4.04%
Lasertech Holding International Ltd.	2,248,786	3.71%
Pan Pacific Investment Corp.	1,839,014	3.04%
China Wire & Cable Co., Ltd	1,037,017	1.71%
HSBC (Taiwan) in custody for Morgan Stanley Investment Fund	975,352	1.61%
Rong How Investment Co., Ltd.	540,000	0.89%
E.SUN Bank in custody for Lasertech Investment Fund	510,374	0.84%
Hong Zhen Mei	461,386	0.76%

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4.1.5 Information on share prices, net worth per share, earnings per share, dividends per share for the past 2 fiscal years

				Unit: NT$; 1,000 shares	Unit: NT$; 1,000 shares
Item	Year		2021	2022	Current fiscal year up to March 31, 2023 (Note 7)
Market price per share (Note 1)	Highest		80.4	84.9	41.55
	Lowest		35.3	31.3	35.65
	Average		50.99	42.74	38.60
Net worth per share(Note 2)	Before distribution		20.01	21.34	Not applicable
	After distribution		19.55	20.54(Note 6)	Not applicable
Earnings per share	Weighted average shares		60,554	60,554	60,554
	Earnings per share	Before adjustment	0.47	1.24	Not applicable
		After adjustment	0.47	1.24	Not applicable
Dividend per share	Cash dividends		0.46	0.8	Not applicable
	~~B~~onus shares	Stock Dividend from Retained Earnings	0	0	Not applicable
		Stock Dividend from Capital Reserve	0	0	Not applicable
	Accumulated	unpaid dividend	0	0	Not applicable
Investment return analysis	Price / Earnings ratio(Note 3)		108.49	34.47	Not applicable
	Price / Dividend ratio(Note 4)		110.85	53.43	Not applicable
	Cash dividendyield rate(Note 5)		0.90%	1.87%	Not applicable

Note 1: The highest and lowest market prices for each year is provided, with the average price for the year computed based on each year’s transaction amount and volume.
Note 2: Use the number of the issued shares at year’s end and the distribution passed at the following year’s shareholders’ meeting to fill in.
Note 3: Price / Earnings ratio= Average closing price for the year / earnings per share.
Note 4: Price / Dividend ratio= Average closing price for the year / cash dividend per share, which is calculated based on the proposed cash dividend distribution approved by the Board of Directors.
Note 5: Dividend yield= Cash dividend per share / average closing price for the year, which is calculated based on the proposed cash dividend distribution approved by the Board of Directors.
Note 6: The earnings distribution proposal has not yet been presented for approval at the shareholders’ meeting.
Note 7: Listed net worth per share and earnings per share are according to the report reviewed by CPA in the latest quarter of the date of the publication of this annual report. Other columns show information for the current year as of the date of the publication of the annual report.

4.1.6 Company's dividend policy and its state of implementation

The dividend policy of the Company is based on the provisions of the Company's Articles of Incorporation, and the relevant provisions are as follows: Article 24:
If the Company makes profits (after deducting the pretax income for remuneration to employees and directors), it shall set aside not less than 1% of its annual profit to employees as a profit sharing and not more than 3% as the compensation for directors. However, if the Company has accumulated losses (including adjustment to undistributed earnings), the losses to be covered shall first be reserved.

The aforementioned employees’ compensation can be distributed in the form of shares or cash, and the employees who are entitled to receive the compensation including the employees of subsidiaries who meet the requirements set by the Board of Directors. The aforementioned director’ compensation can only be distributed in cash,

Both the aforementioned compensation distribution for employee and director shall be approved by a meeting of the Board of Directors, and a report of such distribution shall be submitted to the shareholders’ meeting.

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Article 24-1:

If the Company has net profit after tax for the current period, it shall first be deducted to cover accumulated losses (including adjustment to undistributed earnings), set aside 10% of such profits as a legal reserve as required by law. However, when the legal reserve amounts to the authorized capital, this shall not apply. Then, appropriate another sum as a special reserve as required by law or regulations of the competent authority. If there is any remaining balance, together with the undistributed earnings at the beginning of the period (including adjustments to undistributed earnings), a proposal of surplus earning distribution shall be submitted to the Board of Directors for approval. For the distribution of dividends and bonus in the form of cash, it shall be decided by a resolution to be adopted by a majority voting of the directors present at a meeting of its Board of Directors attended by two-thirds of the directors of the Company, and the decision shall be reported to the shareholders' meeting. If the surplus earnings are distributed in the form of new shares, it shall be approved by the resolution of shareholders' meeting.

The Article 240, paragraph 5 of the Articles of Incorporation of the Company authorizes the distributable dividends and bonuses in whole or in part may be paid in cash after a resolution has been adopted by a majority vote at a meeting of the Board of Directors attended by twothirds of the total number of directors; and in addition thereto a report of such distribution shall be submitted to the shareholders’ meeting.

The dividend policy of the Company in line with current and future development plans, taking account of factors such as investment environment, funding needs, competition at home and abroad, shareholders' interests, etc. The Company will set aside not less than 10% of the distributable earnings as dividends and bonus every year. However, the Company will not make distribution if the accumulated distributable earnings are less than 3% of the paid-in capital. Dividends and bonuses can be distributed in the form of cash or shares, in which the cash dividend shall not less than 10% of the total dividends.

The dividend distribution proposed in the most recent shareholders' meeting:
(1) In the initial months of 2022, the accumulated undistributed earnings was NT$8,967,615, the net profit after tax for FY 2022 was NT$74,842,778, the adjusted retained earnings was NT$54,082,066 as equity method is adopted for investment, the re-measurement of the defined benefit plan that recognized as retained earnings was NT$303,918. After setting aside a legal reserve of NT$12,922,876 and a special reserve of NT$11,907,333, the distributable earnings was NT$113,366,168. A cash dividend distribution of NT$48,442,875, with NT$0.8 per share is proposed.
(2) The proposed cash dividend will be calculated based on the shareholding as recorded in the shareholders' roster on the ex-dividend date and will be rounded down to the nearest whole dollar. The Chairman is authorized to appoint designated person to adjust the total amount of the fractional amounts less than NT$ 1.
(3) The aforementioned dividend distribution is proposed to be distributed first based on the earnings of FY 2021.
(4) The Board of Directors is authorized to set the ex-dividend date and the dividend distribution date after the proposal is approved by the AGM.
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Abnova (Taiwan) Corporation 2022 Profit Distribution

Abnova (Taiwan) Corporation 2022 Profit Distribution	Abnova (Taiwan) Corporation 2022 Profit Distribution	Abnova (Taiwan) Corporation 2022 Profit Distribution
Unit: NT$
Item	Amount
Opening undistributed earnings		8,967,615
Add: Net profit after tax for FY 2022	74,842,778
Add: Adjusted retained earnings as equity method is adopted for investment	54,082,066
Add: Re-measurement of the defined benefit plan that recognized as retained earnings (Note 1)	303,918
The undistributed earnings for the current FY which is the addition of the net profit after tax and the items other than net profit after tax		129,228,762
Deduct: Legal reserve (Note 2)		(12,922,876)
Deduct: Special reserve-other equity reduction item		(11,907,333)
Distributable earnings		113,366,168
Distribution item
Dividend-cash (NT$0.8 per share).	(48,442,875)
Closing undistributed earnings		64,923,293

Note 1: Based on the actuarial valuation of pension plan that recognized as the other comprehensive income.
Note 2: The appropriation is made based on the net amount of NT$129,228,762, which is contributed by the net profit after tax for FY 2022 of NT$74,842,778, the adjusted retained earnings of NT$54,082,066 as equity method is adopted for investment, and the actuarial valuation of pension plan that recognized as the other comprehensive income of NT$303,918.
4.1.7 Effect upon business performance and earnings per share of any stock dividend distribution proposed or adopted at the most recent shareholders’ meeting: No stock dividend is distributed for the current FY.

4.1.8 Profit-sharing compensation of employees and directors

The percentages or ranges with respect to employee and director profit-sharing compensation, as set forth in the Articles of Corporation of the Company: Article 24 of the Articles of Corporation of the Company:
If the Company makes profits (after deducting the pretax income for remuneration to employees and directors), it shall set aside not less than 1% of its annual profit to employees as profit sharing and not more than 3% as compensation for directors. However, if the Company has accumulated losses (including adjustment to undistributed earnings), the losses to be covered shall first be reserved.
The aforementioned employees’ compensation can be distributed in the form of shares or cash, and the employees who are entitled to receive the compensation including the employees of subsidiaries who meet the requirements set by the Board of Directors. The aforementioned director’ compensation can only be distributed in cash.
Both the aforementioned compensation distribution for employee and director shall be approved by a meeting of the Board of Directors, and a report of such distribution shall be submitted to the shareholders’ meeting.
The basis for estimating the amount of employee, director, and supervisor profit-sharing compensation, for calculating the number of shares to be distributed as employee profit-sharing compensation, and the accounting treatment of the discrepancy, if any, between the actual distributed amount and the estimated figure, for the current period: The estimated amount of profit-sharing compensation for employees and directors is calculated based on the Articles of Corporation of the Company. If a stock dividend is resolved to be distributed, the number of shares is determined based on the closing price of the day before the shareholders' meeting and the impact of ex-rights and ex-dividend are taken into account. If there is a difference between the actual distribution amount and the estimated amount, it shall be regarded as changes in accounting estimate and recognized as profit or loss of the year of actual distribution.
Information on any approval by the board of directors of distribution of profit-sharing compensation: See Page 19-20 for details.
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The actual distribution of employee, director, and supervisor profit-sharing compensation for the previous fiscal year (with an indication of the number of shares, monetary amount, and stock price, of the shares distributed), and, if there is any discrepancy between the actual distribution and the recognized employee, director, or supervisor profit-sharing compensation, additionally the discrepancy, cause, and how it is treated:
(1) The proposed distribution of cash compensation for employees of NT$1,510,600 and directors of NT$287,000 for FY2021 was approved by the Board of Directors on March 16, 2022, and reported to the shareholders' meeting on May 31, 2022.
(2) If there is any discrepancy between the actual distribution and the recognized employee, director, or supervisor profit-sharing compensation, additionally the discrepancy, cause, and how it is treated: No discrepancy between the aforementioned distribution amounts and the recognized expenses for employees, directors, and supervisors for the fiscal year. Reason for the discrepancy: None.

Treatment of the amount of difference: No discrepancy for the current period.

4.1.9 Share repurchases by the Company: None.

4.2 Issuance of corporate bonds: None.
4.3 Preferred shares: None.
4.4 Global depository receipts: None.
4.5 Employee share subscription warrants: None.
4.6 New restricted employee shares: None.
4.7 Issuance of new shares in connection with mergers or acquisitions or with acquisitions of shares of other companies: None.

4.8 Capital allocation plans

With respect to each uncompleted public issue or private placement of securities, and to such issues and placements that were completed in the most recent 3 years but have not yet fully yielded the planned benefits, the annual report shall provide a detailed description of the plan for each such public issue and private placement: None.

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V. Operational Highlights

5.1 Business Activities

5.1.1 Business Scope

The main scope of the company's business activities:
(1) Recombinant protein for research use only (RUO)
(2) Polyclonal antibodies for RUO, including mouse MaxPab, rabbit MaxPab, and rabbit DNAxPab
(3) Monoclonal antibodies and recombinant antibodies for RUO
(4) Antibody pairs
(5) Customized recombinant protein and antibody for RUO
(6) Other major products:
A. Cell Lysate Preparation for RUO
B. Kits for RUO
C. Fluorescent dyes for RUO
D. DNA probes for in situ hybridization (ISH)
E. mutaFISH™ probes & kits
F. Negative Enrichment Cell Isolation and Retrieval System (LiquidCell™) kits and consumables
G. GMP reagents/Analyte Specific Reagents (ASR) /In Vitro Diagnostics (IVD)
H. Non-invasive Circulating Rare Cell (CRC) Positive Enrichment & Retrieval System (CytoQuest™ CR )
I. CytoQuest™ kits and consumables
J. Fully automated bio-robotic system for isolation of circulating tumor cell (CTCs) (CytoBot™)
K. Fully automated non-invasive bio-robotic system for isolation of CRCs (CytoQuest™ Dx)
L. Fully automated bio-robotic system for CRC staining and microfluidic chip preparation (CytoPrep™)
M. All-in-One Imaging System with Artificial Intelligence Solution (CytoViewTM)
N. Tissue slides
O. Rapid tests
P. Pseudoviruses
Existing products (services) provided by the Company
(1) Protein: 23,656 types Recombinant protein: 23,419 types

Protein- fragment: 8,266 types Protein- full-length: 14,270 types Activated protein: 2,121 types

(2) Polyclonal antibody (Pab): 49,647 types
(3) Pab (mouse MaxPab): 9,051 types Pab (rabbit MaxPab):4,367 types Pab (rabbit DNAxPab): 12,201 types
(4) Monoclonal antibody (mAb): 39,023 types Recombinant antibody (rAb): 796 types
(5) Antibody Pair: 4,041 types
(6) Other major product
A. Cell Lysate Preparation for RUO: 9,001 types
B. Kit: 4,085 types
C. Fluorescent dye: 120 types
D. DNA probe for ISH: 1,332 types
E. mutaFISH™ probe & kit:32 types
F. LiquidCell™ kits and consumables: 74 types
G. GMP reagents/ ASR /IVR: 74 types
H. CytoQuest™ CR: 1 type

I. CytoQuest™ CR kits and consumables: 55 types

J. CytoBot™: 1 type
K. CytoQuest™ Dx: 1 type
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L. CytoPrep™: 1 type
M. CytoView™: 1 type
N. Tissue slide: 480 types
O. Rapid test: 4 types
P. Pseudovirus: 9 types
(7) Customized products: The Company also accepts product customization, and the feasibility of customization is evaluated through the discussion on the professional details and product specifications between the technical personnels from both parties.
Development of new products
(1) Abnova COVID-19 & Flu A/B Rapid antigen test and Flu A/B & RSV Rapid antigen test: In 2022, Abnova successfully developed COVID-19 & Flu A/B Rapid antigen test and Flu A/B & RSV Rapid antigen test, provide a complete detection scheme for collecting respiratory virus in the elderly, children, and people with low immunity. Abnova COVID19 & Flu A/B Rapid antigen test and Flu A/B & RSV Rapid antigen test has obtained excellent data in the detection of deactivated virus, and it is currently cooperating with clinical laboratories in the United States to apply for LDTs (Laboratory developed tests) detection.
(2) Circular RNA (circRNA) infection vaccine: During the rapid spread of the epidemic, the COVID-19 mRNA vaccine provides the protection of the population against the virus with the advantage of rapid development, so that the epidemic can be controlled. However, the mRNA vaccine suffers from intrinsic instability, susceptibility to rapid degradation, immunogenicity issues necessitating nucleoside modification, and limited duration of protein expression. Compared with linear mRNA, Circular RNA (circRNA) is a single-stranded, covalently closed coding RNA that does not require nucleoside modification and has advantages of higher stability and resistance to nucleic acid exonuclease decomposition. Abnova has successfully established a technical platform for the efficient preparation of circular RNA in vitro, which has been used in the development of COVID-19 vaccine to verify its effectiveness in mouse model tests.

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(3) miRNA Sponge (circRNA Sponge):
miRNA Sponge (circRNA Sponge) is an artificial non-coding cyclic RNA, which can increase the diversity of miRNA sponge adsorption by integrating multiple miRNA targeted fragments onto the miRNA sponge. Compared with linear miRNA sponges, circular miRNA sponges lack 5 'and 3' ends, have low immunity without nucleoside modification and are resistant to the degradation of nucleic acid exonuclease, improving the adsorption stability and efficiency. The miRNA sponge overcomes the toxicity of traditional anti-miRNA oligonucleotides (AMO) and the dose limit of plasmid-based miRNA sponge. Abnova has launched a new product line of miRNA sponges in 2023 to provide efficient tools for in vivo and in vitro miRNA research, with stable expression of the miRNA sponge products.

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(4) Circulating Tumor Cell:

In 2022, cooperated with partners in Japan, Abnova assisted in setting up a one-stop circulating tumor detection laboratory in Tokyo, Japan, to provide screening services for circulating tumor cells in healthy people. Abnova supplies its CytoQuest™ CR platform, including instruments, chips, bioreagents and an advanced microscopy system that analyzes captured images with artificial intelligence (AI) capabilities to Japanese partners. The service is expected to be officially launched in the second quarter of 2023.

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(http://www.abnova.com/products/CytoQuest-CR-M0014.html, https://www.abnova.com/products/products_detail.asp?catalog_id=KA4440, https://www.abnova.com/products/products_detail.asp?catalog_id=KA4818, https://www.abnova.com/products/CytoView-M0019.html )

(5) mRNA cancer therapy:

Abnova’s mRNA cancer therapy platform is a non-viral vector platform based on LNP delivery technology, providing an alternative to lentivirus systems that are costly to manufacture and challenging to expand in the market. In 2022, Abnova collaborated with Citil Pharma to complete mouse model testing for liver cancer, prostate cancer, and triplenegative breast cancer, the R&D process is described as follows:

(a) Liver Cancer Cytokine Immunotherapy:
i. Potential antigens have been identified for designing an effective mRNA vaccine.
ii. Efficacy validation has been conducted in syngeneic mouse HCC tumor models.
(b) Prostate Cancer Vaccine:
i. Potential antigens have been identified for designing an effective mRNA vaccine.
ii. Validation of cytotoxic T-lymphocyte (CTL) response has been performed in the HLA-A2 transgenic mouse models.
(c) Triple-Negative Breast Cancer Vaccine:
i. Potential antigens have been identified for designing an effective mRNA vaccine.
ii. Validation of cytotoxic T-lymphocyte (CTL) response has been performed in syngeneic mouse TNBC tumor models.

Abnova has outsourced the non-GLP preclinical trial in the first quarter of 2023, and evaluated and planned the GLP preclinical trial according to the test toxicological analysis report.

5.1.2 Overview of the industry

Current status and development of the industry
(1) Current status of the global biotech industry's development

In 2022, people have continuously suffered from the interference of new variants of COVID19 (novel coronavirus) all year long. Fortunately, the vaccination rates in various countries have increased, and many countries have gradually lifted their border restrictions and lockdown measures, attempting to return to a normal life while living with the pandemic. Economic activity has visibly picked up, and academic research and development have gradually resumed. For biotech industry, since the outbreak of the COVID-19 pandemic at the end of 2019, biotech companies around the world have been actively developing COVID-19 related products and applications such as testing services, rapid screening products, neutralizing antibodies, vaccines, therapeutic drugs, etc., in response to the post-pandemic era. Other than the pandemic related product development, there continues to be a demand for drugs and treatment as the number of patients with other diseases do not reduce due to pandemic. Therefore, the market demand for pharmaceuticals is still maintained at the past level, and major pharmaceutical companies also continue to develop drugs for various other diseases. The new drug review for marketing also gets backs on track, and the overall biotech industry has visibly recovered.

Apart from the impact of the COVID-19 pandemic, the economic development in Europe and the US has been affected by inflation, unresolved wars between the borders of Europe and Asia and unpredictable situation in the Middle East have greatly impacted the stability of the world economy. Governments continue to adopt new healthcare systems, reducing healthcare costs, improving healthcare efficiency and services, minimizing healthcare waste, as well as driving the development of emerging technologies such as telemedicine and digital healthcare, etc. at the same time, leading the growth and development of the global biotech industry and alleviating the impact of economic factors and pandemics. In a macro view, biopharmaceuticals and medical devices are still the two major markets in biotech industry.

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Global pharmaceutical market
Non-essential medical procedures are reduced due to healthcare personnel control during the pandemic. Following a gradual lifting of restrictions by many countries and returning to normal life, a modest growth in the global pharmaceutical market is observed, the sales of high-growth drugs have stabilized, and the competition of generic drugs is remained intense. An approximate 76% of the global pharmaceutical market share is mainly contributed by the advanced countries such as Europe, the US, Japan, Canada, and Australia, of these, the US has maintained its market leadership in the global largest pharmaceutical market. Global new drug developers mostly target the markets in Europe and the US for new drug listing. While the rapid development of the pharmaceutical markets in Mainland China, Brazil, India, and Russia is noteworthy, which account for approximately 23% of the global pharmaceutical market share, expecting will become important players in the growing pharmaceutical market. Based on the survey conducted by Evaluate Pharm, cancer drugs, immunosuppressive agents, and diabetes drugs remain are the world's top three therapeutic drug categories in the future. With the development of innovative therapies, cancer drugs are expected to grow at a compound annual growth rate (CAGR) of 9-12%. The immunosuppressive agents are expected to grow at a CAGR of 6-9% in the next 5 years as the listing of related biosimilars has impacted on the use of drugs for the disease and slowed down its market growth. While the hypoglycemic drugs will maintain to grow at a CAGR of 6-9%. The sales of the specialty drugs that used to treat chronic diseases, rare diseases, etc. is expected to increase to 40% of the global pharmaceutical market share by 2024. The development of the pharmaceutical market will be influenced by the adoption of Real World Data/Real World Evidences by the US FDA as a reference for drug review decision-making, as well as changes in the medical environment such as niche biological therapies become mainstream, the uses of mobile medical apps and telemedicine, reduced expenditure on brand drug, the promotion of specialty drugs, slow growth trend for emerging pharmaceutical markets, competition in biosimilars, etc. IQVIA forecasted that the global pharmaceutical market will grow at a CAGR of 3-6% in the next 5 years.

The US FDA promotes multiple initiatives for new drug review and listing, including orphan drugs, Fast Track, Breakthrough Therapy, Priority Review, and Accelerated Approval, etc. which simplify or accelerate the review process, shortening the time required for new drug listing. The rigorous review process for new drug listing by the US FDA, coupled with the fact that the US is the world's largest pharmaceutical market, and the drug prices are determined by market mechanisms, resulting in many manufacturers have regarded the US as the first country for new drug listing. This not only allows them to grasp market opportunities, but it also will be more beneficial to their subsequent review in other countries, further strengthening the leading position of the US in the world's new drug market.

From the perspective of drug categories, IQVIA analyzed and estimated that cancer drugs, immunosuppressive agents, and hypoglycemic drugs will remain as the top three therapeutic drug categories in 2026. Meanwhile, out of the top ten drugs, nine of them are biologics (including mAb and recombinant proteins). The rapid growth of the mAb market drives the manufacturers to actively develop new generation antibody technologies and applications, such as antibody-drug conjugates and targeted antibodies immunotherapy, reflecting biologics are increasingly significant for the global pharmaceutical market expansion.

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Global medical device market

As the vaccination rates in various countries have increased, the pandemic is subsiding and many countries are lifting restrictions, the economic activity has visibly recovered. In the past two years, non-essential medical procedures and surgeries, such as those in orthopedics and dentistry were delayed or reduced due to the pandemic, however, its medical device demand now has resumed. The changes in medical procedures also affect the demand and the sales of the medical devices, as reflected in the changes in medical devices and their market demand which has approached the pre-pandemic levels. The US still is the world’s largest medical device market, accounting for approximately 47% of the market share, and followed by Western Europe with approximately 26% of the market share. It is estimated that the market ranking will not change much in the future, that the US, Western Europe, and Asia-Pacific (including China and Japan) will remain as the top three largest markets. The US medical insurance provides strong support for US medical device manufacturers for sustained development, coupled with the rising demand for medical care with the increase in elderly people. Driven by strong supply and demand, the market grew steadily. It is expected that the US will remain as the market leader in the world's medical device market in the coming few years. After Biden has been appointed as US President, various medical policies are introduced in response to COVID-19 pandemic, expanding insurance coverage, establishing US medical device supply chain, promoting the procurement of US medical devices, are all driving the development of medical device market. The prospect of the US medical device industry is relatively promising.

Looking at the demand for medical devices during the COVID-19 pandemic, Europe was facing an undersupply of personal protective equipment, rapid screening products, respiratory therapy equipment, etc. due to the outbreak. The rapid spike in the number of confirmed cases also caused a severe shortage of medical facilities and resources. However, with the rise in vaccination rate, the supply of epidemic prevention supplies has been slightly relieved. In view of Western Europe is the world's most aged population, the demand for related medical care products continues to grow as the elderly population keeps increasing, that has increased the financial burden of Western European governments. Furthermore, uncertainties and risks still exist in the EU region, such as unpredictable future pandemic condition, high inflation rates, unresolved war between Ukraine and Russia, and continuing high energy prices, posing unpredictable risks and challenges to Western European economies. Germany is the largest economy of the EU, leading the growth of European economies. However, the recovery of the Germany economy is slow, hence its subsequent development is noteworthy.

Mainland China is another major market in the Asia-Pacific region and the third largest world's medical device market. Although the domestic medical resources were overwhelmed due to the outbreak, the demand for medical care will grow along with the

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rise of elderly population. Mainland China has ambitious plans for the development of the pharmaceutical industry. In addition to strengthening the R&D in big data and artificial intelligence applications, Mainland China is actively constructing high-end equipment, clustering emerging biomedical industries, and improving remote healthcare networks, etc. Despite being affected by the US-China trade war, the industrial competition between the US and Mainland China continues to escalate, which may affect the upstream supply chain and the US manufacturers' layout strategies in China, thereby promoting the development of China's biomedical industry, meanwhile, domestic leading manufacturers will be selected with first priority, replacing imported products. With policy support and the support of a huge domestic demand market, the future development of Mainland China's medical device industry is worth to concern and anticipate.

According to the BMI Research's study, it is estimated to grow at the CAGR of approximately 5.6% from 2021 to 2026.

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In addition to the pharmaceutical and medical device markets, the digital healthcare and precision medicine markets are also the two key development directions with promising prospects. This is mainly in response to the global aging society, resulting in a rise in medical expenditures and a shortage of healthcare manpower. Advanced countries like Europe, the US, and Japan continue to promote preventive medicine and smart digital healthcare, strengthen medical information exchange and data security protection, big data databases, and artificial intelligence, achieving personalized treatment, reducing unnecessary medical expenses, improving medical quality. Meanwhile, the inconvenience in seeking medical attention due to the COVID-19 pandemic has also driven the telemedicine market, alleviating the shortage of healthcare manpower.

(2) Current status of the biotech industry's development in Taiwan Government has laid a solid foundation and a favorable environment for the development of the biotech industry since 1980. In 2016, the Executive Yuan took the lead in promoting the "Biomedical Industry Innovation Program," which proposed four action plans of "establishing a comprehensive ecosystem, integrating innovation clusters, connecting to global markets, promoting key specialty industries” under the three major themes of '”creating links locally, globally and to the future", to build Taiwan into a "center of innovative biomedical R&D" in Asia-Pacific, strengthen the fields of healthcare, medical devices, pharmaceuticals, and
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agricultural biotechnology, pushing forward the development of biomedical industry and advancing the health and welfare of the nation's citizens. In addition, the implementation deadline for the Act for The Development of Biotech and New Pharmaceuticals Industry was originally scheduled until the end of 2021, but it was deferred to the end of 2031 and renamed as “Act for the Development of Biotech and Pharmaceutical Industry". The Act is additionally applicable to the industry that deals in new dosage forms, digital medicine, innovative technology platforms dedicated to biotech and pharmaceutical industry and the biotech and pharmaceutical companies entrusted with development and manufacturing. The Act encourages both R&D and manufacturing, integrating the advantages of Taiwan's medical technology and information and communication technology to develop biotech and pharmaceutical products that can be more precisely used for treatment, diagnosis, and prevention. The product development and listing can be expedited by using policy tools such as industry guidance, R&D subsidies, tax benefits, and technology business recommendations, etc.

In response to the pandemic in the past two years, the development and manufacturing of biotech and pharmaceutical products in Taiwan have been visibly active, reached a record high of 10.9% growth rate for the biotech and pharmaceutical industry in the last ten years. The medical device market is similar to the global situation, the COVID-19 pandemic has driven the demand for related medical devices, including personal protective equipment and rapid screening tests. However, non-urgent medical procedures are delayed also due to the pandemic, which has resulted in a decrease in demand for orthopedic and dental medical devices. The trend toward aging population and lower birth rates has made the medical biotechnology will be one of the most important human technological developments. Coupled with the information and digital platforms, the health and wellness market offer a promising growth potential.

The future development of Taiwan's biotech industry will focus on (1) strengthening the sustained growth of the industry's operations; (2) facilitating the new drugs and medical devices in gaining access to the international markets; (3) accelerating the development of biotech clusters; and (4) improving the regulatory environment to promote emerging industries such as digital healthcare, precision medicine, regenerative medicine, and elderly health and wellness market, as well as strengthening collaboration with global and regional markets. New therapies and technologies are providing new business opportunities as the government relaxes regulations. It is expected that cell therapy will drive medical tourism and attract foreigners to seek medical attention in Taiwan, shaping a new image for Taiwan's biotech and pharmaceutical industries and establishing Taiwan as an international R&D center for biotech and pharmaceutical.

With the promotion of the biotech industry by government, combining with the complementary development of technology, talent, funding, regulations, clusters, etc., in addition to increasing the willingness of domestic companies to invest, it is also anticipated that it will attract multinational biotech companies to invest in Taiwan or engage local biotech professionals by converging the regulations with the international standard. The government is confident and determined in promoting Taiwan's biotech industry, and with the support of the semiconductor industry, the future development of the biotech industry can access more opportunities in the market.

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The relationship between the upstream, midstream, and downstream sectors of the industry. (1) Antibody reagent category

Antibodies and proteins are the major products of the Company, the relationship between the upstream, midstream, and downstream sectors is illustrated in the diagram below:

Upstream Raw materials for antibodies and proteins and expression	Upstream Raw materials for antibodies and proteins and expression	Upstream			Midstream		Downstream application industries Biochemical R&D industry Agriculture (agricultural diagnostic reagents) Medical industry (medical diagnostic reagents, drug development, biomarkers)
			Antibodies and proteins
	Raw materials for antibodies and proteins and expression			Antibodies and proteins

In terms of the industry structure for the antibody and protein production and marketing process, the production of the raw materials and expression systems for recombinant proteins are the key for the upstream industry. Midstream industry is committed to the production of proteins and antibodies. The Company is the midstream industry of protein and antibody production, committed to large-scale production of product with high quality to supply to various agencies such as research institutions, medical systems, pharmaceutical companies, etc. for basic research. The downstream industry comprises mainly research institutions or enterprises related to biotechnology R&D, medical, and agricultural industry at home and abroad for various research and experiments.

(2) Detection system instruments

Upstream Midstream Downstream application industries

Mechanical components, temperature control components, biochips, microfluidic components Instrument systems	Hospitals Medical industry (drug development) Research institutions

The upstream source of the CRC enrichment, collection, and isolation system is the assembly and production of various mechanical, temperature control, microfluidic components and

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biochips, that mainly used for CTC and circulating fetal cells (CFC) enrichment, collection, and isolation. The downstream industry for CTC detection can be used for clinical applications in hospitals or scientific research, including early tumor screening, prognosis assessment, individualized treatment strategy development, efficacy and drug resistance monitoring, and recurrence and metastasis warning, as well as R&D of new anti-tumor drugs by pharmaceutical companies. The CFC enrichment test can be used for research on fetal genetic disorders and gene defects.

3. Various development trends for products

(1) Antibody reagent category

Proteins are made through gene transcription and translation that carry out the functional roles of genes. While antibodies are the essential tools for understanding proteins and their functions. Antibodies not only can be widely used in the reagent market, but they also give higher value if used in medical diagnostic reagents and drug development. Proteins are interacted with one another during the process of disease development, which has changed the research method to investigate multiple proteins in one time, to effectively understand the complexity of proteins and may understand the reason for pathological changes. This is the reason why it is necessary to obtain antibodies in a large amount in research. Antibodies play a vital role in medical research or therapy as the current biotech industry still relies on antibody as a tool for the related research. In recent years, European and American countries have attached increasing importance to the humane treatment of research animals. In the future, the preparation of antibodies will change to cell culture method to replace the current common method that produces mAb using ascites, which will affect production costs and the existing manufacturing process also need to adjust.

The global pandemic of COVID-19 has resulted in increasing demand for viral test reagent. Currently, polymerase chain reaction (PCR) is usually used as a more stringent viral test, however, it requires more manpower and time. In order to prevent the spread of the virus, many countries are urgently looking for rapid viral test reagent, hence the development of rapid COVID-19 screening tests will inevitably become a trend. Abnova has developed two types of rapid screening tests which are antigen test and neutralizing antibody test. The antigen test uses a lateral flow assay with antibodies to detect the presence of virus antigen in the sample. Abnova has further developed an effective rapid antigen test for Omicron variant detection by screening other antibody pairs targeting the Omicron variant at the same time. While the antibody test detects the binding of antibodies to RBD and NCP proteins. Both antigen and antibody tests also can provide a large number of results in a short period of time. According to statistics of the Ministry of Health and Welfare (MOHW) of Taiwan, as of January 2023, the global number of people infected with COVID-19 has reached approximately 660 million. As the pandemic has not yet subsided, border control at airports or restricted access to other public venues will be continued, and there will be continued demand for rapid viral test reagent.

In addition, the development of the pandemic will move to the next stage, the treatment and prevention of COVID-19 will become a trend. And the human neutralizing antibodies and vaccines are developed to meet the future market demand. The source of traditional antibody drugs mostly are derived from mice, which will easily trigger immune reactions when used by humans. However, at present, genetic engineering can be used to screen for suitable human neutralizing antibodies, providing a safer and more effective treatment. Moreover, Abnova will design inhalable human neutralizing antibodies that the antibodies can be directly absorbed by lungs without passing through the digestive tract, which is highly convenient to administer, playing a vital role in the treatment market. Abnova is still actively seeking potential partners and licensing units for COVID-19 therapeutic mAb.

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(2) RNA vaccines

In terms of pandemic prevention, RNA vaccines are an important trend for future development. Compared to traditional attenuated vaccines, RNA vaccines only require gene sequences for development, hence the cost is lower. Moreover, its manufacturing process is simpler and faster as it does not involve cell or embryo cultivation. As clinical trials of vaccines are often time-consuming, a rapid production of vaccines is extremely vital in public health emergency. Currently, countries around the world are looking forward to the popularization of immunization for COVID-19. Therefore, RNA-based vaccines have been increasingly receiving attention as it is a promising market. Abnova plans to use mRNA and cRNA platforms for disease prevention and R&D in treatment.

(3) Detection system instruments

The diagnosis and treatment of cancer have been a significant challenge for the global medical community in recent decades. Study has demonstrated that if more people are screened regularly for cancer, the cancer related mortality rate as high as 35% could have been prevented. While during cancer treatment, early detection of tumor metastasis and recurrence is also vital in improving survival rates. The significant discrepancies in the dynamics of primary and metastatic tumor cells and the spread of tumor cells to different organs pose a challenge to the monitoring of tumor cell development and the prognosis of drug treatment for most cancers. Hence, many cancers are often misdiagnosed due to sampling biases in tissue biopsies. In recent years, governments and healthcare organizations worldwide have increasingly paid attention to precision medicine that develops personalized tumor treatment based on molecular subtyping. Precision health takes into account individual variability in genotype or gene expression, environment, lifestyle and molecular basis of disease to precisely predict, prevent, diagnose, and treat diseases. Liquid biopsy can be regarded as one of the important directions for the development of precision health industry. Compared to traditional tissue biopsies, liquid biopsy has the following five major characteristics: non-invasive, fast, accurate, real-time, and diversity of applications. Clinically, liquid biopsy is more competitive in diagnosing, monitoring, and evaluating the effectiveness of drug treatment for diseases. The report published by Research and Markets in July 2021 has shown that the liquid biopsy market is expected to grow at a CAGR as high as 15% from 2021 to 2026, with an annual turnover of nearly USD$ 10 billion in 2026. Therefore, cancer diagnosis methods using liquid biopsy technology have been gradually developed and validated for its clinical effectiveness by biomedical researchers in various countries in recent years. Liquid biopsies consist of tumor-derived entities like CTCs, circulating tumor DNA, and exosomes, etc., which are shed from the primary tumor and intravasate into the patient's peripheral blood or other body fluids during the growth and metastasis of tumor cells. Compared to 2020, it is projected that the burden of cancer will increase by 50% in 2040, with an estimated number of new cancer cases approaching 30 million owing to the increased aging population globally. The automated CRC retrieval system independently developed by Abnova can capture CRCs present in blood for genetic analysis, with a view to achieving cancer prevention and treatment purposes.

4. Product Competition

(1) Antibody reagent category

Pab is the most common antibody available in the market, and the traditional Pab is produced using peptide, which has poorly folded antigen-responsive protein that can only identify one epitope. Hence, it is limited to use in Western blot and immunofluorescence staining. mAb, which is the main product of the Company, not only can be used in immunohistochemistry, immunofluorescence, Western blot, antibody pair, and system development, but also, in recent years, it has been clinically used to treat cancer due to its high specificity. Also, the use of mAb to improve autoimmune diseases has achieved considerable progress and effectiveness. Small-molecule drugs have been gradually replaced by mAb therapy. Therefore, mAb will play a crucial role in biochemical R&D and drug development in the future. The Company not only has established a resourceful mAb database, but also provides high-quality Pab, antibody pairs, proteins, etc. to meet customer demands with a wide range of products.

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Other than providing general reagents for RUO, the Company also complements and supports the applications of diagnostic systems in many aspects, particularly providing biological reagents relating to clinical trials and in vitro diagnostics. The selected biological reagents will be produced in accordance with GMP standards and provided to both internal and external customers of the Company for clinical trials or diagnostic medical device use.

In response to the global outbreak of COVID-19 in recent years, the Company has developed the following COVID-19 related products:

COVID-19 viral antigen rapid test, COVID-19 neutralizing antibody rapid test, COVID-19 humanized antibody, COVID-19 self-amplifying mRNA (SAM) universal vaccine. As of December 2022, the FDA has approved 59 COVID-19 viral antigen rapid tests for EUA. To date, the COVID-19 viral antigen rapid tests approved by the U.S. FDA for EUA, such as BD, Quidel, LumiraDx, Abbott, and Access Bio, are use nucleocapsid protein antibody pair for viral detection. And the same goes for Abnova, to precisely interacts with COVID-19 nucleocapsid protein antigens labeled gold nanoparticles. In order to further enhance the sensitivity of rapid tests, Abnova plans to develop COVID-19 viral antigen fluorescence immunoassay rapid test.

As of December 2022, the FDA has approved 3 COVID-19 neutralizing antibody detection tests for EUA, as shown in the table below:

Item	Manufacturer	Product Name	Product Properties
1	GenScript USA Inc.	cPass SARS-CoV-2 Neutralization Antibody Detection Kit	ELISA
2	InBios International, Inc.	SCoV-2 Detect Neutralizing Ab ELISA	ELISA
3	Diazyme Laboratories, Inc.	Diazyme SARS-CoV-2 Neutralizing Antibody CLIA Kit	Total Neutralizing Antibodies, CLIA

The neutralizing antibody assay of Abnova provides a platform to integrate the lentiviral pseudo typed vector with luciferase reporter gene interacting with ACE2 expressing 293T cells. This platform is the gold standard for measuring neutralizing antibody titers and is widely used to measure neutralizing antibodies after vaccination with various types of vaccine production methods, including mRNA, viral vectors, protein, and peptide vaccines. All countries in the world are now deploying and implementing large-scale vaccination programs, and there are numerous of other vaccines are currently awaiting approval. At the same time, vaccines against mutated virus are still in the early stages of clinical trials, which will continue to drive the market for neutralizing antibody testing in the post-vaccination era.

As of December 2022, the FDA has approved 10 COVID-19 antibody treatments for EUA, as shown in the table below:

Item	Product Name	Scopes of application
1	Evusheld (tixagevimab co-packaged with cilgavimab)	For emergency use as pre-exposure prophylaxis for prevention of COVID-19 in adults and pediatric individuals (12 years of age and older weighing at least 40 kg): Who are not currently infected with SARS-CoV-2 and who have not had a known recent exposure to an individual infected with SARS-CoV-2 and Who have moderate to severe immune compromise due to a medical condition or receipt of immunosuppressive medications or treatments and may not mount an adequate immune response to COVID-19 vaccination or For whom vaccination with any available COVID-19 vaccine, according to the approved or authorized schedule, is not recommended due to a history of severe adverse reaction (e.g., severe allergic reaction) to a COVID-19 vaccine(s) and/or COVID-19 vaccine component(s).

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Item	Product Name	Scopes of application
2	Actemra (Tocilizumab)	For the treatment of COVID-19 in hospitalized adults and pediatric patients (2 years of age and older) who are receiving systemic corticosteroids and require supplemental oxygen, non-invasive or invasive mechanical ventilation, or extracorporeal membrane oxygenation(ECMO).
3	Kineret	Kineret (anakinra) is authorized for the treatment of COVID-19 in hospitalized adults with pneumonia requiring supplemental oxygen (low- or high-flow oxygen) who are at risk of progressing to severe respiratory failure and likely to have an elevated plasma soluble urokinase plasminogen activator receptor (suPAR).
4	Lagevrio (molnupiravir)	Lagevrio is authorized for the treatment of mild-to-moderate coronavirus disease 2019 (COVID-19) in adults with positive results of direct SARS-CoV-2 viral testing who are at high risk for progressing to severe COVID-19, including hospitalization or death, and for whom alternative COVID- 19 treatment options approved or authorized by FDA are not accessible or clinically appropriate.
5	Paxlovid	Paxlovid is authorized for the treatment of mild-to-moderate COVID-19 in adults and pediatric patients (12 years of age and older weighing at least 40 kg) with positive results of direct SARS-CoV-2 viral testing, and who are at high risk for progression to severe COVID-19, including hospitalizationordeath.
6	Propofol‐Lipuro 1%	To maintain sedation via continuous infusion in patients greater than age 16 with suspected or confirmed COVID-19 who require mechanical ventilation in an ICU setting.
7	Baricitinib	For emergency use by healthcare providers for the treatment COVID-19 in hospitalized pediatric patients 2 to less than 18 years of age requiring supplemental oxygen, non- invasive or invasive mechanical ventilation, or extracorporeal membrane oxygenation (ECMO).
8	COVID-19 convalescent plasma	COVID-19 convalescent plasma with high titers of anti- SARS-CoV-2 antibodies is authorized for the treatment of COVID-19 in patients with immunosuppressive disease or receiving immunosuppressive treatment, in inpatient or outpatient settings.
9	REGIOCIT replacement solution that contains citrate for regional citrate anticoagulation (RCA) of the extracorporealcircuit	To be used as a replacement solution only in adult patients treated with continuous renal replacement therapy (CRRT), and for whom regional citrate anticoagulation is appropriate, in a critical care setting
10	Fresenius Medical, multiFiltrate PRO System and multiBic/multiPlus Solutions	To provide continuous renal replacement therapy (CRRT) to treat patients in an acute care environment during the COVID-19 pandemic.

The COVID-19 humanized neutralizing antibody 7F7 of Abnova is effective against the UK (B.1.1.7), South Africa (B.1.351), Brazil (B.1.1.28.1), and India (B.1.617.2) variants in pseudovirus neutralization assays. In light of the fact that the currently FDA EUA-approved therapeutic mAb (Eli Lilly and Regeneron) and vaccines from major international manufacturers (Moderna, BioNTech, AstraZeneca, Johnson & Johnson, and Novavax) are not effective against the Omicron variant, resulting in the current evolution of the pandemic becomes more complicated.

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As of March 2022, the WHO has approved 10 COVID-19 vaccines for EUA, as shown in the table below:

Item	Manufacturer	Product Name
1	BioNTech Manufacturing GmbH	COMIRNATY® COVD-19 mRNA Vaccine (nucleoside modified)
2	BioNTech Manufacturing GmbH	COMIRNATY®Original/Omicron BA.1 COVD-19 mRNA Vaccine (nucleoside modified)
3	BioNTech Manufacturing GmbH	COMIRNATY®Original/Omicron BA.4-5 COVD-19 mRNA Vaccine (nucleoside modified)
4	AstraZeneca AB	VAXZEVRIA COVID-19 Vaccine (ChAdOx1-S [recombinant])
5	Serum Institute of India Pvt. Ltd	COVISHIELD™ COVID-19 Vaccine (ChAdOx1-S [recombinant])
6	Janssen–Cilag International NV	COVID-19 Vaccine (Ad26.COV2-S [recombinant])
7	Moderna Biotech ModernaTX, Inc	SPIKEVAX COVID-19 mRNA Vaccine (nucleoside modified)
8	Beijing Institute of Biological Products Co.,Ltd. (BIBP)	Inactivated COVID-19 Vaccine (Vero Cell)
9	Sinovac Life Sciences Co., Ltd	CoronaVac COVID-19 Vaccine (Vero Cell),Inactivated
10	Bharat Biotech International Ltd	COVAXIN® Covid-19 vaccine (Whole Virion Inactivated Corona Virus vaccine)
11	Serum Institute of India Pvt. Ltd	COVOVAX™ COVID-19 vaccine (SARS-CoV-2 rS Protein Nanoparticle [Recombinant])
12	Novavax CZ a.s.	NUVAXOVID™ COVID-19 vaccine (SARS-CoV-2 rS [Recombinant, adjuvanted])
13	CanSino Biologics Inc.	CONVIDECIA COVID-19 Vaccine (Ad5-nCoV-S [Recombinant])

By using Abnova patented COVID-19 RBD vector, the COVID-19 SAM universal vaccine of Abnova is effective against both the UK B.1.1.7 and South Africa B.1.351 variants. At present, Abnova is developing a universal vaccine, expected to providing protection against the Omicron variant.

(2) RNA vaccines

In addition to COVID-19 vaccines, mRNA technology can also be applied to cancer therapy. The combined use of mRNA-4157/V940 vaccine of Moderna Inc. and the Keytruda anticancer drug of Merck & Co Inc. has shown promising results in the treatment of melanoma. Combining Keytruda with mRNA-4157/V940 vaccine can reduce the risk of recurrence or death by 44% compared to using Keytruda alone. Out of 17 patients who treated with BNT111 cancer vaccine developed by BNT in combination with PD-1 mAb, 6 of them have improvement and 2 of them are stable. Currently, BNT is conducting 14 clinical trials for cancer vaccines, with 10 in phase 1 and 4 in phase 2.

(3) Detection system instruments

CellSearch is a CTC detection system platform developed by Veridex, a subsidiary of Johnson & Johnson. It is currently the first and only product approved by the U.S FDA and the China Food and Drug Administration (CFDA) for the detection of CTCs to facilitate the diagnosis of malignant tumors. The introduction of CellSearch represents a symbolic significance as the

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CTC detection technology is permitted for clinical application, but not just for scientific research for the first time ever. CellSearch mainly utilizes the specificity of antibodies coated magnetic beads to identify EpCAM expressing CTCs and the CTCs are isolated from whole blood through immunomagnetic separation. The system is approved for use in predicting progression-free survival and overall survival rates for metastatic breast, colorectal, or prostate cancer. However, the system has currently been discontinued and terminated from sales due to numerous factors, including technical limitations such as the cell cannot be continuously used for analysis by downstream applications, as well as its high cost which is not affordable to the public.

Celsee PREP diagnostic system is a fully automated CTC enrichment and detection platform produced by Celsee Diagnostics; a company based in the US. Its products include the CTC enrichment and diagnostic systems, Celsee PREP100, and Celsee PREP400, as well as the image analyzer, Celsee ANALYZER. Unlike other immunological and immunomagnetic bead or centrifugation-based enrichment and analysis methods, it does not rely on specific markers, but the physical properties of the CTCs are used for CTC capture and enrichment.

Rarecells Diagnostics is established in 2010, and its headquarters is located in Paris, France. The CE-labeled Rarecells® system (previously known as the ISET®, which isolation by size of tumor) consists of disposable filtration blocks and reagent sets. Whole blood is diluted with buffer, then reagent is added into the sample and transferred to the filtration block for pressurecontrolled filtration by the instrument. The instrument only performs pressure-controlled filtration, and the sample can be further processed with manual staining and imaging by the user. Including quantitative and phenotypic analysis through immunolabelling (IH, IF) and FISH that can be directly performed on the filter, as well as analysis of RNA and DNA.

Vortex Biosciences is a subsidiary of NetScientific plc, which is established in 2012. Its CElabeled VTX-1 liquid biopsy system is based on fluidic technology pioneered in the laboratory of Professor Dino Di Carlo at the University of California, Los Angeles. After the whole blood sample is loaded by the operator, all subsequent processing steps are carried out by the instrument and reaction kit. There are many related scientific and clinical studies that have been conducted on the Vortex CTC platform. It does not rely on specific markers, but the physical properties of the CTCs in the Vortex HT microfluidic flow bed are used for CTC capture and enrichment.

ApoCell is established in 2004 and its headquarters is located in Houston, Texas. CTC collection and enumeration platform is just one of the business activities of the company. The ApoStream® platform instrument utilizes dielectrophoresis (DEP) to isolate CTCs. Preprocessing includes isolation of peripheral blood mononuclear cell (PBMC) from whole blood and resuspension at approximately 10[7] /mL are required before attach the sample to the instrument. All remaining processing steps are performed by the instrument and flow cell. The steps include capture of CTCs and the non-CTCs are depleted to waste recovery. After processing, the CTCs are cytospun onto a glass slide, fixed, stained, and observed using fluorescence microscopy. This platform is convenient to use as chemical or enzymatic release of CTCs from the collected cells is not required.

CellMax Life has initiated a clinical trial in the US to validate its product that is used for detection of CTCs in colorectal cancer. The company's CMx platform is currently only sold in Asia and uses a "hybrid microfluidic chip" that can isolate 1-10 CTCs from a background of 1 billion normal cells. In April 2018, CellMax Life collaborated with IncellDx to jointly develop and sell CTC detection products for several solid tumors, which are used for personalized treatment selection and monitoring.

BioFluidica is established in 2006 and its Liquid Scan® platform includes a relatively simple instrument, microfluidic chip, and disposable test-specific reaction chamber, which is roughly the size of a credit card (but slightly thicker). After the whole blood sample is loaded by the operator (pre-processing is not required), all subsequent processing steps are performed by the instrument and specific labeled reaction chamber. The steps include CTC capture, wash and release, and CTC count, that is performed using fluorescence microscope, which is sensitive, compact, and low-cost. The CTCs are captured in the 50 to 500 sinusoidal channels on the Liquid Scan® reaction chamber.

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In 2013, Fluxion Biosciences, a US based company successfully developed the IsoFlux system, which mainly uses positive enrichment technology to directly capture specific antigenexpressed CTCs from peripheral blood. The system is stable, fully automated, and minimal human intervention is needed; however, it has not yet been approved by FDA for clinical verification. Currently, it is mainly used for stability and reliability testing by research institutions. Moreover, it only uses reagents that identify EpCAM expressing CTCs, limiting its use and having higher rates of misidentification.

In addition, there are companies in China have independently developed or licensed technologies for the production and sale of CTC detection instruments, including Livzon Pharmaceutical Group Inc., LiquidBiopsy CTC isolation platform of Thermo Fisher, a US based company which is distributed by Cynvenio,Beijing Zhongke Natai Biotechnology Co., Ltd. and National Center for Nanoscience and Technology are jointly developed a highly sensitive technology, peptide-based magnetic nanobeads for CTC capture and isolation.

CytoQuest™ CR, CytoQuest™ DX, and CytoBot™ are the systems independently developed by Abnova for automated capture, counting, enrichment, and collection of CRCs, which are adopting immunofluorescence-based microfluidic positive enrichment and negative enrichment by magnetic beads, respectively for CRC capture, that can be used for translational research and clinical trials. Besides rare cell capture, cell release and isolation while maintaining cell viability, the cell recovery and capture rates are greater than all aforementioned similar products. The systems are used together with antibody reagents with high specificity. Compared to similar CTC detection system platforms, the Company has achieved a market-leading position in terms of development progress, regardless of scientific research applications or clinical program. In 2021, CytoQuest™ CR obtained the Class III medical device registration certificate in China, which enables it to be widely used in cancer prevention and treatment.

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5.1.3 Overview of technologies and research and development work

1. Research and development expenditures during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report

Unit: NT$ 1,000; %

	Unit: NT$ 1,000; %
Item	FY 2022
R&D Expenditures (A)	48,740
Operating Revenue (B)	411,756
Proportion (A) / (B)	11.84%

As of the date of publication of the annual report, the financial statements for Q1 2023 have not yet been reviewed and audited by the CPAs, hence only information in the most recent fiscal year is disclosed.

2. Technologies and/or products successfully developed during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report

Year	Technology orproduct that has been successfully developed
	Diagnostic reagents CD8 VHH-hIgG1 recombinant human monoclonal antibody, clone A1 CD8 VHH-hIgG1 recombinant human monoclonal antibody, clone A9 CD8 VHH-hIgG1 recombinant human monoclonal antibody, clone B5 4-1BB Humanized monoclonal antibody, clone D2D CD28 Humanized monoclonal antibody, clone O5H CD45RA Humanized monoclonal antibody, clone C1D CD40 Humanized monoclonal antibody, clone 6EOG CD4 Humanized monoclonal antibody, clone E1H SARS-CoV-2 Omicron BA.4 Variant Pseudovirus Expressing Luciferase SARS-CoV-2 Omicron BA.5 Variant Pseudovirus Expressing Luciferase Patent Application mRNA VACCINE AND METHOD OF INDUCING ANTIGEN-SPECIFIC IMMUNE RESPONSES IN INDIVIDUALS(US17/836,990) Method for inducing antigen-specific immune responses in individuals using mRNA vaccines (CN202210610847.6)
2022

5.1.4 Long- and short-term business development plans

1. Short-term business development plan

(1) Antibody reagent category

Regarding bio-reagent product line for RUO, Abnova will continue to put more investment in the production of mAbs through cell culture processes and its sales. Besides, in response to the COVID-19 pandemic, Abnova has been actively developing COVID-19 related products, including COVID-19 antigen rapid tests, COVID-19 neutralizing antibody rapid tests, COVID-19 neutralizing antibody RBD ACE2 ELISA kits, COVID-19 humanized neutralizing antibody, SAM and mRNA vaccines, etc., in order to meet the market demand for testing and prevention.

The established global distribution network of Abnova is the main sales channel of the Company, contributing the majority of operating revenue for reagent products. With years of brand building, the Company has successfully increased the direct purchase willingness from the end users through online purchase platform. In addition, the increasing demand for customized services from end customers in specialized research fields, biotech companies, and pharmaceutical industry has driven Abnova's efforts to meet the professional and quality requirements of both direct and customized demand customers, enhancing customer loyalty and product repurchase frequency through product promotion. For e-commerce marketing platforms, Abnova has achieved good marketing results on Google, BioCompare, and LinkedIn. In 2023, the Company will continue to improve consumer willingness to use the new version of the official website and strengthen e-commerce and social media marketing through increased online influence.

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(2) CTC products and medical testing services:
The market for CTC related products and testing services have been significantly impacted due to the rapid spread of COVID-19 pandemic. Notwithstanding, Abnova has successfully established the CytoQuest®CR positive enrichment and LiquidCell® negative enrichment platforms, and provides a complete range of biological assay testing kits. Abnova currently has resumed its collaboration with Hangzhou Watson Biotech Co., Ltd., for the sales and distribution of CTC products and testing services of Abnova in China. Also, Abnova plans to collaborate with interested partners in the US, Europe, and Japan to jointly develop local markets for CTC instruments and test kit sets through OEM customization. The LiquidCell® platform continues to focus on the development of prenatal applications for pregnant women.

2. Long-term business development plan

In recent years, Abnova has been actively developing diagnostic reagents, antibody drugs and diagnostic instrument systems, expanding its product portfolio from antibody database establishment in the earlier period. The Company has focused on the production of biological reagents relating to clinical trials and in vitro diagnostics in accordance with GMP standards, offering to both internal and external customers of the Company for clinical trials or diagnostic medical device use. At the same time, Abnova has successfully launched mutaFISH™ probe for direct detection for gene mutations in cells and tissues. It is extended to its combination and application based on the principle of fluorescence in situ hybridization (FISH). At present, Abnova continues to collaborate with multiple suppliers, actively expanding the variety of ELISA kit product line.

In addition, Abnova will continue to develop CTC product lines and technical services, COVID19 neutralizing antibody rapid tests, Omicron mRNA vaccines, CTC product lines, mRNA cancer therapy platform, hoping it will benefit the long-term business development of the Company.

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5.2 Market and Sales Overview

5.2.1 Market analysis

1. Geographic areas where the main products (services) of the company are provided (supplied)

(supplied)	(supplied)
		Unit: NT$ 1,000; %
Geographic area		FY 2021		FY	2022
		Sales Amount	Sales Proportion	Sales Amount	Sales Proportion
Domestic sales		68,694	15.22%	29,325	7.12%
Foreign sales	Americas	191,317	42.37%	196,828	47.80%
	Europe	113,684	25.18%	112,624	27.35%
	Others	77,792	17.23%	72,979	17.73%
	Total	382,793	84.78%	382,431	92.88%
Grand total		451,487	100.00%	411,756	100.00%

2. Market Share

(1) Antibody reagent category

Currently, no statistical information related to the antibody reagent industry and the market by relevant industry research institutions at home and abroad is available, hence, no public information can be used for market share calculation and analysis. According to the research of Biocompare Surveys and Report, no single company has been able to achieve a high market share primarily due to the high manufacturing costs and low efficiency of antibody production, numerous brands with varying quality, difference in customer's experimental needs and budget, resulting in a fragmented market share. The Company provides customers with a wide range of antibodies, mainly to maintain the willingness to repurchase of existing customers in order to maintain market share.

(2) Detection system instruments

Currently, the CRC enrichment, separation, and collection systems and next-generation gene sequencing belong to the field of precision medicine diagnostics. The former uses the biological or physical characteristics of cells to capture CRCs, which has the non-invasive advantage in medical testing and is suitable for liquid biopsy samples. The latter can analyze the genotype and phenotype of cells and is highly advanced in technology. At present, cell enrichment, separation, and collection systems are mainly used in scientific research, while their clinical application is still primarily in the stage of clinical verification or clinical trials. The market size and acceptance of these systems are progressing most rapidly in Mainland China. For CRC detection system, compared to similar competing products in Mainland China, the Company has slightly higher market share. With years of development, the technical accuracy and cost for the next-generation sequencing have reached the level of practical clinical application. Its application scope is extensive and can be used for tumor detection, genetic disease detection, newborn genetic testing, etc. This year, the Company has officially engaged in the next-generation sequencing market and collaborated with clinical doctors to design targeted gene panel sequencing of cancer to meet the market user needs.

3. Future demand and supply conditions and the market's growth potential

(1) Antibody reagent category

Based on the research report by the World Health Organization (WHO), the number of new cancer cases worldwide will reach 27 million per year by 2030, with 17 million deaths, and the situation may become even more severe. Not only European and American countries facing such situation, but the situation in developing countries such as China and India are fairly serious. Therefore, cancer prevention and treatment related products are becoming a focus for major global companies. Biopharmaceuticals are becoming increasingly important in the global pharmaceutical market, with treatment areas covering cancer, infectious diseases,

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neurological disorders, antivirals, diabetes, etc. In view of increasing market demand has not been addressed, therefore, coupled with the promising prospects of the antibody drug market and the support from both healthcare reform policies and the industry, the mAb drug development will continue to lead the global biotech industry.

(2) Detection system instruments
The global cancer diagnostics market in 2018 was estimated to be worth USD$ 144.4 billion according to a report by GRAND VIEW RESEARCH, and it is expected to grow at a CAGR of 7.0% during the forecast period. In addition, a report by FMI market research in 2014 showed that the global liquid biopsy market is expected to grow at a CAGR of 21.7% over the next ten years, with the Asia-Pacific region (excluding Japan) expected to grow at a CAGR of 25.5%. The entire liquid biopsy market is expected to achieve USD$ 28.937 billion by the end of 2026. According to the analysis on the global cancer diagnostics market trends from 2013 to 2024 by GRAND VIEW RESEARCH, the global market value of nextgeneration cancer diagnosis reached USD$ 4.38 billion in 2015, and the market size is expected to continue to grow significantly.

The next-generation cancer diagnostic market can be roughly divided into areas of individual risk analysis, tumor screening, diagnosis-based prognosis, treatment monitoring, and companion diagnostics based on their functions. As different cancer patients have different prognoses, and prognosis plays a crucial role in personalized treatment, chemotherapy, radiation therapy, and gene therapy, the prognostic diagnosis market will grow significantly during the forecast period. According to a research report released by JP Morgan, the liquid biopsy market is divided into four areas: early screening, diagnostic typing, drug companion testing, and patient condition testing. The report predicts that the global market potential will reach USD$ 23 billion, with early screening and diagnosis of cancer will account the largest proportion.

4. Competitive Niche

(1) Construct a complete antibody platform
With years of antibody production experience under the process standardization, equipment automation, and product systematization, the Company has constructed a complete and extensive antibody database platform. Leveraging on the existing antibody platform, the Company identifies potential antibodies for antibody drug development, and develops into antibody database system with high added value and diagnostic reagents, and further develops into antibody drugs. Currently, the Company has successfully developed many highly specific antibody reagent products that are compatible with CTC detection instrument systems. This has also overcome a critical obstacle in technical applications that other CTC detection instrument companies have been struggling with.
(2) Continuously develop new products
Abnova has successfully developed a rabbit mAb platform by using its independently developed CRC enrichment system. The platform utilizes pre-immune rabbit plasma to isolate cells for production, which improves the screening throughput and significantly shortens the production cycle of rabbit mAb. Abnova predicts that the market demand for rabbit mAb will continue to increase in the next few years. At the same time, Abnova has successfully launched mutaFISH™ probe for direct detection for gene mutations in cells and tissues. It is extended to its combination and application based on the principle of FISH. At present, Abnova continues to collaborate with multiple suppliers, actively expanding the variety of ELISA kit product line.
(3) Customized antibody services
With years of antibody production experience, the Company has provided protein and antibody customization services to end customers in the professional research field, general biotech companies, pharmaceutical industry, etc., meeting the professional and quality requirements of customers, and enhancing customer willingness to use the Company's products and services in the future.
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(4) Multi-dimensional distribution network and collaborative partnerships
- The global and regional distribution network system established by the Company is the main driver of the Company's operation. The Company establishes brand awareness and builds a customer base through well-known global distribution channels in the industry. Meanwhile, the Company establishes a direct sales customer base by collaborating with renowned academic institutions, research centers, and pharmaceutical companies at home and abroad. At the same time, Abnova has achieved good marketing results on Google, BioCompare, and LinkedIn. In Q1 2023, the Company will launch a new version of the official website, adjusting online ordering process and the design of member center, as well as take the design of mobile app user interface into consideration. It is expected to provide users with a better visual and intuitive new interface and improved browser privacy protection, enhance the consumer experience, thereby increasing the willingness of end customers to place orders directly through the website.

5. Favorable and unfavorable factors for future development and the corresponding responses

(1) Favorable factors

Antibody reagents

A. A complete antibody platform
The antibody platform is an important foundation and asset of the Company, which can be used as an important tool for the development of medical diagnostic reagents and mAb drugs. The practical benefits of the Company's proprietary antibody database are highlighted when collaborating with external institutions to develop diagnostic reagents, drugs, and detection system instruments.
B. Marketing channels network
The Company's global sales network includes global or regional distribution contracts, that has established the sales channel to academic institutions, research centers, or pharmaceutical development companies worldwide through distributors. Meanwhile, the Company has a well-established online sales platform that enables customers to quickly and conveniently search for the products they need, providing them with complete product information and increasing their willingness to place orders.
C. Promotion of precision medicine
The implementation of "Precision Medicine Programs" by various countries will lead the way to a new era of medicine. Precision, timeliness, sharing, and personalization are the four main themes of the Precision Medicine Program. It is hoped that appropriate treatment can be delivered to patients at the appropriate time in the future, and public and private entities are encouraged to share information through the implementation of the program.
D. Government supports the biotech industry
The” Act for the Development of Biotech and Pharmaceutical Industry” has become a new development direction for Taiwan's biotech industry since 2022. The Act incorporated areas such as healthcare, medical devices, pharmaceuticals, and agricultural biotechnology based on the existing biotech industry. It is hoped that the development of the bioeconomy will drive the growth and diversification of Taiwan's industries and fields. Also, it is expected that the new government will provide more support and assistance to Taiwan's biotech industry.
E. Continuously developing new products and applications
The reagent production is mainly focused on the applications in combination with instrument systems, incorporating reagents (e.g., antibodies, FISH probes, and reagent kits) and consumables, actively accumulating practical clinical experiments, developing more disease-specific detection reagent kits. In addition, in response to the COVID-19 pandemic, Abnova has been actively developing COVID-19 antigen rapid tests, COVID-19 neutralizing antibody rapid tests, COVID-19 neutralizing antibody RBD ACE2 ELISA kits, COVID-19 humanized neutralizing antibody, SAM and mRNA vaccines, etc., in order to meet the market demand for testing and prevention.
76 -

(2) Unfavorable factors Antibody reagent category

A. New technologies replacing the use of antibodies

At present, antibodies are the most effective tools in protein research. However, there is currently no standardized method for producing antibodies, and the quality of the output can vary greatly depending on the manufacturing process, indirectly affecting the reliability of the antibodies. In the future, there may be other tools to replace antibodies. Response

The Company increases the functionality and usability of antibodies to increase the added value of products. The Company has focused on the production of biological reagents relating to clinical trials and in vitro diagnostics in accordance with GMP standards, offering to both internal and external customers of the Company for clinical trials or diagnostic medical device use, creating business opportunities beyond the sales for general research purposes only.

B. The antibody market is becoming increasingly competitive There are many brands of antibodies on the market, with varying levels of quality. Given that customers have limited research budgets, resulted in increasing price competition in the antibody market, especially with low-priced but poor-quality brands from Mainland China disrupting the pricing of antibodies and affecting sales profits. Response

Pharmaceutical or biotech companies have a lot of purchasing opportunities for a variety of products due to R&D needs. The Company offers a diverse selection of antibodies, including unique antibody products, providing customers with a one-stop solution to address all their product needs. In addition to maintaining the quality of the products, the Company will also conduct additional application testing on specific antibodies to increase their added value and differentiate them in the market, in response to the price war in the antibody market.

77 -

5.2.2 Usage and manufacturing processes for the company's main products

1. Monoclonal Antibodies

A. Applications of Monoclonal Antibodies:

Product category	Applications
Monoclonal Antibodies	Chemical reagents testing, agricultural testing reagents. Animal model tests and pre-clinical test reagents. Laboratory reagents testing.

B. Production Processes for Monoclonal Antibodies:

==> picture [148 x 410] intentionally omitted <==

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

Immunization
Serum titer test
Cell fusion
Antibody screening I
Subcloning and cell expansion I
Antibody screening II
Subcloning and cell expansion II
Ascites production
Monoclonal antibody purification
Identification and characterization
of monoclonal antibody
----- End of picture text -----

2. Polyclonal Antibodies

A. Applications of Polyclonal Antibodies:

Product category	Applications
Polyclonal Antibodies	Chemical reagents testing, agricultural testing reagents.
	Animal model tests and pre-clinical test reagents.
	Laboratory reagents testing.

B. Production Processes for Polyclonal Antibodies:

Immunization Serum collection and antibody purification Identification and characterization of polyclonal antibody

78 -

3. Recombinant Proteins

A. Applications of Recombinant Proteins:

Product category	Applications
Recombinant Proteins	Chemical reagents testing, agricultural testing reagents.
	Animal model tests and pre-clinical test reagents.
	Laboratory reagents testing.

B. Production Processes for Recombinant Proteins:

==> picture [160 x 153] intentionally omitted <==

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

DNA construction
In vitro transcription
In vitro translation
Recombinant protein purification
Identification and characterization of
recombinant protein
----- End of picture text -----

5.2.3 Supply situation for the company's major raw materials

Major Raw Materials	Major Suppliers	Supply Situation
Protein raw materials	CellFree Sciences, Co. LTD.	Stable, good
Reagent for cell culture	Thermo Fisher Scientific, Level Biotechnology Inc., UNI-ONWARD Corp.	Stable, good
Plasmid extraction kit	QIAGEN Taiwan Company Ltd .	Stable, good
Purification reagent	UNI-ONWARD Corp., Level Biotechnology Inc.	Stable, good
Adjuvant	UNI-ONWARDCorp.,Level BiotechnologyInc.	Stable, good

5.2.4 List of suppliers and clients accounting for 10 percent or more of the company's total procurement (sales) amount in either of the 2 most recent fiscal years, the amounts bought from (sold to) each, the percentage of total procurement (sales) accounted for by each, and an explanation of the reason for increases or decreases

1. Information on major suppliers in the 2 most recent fiscal years:

The information on major suppliers for FY 2021 and FY2022 as shown below:

Unit: NT$ 1,000

						Unit: NT$1,000	Unit: NT$1,000	Unit: NT$1,000
Item		FY 2021				FY 2022
	Name	Amount	Percentage of annual net procurement amount(%)	Relationship with issuer	Name	Amount	Percentage of annual net procurement amount(%)	Relationship with issuer
1	Leadgene Biomedical,Inc.	15,556	12.14	-	Others	118,312	100.00	-
2	Others	112,614	87.86	-	-	-	-	-
	Net procurement amount	128,170	100.00	-	Net procurement amount	118,312	100.00	-

Reason for increase or decrease

Leadgene Biomedical, Inc did not reach 10% of annual net procurement amount in 2022 was mainly due to the production of COVID-19 related products entrusted to Leadgene Biomedical, Inc. in 2022 was reduced compared to 2021.

In 2022, there was no supplier whose net purchase amount accounted for more than 10% of the total net purchase amount.

79 -

2. Information on major customers in the 2 most recent fiscal years:

Unit: NT$ 1,000

					Unit: NT$1,000	Unit: NT$1,000	Unit: NT$1,000	Unit: NT$1,000
Item	FY 2021				FY 2022
	Name	Amount	Percentage of annual net sales amount (%)	Relationship with issuer	Name	Amount	Percentage of annual net sales amount (%)	Relationship with issuer
1	Abcamplc	47,808	10.59	-	Abcamplc	59,699	14.55	-
2	Others	403,679	89.41	-	Others	352,057	85.45	-
	Net sales amount	451,487	100.00	-	Net sales amount	411,756	100.00	-

Reason for increase or decrease

The increase in sales amount for Abcam plc compared to the previous period was mainly due to an increase in customer demand.

5.2.5 Production in the Last Two Years

				Unit: mg, mL, NT$ thousands	Unit: mg, mL, NT$ thousands	Unit: mg, mL, NT$ thousands
Year		2021			2022
Output Major Products	Capacity	Quantity	Amount	Capacity	Quantity	Amount
Monoclonal Antibodies （unit:mg）	3,141 mg	3,070 mg	8,651	2,387 mg	2,261 mg	6,704
Polyclonal Antibodies - unpurified（unit:mL）	4,027 mL	3,868 mL	3,380	4,307 mL	3,896 mL	3,490
Polyclonal Antibodies -purified （unit:mg ）	813 mg	774 mg	2,162	731 mg	666 mg	1,932
Recombinant Proteins （unit:mg）	180 mg	173 mg	10,942	188 mg	178 mg	11,096

5.2.6 The volume of units sold for the 2 most recent fiscal years

Unit: mg; ml; NT$ 1,000

Year	FY 2021	FY 2021	FY 2021	FY 2021	FY 2022	FY 2022	FY 2022	FY 2022
Sales Volum~~e~~ Main Product	Domestic Sales		Foreign Sales		Domestic Sales		Foreign Sales
	Quantity	Amount	Quantity	Amount	Quantity	Amount	Quantity	Amount
mAb (Unit: mg)	8.85	811	2,169.68	124,282	10.54	1,035	2,117.38	131,719
Pab-unpurified (Unit: ml)	0.30	28	45.85	4,137	0.45	50	29.80	2,730
Pab-purified (Unit: mg)	1.65	207	365.49	28,807	1.19	154	329.84	27,767
Protein (Unit: mg)	3.15	2,033	102.92	54,305	1.53	1,089	114.03	65,736
Antibody pair (Unit: Set)	10,516	55,271	7,590.00	90,712	3,569	17,746	7,865	75,477
Detection instrument (Unit: Set)	-	-	87.00	15,403	-	-	2	(1,908)
Others	Note	10,344	Note	65,147	Note	9,251	Note	80,910
Total	-	68,694	-	382,793	-	29,325	-	382,431

Note: Other products cannot be quantified using the same unit of measurement due to the variety of product types.

80 -

5.3 The number of employees employed for the 2 most recent fiscal years, and during the current fiscal year up to the date of publication of the annual report, their average years of service, average age, and education levels

	Year	FY 2021	FY 2022	As of March 31, 2023
Number of employees	Manufacturing personnel	61	60	61
	Sales and marketing personnel	35	31	30
	R&D personnel	13	9	10
	Total	109	100	101
Average years of age		41.63	42.55	42.64
Average years of service		10.85	12.01	12.02
Education levels	Ph.D.	5.51%	5%	5%
	Master’s	27.52%	26%	27%
	Bachelor’s or other higher education	66.97%	69%	68%
	High school	－	－	－
	Below high school	－	－	－

5.4 Environmental Protection Expenditure

No environmental protection expenditure

5.5 Labor Relations

5.5.1 Employee benefit plans, continuing education, training, retirement systems, and the status of their implementation, and the status of labor-management agreements and measures for preserving employees' rights and interests

Employee benefit plans, continuing education, training, retirement systems, and the status of their implementation, and the status of labor-management agreements and measures for preserving employees' rights and interests:
(1) Employee benefit plans and implementation status
- Both labor and management in the Company have a consensus of complementary and synchronous growth. The Company has established an Employee Welfare Committee and has set aside welfare funds and managed related welfare matters in accordance with regulations. The main employee benefit plans of the Company include meal subsidies, subsidies (vouchers) during festival seasons, Chinese New Year lottery, wedding/funeral subsidies, group insurance, health examination, discounts at designated stores, etc.
(2) Continuing education, training, and implementation status To enhance the quality of employees and strengthen their work efficiency and quality, the Company provides guidance and training on job responsibilities to new employees. The Company also conducts professional education and training to employees based on their job requirements from time to time, including both internal and external training. The education and training received by employees are recorded and managed, with a view to training professional talents and effectively utilizing talents.
(3) Retirement system and implementation status The Company has established a "Supervisory Committee of Labor Retirement Fund" to safeguard the rights and interests of employees, protect employees' livelihood after retirement, and promote labor-management relations. The Company makes monthly contributions to the pension fund account with the Bank of Taiwan. In addition, since July 2005, in accordance with the Labor Pension Act, the Company has been contributed labor pension funds to individual labor pension accounts at the Bureau of Labor Insurance for employees to protect employees' livelihood after retirement.
81 -
(4) Status of labor-management agreements and measures for preserving employees' rights and interests
- The Company has established an internal control system for procedures governing salary and personnel-related matters, which serves as a common standard for the Company and employees. The Company also regularly conducts labor-management meetings to promote an exchange of opinions between labor and management. Employees are provided with channels for complaint and communication, employees’ opinions are sufficiently taken into account, and employees’ rights and interests are also reasonably protected.
5.5.2 Any losses suffered by the company in the most recent fiscal year and up to the annual report publication date due to labor disputes, and disclosing an estimate of possible expenses that could be incurred currently and, in the future, and measures being or to be taken: None.
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5.6 Important Contracts

		January31,2023	January31,2023
Commencement and Expiration Dates	Major Content		Restrictive Clauses
2021.12.17-2023.6.16	Establishment of mouse xenograft model of human liver cancer and related clinical trials for inhibiting tumor growth		None

		January31,2023	January31,2023	January31,2023
Nature of the Contracts	Contracting Parties	Commencement and Expiration Dates	Major Content	Restrictive Clauses
Clinical trial contract	Chang Gung Medical Foundation Linkou Chang Gung Memorial Hospital	2021.12.17-2023.6.16	Establishment of mouse xenograft model of human liver cancer and related clinical trials for inhibiting tumor growth	None
Clinical trial contract	Chang Gung Medical Foundation Linkou Chang Gung Memorial Hospital	2022.9.12-2024.3.11	Peripheral blood analysis of triple- negative breast cancer patients and establishment of mouse xenograft model of human triple-negative breast cancer	None
Biotech service contract	Level Biotechnology Inc.	2023.1.12-2024.1.11	Commissioned preclinical study of animal testing	None
Service contract	Akacia System CO., LTD.	2022.7.6-2023.4.5	Commissioned to establish a new Company website and update webpage content	None
Construction contract	K-DESIGN CO., LTD.	2022.12.3-2013.2.15	Commissioned to carry out office renovation at 9th floor of Taipei headquarters	None
Distributor agreement	Funakoshi Co., Ltd.	2007.5.1-2008.4.30 Automatic renewal upon expiration	Distributor in Japan	None
Distributor agreement	Abcam plc	2007.10.4-2008.10.3 Automatic renewal uponexpiration	Global distributor	None
Distributor agreement	Sigma-Aldrich International GmbH	2008.6.1-2010.5.31 Automatic renewal upon expiration	Global distributor	None
Distributor agreement	Thermo Fisher Scientific	2010.3.15-2011.3.14 Automatic renewal upon expiration	Distributor in the US Granted distribution rights in India effective as of August 1, 2010	None
Distributor agreement	VWR International, LLC	2014.4.25-2017.4.24 Automatic renewal uponexpiration	Distributor in the US and Canada	None
Distributor agreement	i-DNA Biotechnology Pte Ltd	2018.2.6~2019.2.5 Automatic renewal upon expiration	Distributor in Singapore, Malaysia, and Vietnam	None
Distributor agreement	Labex Corporation	2018.2.23-2019.2.22 Automatic renewal upon expiration	Distributor in India	None

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VI. Financial Highlights

6.1 Financial summary for the past 5 fiscal years

6.1.1 Consolidated condensed balance sheets and statements of comprehensive income

1. Consolidated Condensed Balance Sheets


	Item	Year	2018	2019		2020		2021		2022
	Current assets		736,032	703,309		773,848		786,290		928,192
	Property, plant and	equipment	342,637	312,808		294,333		270,759		256,546
	Intangible assets		62,701	69,370		71,140		67,659		68,815
	Other assets		153,628	178,502		155,263		158,341		121,276
	Total assets		1,294,998	1,263,989		1,294,584		1,283,049		1,374,829
	Current liabilities	Before Distribution	66,739	64,298		74,574		62,726		72,819
		After Distribution	103,071	70,353		110,906		100,581		Note 2
	Non-current Liabilities		1,027	7,288		8,916		8,567		10,016
	Total Liabilities	Before Distribution	67,766	71,586		83,490		71,293		82,835
		After Distribution	104,098	77,641		119,822		99,148		Note 2
	Equity Attributable to Shareholders of the Parent		1,227,232	1,192,403		1,211,094		1,211,756		1,291,994
	Share Capital		605,536	605,536		605,536		605,536		605,536
	Capital surplus		474,527	474,527		474,527		474,527		474,527
	Retained earnings	Before Distribution	132,141	98,272		130,039		122,464		223,838
		After Distribution	95,809	92,217		93,707		94,609		Note 2
	Other Equity		15,028	14,068		992		9,229		(11,907)
	Non-controlling Interest		0	0		0		0		0
	Total Equity	Before Distribution	1,227,232	1,192,403		1,211,094		1,211,756		1,291,994
		After Distribution	1,190,900	1,186,348		1,174,762		1,183,901		Note 2
	Note 1: All financial data from 2018 to 2022 has been audited by CPAs. Note 2: Not yet distributed. 2. Condensed Statement of Comprehensive Income
	Year Item				2018		2019	2020	2021		2022
Sales Revenue					426,023		414,158	456,449	451,487		411,756
Gross Profit					189,555		185,350	213,501	197,339		201,429
Operating Income					20,157		2,644	57,668	43,820		64,426
Non-operating Income and Expenses					16,949		(1,664)	(8,619)	(7,526)		30,530
Profit Before Tax					37,106		980	49,049	36,294		94,956
Profit from Continuing Operations for the Year					46,118		3,263	36,526	28,369		74,843
Profit (Loss) for the Year					46,118		3,263	36,526	28,369		74,843
Other Comprehensive Income (Loss) for the Year (Net of Tax)					19,680		(1,760)	(11,780)	8,625		33,250
Total Comprehensive Income for the Year					65,798		1,503	24,746	36,994		108,093
Net Income Attributable to Shareholders of the Parent					46,118		3,263	36,526	28,369		74,843
Net Income Attributable to Non-controlling Interests					0		0	0	0		0
Total Comprehensive Income Attributable to Shareholders of the Parent					65,798		1,503	24,746	36,994		108,093
Total Comprehensive Income Attributable to Non-controlling Interests					0		0	0	0		0
EarningsPerShare					0.76		0.05	0.60	0.47		1.24

Unit: NT$ 1,000 (Except EPS: NT$)

Note: All financial data from 2018 to 2022 has been audited by CPAs.

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6.1.2 Parent company only condensed balance sheets and statements of comprehensive income

1. Condensed Balance Sheets – Parent Company Only

1. Condensed Balance Sheets – Parent Company Only	1. Condensed Balance Sheets – Parent Company Only	1. Condensed Balance Sheets – Parent Company Only	1. Condensed Balance Sheets – Parent Company Only	1. Condensed Balance Sheets – Parent Company Only	1. Condensed Balance Sheets – Parent Company Only	1. Condensed Balance Sheets – Parent Company Only
Unit: NT$ 1,000
Year Item		2018	2019	2020	2021	2022
Current assets		688,611	650,384	716,048	749,572	830,588
Property, Plants and Equipment		307,633	291,397	279,303	265,122	252,134
Intangible Assets		62,600	69,351	71,140	67,659	68,815
Other Assets		235,583	243,197	221,509	210,839	217,979
Total assets		1,294,427	1,254,329	1,288,000	1,293,192	1,369,516
Current Liabilities	Before Distribution	66,168	59,810	72,004	80,253	67,506
	After Distribution	102,500	65,865		108,108	Note 2
Non-current Liabilities		1,027	2,116	4,902	1,183	10,016
Total Liabilities	Before Distribution	67,195	61,926	76,906	81,436	77,522
	After Distribution	103,527	67,981	113,238	109,291	Note 2
Equity Attributable to Shareholders of the Parent		-	-	-	-	-
Share Capital		605,536	605,536	605,536	605,536	605,536
Capital surplus		474,527	474,527	474,527	474,527	474,527
Retained earnings	Before Distribution	132,141	98,272	130,039	122,464	223,838
	After Distribution	95,809	92,217	93,707	94,609	Note 2
Other Equity		15,028	14,068	992	9,229	(11,907)
Non-controlling Interest		-	-	-	-	-
Total Equity	Before Distribution	1,227,232	1,192,403	1,211,094	1,211,756	1,291,994
	After Distribution	1,190,900	1,186,348	1,175,572	1,183,901	Note 2

Note 1: All financial data from 2018 to 2022 has been audited by CPAs. Note 2: Not yet distributed.

2. Condensed Statement of Comprehensive Income – Parent Company Only

2. Condensed Statement of Comprehensive Income – Parent Company Only	2. Condensed Statement of Comprehensive Income – Parent Company Only	2. Condensed Statement of Comprehensive Income – Parent Company Only	2. Condensed Statement of Comprehensive Income – Parent Company Only	2. Condensed Statement of Comprehensive Income – Parent Company Only	2. Condensed Statement of Comprehensive Income – Parent Company Only
Unit: NT$ 1,000 (Except EPS: NT$)
Year Item	2018	2019	2020	2021	2022
Sales Revenue	423,615	402,865	454,647	450,383	410,320
Gross Profit	189,101	181,339	211,701	196,058	199,993
Operating Income	37,559	13,431	70,259	57,050	69,067
Non-operating Income and Expenses	(565)	(12,518)	(21,279)	(20,815)	25,848
Profit Before Tax	36,994	913	48,980	36,235	94,915
Profit from Continuing Operations for the Year	46,118	3,263	36,526	28,369	74,843
Profit (Loss) for the Year	46,118	3,263	36,526	28,369	74,843
Other Comprehensive Income (Loss) for the Year (Net of Tax)	19,680	(1,760)	(11,780)	8,625	33,250
Total Comprehensive Income for the Year	65,798	1,503	24,746	36,994	108,093
Net Income Attributable to Shareholders of the Parent	19,680	3,263	36,526	28,369	74,843
Net Income Attributable to Non-controlling Interests	-	-	-	-	-
Total Comprehensive Income Attributable to Shareholders of the Parent	65,798	1,503	24,746	36,994	108,093
Total Comprehensive Income Attributable to Non-controlling Interests	-	-	-	-	-
Earnings Per Share	0.76	0.05	0.6	0.47	1.24

Note: All financial data from 2018 to 2022 has been audited by CPAs.

85 -

6.1.3 Name of the certified public accountant and the auditor's opinion for the past 5 fiscal years

Year	CPA	Accounting Firm	Audit Opinion
2018	Hsu Shu Min, Kuo Rou Lan	KPMG Taiwan	Unqualified Opinion
2019	Hsu Shu Min, Kuo Rou Lan	KPMG Taiwan	Unqualified Opinion
2020	Hsu Shu Min, Kuo Rou Lan	KPMG Taiwan	Unqualified Opinion
2021	Hsu Shu Min, Kuo Rou Lan	KPMG Taiwan	Unqualified Opinion
2022	Hsu Shu Min, Kuo Rou Lan	KPMG Taiwan	Unqualified Opinion

6.2 Financial analysis for the past 5 fiscal years

6.2.1 Analysis of Consolidated Financial Statements

Year Analysis Item	Year Analysis Item	2018	2019	2020	2021	2022
Financial Structure	Debts Ratio (%)	5.23	5.66	6.45	5.56	6.03
	Long-term Fund to Property, Plant and Equipment (%)	358.47	383.52	414.50	450.70	507.52
Solvency Analysis	Current Ratio (%)	1,102.85	1,093.83	1,037.69	1,253.53	1,274.66
	Quick Ratio (%)	352.04	359.02	414.09	570.15	719.34
	Times Interest Earned (Times)	-	36,923	17,936	14,853.66	62,571.05
Operating Performance	Accounts Receivable Turnover (Times)	4.60	4.69	5.96	7.20	6.26
	Average Collection Days	79	78	61	51	58
	Inventory Turnover (Times)	0.24	0.23	0.25	0.27	0.24
	Accounts Payable Turnover (Times)	15.44	16.86	17.41	17.87	15.89
	Average Days in Sales	1,521	1,587	1,460	1,352	1,521
	Property, Plant and Equipment Turnover (Times)	1.34	1.26	1.50	1.60	1.56
	Total Assets Turnover (Times)	0.33	0.32	0.36	0.35	0.31
Profitability	Return on Total Assets (%)	3.55	0.28	2.87	2.22	5.64
	Return on Equity (%)	3.76	0.27	3.04	2.34	5.98
	Pre-tax Income to Paid- in Capital Ratio (%)	6.13	0.16	8.10	5.99	15.68
	Net Profit Ratio (%)	10.83	0.79	8.00	6.28	18.18
	Earnings Per Share (NT$)	0.76	0.05	0.60	0.47	1.24
Cash Flow	Cash Flow Ratio (%)	133.61	115.89	141.20	148.08	182.20
	Cash Flow Adequacy Ratio (%)	52.58	61.15	124.56	284.58	1,505.31
	Cash Flow Reinvestment Ratio (%)	3.38	3.30	8.18	4.61	7.78
Leverage	Operating Leverage	8.91	58.09	3.46	4.13	2.88
	Financial Leverage	1.00	1.16	1.01	1.01	1.00

Note 1: All financial data from 2018 to 2022 has been audited by CPAs.

The causes of changes in the financial ratios for the preceding 2 fiscal years (Analysis of deviation over 20%):

Increase in quick ratio: Mainly due to increase in current assets in the current period.
Increase in times interest earned : Mainly due to increase in pre-tax income in 2022.
Increase in return on assets: Mainly due to increase in net income after tax in 2022.
Increase in return on equity: Mainly due to increase in net income after tax in 2022.
Increase in pre-tax income to paid-in capital ratio: Due to increase in pre-tax net income in 2022, that has also resulted in increase in the ratio of pre-tax income to paid-in capital.
Increase in net profit ratio (%): Mainly due to the increase in net income after tax in 2022.
Increase in earnings per share (NT$): Mainly due to increase in net income after tax in 2011.
Increase in cash flow adequacy ratio: Mainly due to increase in net cash flow from operating activities.
Increase in the cash flow adequacy ratio: Mainly due to increase in net cash flow from operating activities in the past five years.
Increase in cash flow reinvestment ratio: Mainly due to increase in net cash flow from operating activities.
86 -

Calculation formula for financial analysis:

Financial Structure
(1) Debt Ratio = Total Liabilities / Total Assets.
(2) Long-term Fund to Property, Plant and Equipment Ratio = (Shareholders’ Equity + Noncurrent Liabilities) / Net Property, Plant and Equipment.
Solvency
(1) Current Ratio = Current Assets / Current Liabilities.
(2) Quick Ratio = (Current Assets - Inventories - Prepaid Expenses) / Current Liabilities.
(3) Times Interest Earned = Earnings before Interest and Taxes / Interest Expenses.
Operating Performance
(1) Accounts Receivable Turnover (including accounts receivables and notes receivables arising from operations) = Net Sales / Average Trade Receivables (including accounts receivables and notes receivable arising from operations).
(2) Average Collection Days = 365 / Accounts Receivable Turnover.
(3) Inventory Turnover = Cost of Sales / Average Inventory.
(4) Accounts Payable Turnover (including accounts payables and notes payables arising from operations) = Cost of Sales / Average Trade Payables (including accounts payables and notes payables arising from operations).
(5) Average Days in Sales = 365 / Average Inventory Turnover.
(6) Property, Plant and Equipment Turnover = Net Sales / Average Net Property, Plant and Equipment.
(7) Total Assets Turnover = Net Sales / Average Total Assets.
Profitability
(1) Return on Total Assets = (Net Income + Interest Expenses x (1 - Effective Tax Rate)) / Average Total Assets.
(2) Return on Equity = Net Income / Average Equity.
(3) Net Profit Ratio = Net Income / Net Sales.
(4) Earnings Per Share = (Net Income Attributable to Shareholders of the Parent - Preferred Stock Dividend) / Weighted Average Number of Shares Outstanding.
Cash Flow
(1) Cash Flow Ratio = Net Cash Provided by Operating Activities / Current Liabilities.
(2) Cash Flow Adequacy Ratio = Five-year Sum of Cash from Operations / Five-year Sum of Capital Expenditures, Inventory Additions, and Cash Dividend.
(3) Cash Flow Reinvestment Ratio = (Cash Provided by Operating Activities - Cash Dividends) / (Gross Property, Plant and Equipment + Long-term Investments + Other Non-current Assets + Working Capital).
Leverage
(1) Operating Leverage = (Net Sales - Variable Cost) / Income from Operations.
(2) Financial Leverage = Income from Operations / (Income from Operations - Interest Expenses)
87 -

6.2.2 Analysis of individual financial statements

Analysis Item	Year	2018	2019	2020	2021	2022
Financial Structure (%)	Debts Ratio(%)	5.19	4.94	5.97	6.30	5.66
	Long-term Fund to Property, Plant and Equipment(%)	399.26	409.93	435.66	457.50	516.40
Solvency (%)	Current Ratio(%)	1040.7	1087.42	994.46	934.01	1,230.39
	Quick Ratio(%)	297.07	310.65	359.35	407.15	631.82
	Times Interest Earned(Times)	-	477.27	35,337.41	19,581.18	72,005.30
Operating Performance	Accounts Receivable Turnover (Times)	4.51	4.62	6.11	7.32	6.23
	Average Collection Days	81	79	60	50	59
	InventoryTurnover(Times)	0.24	0.23	0.25	0.27	0.24
	Accounts Payable Turnover (Times)	14.96	15.73	17.41	17.89	15.89
	Average Days in Sales	1,521	1,587	1,460	1,352	1,521
	Property, Plant and Equipment Turnover(Times)	1.48	1.35	1.59	1.65	1.59
	Total Assets Turnover(Times)	0.33	0.32	0.36	0.35	0.31
Profitability	Return on Total Assets(%)	3.56	0.27	2.88	2.21	5.63
	Return on Equity (%)	3.76	0.27	3.04	2.34	5.98
	Pre-tax Income to Paid- in Capital Ratio(%)	6.11	0.15	8.09	5.98	15.67
	Net Profit Ratio(%)	10.89	0.81	8.03	9.42	18.24
	Earnings Per Share(NT$)	0.76	0.05	0.60	0.47	1.24
Cash Flow	Cash Flow Ratio(%)	128.00	120.52	149.37	137.95	170.52
	Cash Flow AdequacyRatio(%)	56.02	68.46	138.93	287.60	1,199.21
	Cash Flow Reinvestment Ratio (%)	3.27	3.36	9.07	6.51	7.01
Leverage	OperatingLeverage	5.08	11.38	2.86	3.23	2.72
	Financial Leverage	1.00	1.02	1.00	1.00	1.00

Note 1: All financial data from 2018 to 2022 has been audited by CPAs.

The causes of changes in the financial ratios for the preceding 2 fiscal years (Analysis of deviation over 20%):

Increase in current ratio: Mainly due to the increase in current assets in the current period.
Increase in quick ratio: Mainly due to increase in current assets in the current period.
Increase in times interest earned: Mainly due to increase in pre-tax income in 2022.
Increase in return on assets: Mainly due to increase in net income after tax in 2022.
Increase in return on equity: Mainly due to increase in net income after tax in 2022.
Increase in pre-tax income to paid-in capital ratio: Due to increase in pre-tax net income in 2022, that has also resulted in increase in the ratio of pre-tax income to paid-in capital.
Increase in net profit ratio (%): Mainly due to the increase in net income after tax in 2022.
Increase in earnings per share (NT$): Mainly due to increase in net income after tax in 2022
Increase in cash flow adequacy ratio: Mainly due to increase in net cash flow from operating activities.
Increase in the cash flow adequacy ratio: Mainly due to increase in net cash flow from operating activities in the past five years.
Increase in cash flow reinvestment ratio: Mainly due to increase in net cash flow from operating activities.

Calculation formula for financial analysis:

1. Financial Structure

(1) Debt Ratio = Total Liabilities / Total Assets.
(2) Long-term Fund to Property, Plant and Equipment Ratio = (Shareholders’ Equity + Noncurrent Liabilities) / Net Property, Plant and Equipment.
88 -
Solvency
(1) Current Ratio = Current Assets / Current Liabilities.
(2) Quick Ratio = (Current Assets - Inventories - Prepaid Expenses) / Current Liabilities.
(3) Times Interest Earned = Earnings before Interest and Taxes / Interest Expenses.
Operating Performance
(1) Accounts Receivable Turnover (including accounts receivables and notes receivables arising from operations) = Net Sales / Average Trade Receivables (including accounts receivables and notes receivable arising from operations).
(2) Average Collection Days = 365 / Accounts Receivable Turnover.
(3) Inventory Turnover = Cost of Sales / Average Inventory.
(4) Accounts Payable Turnover (including accounts payables and notes payables arising from operations) = Cost of Sales / Average Trade Payables (including accounts payables and notes payables arising from operations).
(5) Average Days in Sales = 365 / Average Inventory Turnover.
(6) Property, Plant and Equipment Turnover = Net Sales / Average Net Property, Plant and Equipment.
(7) Total Assets Turnover = Net Sales / Average Total Assets.
Profitability
(1) Return on Total Assets = (Net Income + Interest Expenses x (1 - Effective Tax Rate)) / Average Total Assets.
(2) Return on Equity = Net Income / Average Equity.
(3) Net Profit Ratio = Net Income / Net Sales.
(4) Earnings Per Share = (Net Income Attributable to Shareholders of the Parent - Preferred Stock Dividend) / Weighted Average Number of Shares Outstanding.
Cash Flow
(1) Cash Flow Ratio = Net Cash Provided by Operating Activities / Current Liabilities.
(2) Cash Flow Adequacy Ratio = Five-year Sum of Cash from Operations / Five-year Sum of Capital Expenditures, Inventory Additions, and Cash Dividend.
(3) Cash Flow Reinvestment Ratio = (Cash Provided by Operating Activities - Cash Dividends) / (Gross Property, Plant and Equipment + Long-term Investments + Other Non-current Assets + Working Capital).
Leverage
(1) Operating Leverage = (Net Sales - Variable Cost) / Income from Operations.
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6.3 Inspection Report of Supervisors or Audit Committee for the most recent year's financial statement

Abnova (Taiwan) Corporation Inspection Report of Audit Committee

The Board of Directors prepared the Company's business report, financial statements, and profit distribution proposal of 2022. The financial statements have been audited by KPMG accounting firm and an audit report has been issued. The above business report, financial statements, and profit distribution proposal have been audited by the Audit Committee and there is no nonconformity, so the feedback is reported as above in accordance with the relevant provisions of the Securities and Exchange Act and the Company Act, please proceed to certificate.

Abnova (Taiwan) Corporation

Convener of Audit Committee: Lin Jia Hsie

February 24, 2023

6.4 Consolidated financial statements for the most recent fiscal year: Please refer to page 99. 6.5 Parent company only financial statements for the most recent fiscal year: Please refer to page 149. 6.6 If the company or its affiliates have experienced financial difficulties in the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, the annual report shall explain how said difficulties will affect the company's financial situation: None.

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VII. Review of Financial Conditions, Operating Results, and Risk Management

7.1 Analysis of Financial Status

			Unit: NT$ 1,000; %	Unit: NT$ 1,000; %
Year Item	2021	2022	Difference
			Amount	%
Current assets	786,290	928,192	141,902	18
Property, plant and equipment	270,759	256,546	(14,213)	(5)
Intangible Assets	67,659	68,815	1,156	2
Other Assets	158,341	121,276	(37,065)	(23)
Total assets	1,283,049	1,374,829	91,780	7
Current Liabilities	62,726	72,819	10,093	16
Long-term Liabilities	-	-	-	-
Other Liabilities	8,567	10,016	1,449	17
Total Liabilities	71,293	82,835	11,542	16
Share Capital	605,536	605,536	-	-
Capital surplus	474,527	474,527	-	-
Retained earnings	122,464	223,838	101,374	83
Other Equity	9,229	(11,907)	(21,136)	(229)
Total Equity Attributable to Shareholders	1,211,756	1,291,994	80,238	7
Analysis of Deviation over 20%: 1. The increase in other assets (23%) was mainly due to the increase in deferred income tax assets. 2. The increase in retained earnings (83%) was mainly due to the increase in net profit for the year and the income of subsidiaries disposed. 3. The increase in other equity (229%) was mainly due to valuation of financial assets and the cumulative translation adjustment.

7.2 Analysis of Operation Results

7.2.1 Analysis of Financial Performance

nalysis of Operation Results 7.2.1 Analysis of Financial Performance	nalysis of Operation Results 7.2.1 Analysis of Financial Performance	nalysis of Operation Results 7.2.1 Analysis of Financial Performance	nalysis of Operation Results 7.2.1 Analysis of Financial Performance	nalysis of Operation Results 7.2.1 Analysis of Financial Performance
Unit: NT$ 1,000
Year Item	2021	2022	Increase (Decrease) Amount	Deviation (%)
Sales Revenue	458,156	418,396	(39,760)	(8.68%)
Deduct: Sales returns and allowances	(6,669)	(6,640)	(29)	(0.43%)
Net Sales	451,487	411,756	(39,731)	(8.80%)
Operating Costs	(254,148)	(210,327)	(43,821)	(17.24%)
Gross Profit	197,339	201,429	4,090	2.07%
Operating Expenses	(153,519)	(137,003)	(16,516)	(10.76%)
Operating Profit	43,820	64,426	20,606	47.02%
Non-operating Income and Benefits	2,975	30,699	27,724	931.90%
Non-operating Expenses and Losses	(10,501)	(169)	(10,332)	(98.39%)
Profit Before Tax	36,294	94,956	58,662	161.63%
Deduct: Income Tax (Expenses) Benefits	(7,925)	(20,113)	12,188	153.79%
Profit After Tax	28,369	74,843	46,474	163.82%
Analysis of Deviation over 20% (Analysis is not required if the deviation does not exceed 20%): 1. Increase in operating profit: Mainly due to decrease in cost of sales. 2. Increase in non-operating income and benefits: Mainly due to increase in exchange gains. 3. Decrease in non-operating expenses and losses: Mainly due to decrease in exchange losses. 4. Increase in profit before tax: Mainly due to the aforementioned reasons. 5. Increase in income tax expenses: Mainly due to the increase in profit before tax for the year. 6. Increase in profit after tax: Mainly due to the aforementioned reasons.

7.2.2 Sales volume forecast and the basis therefor, and the effect upon the company's financial operations as well as measures to be taken in response

Please refer to the 5.2 Market and Sales Overview under Chapter V. Operational Highlights described in this annual report.

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7.3 Analysis of Cash Flow

7.3.1 Analysis of cash flow changes during the most recent fiscal year

Year Item	2021	2022	Deviation (%)
Cash Flow Ratio	148.08%	182.2%	23.04
Cash Flow Adequacy Ratio	284.58%	1505.31%	428.97
Cash Reinvestment Ratio	4.61%	7.78%	68.73
Increase in cash flow adequacy ratio: Mainly due to increase in net cash flow from operating activities. Increase in the cash flow adequacy ratio: Mainly due toincrease in net cash flow from operating activitiesin the past five years. Increase in cash flow reinvestment ratio: Mainly due to increase in net cash flow from operating activities.

7.3.2 Corrective measures to be taken in response to illiquidity: Not applicable.

7.3.3 Solvency analysis for the coming year

7.3.3 Solvency analysis for the coming year	7.3.3 Solvency analysis for the coming year	7.3.3 Solvency analysis for the coming year	7.3.3 Solvency analysis for the coming year
				Unit: NT$ 1,000
Estimated Cash and Cash Equivalents at Beginning of Year A	Estimated Net Cash Flow from Operating Activities B	Estimated Cash Outflow C	Estimated Cash Surplus (Deficit) A＋B－C	Estimated Remedy for Cash Deficit
				Investment Plan	Financial Plan
367,065	43,467	14,110	396,422	-	-
Analysis of cash flow 1. Operating activities: Mainly due to continued growth in the scale of operations in 2023 is expected and the net profit will increase, resulting in an increase in net cash flows from operating activities. 2. Investing activities: Mainly due to meeting the operational needs in 2023 and the equity transfer funds is expected to be received in 2023. 3. Financing activities: Mainly due to cash dividends distribution is expected in 2023.

7.4 Effect upon financial operations of any major capital expenditures during the most recent fiscal year: None.

7.5 Reinvestment policy for the most recent fiscal year, the main reasons for the profits/losses generated thereby, the plan for improving re-investment profitability, and investment plans for the coming year

7.5.1 Reinvestment policy for the most recent fiscal year

The relevant executive departments comply with the Company's reinvestment policy in accordance with the internal control system, such as the "Investment Cycle" and "Handling Procedures for Acquisition or Disposal of Assets". The aforementioned regulations or procedures have been discussed and approved by the Board of Directors or shareholders' meeting.

7.5.2 The main reasons for the profits/losses generated thereby, the plan for improving reinvestment profitability, and investment plans for the coming year

					Unit: NT$ 1,000
Description Item	Profit (Loss) Amount	Reinvestment Policy	Main Reasons for the Losses	Improvement Plan	Investment Plan for the Coming Year
Abnova GmbH	0	Distribution of biological products	Has not put into substantial operations	December 31, 2016, is the effective date of dissolution, and the liquidation process has been filed and processed in accordance with the law.	None
Abnova Holding Corporation	(4,336)	Investment business	Investment company	None	Depends on operational conditions
Citil Pharma Incorporated	0	R&D and sales of cellular therapy	Mainly involves relevant operating	None	Depends on operational conditions

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Description Item	Profit (Loss) Amount	Reinvestment Policy	Main Reasons for the Losses	Improvement Plan	Investment Plan for the Coming Year
		technology/prod ucts	expenses incurred during the early stages of investment
Abnova (Cayman)Corporation	(4,283)	Investment business	Investment company	None	Depends on operational conditions
Citil Pharma Corporation	0	Investment business	Investment company	Liquidation deregistration was completed in May 2022.	None
Wellconn Genomics(Cayman) Corporation	0	Investment business	Investment company	Liquidation deregistration was completed in September 2022.	None
Abnova(HK)Limited	(1,898)	Investment business	Investment company	None	Depends on operational conditions
Wellconn Genomics(HK)Limited	0	Investment business	Investment company	Liquidation deregistration was completed in January 2022.	None
Abnova Diagnostics (Japan)	(2,155)	R&D, production, sales and examination of medical device related products	Mainly involves relevant operating expenses incurred during the early stages of investment	Actively promoting inspection services business in Japan	Depends on operational conditions
Abnova Diagnostics (Dongguan) Limited	(1,847)	R&D, production, and sales of medical equipment	Mainly involves relevant operating expenses incurred during the early stages of investment	It was sold in November 2022	None

7.6. Risk analysis in the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report

7.6.1 Effect upon the company's profits (losses) of interest and exchange rate fluctuations and changes in the inflation rate, and response measures to be taken in the future

Interest rate: The Company is not affected by the interest rate as the Company has sufficient own funds, and only has small short-term loans in line with banking relationships. In addition, the Company has established a longstanding and close relationship with the banks, so that the Company is able to obtain funds at a lower cost. In the future, the Company will take into account the amount and cost of various sources of funds in order to raise the necessary funds.
Exchange Rate:
A. The quotation for export sales of the Company is often denominated in US dollars or euros. The Company has opened foreign currency accounts to manage and sell foreign currency positions in a timely manner, with a view to minimizing the impact of exchange rate fluctuations. Moreover, the foreign currency generated from sales are used to pay foreign currency payables, achieving a more flexible way of natural hedging, reducing the impact of exchange rate changes on the Company's profitability.
B. The Company has established "Handling Procedures for Acquisition or Disposal of Assets” to govern the procedures related to derivatives. In addition, necessary measures will be taken according to the situations of foreign currency positions and exchange rate fluctuations to minimize the foreign exchange risk derived from the operating activities of the Company.
93 -
Inflation: The Company's profits and losses have not been significantly affected by inflation. The main raw materials are purchased from suppliers at home and abroad, and the impact of inflation on the Company is minimized through supplier diversification.
7.6.2 The company's policy regarding high-risk investments, highly leveraged investments, loans to other parties, endorsements, guarantees, and derivatives transactions; the main reasons for the profits/losses generated thereby; and response measures to be taken in the future
The policy for loaning funds to others of the Company is formulated in accordance with the "Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees” of the Company. The Company provides loan funds to its subsidiaries, and the monetary amount of the loan of funds shall not exceed the maximum amount permitted as prescribed in the "Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees”. Also, the Company's operations, finances, and future development are taken into consideration in providing loan funds to effectively control risks, and the permitted amount of loan funds will not adversely affect the financial position of the Company. At present, the Company does not engage in high-risk investments, highly leveraged investments, endorsements, guarantees, and derivatives transactions.
7.6.3 Research and development work to be carried out in the future, and further expenditures expected for research and development work
The existing sufficient and resourceful antibody database of the Company has been used to develop antibody reagents and applications for system integration. Also, the Company is actively developing diagnostic reagents and system instruments. For the Company's R&D plan in FY 2023, please refer to 3. Development of new products on pages 58-59. An estimated R&D expenses for clinical trials and proprietary technology licensing of NT$ 50,171,000 to be invested by the Company in FY 2023.
7.6.4 Effect on the company's financial operations of important policies adopted and changes in the legal environment at home and abroad, and measures to be taken in response
The Company's operations comply with the relevant domestic and foreign laws and regulations. The Company pays attention at all times to the domestic and foreign policy trend developments and regulatory changes, collecting relevant information, which will be served as a reference for management in adjusting relevant operational strategies of the Company. To date, the Company has not been affected by any important policies adopted or changes in the legal environment at home and abroad which will affect the financial operations of the Company.
7.6.5 Effect on the company's financial operations of developments in science and technology as well as industrial change, and measures to be taken in response The major products of the Company have been widely accepted by customers, and the Company has also been actively enhancing its R&D capabilities and keeping track of industry trends and competitor information, as well as adopting a prudent financial management strategy to maintain its market competitiveness. In the future, the Company will continue to monitor relevant technological changes and evaluate their impact on the Company's operations, making corresponding adjustments to enhance the business development and financial position of the Company.

7.6.6 Effect on the company's crisis management of changes in the company's corporate image, and measures to be taken in response

The Company has always adhered to the operating principles of honesty and professionalism and emphasized the corporate image. To date, there shall not have been any event affecting the corporate image of the Company.

7.6.7 Expected benefits and possible risks associated with any merger and acquisitions, and mitigation measures being or to be taken

There are no possible risks associated with any merger and acquisitions as the Company does not have any plans for mergers and acquisitions for the time being.
94 -

7.6.8 Expected benefits and possible risks associated with any plant expansion, and mitigation measures being or to be taken

There are no possible risks associated with any plant expansion as the Company does not have any plans for plant expansion for the time being.

7.6.9 Risks associated with any consolidation of sales or purchasing operations, and mitigation measures being or to be taken

Procurement: The Company has diversified suppliers at home and abroad and has established good cooperative relationships with existing suppliers. To date, there are no risks associated with any consolidation of purchasing operations.
Sales: The Company has established good cooperative relationships with existing global and regional distributors and is actively increasing its customer base through direct sales via the Company website. To date, there are no risks associated with any consolidation of sales operations.

7.6.10 Effect upon and risk to the company in the event a major quantity of shares belonging to a director, supervisor, or shareholder holding greater than a 10 percent stake in the company has been transferred or has otherwise changed hands, and mitigation measures being or to be taken

The Company currently does not have any major shareholders holding greater than a 10 percent stake. In the event a major quantity of shares has been transferred or has otherwise changed hands, it may result in a re-election of directors due to insufficient shareholding or more than one half of the total number of shares that have been transferred. Therefore, in addition to strengthening the functions of directors, directors are occasionally reminded about the impact of changes in shareholding on the Company's operations.

7.6.11 Effect upon and risk to company associated with any change in governance personnel or top management, and mitigation measures being or to be taken

In the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, there is no change in governance personnel or top management.

7.6.12 Litigious and non-litigious matters

If there has been any material impact upon shareholders' equity or prices for the company's securities as a result of any litigation, non-litigious proceeding, or administrative dispute involving the company that was finalized or remained pending up to the publication of the annual report, the annual report shall disclose the facts in dispute, amount in dispute, commencement date, main parties involved, and current status of the case: None.
7.6.13 Other important risks, and mitigation measures being or to be taken None.

7.7 Other important matters: None.

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VIII. Special Disclosure

8.1 Information of the Affiliates

8.1.1 Consolidated Business Report of the Affiliates

1. Overview of the Affiliates

(1) Basic Information of the Affiliates

			December 31, 2022; Unit: NT$ 1,000 Paid-In Capital Main Business or Items 818 Distribution of biological products 80,921 Investment business 2,029 R&D and sales of cellular therapy technology/products 80,000 Investment business (Note 1) Investment business (Note 1) Investment business 51,286 Investment business (Note 1) Investment business 20,916 Medical testing services, R&D, manufacturing, and sales of medical equipment (Note 2) R&D, manufacturing, and sales of medical equipment	December 31, 2022; Unit: NT$ 1,000 Paid-In Capital Main Business or Items 818 Distribution of biological products 80,921 Investment business 2,029 R&D and sales of cellular therapy technology/products 80,000 Investment business (Note 1) Investment business (Note 1) Investment business 51,286 Investment business (Note 1) Investment business 20,916 Medical testing services, R&D, manufacturing, and sales of medical equipment (Note 2) R&D, manufacturing, and sales of medical equipment
Company Name	Incorporation Date	Address	Paid-In Capital	Main Business or Items
Abnova -GmbH	2005.04.19	69126 Heidelberg, Boxbergring 107 c/o EMBL Technology Transfer GmbH	818	Distribution of biological products
Abnova Holding Corporation	2014.11.25	Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,British Virgin Islands	80,921	Investment business
Citil Pharma Incorporated	2021.06.04	910 Foulk Road, Suite 201, New Castle Country, Wilmington DE 19803. U.S.A.	2,029	R&D and sales of cellular therapy technology/products
Abnova (Cayman)Corporation	2014.11.28	The Grand Pavilion Commercial Centre, Oleander Way, 802 West Bay Road, P.O. Box 32052, Grand Cayman KY1-1208 Cayman Islands	80,000	Investment business
Citil Pharma Corporation	2017.07.18	The Grand Pavilion Commercial Centre, Oleander Way,802 West Bay Road, P.O. Box 32052, Grand Cayman KY1-1208,Cayman Islands	(Note 1)	Investment business
Wellconn Genomics (Cayman) Corporation	2019.01.10	The Grand Pavilion Commercial Centre, Oleander Way,802 West Bay Road, P.O. Box 32052, Grand Cayman KY1-1208,Cayman Islands	(Note 1)	Investment business
Abnova(HK)Limited	2015.01.06	Unit1606,16/F.,Citicorp Centre,No.18 Whitfield Road, CausewayBay,HongKong	51,286	Investment business
Wellconn Genomics (HK) Limited	2017.02.15	RM2401,24/F 101 KING’S RD FORTRESS HILL, HONG KONG	(Note 1)	Investment business
Abnova Diagnostics (Japan)	2016.01.15	2nd Floor, Ikenokata Hiro Heights, 2-12-18 Ueno, Taito- ku, Tokyo	20,916	Medical testing services, R&D, manufacturing, and sales of medical equipment
Abnova Diagnostics (Dongguan) Limited	2015.04.08	No. 403, Unit 2, Building 1, No. 9 Keji 9th Road, Dongguan Songshan Lake Science and Technology Industrial Park, Dongguan City, Guangdong Province	(Note 2)	R&D, manufacturing, and sales of medical equipment

Note 1: Liquidation deregistration was completed in 2022. Note 2: It was sold in 2022.

96 -

(2) Organizational chart of the affiliates: (December 31, 2022)

==> picture [497 x 249] intentionally omitted <==

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

Abnova (Taiwan) Corporation
Citil Pharma Abnova Holding Corporation Abnova-GmbH
Abnova (Cayman) Corporation
Abnova Diagnostics (Japan) Abnova(HK)Limited
Abnova Diagnostics (Dongguan) Limited
(It was sold in 2022)
----- End of picture text -----

(3) Companies presumed to have a relationship of control and subordination under Article 369-3 of the Law: None.
(4) The industries covered by the business operated by the affiliates overall: Please refer to the (1) Basic Information of the Affiliates .

Where connections exist among the businesses operated by individual affiliates, a description of the mutual dealings and division of work among such affiliates should be provided: None.

(5) Information on the directors, supervisors, and President of each affiliate:

			December 31, 2022	December 31, 2022
Company Name	Title	Representative	Shareholding
			Shares	%
Abnova –GmbH	Responsible Person	Wilber Huang	(Note 1, 2)	100%
Abnova Holding Corporation	Director	Wilber Huang	52,700	100%
Citil Pharma Incorporated	Responsible Person	Wilber Huang	2,890,000	40%
Abnova (Cayman) Corporation	Director	Wilber Huang	2,605,000	100%
Citil Pharma Corporation	Director	Wilber Huang	(Note 5)	(Note 5)
Wellconn Genomics (Cayman) Corporation	Director	Wilber Huang	(Note 5)	(Note 5)
Abnova (HK) Limited	Director	Chiu Chi Ching	1,670,000	100%
Wellconn Genomics (HK) Limited	Director	Chiu Chi Ching	(Note 5)	(Note 5)
Abnova Diagnostics (Japan)	Representative Director	Wilber Huang	1, 800,000	100%
Abnova Diagnostics (Dongguan) Limited	Executive Director cum President	Wilber Huang	(Note 3, 4)	100%
	Supervisor	Chiu Chi Ching

Note 1: A subsidiary established in Germany, which is a limited liability company without issued shares. Note 2: A subsidiary has no operating activities, therefore there is no managerial personnel. Note 3: A subsidiary established in China, which is a limited liability company without issued shares. Note 4: A subsidiary that was sold in 2022.

Note 5: Liquidation deregistration was completed in 2022.

97 -

2. Overview of the Operations of the Affiliates

December 31, 2022; Unit: NT$ 1,000

Company Name	Paid- in Capital	Total Assets	Total Liabilities	Net Worth	Operating Revenue	Operating Profit	Net Income (After Tax)	Earnings Per Share (NT$) (After Tax)
Abnova-GmbH	818	-	(2,809)	(2,809)	-	-	-	-
Abnova Holding Corporation	80,921	97,014	-	97,014	-	(87)	(4,336)	(82.27)
Citil Pharma Incorporated	2,029	-	-	-		-	-	-
Abnova (Cayman) Corporation	80,000	96,913	-	96,913	-	(233)	(4,283)	(1.64)
Citil Pharma Corporation (Note 1)	-	-	-	-	-	-	-	-
Wellconn Genomics (Cayman) Corporation(Note 1)	-	-	-	-	-	-	-	-
Abnova (HK) Limited	51,286	95,266	4,843 -	90,423	-	(39)	(1,898)	(1.14)
Abnova Diagnostics (Japan)	20,916	6,073	(469)	5,604	1,443	(2,104)	(2,155)	(1.20)
Wellconn Genomics (HK) Limited (Note1)	-	-	-	-	-	-	-	-
Abnova Diagnostics (Dongguan) Limited (Note2)	44,962	-	-	-	-	-	(1,847)	-

Note 1: Liquidation deregistration was completed in 2022. Note 2: It was sold in 2022.

8.1.2 Consolidated Financial Statements of Affiliated Enterprises None.

8.2 Private placement of securities during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, and the status of use of the capital raised through the private placement of securities, the implementation progress of the plan, and the realization of the benefits of the plan: None.
8.3 Holding or disposal of shares in the company by the company's subsidiaries during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report: None.

8.4 Other matters that require additional description: None.

IX. If any of the situations listed in Article 36, paragraph 2, subparagraph 2 of the Securities and Exchange Act, which might materially affect shareholders' equity or the price of the company's securities, has occurred during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report: None.
98 -

Stock Code：4133

Abnova Corporation and Subsidiaries

Consolidated Financial Statements With Independent Auditors’ Report

For the Years Ended December 31, 2022 and 2021

Address ： 9th Fl., No. 108, Jhouzih St., Neihu District, Taipei City Telephone ： (02)8751-1888

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Representation Letter

The entities that are required to be included in the consolidated financial statements of Abnova Corporation as of and for the year ended December 31, 2022 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standards No. 10 by the Financial Supervisory Commission, “Consolidated Financial Statements.” In addition, the information required to be disclosed in the consolidated financial statements is included in the consolidated financial statements. Consequently, Abnova Corporation and Subsidiaries do not prepare a separate set of consolidated financial statements.

Company name: Abnova Corporation Chairman: WILBER HUANG Date: February 24, 2023

100 -

Independent Auditors’ Report

To the Board of Directors of Abnova Corporation:

Opinion

We have audited the consolidated financial statements of Abnova Corporation and its subsidiaries (“the Group”), which comprise the consolidated balance sheets as of December 31, 2022 and 2021, the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of Abnova Corporation and its subsidiaries as of December 31, 2022 and 2021, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“IASs”), Interpretations developed by the International Financial Reporting Interpretations Committee (“IFRIC”) or the former Standing Interpretations Committee (“SIC”) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

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 Consolidated Financial Statement section of our report. We are independent of the Group 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 consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated 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:

1. Inventory valuation

Please refer to Note 4(8) “Inventories”; Note 5(1) “Significant accounting assumptions and judgments, and major sources of estimation uncertainty”, and Note 6(5) “Inventories”.

Description of key audit matter:

The major business of the Group 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 Abnova Corporation and its subsidiaries have 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.

101 -

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 Abnova Corporation and its subsidiaries 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 consistency of the policy used to recognize the inventory valuation loss; understanding the Group and its subsidiaries’ 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.

Other matter

Abnova Corporation has prepared its parent-company-only financial statements as of and for the years ended December 31, 2022 and 2021, on which we have issued an unmodified opinion.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the IFRSs, IASs, IFRC, SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’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 Group 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 Group’s financial reporting process.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated 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 consolidated 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 consolidated 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 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 Group’s internal control.
102 -
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 Group’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 consolidated 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 Group’s to cease to continue as a going concern.
E. Evaluate the overall presentation, structure and content of the consolidated financial reports, including the disclosures, and whether the consolidated 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 entities or business activities within the Group to express an opinion on consolidated financial statements. We are responsible for the direction, supervision and performance of the group 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 consolidated 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-SupervisoryCompetent Securitities-Six-0940100754 Authority Financial-SupervisoryApprovedSecuritities-Auditingcertified No. 1070304941 February 24, 2023

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Abnova Corporation and Subsidiaries

Consolidated Balance Sheets

December 31, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

December 31, 2022 Amount ％ $ 367,065 27 246 - 59,999 4 95,657 7 396,079 29 7,237 - 849 - 1,060 -	December 31, 2022 Amount % $ 2,622 - 14,995 1 41,387 3 2,057 - 7,199 1 4,559 -	December 31, 2021 Amount % 2,638 - 11,480 1 33,517 3 4,396 - 6,992 1 3,703 -
	72,819 5	62,726 5
	5,804 - 3,686 - 526 -	- - 560 - 8,007 1
928,192 67
- - 550 - 256,546 19 10,733 1 68,815 5 98,278 7 11,715 1
	10,016 -	8,567 1
	82,835 5	71,293 6
	605,536 44 474,527 35 85,642 7 138,196 10 (11,907) (1)	605,536 47 474,527 37 82,766 6 39,698 3 9,229 1
446,637 33
	1,291,994 95	1,211,756 94
	$ 1,374,829 100	1,283,049 100
$ 1,374,829 100

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Abnova Corporation and Subsidiaries Consolidated Statements of Comprehensive Income For the years ended December 31, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

2022	％ 100 (51)	2021	％ 100 (56)
Amount $ 411,756 (210,327)		Amount 451,487 (254,148)
201,429	49	197,339	44
(40,349) (47,216) (48,740) (698)	(10) (11) (12) -	(39,812) (59,365) (53,141) (1,201)	(9) (13) (12) -
(137,003)	(33)	(153,519)	(34)
64,426	16	43,820	10
3,636 971 26,075 (152) -	1 - 6 - -	716 2,259 (9,925) (246) (330)	- 1 (2) - -
30,530	7	(7,526)	(1)
94,956 20,113	23 5	36,294 7,925	9 2
74,843	18	28,369	7
304 28,730 -	- 7 -	388 11,345 -	- 3 -
29,034	7	11,733	3
4,216 -	1 -	(3,108) -	(1) -
4,216	1	(3,108)	(1)
33,250	8	8,625	2
$ 108,093	26	36,994	9
$	1.24		0.47
$	1.23		0.47

105 -

(Expressed in Thousands of New Taiwan Dollars)

Abnova Corporation and Subsidiaries Consolidated Statements of Changes in Equity For the years ended December 31, 2022 and 2021

Equity attributable to owners of parent

Shares Ordinary shares $ 605,536 - -	Capital surplus 474,527 - -	Retained	earnings Unappropriated retained earnings 51,055 28,369 388	Other equity interest Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Exchange differences on translation of foreign financial statements (8,070) 9,062 - - (3,108) 11,345	Other equity interest Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Exchange differences on translation of foreign financial statements (8,070) 9,062 - - (3,108) 11,345	Total equity 1,211,094 28,369 8,625
				Exchange differences on translation of foreign financial statements (8,070) - (3,108)
		Legal reserve 78,984 - -
-	-	-	28,757	(3,108)	11,345	36,994
- -	- -	3,782 -	(3,782) (36,332)	- -	- -	- (36,332)
605,536 - -	474,527 - -	82,766 - -	39,698 74,843 304	(11,178) - 4,216	20,407 - 28,730	1,211,756 74,843 33,250
-	-	-	75,147	4,216	28,730	108,093
- - -	- - -	2,876 - -	(2,876) (27,855) 54,082	- - -	- - (54,082)	- (27,855) -
$ 605,536	474,527	85,642	138,196	(6,962)	(4,945)	1,291,994

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Abnova Corporation and Subsidiaries Consolidated Statements of Cash Flows For the years ended December 31, 2022 and 2021

(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 Interest expense Interest income Share of associates and joint ventures losses accounted for using equity method Loss (gain) from disposal 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 Prepayments Other current assets Other non-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 Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease in guarantee deposits paid Acquisition of intangible assets Increase in other current financial assets Decrease in other non-current assets Increase in other non-current liabilities Increase in prepayments for business facilities Net cash flows (outflows) used in investing activities Cash flows from financing activities: Decrease in guarantee deposits received Payment of lease liabilities Cash dividends paid Proceeds from disposal of subsidiaries cash Net cash flows from financing activities Effect of exchange rate changes on cash and cash equivalents Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2022 $ 94,956 23,754 10,739 698 152 (3,636) - (7)	2021 36,294 31,741 10,308 1,201 246 (716) 330 824
	31,700	43,934
	194 (12,335) (439) 9,314 3,068 726 -	315 (1,453) 168 36,565 (3,296) (4,554) (22)
	528	27,723
	(16) 3,515 3,504 708	369 (5,477) 1,392 63
	7,711	(3,653)
	8,239	24,070
	39,939	68,004
	134,895 3,189 (152) (5,259)	104,298 728 (246) (11,903)
	132,673	92,877
	- (1,390) 45 476 (5,240) (304) 66 (97) (7,231)	(811) (642) 2,152 219 (104) (2) - 234 (88)
	(13,675)	958
	(4,423) (8,897) (27,855) (20,225)	4,159 (11,630) (36,332) -
	(61,400)	(43,803)
	2,746 60,344 306,721	(1,074) 48,958 257,763
	$ 367,065	306,721

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Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements For the years ended December 31, 2022 and 2021 (Expressed in thousands of New Taiwan Dollars, unless specified otherwise)

1. Company history

Abnova 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 and its subsidiaries (the “Group”) has been actively developing, manufacturing, and sell 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 Group 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 consolidated financial statements

These consolidated financial statements were authorized for issue by the Board of Directors on February 24, 2023.

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 Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2022.

‧ Amendments to IAS 16 “Property, Plant and Equipment － Proceeds Before Intended Use”
‧ Amendments to IAS 37 “Onerous Contracts － Cost of Fulfilling a Contract”
‧ Annual Improvements to IFRS Standards 2018-2020
‧ Amendments to IFRS 3 “Reference to the Conceptual Framework”
(2) The impact of IFRS issued by the FSC but not yet effective

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2023, would not have a significant impact on its consolidated financial statements.

‧ 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”
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Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(3) The impact of IFRS issued by IASB but not yet endorsed by the FSC

The following new and amended standards, which may be relevant to the Group, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Standards or Interpretations Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”	Content of amendment The current IAS 1 provided that with respect to classification as current, an entity’s right to defer settlement for at least 12 months is subject to the entity complying with conditions after the reporting period. The amendment deleted the requirement that the right shall be unconditional and instead requires that the right must exist and be substantive at the end of the reporting period. The amendments clarify how an entity classifies debt and other financial liabilities as current or non-current with its own equity instruments for the settlement of a liability (such as convertible corporate bonds).	Effective date per IASB
		January 1, 2024

The Group is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its consolidated financial position and consolidated financial performance. The results thereof will be disclosed when the Group completes its evaluation.

The Group does not expect the following other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its consolidated 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”
‧ Amendments to IAS 1 “Non-current Liabilities with Covenants”
‧ Amendments to IFRS 16 “Lease Liability in a Sale and Leaseback”

4. Summary of significant accounting policies

The significant accounting policies presented in the consolidated 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 consolidated 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”) and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, ands SIC Interpretations endorsed by the Financial Supervisory Commission, R.O.C.

(2) Basis of preparation
A. Basis of measurement
Except for the following significant accounts, the consolidated 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(16).
B. Functional and presentation currency
The functional currency of each entity of the Group is determined based on the primary economic environment in which the entity operates. The financial statements are presented in New Taiwan
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Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Dollars, which is the Group’s functional currency. All financial information presented in New Taiwan Dollars has been rounded to the nearest thousand.

(3) Basis of consolidation
A. Principles of preparation of the consolidated financial statements
The consolidated financial statements comprise the Company and subsidiaries. Subsidiaries are entities controlled by the Group. Except for Abnova GmbH, the German subsidiary which is not included in an entity of the Group’s consolidated financial report, the rest of the subsidiaries have been included. The Group ‘controls’ an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. Intragroup balances and transactions, and any unrealized income and expenses arising from Intragroup transactions are eliminated in preparing the consolidated financial statements. The Group attributes the profit or loss and each component of other comprehensive income to the owners of the parent and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.
The Group prepares consolidated financial statements using uniform accounting policies for like transactions and other events in similar circumstances.
Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received will be recognized directly in equity, and the Group will attribute it to the owners of the parent.
B. List of subsidiaries in the consolidated financial statements The consolidated entities were as follows:

Name of investor	Name of subsidiary	Main activities	Percentage of ownership	Percentage of ownership	Note
			December 31, 2022	December 31, 2021
The Company Abnova Holding Corporation 〞〞 Abnova (Cayman) Corporation 〞	Abnova Holding Corporation Abnova (Cayman) Corporation Citil Pharma Corporation Wellconn Genomics (Cayman) Corporation Abnova (HK) Limited Abnova Diagnostics	Investment business Investment business Investment business Investment business Investment business R&D, manufacturing and sales of medical device, etc., testing services	100.00% 100.00% - % - % 100.00% 100.00%	100.00% 100.00% 100.00% 100.00% 100.00% 100.00%	Note 3 Note 4

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Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Name of investor	Name of subsidiary	Main activities	Percentage of ownership	Percentage of ownership	Note
			December 31, 2022	December 31, 2021
Abnova (HK) Limited Wellconn Genomics (Cayman) Corporation Wellconn Genomics (HK) Limited Citil Pharma Corporation	Abnova Diagnostics (Dongguan) Limited Wellconn Genomics (HK) Limited Wellconn Genomics (Dongguan) Limited Katoku	R&D, manufacturing and sales of medical device Investment business Medical testing service business and technical consulting service R&D, manufacturing and sales of cell therapy technology/pr oducts	100.00% - % - % - %	100.00% 100.00% - % - %	Note 5 Note 2 Note 1 Note 1

Note 1 ： Wellconn Genomics (Dongguan) Limited and Katoku had been liquidated in 2021. Note 2 ： Wellconn Genomics (HK) Limited had been liquidated in January 2022. Note 3 ： Citil Pharma Corporation had been liquidated in May 2022.

Note 4 ： Wellconn Genomics (Cayman) Corporation had been liquidated in September 2022. Note 5 ： Abnova Diagnostics (Dongguan) Limited had been sold in 2022.

C. Subsidiaries excluded from the consolidated financial statements:

Name of investor	Name of subsidiary	Main activities	Percentage	of wnership	Note
			December 31, 2022	December 31, 2021
The Company	Abnova-GmbH	Distribution of biological products	100.00%	100.00%	Note

Note ： Since Abnova GmbH’s capital equivalent to NT$1,210 (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.

(4) 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

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Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

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.
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 Group 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 Group 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.
(5) 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 Group 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.
(6) 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.

(7) 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 Group 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

112 -

Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

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 Group 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 (FVOCI) On initial recognition of an equity investment that is not held for trading, the Group 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 Group’s right to receive payment is established (usually the ex-dividend date).

The Group recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, financial assets measured at amortized costs, notes and accounts receivables, other receivable, financial lease payments receivable, guarantee deposit paid and other financial assets) and contract assets.

The Group 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.

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 Group 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 Group’s historical experience and informed credit

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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 Group in accordance with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Group 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 more than 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. For debt investment at FVOCI, loss allowances are recognized in other comprehensive income instead of reducing the carrying amount of the asset.

The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate accounts, the Group 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 Group 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 Group’s procedures for recovery of amounts due.

(d) Derecognition of financial assets
The Group 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 Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Group 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.

(8) 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, semifinished 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
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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).

(9) Non-current assets held for sale

In the first quarter of 2022, the Group passed the resolution to sell the equity of the subsidiary made by the Board of Directors, therefore, the accounting policy related to non-current assets held for sale began to apply from March 31, 2022.

When the carrying amount of the disposal group comprising of non-current assets or assets and liabilities is highly probable to be recovered mainly through a sale transaction rather than continuing use, it is classified as held for sale. Assets or components of disposal groups are remeasured according to the accounting policy of the Group before classifying to be held for sale. The disposal groups classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell. Impairment losses of any disposal group are first apportioned to goodwill and then apportioned to the remaining assets and liabilities on a pro rata basis. However, the loss will not be allocated to assets that are not within the scope of asset impairment under IAS 36, and the aforementioned items will continue to be measured in accordance with the accounting policy of the Group. Impairment losses recognized for the classification as held for sale and gains and losses arising from the subsequent remeasurements are recognized in profit or loss, provided that gains on reversal cannot exceed the cumulative impairment loss recognized.

When intangible assets and property, plant and equipment are classified as held for sale, they are no longer depreciated or amortized. In addition, when an associate recognized using the equity method is classified as held for sale, the equity method will cease to be adopted. (10) Invest in associates

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

The Group 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 consolidated 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 Group, the Group 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 Group, the Group will recognize all changes in equity as capital reserves according to the shareholding ratio.

Unrealized gains and losses arising from transactions between the Group and associates are recognized in the corporate financial statements only within the scope of non-related party investors’ interests in associates.

When the Group 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 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.

When an associate issues new shares, if the Group does not subscribe in accordance with the shareholding ratio, resulting in a change in the shareholding ratio, and thus an increase or decrease

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in the net equity value of the investment occurred, the increase or decrease shall be adjusted to the capital reserve and the investment using the equity method. If this adjustment is to write-down the capital reserve, and the balance of the capital reserve generated by the investment using the equity method is insufficient, the difference will be debited to retained earnings. However, if the Group does not subscribe according to the shareholding ratio, resulting in a decrease in its ownership interest in the associate, the amount related to the associate previously recognized in other comprehensive income is reclassified according to the reduction ratio, and its accounting treatment is the basis same as that which an associate would have to follow if it directly disposes of the related assets or liabilities.

(11) 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 Group.

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 10 to 50 years (b) Machinery and equipment 2 to 10 years (c) Office equipment 3 to 8 years (d) Leasehold improvements 3 to 15 years (e) Other equipment 3 to 5 years

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

(12) Leases

At inception of a contract, the Group 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 Group 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

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end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if 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 Group’s incremental borrowing rate. Generally, the Group 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;
(c) amounts expected to be payable under a residual value guarantee; and

(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 Group’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 Group 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 Group 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 Group 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 Group 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 Group 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 Group 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 Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.
When the Group 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
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head lease is a short-term lease to which the Group 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 Group applies IFRS 15 to allocate the consideration in the contract.

(13) Intangible assets
A. Recognition and measurement

Goodwill arising on the acquisition of a subsidiary is measured at cost less accumulated impairment losses.

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 Group 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 are acquired by the Group 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 5 to 30 years
(b) Intangible assets internally generated 3 years

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

(14) Impairment of non-derivative financial assets
At each reporting date, the Group 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.

(15) Revenue recognition
A. Revenue from contracts with customers
Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for transferring goods to a customer. The Group 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:
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(a) Sales of goods

The Group 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 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 Group has objective evidence that all criteria for acceptance have been satisfied.

The Group offers volume discounts to customers. The Group 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.

(16) Employee benefits
A. Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid contribution is recognized as an asset to the extent that they will result in a return of cash or a reduction in future payments.

B. Defined benefit plans

The Company’s net obligation in respect of each defined benefit plans 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 Group, 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 Group 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 Group 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 Group 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.
(17) 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

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year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables, which reflects the related uncertainties of income taxes (if any), 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 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 taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if the following criteria are met:

A. the Group 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.
(18) Earnings per share

The Group 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.

(19) Segment information
The Group’s operating segments information is reported in a consistent manner with internal management reports provided to key operating decision makers. The chief operating decision maker is responsible for allocating resources to operating segments and assessing their performance.

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 consolidated 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 and reflected the impact of COVID-19, is as follows:

(1) Valuation of inventories
As inventories are stated at the lower of cost or net realizable value, the Group 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 Group 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.
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6. Explanation of significant accounts

(1) Cash and cash equivalents

tion of significant accounts ) Cash and cash equivalents
Cash Checking account Demand deposits Time deposits Cash and cash equivalents listed in the consolidated statements of cash flows	December 31, 2022 $ 589 716 163,855 201,905	December 31, 2021 798 714 149,439 155,770
	$ 367,065	306,721

The term of the Group’s time deposits is three months to one year. 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 exchange rate risk, interest rate risk, and sensitivity analysis of the financial assets and liabilities.

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

Equity instruments measured at fair value through other comprehensive income: Foreign non-listed (non-OTC-listed) stocks －Hukui Biotechnology Corporation (Samoa) Foreign non-listed (non-OTC-listed) stocks－Hangzhou Watson Biotech Co., Ltd.	December 31, 2022 $ - -	December 31, 2021 - 36,547
	$ -	36,547

A. Investments in equity instruments measured at fair value through other comprehensive income The Group designated the investment shown above as equity securities at fair value through other comprehensive income because these equity securities represent those investments that the Group intends to hold for long-term strategic purpose.
Gains on valuation of financial assets measured at fair value through other comprehensive income recognized by the Group were $28,730,000 and $11,345,000 as of December 31, 2022 and 2021, respectively.

B. Please refer to Note 6(18) for information on market risks.

C. As of December 31, 2022 and 2021, the aforementioned financial assets were not pledged as collateral.
D. The Group had completed the disposal of the subsidiary, Abnova Diagnostics (Dongguan) Limited, on November 3, 2022. The subsidiary held stocks of Hangzhou Watson Biotech Co., Ltd. with the realized profit of $54,082,000, which was transferred from other equity to retained earnings. The strategic investment in 2021 is not disposed.
(3) Notes and accounts receivable

Notes receivable Accounts receivable Less: Loss allowance	December 31, 2022 $ 246 68,151 (8,152)	December 31, 2021 440 62,811 (14,449)
	$ 60,245	48,802

The Group applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime

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Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

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:

December 31, 2022	December 31, 2022	Loss allowance provision -
Gross carrying amount $ 26	Weighted-avera ge loss rate
		Loss allowance provision - 11,590
		11,590
		8,152
		Loss allowance provision 149 328 119 288 331 205 1,439
Gross carrying amount $ 42,110 5,206 862 988 759 286 1,439	Weighted-avera ge loss rate
	0.35% 6.30% 13.76% 29.15% 43.66% 71.63% 100.00%
$ 51,650		2,859

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

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Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

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 Balance at December 31	2022 $ 14,449 698 (6,995)	2021 13,248 1,201 -
	$ 8,152	14,449

As of December 31, 2022 and 2021, the aforementioned financial assets were not pledged as long-term loans and financing facilities.

(4) Other receivables

Other receivables	December 31, 2022 $ 95,657	December 31, 2021 1,566

The Group disposed its subsidiary, Abnova Diagnostics (Dongguan) Limited, on November 3, 2022 for a total selling price of $93,205,000 (USD 3,035,000). As of December 31, 2022, the unrecovered amount was $93,205,000. Due to foreign exchange control in Mainland China, the remittance can be made to overseas only after the equity transferred. In order to ensure the rights and interests of the Group, a capital supervision agreement was signed with the bank. The first installment of USD 2,135,000 has been remitted to the supervision account and will be remitted back after the verification and relevant procedures were done by the bank. The remaining USD 900,000 does not need to be remitted to the supervision account, and will be collected according to the schedule agreed in the contract and after the completion of the procedures.

(5) Inventories

Raw materials and supplies Semi-finished goods Work in progress Finished goods Merchandise Testing instruments	December 31, 2022 $ 21,973 239,258 6,503 119,329 6,364 2,652	December 31, 2021 24,991 247,335 2,498 126,615 10,311 4,043
	$ 396,079	415,793

The components of cost of sales for the years ended December 31, 2022 and 2021 are as follows:

Sales of inventories transferred Inventory valuation loss Inventory disposal loss Total	2022 $ 163,554 60,016 (13,243)	2021 202,909 60,229 (8,990)
	$ 210,327	254,148

As of December 31, 2022 and 2021, the inventories were not pledged as collateral.

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(6) Investments accounted for using equity method

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

Subsidiary Abnova GmbH (Note) Associate Citil Pharma Incorporated	December 31, 2022	December 31, 2021 (2,809)
	$ (2,809)
	$ 550	495

Note ： The net amount deducted from receivables as of December 31, 2022 and 2021 were listed in other noncurrent liabilities.

Since Abnova GmbH’s capital equivalent to NT$1,210 (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.

The Group paid an investment of $811,000 on July 9, 2021 and acquired 40% of the shares of Citil Pharma Incorporated, thus obtaining significant influence over the company.

As of December 31, 2022 and 2021, the investment adopting equity method were not pledged as collateral.

(7) Property, plant and equipment

Land	Buildings and structures	Machinery and equipment	Office equipment	Leasehold improveme nts	Other equipment	Unfinished constructio n and equipment pending acceptance	Total
$ 137,911 - - - -	101,747 - - - -	187,951 1,390 352 (2,357) (91)	27,263 - - (367) (25)	33,426 - - (16,947) 301	9,094 - - - -	992 - (792) - -	498,384 1,390 (440) (19,671) 185
$ 137,911	101,747	187,245	26,871	16,780	9,094	200	479,848
$ 137,911 - - - -	101,747 - - - -	197,707 338 - (9,505) (589)	28,129 - - (704) (162)	34,376 - - - (950)	8,619 304 388 (217) -	1,380 - (388) - -	509,869 642 - (10,426) (1,701)
$ 137,911	101,747	187,951	27,263	33,426	9,094	992	498,384

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Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Land	Buildings and structures	Machinery and equipment	Office equipment	Leasehold improveme nts	Other equipment	Unfinished constructio n and equipment pending acceptance	Total
$ - - - n -	23,804 5,997 - -	139,115 7,958 (2,320) (37)	26,739 248 (366) (10)	29,573 380 (16,947) 430	8,394 344 - -	- - - -	227,625 14,927 (19,633) 383
$ -	29,801	144,716	26,611	13,436	8,738	-	223,302
$ - - - n -	17,807 5,997 - -	135,454 10,618 (6,574) (383)	26,988 507 (659) (97)	26,998 2,907 - (332)	8,289 322 (217) -	- - - -	215,536 20,351 (7,450) (812)
$ -	23,804	139,115	26,739	29,573	8,394	-	227,625
$ 137,911	71,946	42,529	260	3,344	356	200	256,546
$ 137,911	83,940	62,253	1,141	7,378	330	1,380	294,333
$ 137,911	77,943	48,836	524	3,853	700	992	270,759

The amount of machinery and equipment, office equipment and leasehold improvements disposed of by the Group due to the sale of Abnova Diagnostics (Dongguan) Limited in the current period were $456,000, $278,000 and $16,946,000, respectively, and the accumulated depreciation were $419,000, $277,000 and $16,946,000, respectively.

(8) Right-of-use assets

Buildings and structures $ 37,273 11,030 1,249 (6,377) (12)	Transportation equipment 2,954 - - - -	Total 40,227 11,030 1,249 (6,377) (12)
$ 43,163	2,954	46,117
$ 36,036 1,936 (699)	1,552 1,402 -	37,588 3,338 (699)
$ 37,273	2,954	40,227

125 -

Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Buildings and structures $ 30,961 8,358 (6,377) 33	Transportation equipment 1,942 467 - -	Total 32,903 8,825 (6,377) 33
$ 32,975	2,409	35,384
$ 20,658 10,810 (507)	1,362 580 -	22,020 11,390 (507)
$ 30,961	1,942	32,903
$ 10,188	545	10,733
$ 15,378	190	15,568
$ 6,312	1,012	7,324

(9) Intangible assets

The movements of intangible assets of the Group for the years ended December 31, 2022 and 2021 were as follows:

Development expenditure of monoclonal antibody hybridoma	Other 235 - - (240) 5	Total 382,061 5,240 6,655 (240) 5
$ 318,105 75,616	-	393,721
$ 299,487 75,512 - 104 3,424 - 3,299 - - -	237 - - - (2)	375,236 104 3,424 3,299 (2)
$ 306,210 75,616	235	382,061

126 -

Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Amortization and impairment loss: Balance at January 1, 2022 Amortization Disposals Effects of changes in foreign exchange rates Balance at December 31, 2022 Balance at January 1, 2021 Amortization Disposals Balance at December 31, 2021 Carrying amount: Balance at December 31, 2022 January 1, 2021 Balance at December 31, 2021	$ 295,167 19,000 235 314,402 8,330 2,409 - 10,739 - - 5 5 - - (240) (240)
	$ 303,497 21,409 - 324,906
	$ 287,265 16,594 237 304,096 7,902 2,406 - 10,308 - - (2) (2)
	$ 295,167 19,000 235 314,402
	$ 14,608 54,207 - 68,815
	$ 12,222 58,918 - 71,140
	$ 11,043 56,616 - 67,659

The amortization expenses of intangible assets for the years ended December 2022 and 2021 were presented in the following items in the consolidated statements of comprehensive income:

2022 Operating costs $ 8,331 Operating expenses 2,408 $ 10,739 ease liabilities The carrying amount of lease liabilities were as follows: December 31, 2022 Current $ 7,199 Non-current $ 3,686 For the maturity analysis, please refer to Note 6(18) Financial instruments. The amount recognized in profit or loss were as follows: 2022 Interest on lease liabilities $ 152 Expenses relating to short-term leases $ 3,061 he amount recognized in the statements of cash flows for the Group were as follows: 2022 Total cash outflow for leases $ 12,110	2022 $ 8,331 2,408	2021 7,902 2,406
	$ 10,739	10,308
	December 31, 2022 $ 7,199	December 31, 2021 6,992
	$ 3,686	560
		2021 246
	$ 3,061	3,099
	ere as follows: 2022 $ 12,110	2021 14,975

(10) Lease liabilities

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

A. Buildings and structures leases

The Group leases buildings and structures for its office space and factories for the year ended December 31, 2022, which typically run for a period of one to six years.

B. Other leases

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

(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, 2022 $ 5,743 (7,191)	December 31, 2021 5,725 (6,862)
	$ (1,448)	(1,137)

127 -

Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

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. 1096017325, No. 1106083461 and No. 1116069618 of May 8, 2020, September 27, 2021 and August 15, 2022, respectively which approved to suspend the appropriation of pension fund from May 2020 to April 2021, from September 2021 to August 2022 and from September 2022 to August 2023.

(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 $7,191,000 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, 2022 and 2021 were as follows:

2022 2021 Defined benefit obligations at January 1 $ 5,725 5,977 Current service cost and interest cost 40 24 Remeasurements loss of net defined benefit obligations －Actuarial loss (benefit) arising from experience adjustments 743 (38) －Actuarial loss arising from changes in demographic hypothesis - 7 －Actuarial benefit arising from changes in financial assumptions (530) (245) Benefits paid (235) - Defined benefit obligations at December 31 $ 5,743 5,725 ovements in fair value of plan assets he movements in the fair value of the plan assets for the years ended December 31, 2022 and 2021 were as llows: 2022 2021 Fair value of plan assets at January 1 $ (6,862) (6,720) Interest income (48) (27) Remeasurements loss of net defined benefit obligations －Return on plan assets excluding interest income (516) (112) Contributions paid by the employer - (3) Benefits paid 235 - Fair value of plan assets at December 31 $ (7,191) (6,862)	2022 $ 5,725 40 743 - (530) (235)	2021 5,977 24 (38) 7 (245) -
	$ 5,743	5,725
	$ (7,191)	(6,862)

The movements in the fair value of the plan assets for the years ended December 31, 2022 and 2021 were as follows:

128 -

Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(d) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the years ended December 31, 2022 and 2021 were as follows:

Net interest of net defined benefit liabilities (assets) Operating costs Operating expenses	2022 $ (8)	2021
		(3)
	$ (6) (2)	(2) (1)
	$ (8)	(3)

(e) Actuarial assumptions

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

porting date were as follows:
Discount rate Future salary increase rate	December 31, 2022 1.40% 3.00%	December 31, 2021
		0.70% 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, 2022 and 2021, if the actuarial assumptions had changed, the impact on the present value of the defined benefit obligations shall be as follows:

December 31, 2022 Discount rate (0.25% variable) Future salary increases rate (0.25% variable) December 31, 2021 Discount rate (0.25% variable) Future salary increases rate (0.25% variable)	Influences of defined benefit obligations	Influences of defined benefit obligations
	Increase (175) 166 (188) 179	Decrease
		182 (161) 196 (173)

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 2022 and 2021.

B. Defined contribution plans

The Group 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 Group allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation.

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to $3,857,000 and $2,923,000 for the years ended December 31, 2022 and 2021, respectively.

129 -

Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(12) Income taxes

A. Tax expense

The components of the income tax in the years 2022 and 2021 were as follows:

2022 Current tax expense Current period $ 6,561 Adjustment for prior periods (3,646) 2,915 Deferred tax expense Origination and reversal of temporary differences 17,198 Income tax for the continuing operations $ 20,113 e reconciliation of income tax expenses recognized in other comprehensive income were 2022 Profit from continuing operations before tax $ 94,956 Income tax using the Company’s domestic tax rate $ 18,991 Tax effect in foreign jurisdiction 33 Nondeductible expenses 9,182 Tax incentive (4,447) Overestimation for prior periods (3,646) Tax expense $ 20,113	2022 $ 6,561 (3,646)	2021 7,236 -
	2,915 17,198	7,236 689
	$ 20,113	7,925
		as below: 2021 36,294
	$ 18,991 33 9,182 (4,447) (3,646)	7,258 48 3,044 (2,425) -
	$ 20,113	7,925

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

B. Deferred tax assets and liabilities

Changes in the amount of deferred tax assets for the years ended December 31, 2022 and 2021 were as follows:

Other

	Other
Deferred tax liabilities: Balance at January 1, 2022 Recognized in profit or loss Balance at December 31, 2022	$ - 5,804
	$ 5,804

Allowance for inventory valuation and obsolescence $ 98,406 (2,648)	Other 11,266 (8,746)	Total 109,672 (11,394)
$ 95,758	2,520	98,278
$ 100,204 (1,798)	10,157 1,109	110,361 (689)
$ 98,406	11,266	109,672

C. Assessment of tax

The Company’s tax returns for the years through 2020 were assessed by the National Taiwan Bureau.

130 -

Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(13) Capital and other equity

A. Ordinary shares

As of December 31, 2022 and 2021, the number of authorized ordinary shares each consisted were $800,000,000. In addition, the issuance of ordinary shares each consisted of 60,554 thousand, with a par value of $10 per share. Payments for all issued shares had been received.

B. Capital surplus

The balances of capital surplus were as follows:

Share premium	December 31, 2022 $ 474,527	December 31, 2021 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’ 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 2021 and 2020 had been approved during the board meetings on March 16, 2022 and March 30, 2021, respectively. The relevant dividend distributions to shareholders were as follows:

131 -

Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

2021 Amount per share Amount Dividends distributed to ordinary shareholders: Cash $ 0.46 27,855	2020 Amount per share Amount 0.6 36,332	2020 Amount per share Amount 0.6 36,332
	Amount per share
	0.6

The amount of dividends on the appropriation of earnings for 2022 had been approved during the board meetings on February 24, 2023. The distribution to shareholders was as follows:

2022 Amountper share Amount $ 0.80 48,443 Exchange differences on translation of foreign financial statements Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Total $ (11,178) 20,407 9,229 4,216 - 4,216 - 28,730 28,730 - (54,082) (54,082)	2022 Amountper share Amount $ 0.80 48,443 Exchange differences on translation of foreign financial statements Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Total $ (11,178) 20,407 9,229 4,216 - 4,216 - 28,730 28,730 - (54,082) (54,082)	2022 Amountper share Amount $ 0.80 48,443 Exchange differences on translation of foreign financial statements Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Total $ (11,178) 20,407 9,229 4,216 - 4,216 - 28,730 28,730 - (54,082) (54,082)
$ (6,962)	(4,945)	(11,907)
Exchange differences on translation of foreign financial statements $ (8,070) (3,108) -	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income 9,062 - 11,345	Total 992 (3,108) 11,345
$ (11,178)	20,407	9,229

D. Other equity interest

132 -

Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(14) Earnings per share

A. Basic earnings per share

The basic earnings per share of the Group in 2022 and 2021 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

Profit attributable to ordinary shareholders of the Company eighted average number of ordinary shares (in thousands) Weighted average number of ordinary shares at December 31 (in thousands) (the number of shares at January 1)	2022 $ 74,843	2022 $ 74,843	2021 28,369
		2022 60,554	2021 60,554

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

B. Diluted earnings per share

The diluted earnings per share in 2022 and 2021 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:

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

2022 Profit attributable to ordinary shareholders of the Company (diluted) $ 74,843 eighted average number of ordinary shares (diluted) (in thousands) 2022 Weighted average number of ordinary shares (basic) 60,554 Effect of employee share bonus 110 Weighted average number of ordinary shares at December 31 (diluted) 60,664	2022 $ 74,843	2021 28,369
		2021 60,554 44
	60,664	60,598

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

(15) Revenue from contracts with customers

A. Details of revenue

Primary geographical markets: America Europe Taiwan Other country Main product/service line: Monoclonal antibody Matched antibody Protein Polyclonal antibody Testing instruments Other B. Contract balances	Primary geographical markets: America Europe Taiwan Other country Main product/service line: Monoclonal antibody Matched antibody Protein Polyclonal antibody Testing instruments Other B. Contract balances	2022 $ 196,828 112,624 29,325 72,979	2022 $ 196,828 112,624 29,325 72,979	2021 191,317 113,684 68,694 77,792
		$ 411,756		451,487
		$ 132,754 93,223 66,825 30,701 (1,908) 90,161		125,093 145,983 56,338 33,179 15,403 75,491
		$ 411,756		451,487

Notes and accounts receivable Less: Loss allowance Total Contract liabilities	December 31, 2022 $ 68,397 (8,152)		December 31, 2021 63,251 (14,449)	January 1, 2021 62,134 (13,248)
	$ 60,245		48,802	48,886
	$ 2,622		2,638	2,269

ontract balances
		December 31,	December 31,		January 1, 2021
		2022	2021
Notes and accounts receivable	$	68,397		63,251	62,134
Less: Loss allowance		(8,152)	(14,449)		(13,248)
Total	$	60,245		48,802	48,886
Contract liabilities	$	2,622		2,638	2,269

For details on accounts receivable and its loss allowance, please refer to note 6(3).

The balance of contract liabilities at January 1, 2022 and 2021 recognized as revenue for the years 2022 and 2021 were $864,000 and $359,000, respectively.

133 -

Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(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, 2022 and 2021, the Company recognized its employee remuneration amounting to $4,179,000 and $1,511,000 respectively; as well as its remuneration to directors and supervisors amounting to $795,000 and $287,000, 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, multiplied by the distribution of ratio of the remuneration to employees and directors 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 2022 and 2021.

(17) Non-operating income and expenses

A. Interest income

The details of interest income were as follows:

on-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 (losses) on disposal of property, plant and equipment Foreign exchange gains (losses) Miscellaneous income (expenses) D. Finance cost The details of finance cost were as follows: Interest expense	2022 $ 3,636	2021 716
	2022 $ 971	2021 2,259
	2022 $ 7 26,079 (11) $ 26,075 2022 $ 152	2021 (824) (8,394) (707)
		(9,925)
		2021 246

134 -

Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(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. As of December 31, 2022 and 2021, 31% and 17%, respectively, of accounts receivable were concentrated on the biggest customer, and 69% and 83%, 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, 2022, the Group 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	1to 2years	2to 5 years	Over 5 years
	14,995 41,387 11,148 4,559	14,995 41,387 7,337 4,559	- - 3,811 -	- - - -	- - - -
$ 71,826	72,089	68,278	3,811	-	-
	11,480 33,517 7,636 7,383 3,703	11,480 33,517 7,065 7,383 3,703	- - 571 - -	- - - - -	- - - - -
$ 63,635	63,719	63,148	571	-	-

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

135 -

Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

C. Currency risk

(a) Exposure to foreign currency risk

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

December 31, 2022 Foreign currency (in thousands) Exchange rate Financial assets Monetary items USD $ 11,533 USD：TWD 30.71 EUR 607 EUR：TWD 32.72 GBP 186 GBP：TWD 37.09 JPY 14,659 JPY：TWD 0.23 Non-monetary items USD 3,177 USD：TWD 30.71 EUR (86) EUR：TWD 32.72 JPY 24,011 JPY：USD 0.0076 Financial liabilities Monetary items USD 333 USD：TWD 30.71 EUR 106 EUR：TWD 32.72 JPY 4,426 JPY：TWD 0.23 December 31, 2021 Foreign currency (in thousands) Exchange rate Financial assets Monetary items USD $ 9,282 USD：TWD 27.68 EUR 760 EUR：TWD 31.32 GBP 140 GBP：TWD 37.30 Non-monetary items USD 3,318 USD：TWD 27.68 EUR (90) EUR：TWD 31.32 JPY 33,526 JPY：USD 0.0087 CNY 13,833 CNY：USD 0.1569		December 31, 2022	New Taiwan Dollars 354,194 19,849 6,906 3,407 97,564 (2,809) 5,604 10,211 3,463 1,029 New Taiwan Dollars 256,914 23,806 5,230 91,843 (2,809) 8,074 60,075

136 -

Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Financial liabilities Monetary items USD EUR		December 31, 2021	New Taiwan Dollars 9,331 3,066
	Foreign currency (in thousands) Exchange rate 337 USD：TWD 27.68 98 EUR：TWD 31.32

(b) Sensitivity analysis

The Group’s 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, financial assets measured at fair value through other comprehensive income and accounts and other payables that are denominated in foreign currency. A strengthening (weakening) of 1% of the NTD against the USD, EUR and JPY as of December 31, 2022 and 2021 would have increased (decreased) the net profit after tax by $2,957,000 and $2,187,000, respectively. The analysis for the two periods were on the same basis.

Since the Group 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, 2022 and 2021, the foreign exchange gains (losses) (including realized and unrealized portions) amounted to $26,079,000 and $(8,394,000), respectively.

D. Interest rate analysis

Please refer to the notes on liquidity risk management and interest rate exposure of the Group’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 Group management’s assessment of the reasonably possible interest rate change.
If the interest rate had increased or decreased by 1% basis points, the Group’s net income would have increased or decreased by $1,639,000 and $1,494,000 for the years ended December 31, 2022 and 2021, assuming all other variable factors remain constant. This is mainly due to the Group’s deposits and investments in floating variable rates.

E. Fair value of financial instruments

(a) Fair value hierarchy

The Group’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:

137 -

Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

	December 31, 2022	December 31, 2022	December 31, 2022	Total -
Carrying amount $ -		Fair value
	Level 1 -	Level 2 -	Level 3 -
367,065 60,245 95,657 849 2,581	- - - - -	- - - - -	- - - - -	- - - - -
526,397	-	-	-	-
$ 526,397	-	-	-	-
$ 14,995 41,387 10,885 4,559	- - - -	- - - -	- - - -	- - - -
$ 71,826	-	-	-	-
	December 31, 2021			Total 36,547
Carrying amount $ 36,547		Fair value
	Level 1 -	Level 2 -	Level 3 36,547
306,721 48,802 1,566 545 3,078	- - - - -	- - - - -	- - - - -	- - - - -
360,712	-	-	-	-
$ 397,259	-	-	36,547	36,547

138 -

Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

	December 31, 2021	December 31, 2021	December 31, 2021
Carrying amount $ 11,480 33,517 7,552 3,703 7,383		Fair value		Total - - - - -
	Level 1 - - - - -	Level 2 - - - - -	Level 3 - - - - -
$ 63,635	-	-	-	-

(b) Valuation techniques for financial instruments measured at fair value

(2.1) Non-derivative financial instruments

A financial instrument is regarded as being quoted in an active market if quoted prices are readily and regularly available.

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. (c) Movements of Level 3

January 1 Total gains or losses Recognized to other comprehensive income Effects of changes in foreign exchange rates Disposals December 31	Measured at fair value through other comprehensive income 2022 2021 $ 36,547 25,291 28,730 11,345 - (89) (65,277) -	Measured at fair value through other comprehensive income 2022 2021 $ 36,547 25,291 28,730 11,345 - (89) (65,277) -
	2022 $ 36,547 28,730 - (65,277)
	$ -	36,547

The above-mentioned total gains or losses were accrued and recognized to “unrealized gains (losses) of financial assets measured at fair value through other comprehensive income”. Wherein, those related to the assets still held in 2022 and 2021 are as follows:

2022 Total gains or losses Recognized to other comprehensive income (accrued and recognized to “unrealized gains (losses) of financial assets measured at fair value through other comprehensive income”) $ 28,730	2021 11,345

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Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(d) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

The Group’s financial instruments that use Level 3 inputs to measure fair value include “financial assets measured at fair value through other comprehensive income – equity investments” Most of the fair value of the Group is classified as Level 3 with only single significant unobservable inputs, and only investments in equity instruments without an active market have multiple significant unobservable inputs. Significant unobservable inputs of investments in equity instruments without an active market are independent of each other, therefore there is no interrelationship.

Quantified information of significant unobservable inputs was as follows:

Item Financial assets measured at fair value through other comprehensive income － equity investments without an active market	Valuation technique Comparable to Company Law of listed or OTC-listed companies	Significant unobservable inputs ‧Multiplier of net equity method and sales value of stock price (December 31, 2021 and July 17) ‧The market illiquidity discount rate (30% on December 31, 2021)	Inter-relationship between significant unobservable inputs and fair value measurement
			‧The higher multiplier, the higher fair value ‧The higher market illiquidity discount, the lower fair value ‧Including adjustments for uncertainties

(e) Fair value measurements in Level 3 – sensitivity analysis of reasonably possible alternative assumptions

The fair value measurement of financial instruments by the Group is reasonable, but the use of different evaluation models or evaluation parameters may result in different evaluation results. For fair value measurements in Level 3, if the evaluation parameters change, would have the following effects of profit or loss or other comprehensive income:

Input	Assumptions	Other comprehensive income	Other comprehensive income
		Favorable $ 364 264	Unfavorable
Liquidity discount rate Multiplier of net equity method and sales value of stock price	3% 3%		(364) (264)
		$ 628	(628)

The favorable and unfavorable effects represent the changes in fair value, and fair value is based on a variety of unobservable inputs calculated using a valuation technique. The analysis above only reflects the effects of changes in a single input, and it does not include the interrelationships with another input.

140 -

Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(19) Financial risk management
A. Overview

The Group have exposures to the following risks from its financial instruments:

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

The following likewise discusses the Group’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 Group, which its establishment is to identify and analyze the risks faced by the Group, 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 Group. The Group 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 Group’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Group 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.
C. Credit risk
Credit risk is the risk of financial loss to the Group if a counterparty to a financial instrument fails to meet its contractual obligations. A credit policy of the Group 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 Group 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 Group’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 Group’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 Group 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 Group has established a policy, managing currency risk arises from future commercial transactions and assets and liabilities recognized, and based on the principal of natural

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Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

hedging, the Group 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 Group’s functional currency.

(b) Interest rate risk

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

7. Related-party transactions

(1) Names of related parties and their relationships

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

Name of related party Abnova-GmbH Wellconn Genomics	Relationship with the Group
	Subsidiary of the Group Other related party

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

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

Associate Other related party	2022 $ - -	2021 696 974
	$ -	1,670

The general sales price is no significant difference between the Group’s sales to associates and other related parties, and the collection period is one month.

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Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

B. Loans to related parties

Related parties Abnova GmbH Less: Investment additions accounted for using equity method Other non-current liabilities	December 31, 2022 $ 2,283 (2,809)	December 31, 2021 2,185 (2,809)
	$ (526)	(624)

(a) The Group did not charge interest for the above-mentioned transactions of loans to related parties.

(b) The Group’s maximum limit of fund lent to related parties in 2022 and 2021 were both $5,000,000. C. Other

(a) The Group 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 research expenses (as R&D expenses) in 2022 and 2021 were $1,575,000 and $1,740,000, respectively.

(b) The Group signed an office leasing contract with other related parties, which will be renewed every year after the expiration. The leasing price was negotiated by both parties, and the Group collects rent on a monthly basis according to the contract. The rent income in 2022 and 2021 was both $648,000.

(3) Key management personnel transaction

Key management personnel compensation comprised:

on July 9, 2021. (3) Key management personnel transaction Key management personnel compensation comprised:
2022 Short-term employee benefits $ 9,606 ged assets he carrying values of pledged assets were as follows: Pledged assets Object December 31, 2022 Other current financial assets Customs duty pledged, Forward exchange transactions guarantee $ 849 Other financial assets－ non-current guarantee deposits paid 2,581 $ 3,430	2022		2021 7,976 December 31, 2021 545 3,078
	$ 9,606
		December 31, 2022
		$ 3,430	3,623

8. Pledged assets

The carrying values of pledged assets were as follows:

9. Commitments and contingencies

The Group’s significant contractual commitments were as follows:

The Group 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 2021 and 2021 were $33,320,000 and $30,033,000, 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.

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Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

12. Other

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

By function	2022	2022	2022	2021	2021	2021
By item	Operating cost	Operating expenses	Total	Operating cost	Operating expenses	Total
Employee benefits Salaries and wages Labor and health insurance Pension Other Depreciation expenses Amortization expenses	36,480 3,977 1,983 1,854 8,037 8,331	45,693 3,695 1,866 1,756 15,717 2,408	82,173 7,672 3,849 3,610 23,754 10,739	37,726 4,189 2,109 1,938 8,755 7,902	50,600 4,309 2,133 1,977 22,986 2,406	88,326 8,498 4,242 3,915 31,741 10,308

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 Group:

A. Loans to other parties:

==> picture [450 x 165] intentionally omitted <==

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

(Expressed in Thousands of New Taiwan Dollars)
Num Name of Name of Account Related Highest Ending Actual Range Natur Transacti Reasons for Allowance Collateral Individual Maximum
ber lender borrower name party balance of balance usage of e of on short-term for bad funding loan limit of
financing amount interest financ amount financing debt Name Value limits fund
to other during the rates ing for Amount financing
parties period during business
during the the between
period period two
parties
0 Abnova Abnova-G Other Yes 5,000 5,000 2,283 - 2 - Operating - - 129,199 516,797
Corporation mbH receivabl turnover for
es-relate subsidiaries
d party
----- 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 audited or reviewed by accountants.
The individual financing amount to one entity that have business transaction with the Company shall not exceed the total transaction amount.
The total amount for short-term financing to one entity shall not exceed 10% (inclusive) of the Company’s net worth in the latest financial statements audited or reviewed by auditors.

B. Guarantees and endorsements for other parties: None.

144 -

Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

C. Securities held as of December 31, 2022 (excluding investment in subsidiaries, associates and joint ventures):

	Unit: New Taiwan Dollars per share	Unit: New Taiwan Dollars per share	Unit: New Taiwan Dollars per share
	Ending balance	Highest

				Unit: New Taiwan Dollars per share	Unit: New Taiwan Dollars per share	Unit: New Taiwan Dollars per share	Unit: New Taiwan Dollars per share	Unit: New Taiwan Dollars per share	Unit: New Taiwan Dollars per share
Name of holder	Category and name of security	Relationship with company	Account name	Ending balance				Highest
				Shares	Carrying amount	Percentage of ownership	Fair value	percentage of ownership	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.
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.
J. Business relationships and significant intercompany transactions: 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, 2022

						Unit: NewTaiwan Dollars pershare	Unit: NewTaiwan Dollars pershare	Unit: NewTaiwan Dollars pershare	Unit: NewTaiwan Dollars pershare	Unit: NewTaiwan Dollars pershare	Unit: NewTaiwan Dollars pershare	Unit: NewTaiwan Dollars pershare
Name of investor	Name of investee	Location	Main businesses and products	Original i amo	nvestment unt	Balance as of December 31, 2022			Highest percentage of ownership	Net income (loss) of investee	Investment profit (loss) recognized by investor	Note
				December 31, 2022	December 31, 2021	Shares	Percentage of ownership	Carrying amount
The Company " " Abnova Holding Corporation " " Abnova (Cayman) Corporation " Wellconn Genomics (Cayman)	Abnova GmbH (Note 5) Abnova Holding Corporation Citil Pharma Incorporated Abnova (Cayman) Corporation Citil Pharma Corporation (Note 6) Wellconn Genomics (Cayman) Corporation (Note 6) Abnova (HK) Limited Abnova Diagnostics Wellconn Genomics (HK) Limited (Note 6)	Germany British Virgin Islands America Cayman Islands Cayman Islands Cayman Islands Hong Kong Japan Hong Kong	Distribution of biological products Investment business R&D of cell therapy technology Investment business Investment business Investment business Investment business R&D, manufacturing and sales of medical device, etc., testing services Investment business	818 80,921 888 80,000 - - 51,286 20,916 -	818 107,946 888 80,000 1,843 25,182 51,286 20,916 25,182	(Note4) 52,700 2,890,000 2,605,000 - - 1,670,000 1,800,000 -	100.00% 100.00% 40.00% 100.00% - % - % 100.00% 100.00% - %	(2,809) 97,014 550 96,913 - - 90,423 5,604 -	- % - % - % - % - % - % - % - % - %	- (4,336) - (4,283) - - (1,898) (2,155) -	- (4,336) - (4,283) - - (1,898) (2,155) -	Subsidiary " Associates Second- tier subsidiary " " " " "

Note 1 ： The above transaction amount was eliminated in the consolidated financial statements.

Note 2 ： The original investment amount of investees was calculated at USD1:TWD30.71 of December 31, 2022. Note 3 ： The original investment amount of investees was calculated at JPY1:TWD0.2324 of December 31, 2022. Note 4 ： The investee is a limited company with no shares issued.

Note 5 ： The investee is a subsidiary of the Company, and the net amount after deducting its receivables was listed in “Other non-current liabilities”. Note 6 ： The investee was liquidated in 2022.

145 -

Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(3) Information on investment in Mainland China:

A. The names of investees in Mainland China, the main businesses and products, and other information:

					(Expressed in Thousands of New Taiwan Dollars)	(Expressed in Thousands of New Taiwan Dollars)	(Expressed in Thousands of New Taiwan Dollars)	(Expressed in Thousands of New Taiwan Dollars)	(Expressed in Thousands of New Taiwan Dollars)	(Expressed in Thousands of New Taiwan Dollars)	(Expressed in Thousands of New Taiwan Dollars)	(Expressed in Thousands of New Taiwan Dollars)	(Expressed in Thousands of New Taiwan Dollars)
Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investm ent (Note 1)	Accumulated outflow of investment from Taiwan as of January 1, 2022	Investment flows		Accumulated outflow of investment from Taiwan as of December 31, 2022	Net income (loss) of investee	Percentage of ownership	Highest percentage of ownership	Investment profit (loss) recognized by investor	Book value	Accumulate d remittance of earnings in current period
					Outflow	Inflow
Abnova Diagnostics (Dongguan) Limited(Note 4、7)	R&D, manufacturin g and sales of medical device	44,962	(1)	44,962	-	-	-	(1,847)	- %	- %	(1,847)	-	Abnova Diagnostics (Dongguan) Limited(Not e 4、7)

B. Limitation on investment in Mainland China:

Name	Accumulated Investment in Mainland China as of December 31, 2022	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment (Note 5)
The Company	-	-	775,196

Note 1 ： Investment methods are classified into the following two categories:

Remit investment to Mainland China through a third region.
Reinvest in Mainland China through an investee in Mainland China.

Note 2 ： The basis for recognition of investment profit and loss is based on the financial statements of the investee audited by accountants or prepared by the company.

Note 3 ： The exchange rate on the financial statement date is converted into New Taiwan Dollars.

Note 4 ： The paid-in capital of the investee was CNY10,200,000 calculated at CNY1:TWD4.408 of December 31, 2022. Note 5 ： The limit is based on 60% of the net worth.

Note 6 ： The above transaction was eliminated in the consolidated financial statements.

Note 7 ： Abnova Diagnostics (Dongguan) Limited had been sold in 2022. Please refer to Note 6(4) for the related information.

C. Significant transactions:

The significant inter-company transactions with the subsidiary in Mainland China, which were eliminated in the preparation of financial statements, are disclosed in “Information on significant transactions”.

(4) Major shareholders ：

Unit: Shares

Shareholding Shareholder’s name	Shares	Percentage
Huang Wilber	3,651,144	6.02%

146 -

Abnova Corporation and Subsidiaries Notes to the Consolidated Financial Statements

14. Segment information

(1) General information

The Group’s main business is the R&D and production of biotechnology and operates only a single industry. The operating decision-makers of the Group evaluate performance and allocate resources based on the company’s overall operating results, and the group is identified as a single reportable segment.

(2) Segment information

The accounting policies of the Group's operating segments are the same as ‘summary of significant accounting policies’ stated in Note 4 to the financial reports, and profit or loss are measured by net operating income, which is as the basis for evaluating the operating segments’ performance.

(3) Reconciliation of segment’s income

The Group’s net operating income reported to the chief operating decision-maker adopts the same measurement method as the income and expenses in the statements of comprehensive income, so the reconciliation items of net operating income are the same as those in the statements of comprehensive income.

147 -
(4) Geographic information

In presenting information on the basis of geography, segment revenue was based on the geographical location of customers, while segment assets were based on the geographical location of the assets. Noncurrent assets include property, plant and equipment, intangible assets and other assets, excluding financial instruments, deferred tax assets, assets of post-employment benefits and guarantee deposits paid.

Revenue from external customers Revenue from external customers: Taiwan America England China Japan Germany Other country Total Non-current assets Non-current assets: Taiwan China Japan Total	2022 $ 29,325 192,910 64,738 28,449 28,851 14,424 53,059	2021 68,694 188,435 57,240 44,116 13,396 23,132 56,474
	$ 411,756	451,487
	December 31, 2022 $ 339,607 - 4,723	December 31, 2021 339,559 285 5,897
	$ 344,330	345,741

(5) Major customers

The Group’s income from a single customer accounted for 10% of the operating revenue for the years ended December 31, 2022 and 2021 was as follows:

ded December 31, 2022 and 2021 was as follows:
Customer A Customer B	2022 $ 59,699 -	2021
		47,808 21,817
	$ 59,699	69,625

148 -

Stock Code：4133

Abnova Corporation Parent Company Only Financial Statements

With Independent Auditors’ Report

For the Years Ended December 31, 2022 and 2021

Address ： 9th Fl., No. 108, Jhouzih St., Neihu District, Taipei City Telephone ： (02)8751-1888

149 -

Independent Auditors’ Report

To the Board of Directors of Abnova Corporation:

Opinion

We have audited the financial statements of Abnova Corporation (“the Company”), which comprise the balance sheets as of December 31, 2022 and 2021, 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, 2022 and 2021, 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:

1. 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”.

150 -

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 consistency 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
151 -

misstatement resulting from fraud is higher than for one resulting from error, as 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-SupervisoryCompetent Securitities-Six-0940100754 Authority Financial-SupervisoryApprovedSecuritities-Auditingcertified No. 1070304941 February 24, 2023

152 -

Abnova Corporation

Balance Sheets

December 31, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

December 31, 2022 Amount ％ $ 362,971 27 246 - 59,999 4 2,452 - 396,079 29 6,932 1 849 - 1,060 -	December 31, 2022 Amount % $ 2,622 - 14,995 1 36,541 3 2,015 - 6,778 - 4,555 -	December 31, 2021 Amount % 2,638 - 11,480 1 33,048 3 4,353 - 6,295 - 22,439 2
	67,506 4	80,253 6
	5,804 - 3,686 - 526 -	- - 560 - 623 -
830,588 61
97,564 7 252,134 18 10,422 1 68,815 5 98,278 7 11,715 1
	10,016 -	1,183 -
	77,522 4	81,436 6
	605,536 45 474,527 35 85,642 7 138,196 10 (11,907) (1)	605,536 47 474,527 37 82,766 6 39,698 3 9,229 1
538,928 39
	1,291,994 96	1,211,756 94
$ 1,369,516 100	$ 1,369,516 100	1,293,192 100

153 -

Abnova Corporation Statements of Comprehensive Income For the years ended December 31, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars) 2022 2021 Amount ％ Amount ％ 4000 Operating revenue (Note 6(15) and Note 7) $ 410,320 100 450,383 100 5000 Operating costs (Note 6(5)) (210,327) (51) (254,325) (56) Net gross profit 199,993 49 196,058 44 5920 Add: Realized loss (profit) from sales (Note 7) - - 85 - 199,993 49 196,143 44 Operating expenses: 6100 Marketing expenses (40,349) (10) (39,812) (9) 6200 Administrative expenses (41,139) (10) (44,940) (10) 6300 R&D expenses (48,740) (12) (53,140) (12) 6450 Expected credit loss (Note 6(3)) (698) - (1,201) - Total operating expenses (130,926) (32) (139,093) (31) Net operating income 69,067 17 57,050 13 Non-operating income and expenses (Note 6(17)): 7100 Interest income 3,463 1 395 - 7010 Other income 800 - 2,407 - 7020 Other gains and losses 26,053 6 (8,221) (2) 7050 Finance cost (132) - (186) - 7375 Share of subsidiaries, associates and joint ventures income accounted for using equity method (Note 6(6)) (4,336) (1) (15,210) (3) Total non-operating income and expenses 25,848 6 (20,815) (5) Profit from continuing operations before tax 94,915 23 36,235 8 7950 Tax expense (Note 6(12)) 20,072 5 7,866 2 Profit 74,843 18 28,369 6 Other comprehensive income: 8310 Components of other comprehensive income that will not be reclassified to profit or loss 8311 Remeasurements of defined benefit plans 304 - 388 - 8330 Share of subsidiaries, associates and joint ventures other comprehensive income accounted for using equity method－ components that will not be reclassified to profit or loss 28,730 7 11,345 3 8349 Less: Income tax related to components of other comprehensive income that will not be reclassified to profit or loss - - - - Components of other comprehensive income that will not be reclassified to profit or loss 29,034 7 11,733 3 8360 Components of other comprehensive income (loss) that may be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 4,216 1 (3,108) (1) 8399 Less: Income tax related to components of other comprehensive income that may be reclassified to profit or loss - - - - Components of other comprehensive income (loss) that may be reclassified to profit or loss 4,216 1 (3,108) (1) Other comprehensive income, net of tax 33,250 8 8,625 2 Total comprehensive income $ 108,093 26 36,994 8 Basic earnings per share (NT dollars)(Note 6(14)) Basic earnings per share (NT dollars) $ 1.24 0.47 Diluted earnings per share (NT dollars) $ 1.23 0.47	(Expressed in Thousands of New Taiwan Dollars) 2022 2021 Amount ％ Amount ％ 4000 Operating revenue (Note 6(15) and Note 7) $ 410,320 100 450,383 100 5000 Operating costs (Note 6(5)) (210,327) (51) (254,325) (56) Net gross profit 199,993 49 196,058 44 5920 Add: Realized loss (profit) from sales (Note 7) - - 85 - 199,993 49 196,143 44 Operating expenses: 6100 Marketing expenses (40,349) (10) (39,812) (9) 6200 Administrative expenses (41,139) (10) (44,940) (10) 6300 R&D expenses (48,740) (12) (53,140) (12) 6450 Expected credit loss (Note 6(3)) (698) - (1,201) - Total operating expenses (130,926) (32) (139,093) (31) Net operating income 69,067 17 57,050 13 Non-operating income and expenses (Note 6(17)): 7100 Interest income 3,463 1 395 - 7010 Other income 800 - 2,407 - 7020 Other gains and losses 26,053 6 (8,221) (2) 7050 Finance cost (132) - (186) - 7375 Share of subsidiaries, associates and joint ventures income accounted for using equity method (Note 6(6)) (4,336) (1) (15,210) (3) Total non-operating income and expenses 25,848 6 (20,815) (5) Profit from continuing operations before tax 94,915 23 36,235 8 7950 Tax expense (Note 6(12)) 20,072 5 7,866 2 Profit 74,843 18 28,369 6 Other comprehensive income: 8310 Components of other comprehensive income that will not be reclassified to profit or loss 8311 Remeasurements of defined benefit plans 304 - 388 - 8330 Share of subsidiaries, associates and joint ventures other comprehensive income accounted for using equity method－ components that will not be reclassified to profit or loss 28,730 7 11,345 3 8349 Less: Income tax related to components of other comprehensive income that will not be reclassified to profit or loss - - - - Components of other comprehensive income that will not be reclassified to profit or loss 29,034 7 11,733 3 8360 Components of other comprehensive income (loss) that may be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 4,216 1 (3,108) (1) 8399 Less: Income tax related to components of other comprehensive income that may be reclassified to profit or loss - - - - Components of other comprehensive income (loss) that may be reclassified to profit or loss 4,216 1 (3,108) (1) Other comprehensive income, net of tax 33,250 8 8,625 2 Total comprehensive income $ 108,093 26 36,994 8 Basic earnings per share (NT dollars)(Note 6(14)) Basic earnings per share (NT dollars) $ 1.24 0.47 Diluted earnings per share (NT dollars) $ 1.23 0.47	(Expressed in Thousands of New Taiwan Dollars) 2022 2021 Amount ％ Amount ％ 4000 Operating revenue (Note 6(15) and Note 7) $ 410,320 100 450,383 100 5000 Operating costs (Note 6(5)) (210,327) (51) (254,325) (56) Net gross profit 199,993 49 196,058 44 5920 Add: Realized loss (profit) from sales (Note 7) - - 85 - 199,993 49 196,143 44 Operating expenses: 6100 Marketing expenses (40,349) (10) (39,812) (9) 6200 Administrative expenses (41,139) (10) (44,940) (10) 6300 R&D expenses (48,740) (12) (53,140) (12) 6450 Expected credit loss (Note 6(3)) (698) - (1,201) - Total operating expenses (130,926) (32) (139,093) (31) Net operating income 69,067 17 57,050 13 Non-operating income and expenses (Note 6(17)): 7100 Interest income 3,463 1 395 - 7010 Other income 800 - 2,407 - 7020 Other gains and losses 26,053 6 (8,221) (2) 7050 Finance cost (132) - (186) - 7375 Share of subsidiaries, associates and joint ventures income accounted for using equity method (Note 6(6)) (4,336) (1) (15,210) (3) Total non-operating income and expenses 25,848 6 (20,815) (5) Profit from continuing operations before tax 94,915 23 36,235 8 7950 Tax expense (Note 6(12)) 20,072 5 7,866 2 Profit 74,843 18 28,369 6 Other comprehensive income: 8310 Components of other comprehensive income that will not be reclassified to profit or loss 8311 Remeasurements of defined benefit plans 304 - 388 - 8330 Share of subsidiaries, associates and joint ventures other comprehensive income accounted for using equity method－ components that will not be reclassified to profit or loss 28,730 7 11,345 3 8349 Less: Income tax related to components of other comprehensive income that will not be reclassified to profit or loss - - - - Components of other comprehensive income that will not be reclassified to profit or loss 29,034 7 11,733 3 8360 Components of other comprehensive income (loss) that may be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 4,216 1 (3,108) (1) 8399 Less: Income tax related to components of other comprehensive income that may be reclassified to profit or loss - - - - Components of other comprehensive income (loss) that may be reclassified to profit or loss 4,216 1 (3,108) (1) Other comprehensive income, net of tax 33,250 8 8,625 2 Total comprehensive income $ 108,093 26 36,994 8 Basic earnings per share (NT dollars)(Note 6(14)) Basic earnings per share (NT dollars) $ 1.24 0.47 Diluted earnings per share (NT dollars) $ 1.23 0.47	(Expressed in Thousands of New Taiwan Dollars) 2022 2021 Amount ％ Amount ％ 4000 Operating revenue (Note 6(15) and Note 7) $ 410,320 100 450,383 100 5000 Operating costs (Note 6(5)) (210,327) (51) (254,325) (56) Net gross profit 199,993 49 196,058 44 5920 Add: Realized loss (profit) from sales (Note 7) - - 85 - 199,993 49 196,143 44 Operating expenses: 6100 Marketing expenses (40,349) (10) (39,812) (9) 6200 Administrative expenses (41,139) (10) (44,940) (10) 6300 R&D expenses (48,740) (12) (53,140) (12) 6450 Expected credit loss (Note 6(3)) (698) - (1,201) - Total operating expenses (130,926) (32) (139,093) (31) Net operating income 69,067 17 57,050 13 Non-operating income and expenses (Note 6(17)): 7100 Interest income 3,463 1 395 - 7010 Other income 800 - 2,407 - 7020 Other gains and losses 26,053 6 (8,221) (2) 7050 Finance cost (132) - (186) - 7375 Share of subsidiaries, associates and joint ventures income accounted for using equity method (Note 6(6)) (4,336) (1) (15,210) (3) Total non-operating income and expenses 25,848 6 (20,815) (5) Profit from continuing operations before tax 94,915 23 36,235 8 7950 Tax expense (Note 6(12)) 20,072 5 7,866 2 Profit 74,843 18 28,369 6 Other comprehensive income: 8310 Components of other comprehensive income that will not be reclassified to profit or loss 8311 Remeasurements of defined benefit plans 304 - 388 - 8330 Share of subsidiaries, associates and joint ventures other comprehensive income accounted for using equity method－ components that will not be reclassified to profit or loss 28,730 7 11,345 3 8349 Less: Income tax related to components of other comprehensive income that will not be reclassified to profit or loss - - - - Components of other comprehensive income that will not be reclassified to profit or loss 29,034 7 11,733 3 8360 Components of other comprehensive income (loss) that may be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 4,216 1 (3,108) (1) 8399 Less: Income tax related to components of other comprehensive income that may be reclassified to profit or loss - - - - Components of other comprehensive income (loss) that may be reclassified to profit or loss 4,216 1 (3,108) (1) Other comprehensive income, net of tax 33,250 8 8,625 2 Total comprehensive income $ 108,093 26 36,994 8 Basic earnings per share (NT dollars)(Note 6(14)) Basic earnings per share (NT dollars) $ 1.24 0.47 Diluted earnings per share (NT dollars) $ 1.23 0.47
Amount $ 410,320 (210,327)		Amount 450,383 (254,325)
199,993 -	49 -	196,058 85	44 -
199,993	49	196,143	44
(40,349) (41,139) (48,740) (698)	(10) (10) (12) -	(39,812) (44,940) (53,140) (1,201)	(9) (10) (12) -
(130,926)	(32)	(139,093)	(31)
69,067	17	57,050	13
3,463 800 26,053 (132) (4,336)	1 - 6 - (1)	395 2,407 (8,221) (186) (15,210)	- - (2) - (3)
25,848	6	(20,815)	(5)
94,915 20,072	23 5	36,235 7,866	8 2
74,843	18	28,369	6
304 28,730 -	- 7 -	388 11,345 -	- 3 -
29,034	7	11,733	3
4,216 -	1 -	(3,108) -	(1) -
4,216	1	(3,108)	(1)
33,250	8	8,625	2
$ 108,093	26	36,994	8
$	1.24		0.47
$	1.23		0.47

154 -

Abnova Corporation Statements of Changes in Equity For the years ended December 31, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Shares	Capital surplus	Retained	earnings	Other equity interest	Other equity interest	Total equity
				Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income
Ordinary shares		Legal reserve	Unappropriated retained earnings
$ 605,536 - -	474,527 - -	78,984 - -	51,055 28,369 388	(8,070) - (3,108)	9,062 - 11,345	1,211,094 28,369 8,625
-	-	-	28,757	(3,108)	11,345	36,994
- -	- -	3,782 -	(3,782) (36,332)	- -	- -	- (36,332)
605,536 - -	474,527 - -	82,766 - -	39,698 74,843 304	(11,178) - 4,216	20,407 - 28,730	1,211,756 74,843 33,250
-	-	-	75,147	4,216	28,730	108,093
- - -	- - -	2,876 - -	(2,876) (27,855) 54,082	- - -	- - (54,082)	- (27,855) -
$ 605,536	474,527	85,642	138,196	(6,962)	(4,945)	1,291,994

155 -

Abnova Corporation Statements of Cash Flows For the years ended December 31, 2022 and 2021

(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 Interest expense Interest income Share of subsidiaries, associates and joint ventures losses accounted for using equity method Other Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Changes in operating assets: Notes receivable Accounts receivable Other receivables Inventories Prepayments Other current assets Other non-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 Cash refund from capital reduction of investees accounted for using equity method Acquisition of property, plant and equipment Decrease (Increase) in guarantee deposits paid Acquisition of intangible assets Increase in other current financial assets Decrease in other non-current assets Increase (Decrease) in other non-current liabilities Increase in prepayments for business facilities Net cash flows (outflows) used in investing activities Cash flows from financing activities: Payment of lease liabilities Cash dividends paid Net cash flows from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2022 $ 94,915 21,324 10,739 698 132 (3,463) 4,336 -	2021 36,235 22,322 10,308 1,201 186 (395) 15,210 (86)
	33,766	48,746
	194 (12,344) (300) 8,583 2,789 726 -	315 (3,684) (94) 35,276 (2,968) (4,554) (8)
	(352)	24,283
	(16) 3,515 3,493 (17,884)	369 (5,477) (831) 18,982
	(10,892)	13,043
	(11,244)	37,326
	22,522	86,072
	117,437 3,016 (132) (5,212)	122,307 407 (186) (11,820)
	115,109	110,708
	- 21,675 (1,390) (46) (5,240) (304) 66 (97) (7,231)	(811) - (642) 250 (104) (2) - 234 (88)
	7,433	(1,163)
	(7,421) (27,855)	(7,464) (36,332)
	(35,276)	(43,796)
	87,266 275,705	65,749 209,956
	$ 362,971	275,705

156 -

Abnova Corporation Notes to the Financial Statements For the years ended December 31, 2022 and 2021 (Expressed in thousands of New Taiwan Dollars, unless specified otherwise)

1. Company history

Abnova 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 sell 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 24, 2023.

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, 2022.
‧Amendments to IAS 16 “Property, Plant and Equipment－Proceeds Before Intended Use”
‧Amendments to IAS 37 “Onerous Contracts－Cost of Fulfilling a Contract”
‧ Annual Improvements to IFRS Standards 2018-2020
‧ Amendments to IFRS 3 “Reference to the Conceptual Framework”
(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, 2023, would not have a significant impact on its financial statements.

‧ 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”
157 -

Abnova Corporation Notes to the Financial Statements (Cont.)

(3) The impact of IFRS issued by IASB but not yet endorsed by the FSC

The following new and amended standards, which may be relevant to the Company, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Standards or Interpretations Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”	Content of amendment The current IAS 1 provided that with respect to classification as current, an entity’s right to defer settlement for at least 12 months is subject to the entity complying with conditions after the reporting period. The amendment deleted the requirement that the right shall be unconditional and instead requires that the right must exist and be substantive at the end of the reporting period. The amendments clarify how an entity classifies debt and other financial liabilities as current or non- current with its own equity instruments for the settlement of a liability (such as convertible corporate bonds).	Effective date per IASB
		January 1, 2024

The Company is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its financial position and financial performance. The results thereof will be disclosed when the Company completes its evaluation.

The Company does not expect the following other new and amended standards, which have yet to be endorsed by the FSC, to 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”
‧ Amendments to IAS 1 “Non-current Liabilities with Covenants”
‧ Amendments to IFRS 16 “Lease Liability in a Sale and Leaseback”

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(16).
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
158 -

Abnova Corporation Notes to the Financial Statements (Cont.)

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.
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
159 -

Abnova Corporation Notes to the Financial Statements (Cont.)

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.
(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).
(c) Impairment of financial assets
- 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.
160 -

Abnova Corporation Notes to the Financial Statements (Cont.)

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.

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.

(7) Inventories
A. The perpetual inventory system is adopted, and the acquisition costs are recorded in the account. The
161 -

Abnova Corporation Notes to the Financial Statements (Cont.)

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, semifinished 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) Non-current assets held for sale
In the first quarter of 2022, the Company passed the resolution to sell the equity of the subsidiary made by the Board of Directors, therefore, the accounting policy related to non-current assets held for sale began to apply from March 31, 2022.
When the carrying amount of the disposal group comprising of non-current assets or assets and liabilities is highly probable to be recovered mainly through a sale transaction rather than continuing use, it is classified as held for sale. Assets or components of disposal groups are remeasured according to the accounting policy of the Company before classifying to be held for sale. The disposal groups classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell. Impairment losses of any disposal group are first apportioned to goodwill and then apportioned to the remaining assets and liabilities on a pro rata basis. However, the loss will not be allocated to assets that are not within the scope of asset impairment under IAS 36, and the aforementioned items will continue to be measured in accordance with the accounting policy of the Company. Impairment losses recognized for the classification as held for sale and gains and losses arising from the subsequent remeasurements are recognized in profit or loss, provided that gains on reversal cannot exceed the cumulative impairment loss recognized.
When intangible assets and property, plant and equipment are classified as held for sale, they are no longer depreciated or amortized. In addition, when an associate recognized using the equity method is classified as held for sale, the equity method will cease to be adopted.
(9) 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.
162 -

Abnova Corporation Notes to the Financial Statements (Cont.)

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 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.

(10) 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.
(11) 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

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 10 years (c) Office equipment 3 to 8 years (d) Leasehold improvements 3 to 8 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.

(12) 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.

163 -

Abnova Corporation Notes to the Financial Statements (Cont.)

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 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;
(c) amounts expected to be payable under a residual value guarantee; and
(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
164 -

Abnova Corporation Notes to the Financial Statements (Cont.)

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.

(13) 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 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
5 to 30 years
3 years

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

(14) 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.
(15) 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

165 -

Abnova Corporation Notes to the Financial Statements (Cont.)

over the channel and price to sell the products, and there is no unfulfilled obligation 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.

(16) Employee benefits
A. Defined contribution plans
Obligations for contributions of pension to defined contribution plans are expensed as the related service is provided. Prepaid contribution is recognized as an asset to the extent that they will result in a return of cash or a reduction in future payments.
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.
(17) 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
166 -

Abnova Corporation Notes to the Financial Statements (Cont.)

  - 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 when they reserve, using tax rates enacted or substantively enacted at the reporting date.

  - 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 tax assets and liabilities are offset if the following criteria are met:

  - 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.

(18) 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.
(19) 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.

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.

(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.
167 -

Abnova Corporation Notes to the Financial Statements (Cont.)

6. Explanation of significant accounts

(1) Cash and cash equivalents

Cash Checking account Demand deposits Time deposits	December 31, 2022 $ 566 716 159,784 201,905	December 31, 2021 399 714 125,336 149,256
	$ 362,971	275,705

The term of the Company’s time deposits is three months to one year. 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 exchange rate risk, interest rate risk, and sensitivity analysis of the financial assets and liabilities.

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

Equity instruments measured at fair value through other comprehensive income: Foreign non-listed (non-OTC-listed) stocks －Hukui Biotechnology Corporation (Samoa)	December 31, 2022 $ -	December 31, 2021 -

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.

The Company did not dispose strategic investments in 2022 and 2021, and the accumulated profits and losses during these periods have not been made for any transfer within the equity.

B. Please refer to Note 6(19) for information on credit risks and market risks.
C. As of December 31, 2022 and 2021, the aforementioned financial assets were not pledged as longterm loans and financing facilities.
(3) Notes and accounts receivable

Notes receivable Accounts receivable Less: Loss allowance	December 31, 2022 $ 246 68,151 (8,152)	December 31, 2021 440 62,802 (14,449)
	$ 60,245	48,793

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	December 31, 2022	December 31, 2022	December 31, 2022	Loss allowance provision -
	Gross carrying amount $ 26	Weighted-avera ge loss rate
		1.51%

168 -

Abnova Corporation Notes to the Financial Statements (Cont.)

December 31, 2021	December 31, 2021	Loss allowance provision - 11,590
Gross carrying amount $ 12 11,590	Weighted-avera ge loss rate
	4.22% 100.00%
$ 11,602		11,590

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, 2022	December 31, 2022	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	Weighted-avera ge loss rate
$ 68,371		8,152
		Loss allowance provision 149 328 119 288 331 205 1,439
Gross carrying amount $ 42,100 5,206 862 988 759 286 1,439	Weighted-avera ge loss rate
	0.35% 6.30% 13.76% 29.15% 43.66% 71.63% 100.00%
$ 51,640		2,859

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 Balance at December 31	2022 $ 14,449 698 (6,995)	2021 13,248 1,201 -
	$ 8,152	14,449

As of December 31, 2022 and 2021, 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, 2022 $ 2,452 -	December 31, 2021 1,566 139
	$ 2,452	1,705

169 -

Abnova Corporation Notes to the Financial Statements (Cont.)

(5) Inventories

ventories
Raw materials and supplies Semi-finished goods Work in progress Finished goods Merchandise Testing instruments	December 31, 2022 $ 21,973 239,258 6,503 119,329 6,364 2,652	December 31, 2021 24,360 247,335 2,498 126,615 6,466 4,043
	$ 396,079	411,317

The components of cost of sales for the years ended December 31, 2022 and 2021 are as follows:

2022 Sales of inventories transferred $ 163,554 Inventory disposal loss 60,016 Gain from price recovery of inventory valuation and obsolescence (13,243) Total $ 210,327 As of December 31, 2022 and 2021, the inventories were not pledged as collateral.	2022 Sales of inventories transferred $ 163,554 Inventory disposal loss 60,016 Gain from price recovery of inventory valuation and obsolescence (13,243) Total $ 210,327 As of December 31, 2022 and 2021, the inventories were not pledged as collateral.	2021 203,086 60,229 (8,990)
	$ 210,327	254,325

(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 Abnova-GmbH (Note) Associate Citil Pharma Incorporated	December 31, 2022 $ 97,014 (2,809) 550	December 31, 2021 90,134 (2,809) 495
	$ 94,755	87,820

Note: The net amount deducted from receivables as of December 31, 2022 and 2021 were listed in other noncurrent liabilities.

The Company paid an investment of $811,000 on July 9, 2021 and acquired 40% of the shares of Citil Pharma Incorporated, thus obtaining significant influence over the company.

Abnova Holding Corporation reduced its capital to compensate deficits and respectively refunded $5,711,000 and $21,675,000 of capital shares in 2022. The legal registration process was completed. As of December 31, 2022 and 2021, the investment adopting equity method were not pledged as collateral.

Share attributable to the Company: Net loss from continuing operations	2022 $ (4,336)	2021 (15,210)

For information on the Company’s subsidiaries, please refer to the 2022 consolidated financial statements. As of December 31, 2022 and 2021, the investment adopting equity method were not pledged as collateral.

170 -

Abnova Corporation Notes to the Financial Statements (Cont.)

(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, 2022 and 2021 were as follows:

Land	Buildings and structures	Machiner y and equipment	Office equipment	Leasehold improvem ents	Other equipment	Unfinished constructi on and equipment pending acceptance	Total
$ 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
$ 137,911 - - -	101,747 - - -	183,690 338 - (605)	26,355 - - (433)	11,386 - - -	8,619 304 388 (217)	1,380 - (388) -	471,088 642 - (1,255)
$ 137,911	101,747	183,423	25,922	11,386	9,094	992	470,475
$ - - -	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
$ - - -	17,807 5,997 -	128,427 8,203 (605)	25,880 298 (433)	11,382 2 -	8,289 323 (217)	- - -	191,785 14,823 (1,255)
$ -	23,804	136,025	25,745	11,384	8,395	-	205,353
$ 137,911	71,946	41,642	80	-	355	200	252,134
$ 137,911	77,943	47,398	177	2	699	992	265,122
$ 137,911	83,940	55,263	475	4	330	1,380	279,303

171 -

Abnova 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 $ 26,600 11,030	Transportatio n equipment 2,954 -	Total 29,554 11,030
$ 37,630	2,954	40,584
$ 24,664 1,936	1,552 1,402	26,216 3,338
$ 26,600	2,954	29,554
20,834 6,919	1,942 467	22,776 7,386
$ 27,753	2,409	30,162
$ 13,916 6,918	1,361 581	15,277 7,499
$ 20,834	1,942	22,776
$ 9,877	545	10,422
$ 5,766	1,012	6,778
$ 10,748	191	10,939

172 -

Abnova Corporation Notes to the Financial Statements (Cont.)

(9) Intangible assets

The movements of costs, amortization and impairment of the intangible assets for the years ended December 31, 2022 and 2021 were as follows:

Development expenditure of monoclonal antibody hybridoma $ 306,210 5,240 6,655 $ 318,105	Royalty	Total
	75,616 - - 75,616 75,512 104 - - 75,616 19,000 2,409 21,409 16,594 2,406 19,000 54,207 56,616 58,918	381,826 5,240 6,655 393,721 374,999 104 3,424 3,299 381,826 314,167 10,739 324,906 303,859 10,308 314,167 68,815 67,659 71,140

$ 299,487 - 3,424 3,299
$ 306,210
$ 295,167 8,330
$ 303,497
$ 287,265 7,902
$ 295,167
$ 14,608
$ 11,043
$ 12,222

The amortization expenses of intangible assets for the years ended December 2022 and 2021 were presented in the following items in the statements of comprehensive income:

Operating costs Operating expenses	2022 $ 8,331 2,408	2021 7,902 2,406
	$ 10,739	10,308

173 -

Abnova Corporation

Notes to the Financial Statements (Cont.)

(10) Lease liabilities

The carrying amount of lease liabilities were as follows:

December 31, 2022 December 31, 2021 Current $ 6,778 6,295 Non-current $ 3,686 560 or the maturity analysis, please refer to Note 6(18) Financial instruments. he amount recognized in profit or loss were as follows: 2022 2021 Interest on lease liabilities $ 132 186 Expenses relating to short-term leases $ 2,825 2,623 he amount recognized in the statements of cash flows for the Company were as follows: 2022 2021 Total cash outflow for leases $ 10,378 10,273	December 31, 2022 $ 6,778	December 31, 2021 6,295
	$ 3,686	560
		2021 186
	$ 2,825	2,623

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

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, 2022, which typically run for a period of three to six years.

B. Other leases

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

(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, 2022 $ 5,743 (7,191)	December 31, 2021 5,725 (6,862)
	$ (1,448)	(1,137)

(a) Composition of plan assets

(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, 2022 and 2021 were as follows:

174 -

Abnova Corporation Notes to the Financial Statements (Cont.)

2022 Defined benefit obligations at January 1 $ 5,725 Current service cost and interest cost 40 Remeasurements loss of net defined benefit obligations －Actuarial loss (benefit) arising from experience adjustments 743 －Actuarial loss arising from changes in demographic hypothesis - －Actuarial benefit arising from changes in financial assumptions (530) Benefits paid (235) Defined benefit obligations at December 31 $ 5,743	2022 Defined benefit obligations at January 1 $ 5,725 Current service cost and interest cost 40 Remeasurements loss of net defined benefit obligations －Actuarial loss (benefit) arising from experience adjustments 743 －Actuarial loss arising from changes in demographic hypothesis - －Actuarial benefit arising from changes in financial assumptions (530) Benefits paid (235) Defined benefit obligations at December 31 $ 5,743	2021 5,977 24 (38) 7 (245) -
	$ 5,743	5,725

(c) Movements in fair value of plan assets

The movements in the fair value of the plan assets for the years ended December 31, 2022 and 2021 were as follows:

Fair value of plan assets at January 1 Interest income Remeasurements loss of net defined benefit obligations －Return on plan assets excluding interest income Contributions paid by the employer Benefits paid Fair value of plan assets at December 31	2022 $ (6,862) (48) (516) - 235	2021 (6,720) (27) (112) (3) -
	$ (7,191)	(6,862)

(d) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the years ended December 31, 2022 and 2021 were as follows:

Net interest of net defined benefit liabilities (assets) Operating costs Operating expenses	2022 $ (8)	2021 (3)
	$ (6) (2)	(2) (1)
	$ (8)	(3)

(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, 2022 1.40% 3.00%	December 31, 2021 0.70% 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

175 -

Abnova Corporation Notes to the Financial Statements (Cont.)

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, 2022 and 2021, if the actuarial assumptions had changed, the impact on the present value of the defined benefit obligations shall be as follows:

December 31, 2022 Discount rate (0.25% variable) Future salary increase rate (0.25% variable) December 31, 2021 Discount rate (0.25% variable) Future salary increase rate (0.25% variable)	Influences of defined benefit obligations	Influences of defined benefit obligations
	Increase (175) 166 (188) 179	Decrease
		182 (161) 196 (173)

There were no changes in the method and assumptions used in the preparation of sensitivity analysis for 2022 and 2021.

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.

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to $3,857,000 and $4,245,000 for the years ended December 31, 2022 and 2021, respectively.

(12) Income taxes

A. Tax expense

The components of the income tax in the years 2022 and 2021 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 The reconciliation of income tax expenses recognized in other Profit from continuing operations before tax Income tax using the Company’s domestic tax rate Nondeductible expenses Tax incentive Overestimation for prior periods Tax expense	2022 $ 6,520 (3,646)	2021 7,177 -
	2,874 17,198	7,177 689
	$ 20,072	7,866
	comprehensive income were as below: 2022 2021 $ 94,915 36,235
	$ 18,983 9,182 (4,447) (3,646)	7,247 3,044 (2,425) -
	$ 20,072	7,866

176 -

Abnova Corporation Notes to the Financial Statements (Cont.)

B. Deferred tax assets and liabilities

Changes in the amount of deferred tax assets for the years ended December 31, 2022 and 2021 were as follows:

Deferred tax liabilities: Balance at January 1, 2022 Recognized in profit or loss Balance at December 31, 2022	Other $ - 5,804
	$ 5,804

Allowance for inventory valuation and obsolescence $ 98,406 (2,648)	Other 11,266 (8,746)	Total 109,672 (11,394)
$ 95,758	2,520	98,278
$ 100,204 (1,798)	10,157 1,109	110,361 (689)
$ 98,406	11,266	109,672

C. Assessment of tax

The Company’s tax returns for the years through 2020 were assessed by the National Taiwan Bureau.

(13) Capital and other equity

A. Ordinary shares

B. Capital surplus

The balances of capital surplus were as follows:

Share premium	December 31, 2022 $ 474,527	December 31, 2021 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

177 -

Abnova Corporation Notes to the Financial Statements (Cont.)

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’ 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

(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.
(c) Earnings distribution

2021 Amount per share Amount Dividends distributed to ordinary shareholders: Cash $ 0.46 27,855	2020 Amount per share Amount 0.6 36,332	2020 Amount per share Amount 0.6 36,332
	Amount per share
	0.6

The amount of dividends on the appropriation of earnings for 2022 had been approved during the board meetings on February 24, 2023. The distribution to shareholders was as follows:

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

178 -

Abnova Corporation

Notes to the Financial Statements (Cont.)

D. Other equity interest

Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	Total 9,229 4,216 28,730 (54,082)
$ (11,178) 4,216 - - $ (6,962) Exchange differences on translation of foreign financial statements	20,407 - 28,730 (54,082) (4,945) Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income
		(11,907)
		Total 992 (3,108) 11,345
$ (8,070) (3,108) - $ (11,178)	9,062 - 11,345 20,407
		9,229

(14) Earnings per share

A. Basic earnings per share

The basic earnings per share of the Company in 2022 and 2021 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

179 -

Abnova Corporation

Notes to the Financial Statements (Cont.)

2022 Profit attributable to ordinary shareholders of the Company $ 74,843 (b) Weighted average number of ordinary shares (in thousands) 2022 Weighted average number of ordinary shares at December 31 (in thousands) (the number of shares at January 1) 60,554	2022 $ 74,843	2021 28,369
		2021 60,554

B. Diluted earnings per share

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

2022 Profit attributable to ordinary shareholders of the Company (diluted) $ 74,843 (b) Weighted average number of ordinary shares (diluted) (in thousands) 2022 Weighted average number of ordinary shares (basic) 60,554 Effect of employee share remuneration 110 Weighted average number of ordinary shares at December 31 (diluted) 60,664	2022 $ 74,843	2021 28,369
		2021 60,554 44
	r 60,664	60,598

180 -

Abnova Corporation

Notes to the Financial Statements (Cont.)

(15) Revenue from contracts with customers

A. Details of revenue

ue from contracts with customers etails of revenue
Primary geographical markets: America Europe Taiwan Other country Main product/service line: Monoclonal antibody Matched antibody Protein Polyclonal antibody Testing instruments Other	2022 $ 196,828 112,624 29,325 71,543	2021 191,317 113,684 68,694 76,688
	$ 410,320	450,383
	$ 132,754 93,223 66,825 30,701 (1,908) 88,725	125,093 145,983 56,338 33,179 15,403 74,387
	$ 410,320	450,383

B. Contract balances

Notes and accounts receivable Less: Loss allowance Total Contract liabilities	December 31, 2022 $ 68,397 (8,152)	December 31, 2021 63,242 (14,449)	January 1, 2021 59,873 (13,248)
	$ 60,245	48,793	46,625
	$ 2,622	2,638	2,269

For details on accounts receivable and its loss allowance, please refer to note 6(3).

The balance of contract liabilities at January 1, 2022 and 2021 recognized as revenue for the years 2022 and 2021 were $864,000 and $359,000, respectively.

181 -

Abnova Corporation

Notes to the Financial Statements (Cont.)

(16) Remuneration to employees and directors

For the years ended December 31, 2022 and 2021, the Company recognized its employee remuneration amounting to $4,179,000 and $1,511,000 respectively; as well as its remuneration to directors and supervisors amounting to $795,000 and $287,000, 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 2022 and 2021.

(17) Non-operating income and expenses

A. Interest income

The details of interest income were as follows:

on-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－other C. Other gains and losses The details of other gains and losses were as follows: Foreign exchange gains (losses) D. Finance cost The details of finance cost were as follows: Other finance expenses	2022 $ 3,463	2021 395
	2022 $ 800	2021 2,407
	2022 $ 26,053	2021 (8,221)
	2022 $ 132	2021 186

182 -

Abnova 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

For credit risk exposure of notes and accounts receivable, please refer to Note 6(3).

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 l cash flow	Within 1 year	1 to 2years	2 to 5years	Over 5 years
	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	-	-
	11,480 33,048 6,937 22,439	11,480 33,048 6,366 22,439	- - 571 -	- - - -	- - - -
$ 73,822	73,904	73,333	571	-	-

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

183 -

Abnova 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:

Foreign currency (inthousands) Financial assets Monetary items USD $ 11,533 EUR 676 GBP 186 JPY 14,659 Non-monetary items USD 3,177 EUR (86) JPY 24,011 Financial liabilities Monetary items USD 333 EUR 106 JPY 4,426 Foreign currency (in thousands) Financial assets Monetary items USD $ 9,287 EUR 830 GBP 140 Non-monetary items USD 3,307 EUR (90) JPY 33,526 CNY 13,833		December 31, 2022	New Taiwan Dollars 354,194 22,132 6,906 3,407 97,564 (2,809) 5,604 10,211 3,463 1,029 New Taiwan Dollars 257,053 25,991 5,230 91,843 (2,809) 8,074 60,075
		Exchange rate USD：TWD 30.71 EUR：TWD 32.72 GBP：TWD 37.09 JPY：TWD 0.2324 USD：TWD 30.71 EUR：TWD 32.72 JPY：USD 0.2324 USD：TWD 30.71 EUR：TWD 32.72 JPY：TWD 0.2324 December 31, 2021
		Exchange rate USD：TWD 27.68 EUR：TWD 31.32 GBP：TWD 37.30 USD：TWD 27.680 EUR：TWD 31.32 JPY：USD 0.0087 CNY：USD 0.1569

184 -

Abnova Corporation Notes to the Financial Statements (Cont.)

Financial liabilities Monetary items USD EUR		December 31, 2021	New Taiwan Dollars 9,331 3,066
	Foreign currency (in thousands) 337 98	Exchange rate USD：TWD 27.68 EUR：TWD 31.32

(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, 2022 and 2021 would have increased (decreased) the net profit after tax by $2,975,000 and $2,206,000, 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, 2022 and 2021, the foreign exchange gains (losses) (including realized and unrealized portions) amounted to $26,053,000 and $(8,221,000), 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 $1,598,000 and $1,253,000 for the years ended December 31, 2022 and 2021, 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:

185 -

Abnova Corporation Notes to the Financial Statements (Cont.)

	December 31, 2022	December 31, 2022	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	-	-	-	-
$ 14,995 36,541 4,555 10,464	- - - -	- - - -	- - - -	- - - -
$ 66,555	-	-	-	-
	December 31, 2021
Carrying amount $ -		Fair value		Total -
	Level 1 -	Level 2 -	Level 3 -
275,705 48,793 1,705 545 2,535	- - - - -	- - - - -	- - - - -	- - - - -
329,283	-	-	-	-
$ 329,283	-	-	-	-

186 -

Abnova Corporation Notes to the Financial Statements (Cont.)

	December 31, 2021	December 31, 2021	December 31, 2021
Carrying amount $ 11,480 33,048 22,439 6,855		Fair value		Total - - - -
	Level 1 - - - -	Level 2 - - - -	Level 3 - - - -
$ 73,822	-	-	-	-

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

(19) Financial risk management
A. Overview

The Company have 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.

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
187 -

Abnova Corporation Notes to the Financial Statements (Cont.)

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.

188 -

Abnova 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
Abnova (Cayman) Corporation
Citil Pharma Corporation
Wellconn Genomics (Cayman) Corporation
Abnova (HK) Limited
Abnova Diagnostics
Wellconn Genomics (HK) Limited
Katoku
Citil Pharma Incorporated
Wellconn Genomics

Relationship with 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
Subsidiary indirectly owned by the Company
Subsidiary indirectly owned by the Company
Subsidiary indirectly owned by the Company
Subsidiary indirectly owned by the Company
Associate of the Company
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 Other related party	2022 $ - -	2021 696 974
	$ -	1,670

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 Other receivables	Relationship Subsidiary	December 31, 2022 $	December 31, 2021 139

189

Abnova Corporation Notes to the Financial Statements (Cont.)

C. Loans to related parties

Related parties Abnova-GmbH Less: Investment additions accounted for using equit method Other non-current liabilities	December 31, 2022 $ 2,283 y (2,809) $ (526)	December 31, 2021 2,185 (2,809)
		(624)

(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 2022 and 2021 were both $5,000,000.

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 research expenses (as R&D expenses) in 2022 and 2021 were $1,575,000 and $1,740,000, respectively.
(b) The Company signed an office leasing contract with other related parties, which will be renewed every year after the expiration. 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 2022 and 2021 was both $648,000.
(c) The Company increased the cash capital to Citil Pharma Incorporated with a total amount of $811,000 on July 9, 2021.
(d) The Company recognized other income from subsidiaries amounting $1,745,000 in 2021.
(e) The Company temporarily received a capital refund of $18,911,000 for the capital reduction to subsidiaries and accounted to non-current liabilities, and the legal registration process was completed in 2022.
(3) Key management personnel transaction

Key management personnel compensation comprised:

Short-term employee benefits edged assets The carrying values of pledged assets were as follows: Pledged assets Object Other current financial assets Customs duty pledged, Forward exchange transactions guarantee Other financial assets－non- current Guarantee deposits paid	2022 $ 9,606 December 31, 2022 $ 849 2,581	2021
		7,976
		December 31, 2021 545 2,535 3,080
	$ 3,430

8. Pledged assets

190 -

Abnova Corporation Notes to the Financial Statements (Cont.)

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 2021 and 2021 were $33,320,000 and $30,033,000, 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: By function 2022 2021 By item Operating cost Operating expenses Total Operating cost Operating expenses Total Employee benefits Salaries and wages 36,480 45,568 82,048 37,726 47,896 85,622 Labor and health insurance 3,977 3,695 7,672 4,189 4,309 8,498 Pension 1,983 1,866 3,849 2,109 2,133 4,242 Remuneration to directors - 2,835 2,835 - 2,327 2,327 Other 1,854 1,756 3,610 1,938 1,977 3,915 Depreciation expenses 8,037 13,287 21,324 8,755 13,567 22,322 Amortization expenses 8,331 2,408 10,739 7,902 2,406 10,308	The employee benefits, depreciation, and amortization expenses categorized by function, were as follows: By function 2022 2021 By item Operating cost Operating expenses Total Operating cost Operating expenses Total Employee benefits Salaries and wages 36,480 45,568 82,048 37,726 47,896 85,622 Labor and health insurance 3,977 3,695 7,672 4,189 4,309 8,498 Pension 1,983 1,866 3,849 2,109 2,133 4,242 Remuneration to directors - 2,835 2,835 - 2,327 2,327 Other 1,854 1,756 3,610 1,938 1,977 3,915 Depreciation expenses 8,037 13,287 21,324 8,755 13,567 22,322 Amortization expenses 8,331 2,408 10,739 7,902 2,406 10,308	The employee benefits, depreciation, and amortization expenses categorized by function, were as follows: By function 2022 2021 By item Operating cost Operating expenses Total Operating cost Operating expenses Total Employee benefits Salaries and wages 36,480 45,568 82,048 37,726 47,896 85,622 Labor and health insurance 3,977 3,695 7,672 4,189 4,309 8,498 Pension 1,983 1,866 3,849 2,109 2,133 4,242 Remuneration to directors - 2,835 2,835 - 2,327 2,327 Other 1,854 1,756 3,610 1,938 1,977 3,915 Depreciation expenses 8,037 13,287 21,324 8,755 13,567 22,322 Amortization expenses 8,331 2,408 10,739 7,902 2,406 10,308	The employee benefits, depreciation, and amortization expenses categorized by function, were as follows: By function 2022 2021 By item Operating cost Operating expenses Total Operating cost Operating expenses Total Employee benefits Salaries and wages 36,480 45,568 82,048 37,726 47,896 85,622 Labor and health insurance 3,977 3,695 7,672 4,189 4,309 8,498 Pension 1,983 1,866 3,849 2,109 2,133 4,242 Remuneration to directors - 2,835 2,835 - 2,327 2,327 Other 1,854 1,756 3,610 1,938 1,977 3,915 Depreciation expenses 8,037 13,287 21,324 8,755 13,567 22,322 Amortization expenses 8,331 2,408 10,739 7,902 2,406 10,308	The employee benefits, depreciation, and amortization expenses categorized by function, were as follows: By function 2022 2021 By item Operating cost Operating expenses Total Operating cost Operating expenses Total Employee benefits Salaries and wages 36,480 45,568 82,048 37,726 47,896 85,622 Labor and health insurance 3,977 3,695 7,672 4,189 4,309 8,498 Pension 1,983 1,866 3,849 2,109 2,133 4,242 Remuneration to directors - 2,835 2,835 - 2,327 2,327 Other 1,854 1,756 3,610 1,938 1,977 3,915 Depreciation expenses 8,037 13,287 21,324 8,755 13,567 22,322 Amortization expenses 8,331 2,408 10,739 7,902 2,406 10,308	The employee benefits, depreciation, and amortization expenses categorized by function, were as follows: By function 2022 2021 By item Operating cost Operating expenses Total Operating cost Operating expenses Total Employee benefits Salaries and wages 36,480 45,568 82,048 37,726 47,896 85,622 Labor and health insurance 3,977 3,695 7,672 4,189 4,309 8,498 Pension 1,983 1,866 3,849 2,109 2,133 4,242 Remuneration to directors - 2,835 2,835 - 2,327 2,327 Other 1,854 1,756 3,610 1,938 1,977 3,915 Depreciation expenses 8,037 13,287 21,324 8,755 13,567 22,322 Amortization expenses 8,331 2,408 10,739 7,902 2,406 10,308	The employee benefits, depreciation, and amortization expenses categorized by function, were as follows: By function 2022 2021 By item Operating cost Operating expenses Total Operating cost Operating expenses Total Employee benefits Salaries and wages 36,480 45,568 82,048 37,726 47,896 85,622 Labor and health insurance 3,977 3,695 7,672 4,189 4,309 8,498 Pension 1,983 1,866 3,849 2,109 2,133 4,242 Remuneration to directors - 2,835 2,835 - 2,327 2,327 Other 1,854 1,756 3,610 1,938 1,977 3,915 Depreciation expenses 8,037 13,287 21,324 8,755 13,567 22,322 Amortization expenses 8,331 2,408 10,739 7,902 2,406 10,308
By function By item	2022			2021
	Operating cost	Operating expenses	Total	Operating cost	Operating expenses	Total
Employee benefits Salaries and wages Labor and health insurance Pension Remuneration to directors Other Depreciation expenses Amortization expenses	36,480 3,977 1,983 - 1,854 8,037 8,331	45,568 3,695 1,866 2,835 1,756 13,287 2,408	82,048 7,672 3,849 2,835 3,610 21,324 10,739	37,726 4,189 2,109 - 1,938 8,755 7,902	47,896 4,309 2,133 2,327 1,977 13,567 2,406	85,622 8,498 4,242 2,327 3,915 22,322 10,308

The complementary information on the number of employees and employee benefits for the years ended December 31, 2022 and 2021 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	2022 110	2021 124
	6	6
	$ 934	867
	$ 789	726
	8.68% $ -	4.76%
		-

191 -

Abnova Corporation Notes to the Financial Statements (Cont.)

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 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.
192 -

Abnova Corporation Notes to the Financial Statements (Cont.)

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 ：

==> picture [450 x 238] intentionally omitted <==

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

(Expressed in Thousands of New Taiwan Dollars)
Num Name of Name of Accou Relate Highest Ending Actual Range Natu Transac Reasons Allowan Collateral Individual Maximu
ber lender borrowe nt d party balance balance usage of re of tion for ce for funding m limit of
r name of amount interes finan amount short-term bad debt loan limits fund
financin during t rates cing for financing Amount financing
g to the during business
other period the between
parties period two
during parties
the
period
Name Value
0 Abnova Abnova Other Yes 5,000 5,000 2,283 - 2 - Operating - - 129,199 516,797
Corporati -GmbH receiv turnover
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----- 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, 2022 (excluding investment in subsidiaries, associates and joint ventures):

entures):	entures):	entures):	entures):
				(Expressedin Thousands ofNewTaiwan Dollars perShare)
Name of holder	Category and name of security	Relationship with company	Account name	Ending balance				Note
				Shares	Carrying amount	Percentage of ownership	Fair value
The Company	Hukui Biotechnology Corporation (Samoa)	-	Financial assets measured at fair value through other comprehensive income	50,000	-	1.32%	-

193 -

Abnova Corporation Notes to the Financial Statements (Cont.)

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.
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, 2022

						(Expressedin Thousands ofNewTa	(Expressedin Thousands ofNewTa	(Expressedin Thousands ofNewTa	(Expressedin Thousands ofNewTa	iwan Dollars	perShare)
Name of investor	Name of investee	Location	Main businesses and products	Original investment amount		Balance as of Decemb		er 31, 2022	Net income (loss) of investee	Investment profit (loss) recognized by investor	Note
				December 31, 2022	December 31, 2021	Shares	Percenta ge of ownershi p	Carrying amount
The Company 〞〞 Abnova Holding Corporation 〞〞 Abnova (Cayman) Corporation 〞 Wellconn Genomics (Cayman) Corporation	Abnova GmbH (Note 4) Abnova Holding Corporation Citil Pharma Incorporated Abnova (Cayman) Corporation Citil Pharma Corporation (Note 5) Wellconn Genomics (Cayman) Corporation (Note 5) Abnova (HK) Limited Abnova Diagnostics Wellconn Genomics (HK) Limited (Note 5)	Germany British Virgin Islands America Cayman Islands Cayman Islands Cayman Islands Hong Kong Japan Hong Kong	Distribution of biological products Investment business R&D of cell therapy technology Investment business Investment business Investment business Investment business R&D, manufacturing and sales of medical device, etc., testing services Investment business	818 80,921 888 80,000 - - 51,286 20,916 -	818 107,946 888 80,000 1,843 25,182 51,286 20,916 25,182	(Note 3) 52,700 2,890,000 2,605,000 - - 1,670,000 1,800,000 -	100.00% 100.00% 40.00% 100.00% - % - % 100.00% 100.00% - %	(2,809) 97,014 550 96,913 - - 90,423 5,604 -	- (4,336) - (4,283) - - (1,898) (2,155) -	- (4,336) - (4,283) - - (1,898) (2,155) -	Subsidiary 〞 Associate Second-tier subsidiary 〞〞〞〞〞

Note 1 ： The original investment amount of investees was calculated at USD1:TWD30.71 of December 31, 2022.

Note 2 ： The original investment amount of investees was calculated at JPY1:TWD0.2324 of December 31, 2022. 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 ： The investee was liquidated in 2022.

194 -

Abnova Corporation Notes to the Financial Statements (Cont.)

(3) Information on investment in Mainland China:

A. Information on investment in Mainland China:

								(Expressed in Thousands of New Taiwan Dollars)	(Expressed in Thousands of New Taiwan Dollars)	(Expressed in Thousands of New Taiwan Dollars)	(Expressed in Thousands of New Taiwan Dollars)	(Expressed in Thousands of New Taiwan Dollars)	(Expressed in Thousands of New Taiwan Dollars)
Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investm ent (Note 1)	Accumulated outflow of investment from Taiwan as of January 1, 2022	Investm	ent flows	Accumulated outflow of investment from Taiwan as of December 31, 2022	Net income (loss) of investee	Percentage of ownership	Highest percentage of ownership	Investment profit (loss) recognized by investor	Book value	Accumulated remittance of earnings in current period
					Outflow	Inflow
Abnova Diagnostics (Dongguan) Limited (Note 4、5)	R&D, manufacturi ng and sales of medical device	44,96 2	(1)	44,962	-	-	-	(1,847)	- %	- %	(1,847)	-	-

B. Limitation on investment in Mainland China:

Accumulated Investment in Mainland China as of December 31, 2022	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment (Note 6)
-	-	775,196

Note 1 ： Investment methods are classified into the following two categories:

Remit investment to Mainland China through a third region.
Reinvest in Mainland China through an investee in Mainland China.

Note 2 ： The basis for recognition of investment profit and loss is based on the financial statements of the investee audited by accountants or prepared by the company.

Note 3 ： The exchange rate on the financial statement date is converted into New Taiwan Dollars.

Note 4 ： The paid-in capital of the investee was CNY10,200,000 calculated at CNY1:TWD4.408 of December 31, 2022.

Note 5 ： Abnova Diagnostics (Dongguan) Limited had been sold in 2022. Please refer to Note 6(4) for the related information. Note 6 ： The limit is based on 60% of the net worth.

C. Significant transactions:

(4) Major shareholders:

Unit: Shares

Shareholding Shareholder’s name	Shares	Percentage
Huang Wilber	3,651,144	6.02%

14. Segment information

Please refer to the 2022 consolidated financial statements.

195 -

Abnova (Taiwan) Corporation

Chairman: Wilber Huang

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

Phone: (02)8751-1888

AI assistant

Abnova — Annual Report 2022

52384_rns_2023-05-29_965735d1-d524-4389-81bc-4c727303d274.pdf

Abnova （ Taiwan ） Corporation

2022 Annual Report

Notice to readers.

Spokesperson

Headquarters, Branches and Plant

Deputy Spokesperson

Taoyuan Plant

Stock Transfer Agent

Auditors

Overseas Securities Exchange

Corporate Website

Table of Contents

I. Letter to Shareholders

I. 2022 Operating Results: (Consolidated Financial Statements)

II. 2023 Business Plan:

1. Business Marketing:

2. Product Development:

III. The effect of external competition, the legal environment, and the overall business environment

1. External Competition:

2. Legal Environment:

3. Overall Business Environment:

II. Company Profile

2.1. Date of Incorporation:

2.2 Company History

2018:

2019:

2020:

2021

2022

III. Corporate Governance Report

3.1. Organization

3.1.1 Organization Chart

3.1.2 Major Corporate Functions

3.2 Information on the Directors, Supervisors and Management Team 3.2.1 Directors and Supervisors 1. Basic Information

2. For directors and supervisors acting as the representatives of institutional shareholders, indicate the names of the institutional shareholders, and the names of its 10 largest shareholders and the holding percentage of each.

Table1: Major shareholders of the institutional shareholders

3. Disclosure of Professional Qualifications of Directors and Independence Analysis of Independent Directors:

3.2.2 Information on the company's President, assistant Presidents, Senior managers, and the chiefs of all the company's divisions and branch units

3.2.3 Remuneration of Directors, Independent Directors, Supervisors, President, and Vice Presidents 1. Remuneration of Directors and Independent Directors

3. The remuneration paid to President and Vice Presidents in the most recent fiscal year (2022):

Range of Remuneration

4. Names and acquisition status of managerial personnels who have acquired new restricted employee shares:

3.3 Corporate Governance 3.3.1 Board of Directors

3.3.2 Performance Evaluation of the Board of Directors

3.3.3 Audit Committee

the independent directors was as follows:

3.3.4 Corporate Governance Implementation Status and Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”

3.3.5 If the company has a remuneration committee or nomination committee in place, the composition and operation of such committee shall be disclosed

(1) Information of Members of the Remuneration Committee

(2) Attendance of Members at Remuneration Committee Meetings

3.3.6 Fulfillment of CSR and Deviations from the "Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies"

3.3.7 Fulfillment of Ethical Corporate Management and Deviations from the "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies"

3.3.8 If the company has adopted corporate governance best-practice principles or related bylaws, disclose how these are to be searched.

3.3.9 Other significant information that will provide a better understanding of the state of the company's implementation of corporate governance may also be disclosed: None.

3.3.10 Internal Control System 1. Statement of Internal Control System

Abnova (Taiwan) Corporation Statement of Internal Control System

3.3.12 Material resolutions of a shareholders meeting or a board of directors meeting during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report

2. Board Meetings:

3.5 Information on replacement of certified public accountant:

3.5.1. Regarding the former certified public accountant:

3.5.2 Regarding the successor certified public accountant:

3.5.3 The reply of former CPAs on Article 10.6.1 and Article 10.6.2.3 of the Standards: Not applicable

3.7.3 Stock pledge with related party: None.

3.8 Relationship information, if among the company's 10 largest shareholders anyone is a related party or a relative within the second degree of kinship of another.

3.9 The total number of shares and total equity stake held in any single enterprise by the company, its directors and supervisors, managerial officers, and any companies controlled either directly or indirectly by the company and total shareholding

IV. Capital Overview

4.1. Capital and Shares 4.1.1 Source of capital stock

4.1.2 Composition of Shareholders

4.1.3 Distribution of Shareholding

4.1.4 List of major shareholders

4.1.5 Information on share prices, net worth per share, earnings per share, dividends per share for the past 2 fiscal years

4.1.6 Company's dividend policy and its state of implementation

Abnova (Taiwan) Corporation 2022 Profit Distribution

4.1.8 Profit-sharing compensation of employees and directors

4.1.9 Share repurchases by the Company: None.

4.8 Capital allocation plans

V. Operational Highlights

Abnova Annual Report 2022