Stock Code ： 4133

Abnova (Taiwan) 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

Notice to readers.

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

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

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Independent Auditors’ Report

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

Opinion

We have audited the financial statements of Abnova (Taiwan) Corporation (“the Company”), which comprise the balance sheets as of December 31, 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”.

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Description of key audit matter:

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

Our principal audit procedures included:

The key audit procedures for the above-mentioned key audit matter based on the understanding of the industrial characteristics of the Company include obtaining statistical information on the sales time and sales status of the products on the shelves in each year provided by the management in the subsequent years to evaluate the 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 misstatement resulting from fraud is higher than for one resulting from error, as

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

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

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

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

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

KPMG

Auditors ：

Securities ：Financial-Supervisory-Securititi Competent es-Six-0940100754 Authority Financial-Supervisory-Securititi Approved-certi es-Auditing-1070304941 fied No. February 24, 2023

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Abnova (Taiwan) 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 ％ $ 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
Amount $ 362,971 246 59,999 2,452 396,079 6,932 849 1,060
		67,506 4	80,253 6
		5,804 - 3,686 - 526 -	- - 560 - 623 -
830,588	61
97,564 252,134 10,422 68,815 98,278 11,715	7 18 1 5 7 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

(See accompanying notes to financial statements.) Manager: WILBER HUANG

Chairman: WILBER HUANG

Accounting supervisor: YA-PING ZHANG

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Abnova (Taiwan) Corporation 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 $ 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
	- 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

(See accompanying notes to financial statements.)

Chairman: WILBER HUANG Manager: WILBER HUANG

Accounting supervisor: YA-PING ZHANG

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(Expressed in Thousands of New Taiwan Dollars)

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

Shares	Capital surplus	Retained	earnings	Other equity interest	Other equity interest	Total equity 1,211,094 28,369 8,625
				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
-	-	-	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

(See accompanying notes to financial statements.) Manager: WILBER HUANG

Chairman: WILBER HUANG

Accounting supervisor: YA-PING ZHANG

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Abnova (Taiwan) 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

(See accompanying notes to financial statements.) Manager: WILBER HUANG

Chairman: WILBER HUANG

Accounting supervisor: YA-PING ZHANG

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Abnova (Taiwan) 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 (Taiwan) Corporation (the “Company”) was legally established with the approval of the Ministry of Economic Affairs (R.O.C.) on January 4, 2002, with registered address at 9th Fl., No. 108, Jhouzih St., Neihu District, Taipei City, Taiwan (R.O.C.). The Company has been actively developing, manufacturing, and 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”

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Abnova (Taiwan) 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.

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

(3) Foreign currency
A. Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Company entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss, except for those differences relating to the following, which are recognized in other comprehensive income:

(a) an investment in equity securities designated as at fair value through other comprehensive income;

(b) a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or

(c) qualifying cash flow hedges to the extent that the hedges are effective.
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

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

counterparty, result in its settlement by issuing equity instruments that do not affect its classification.

(5) Cash and cash equivalents

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

(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

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

measured at amortized cost (including cash and cash equivalents, notes and accounts receivables, other receivable, guarantee deposit paid and other financial assets) and contract assets.

The Company measures loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL:

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

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.

～ 12 ～

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

(7) Inventories

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

～ 13 ～

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

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

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

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:

property, plant and equipment. Land is not depreciated. The estimated useful lives of property, plant are as follows:	and equipment for current an
(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.

～ 14 ～

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

(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.

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

～ 15 ～

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

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

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

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

(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 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 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

～ 16 ～

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

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 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

～ 17 ～

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

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 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.

～ 18 ～

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

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

The preparation of the consolidated financial report requires management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the following period.

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

6. Explanation of significant accounts

(1) Cash and cash equivalents

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.

～ 19 ～

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

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 long-term 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:

December 31, 2022 Gross carrying amount Weighted-ave rage loss rate Loss allowance provision $ 26 1.51% - December 31, 2021 Gross carrying amount Weighted-ave rage loss rate Loss allowance provision $ 12 4.22% - 11,590 100.00% 11,590 $ 11,602 11,590	December 31, 2022 Gross carrying amount Weighted-ave rage loss rate Loss allowance provision $ 26 1.51% - December 31, 2021 Gross carrying amount Weighted-ave rage loss rate Loss allowance provision $ 12 4.22% - 11,590 100.00% 11,590 $ 11,602 11,590	December 31, 2022 Gross carrying amount Weighted-ave rage loss rate Loss allowance provision $ 26 1.51% - December 31, 2021 Gross carrying amount Weighted-ave rage loss rate Loss allowance provision $ 12 4.22% - 11,590 100.00% 11,590 $ 11,602 11,590
Gross carrying amount $ 12 11,590	Weighted-ave rage loss rate
	4.22% 100.00%
$ 11,602		11,590

～ 20 ～

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

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

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

～ 21 ～

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

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 ventories Raw materials and supplies Semi-finished goods Work in progress Finished goods Merchandise Testing instruments	December 31, 2022 $ 2,452 -	December 31, 2021 1,566 139
	$ 2,452	1,705
	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

(5) Inventories

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

Sales of inventories transferred Inventory disposal loss Gain from price recovery of inventory valuation and obsolescence Total	2022 $ 163,554 60,016 (13,243)	2021 203,086 60,229 (8,990)
	$ 210,327	254,325

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

～ 22 ～

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

(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 non-current 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 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.

～ 23 ～

Abnova (Taiwan) 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	Unfinishe d constructi on and equipment pending acceptanc e	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

～ 24 ～

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

(8) Right-of-use assets

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

Buildings and structures $ 26,600 11,030	Transportati on 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

～ 25 ～

Notes to the Financial Statements (Cont.)

Abnova (Taiwan) Corporation

(9) Intangible assets

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

Development expenditure of monoclonal antibody hybridoma Royalty Total Cost: Balance at January 1, 2022 $ 306,21 75,616 381,826 Internally developed 5,24 - 5,240 Inventories transferred to intangible assets 6,65 - 6,655 Balance at December 31, 2022 $ 318,10 75,616 393,721 Balance at January 1, 2021 $ 299,48 75,512 374,999 Additions - 104 104 Internally developed 3,42 - 3,424 Inventories transferred to intangible assets 3,29 - 3,299 Balance at December 31, 2021 $ 306,21 75,616 381,826 Amortization and impairment loss: Balance at January 1, 2022 $ 295,16 19,000 314,167 Amortization 8,33 2,409 10,739 Balance at December 31, 2022 $ 303,49 21,409 324,906 Balance at January 1, 2021 $ 287,26 16,594 303,859 Amortization 7,90 2,406 10,308 Balance at December 31, 2021 $ 295,16 19,000 314,167 Carrying amount: Balance at December 31, 2022 $ 14,60 54,207 68,815 Balance at December 31, 2021 $ 11,04 56,616 67,659 January 1, 2021 $ 12,22 58,918 71,140 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: 2022 2021 Operating costs $ 8,331 7,902 Operating expenses 2,408 2,406 $ 10,739 10,308 (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	Royalty		Total

For the maturity analysis, please refer to Note 6(18) Financial instruments.

～ 26 ～

Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

The amount recognized in profit or loss were as follows:

e 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 The 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	2022 $ 132	2021 186
	$ 2,825	2,623

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)

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:

～ 27 ～

Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

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

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

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%

～ 28 ～

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

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 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)

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 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.

～ 29 ～

Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

(12) Income taxes

A. Tax expense

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

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

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:

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.

～ 30 ～

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

(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.

～ 31 ～

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

(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

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:

Dividends distributed to ordinary shareholders: Cash	2021 Amount per share Amount $ 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	Amount per share
	$ 0.46	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 Amount per share Dividends distributed to ordinary shareholders: Cash $ 0.80 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 Balance at January 1, 2022 $ (11,178) 20,407 Exchange differences on foreign operations 4,216 - Share of unrealized gains and losses from financial assets measured at fair value through other comprehensive income in subsidiaries accounted for using equity method - 28,730 Effect on equity of disposal of subsidiaries - (54,082) Balance at December 31, 2022 $ (6,962) (4,945)	2022	2022	2022	Amount 48,443 Total 9,229 4,216 28,730 (54,082)
	Amount per share

				(11,907)

D. Other equity interest

～ 32 ～

Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

Balance at January 1, 2021 Exchange differences on foreign operations Share of unrealized gains and losses from financial assets measured at fair value through other comprehensive income in subsidiaries accounted for using equity method Balance at December 31, 2021	Exchange differences on translation of foreign financial statements		Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income 9,062 - 11,345 20,407	Total 992 (3,108) 11,345
	$ (8,070) (3,108) - $ (11,178)
				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

2022 Profit attributable to ordinary shareholders of the Company $ 74,843 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) 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)

Profit attributable to ordinary shareholders of the Company (diluted)	2022 $ 74,843	2021 28,369

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

Weighted average number of ordinary shares (basic) Effect of employee share remuneration Weighted average number of ordinary shares at December 31 (diluted)	2022 60,554 110	2021 60,554 44
	60,664	60,598

～ 33 ～

Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

(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	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.

～ 34 ～

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

(16) Remuneration to employees and directors

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

For the years ended December 31, 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:

distributions for 2022 and 2021. n-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

～ 35 ～

Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

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

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

(b) Concentration of credit risk

Except for the biggest customers, the Company has no significant credit risk exposure to any single counterparty or any group of counterparties with similar characteristics. 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 Company had no impairment on other receivables.

B. Liquidity risk

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

Carrying amount	Contractua lcash flow	Within 1 year	1to 2years	2to 5 years	Over 5 years
$ 14,995 36,541 10,464 4,555	14,995 36,541 10,725 4,555	14,995 36,541 6,914 4,555	- - 3,811 -	- - - -	- - - -
$ 66,555	66,816	63,005	3,811	-	-
$ 11,480 33,048 6,855 22,439	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.

～ 36 ～

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

C. Currency risk

(a) Exposure to foreign currency risk

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

December 31, 2022

		December 31, 2022
Financial assets Monetary items USD EUR GBP JPY Non-monetary items USD EUR JPY Financial liabilities Monetary items USD EUR JPY Financial assets Monetary items USD EUR GBP Non-monetary items USD EUR JPY CNY	Foreign currency (in thousands) $ 11,533 676 186 14,659 3,177 (86) 24,011 333 106 4,426	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	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
	Foreign currency (in thousands) $ 9,287 830 140 3,307 (90) 33,526 13,833	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

～ 37 ～

Abnova (Taiwan) 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:

～ 38 ～

Abnova (Taiwan) 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	-	-	-	-

～ 39 ～

Abnova (Taiwan) 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

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

(19) Financial risk management
A. Overview

The Company 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

～ 40 ～

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

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

D. Liquidity risk

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

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

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

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

(b) Interest rate risk

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

(20) Capital management

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

～ 41 ～

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

7. Related-party transactions

(1) Names of related parties and their relationships

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

Name of related party Relationship with the Company Abnova-GmbH Subsidiary of the Company Abnova Holding Corporation Subsidiary of the Company Abnova (Cayman) Corporation Subsidiary indirectly owned by the Company Citil Pharma Corporation Subsidiary indirectly owned by the Company Wellconn Genomics (Cayman) Subsidiary indirectly owned by the Company Corporation Abnova (HK) Limited Subsidiary indirectly owned by the Company Abnova Diagnostics Subsidiary indirectly owned by the Company Wellconn Genomics (HK) Limited Subsidiary indirectly owned by the Company Katoku Subsidiary indirectly owned by the Company Citil Pharma Incorporated Associate of the Company Wellconn Genomics 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

～ 42 ～

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

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

8. Pledged assets

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Abnova (Taiwan) 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:

follows:
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%
		-

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

～ 44 ～

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

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.

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 ：

A. Loans to other parties：	A. Loans to other parties：	A. Loans to other parties：	A. Loans to other parties：	A. Loans to other parties：	A. Loans to other parties：	A. Loans to other parties：	A. Loans to other parties：	A. Loans to other parties：	A. Loans to other parties：	A. Loans to other parties：	A. Loans to other parties：	A. Loans to other parties：
(Expressed in Thousands													of New Taiwan Dollars)
Numb er	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Natur e of financ ing	Transacti on amount for business between two parties	Reasons for short-term financing	Allowance for bad debt Amount	Collateral		Individual funding loan limits	Maximum limit of fund financing
													Name	Value
0	Abnova (Taiwan) Corporation	Abnova-G mbH	Other receivabl es－ related party	Yes	5,000	5,000	2,283	-	2	-	Operating turnover for insufficient working capital	-		-	129,199	516,797

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.

～ 45 ～

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

B. Guarantees and endorsements for other parties: None.
C. Securities held as of December 31, 2022 (excluding investment in subsidiaries, associates and joint ventures):

Guarantees and endorsements for other parties: None. Securities held as of December 31, 2022 (excluding investment in subsidiaries, associates and oint ventures):	Guarantees and endorsements for other parties: None. Securities held as of December 31, 2022 (excluding investment in subsidiaries, associates and oint ventures):	Guarantees and endorsements for other parties: None. Securities held as of December 31, 2022 (excluding investment in subsidiaries, associates and oint ventures):	Guarantees and endorsements for other parties: None. Securities held as of December 31, 2022 (excluding investment in subsidiaries, associates and oint ventures):	Guarantees and endorsements for other parties: None. Securities held as of December 31, 2022 (excluding investment in subsidiaries, associates and oint ventures):	Guarantees and endorsements for other parties: None. Securities held as of December 31, 2022 (excluding investment in subsidiaries, associates and oint ventures):	Guarantees and endorsements for other parties: None. Securities held as of December 31, 2022 (excluding investment in subsidiaries, associates and oint ventures):	Guarantees and endorsements for other parties: None. Securities held as of December 31, 2022 (excluding investment in subsidiaries, associates and oint ventures):	Guarantees and endorsements for other parties: None. Securities held as of December 31, 2022 (excluding investment in subsidiaries, associates and oint ventures):
(Expressed in Thousands of New Taiwan Dollars per Share)
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 comprehensiveincome	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.
(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

(Expressed in Thousands of New Taiwan Dollars per Share)

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Balance as of December 31, 2022	Balance as of December 31, 2022	Balance as of December 31, 2022	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) 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) -	Subsidiar y 〞 Associate Second-ti er subsidiar y 〞〞〞〞〞

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.

～ 46 ～

Abnova (Taiwan) 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)

Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investme nt (Note 1)	Accumulated outflow of investment from Taiwan as of January 1, 2022	Investment flows	Investment flows	Accumulated outflow of investment from Taiwan as of December 31, 2022	Net income (loss) of investee	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)(Note 5)	R&D, manufacturing and sales of medical device	44,962	(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:

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%

14. Segment information

Please refer to the 2022 consolidated financial statements.

～ 47 ～

Abnova (Taiwan) Corporation Statement of cash and cash equivalents December 31, 2022 (Expressed in Thousands of New Taiwan Dollars)

Item	Description	Amount $ 566 716 16,695 143,089 201,905
Cash Cash in banks Total	Petty cash Checking account Demand deposits Foreign demand deposits (USD3,879,000 and EUR416,000, etc.) Time deposits (USD5,500,000 and NTD33,000,000)
		$ 362,971

Statement of accounts receivable

Item	Description	Amount $ 20,626 6,952 5,902 3,804 3,700 27,167 (8,152)	Note
Non-related party Client A Client B Client C Client D Client E Other Less: Loss allowance Total			The amount of each item does not exceed 5% of the account balance.
		$ 59,999

～ 48 ～

Abnova (Taiwan) Corporation Statement of inventories December 31, 2022

(Expressed in Thousands of New Taiwan Dollars)

Item	Amount Cost Net realizable value $ 60,253 21,973 600,608 239,258 6,503 6,503 189,195 119,329 9,243 2,652 9,066 6,364	Amount Cost Net realizable value $ 60,253 21,973 600,608 239,258 6,503 6,503 189,195 119,329 9,243 2,652 9,066 6,364
	Cost $ 60,253 600,608 6,503 189,195 9,243 9,066
Raw materials and supplies Semi-finished goods Work in progress Finished goods Testing instruments Merchandise inventory Subtotal Less: Allowance for inventory valuation and impairment loss
	874,868 (478,789)	396,079

	$ 396,079

～ 49 ～

Abnova (Taiwan) Corporation

Statement of movements in non-current financial assets measured at fair value through other comprehensive income For the year ended December 31, 2022

(Expressed in Thousands of New Taiwan Dollars)

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

～ 50 ～

Abnova (Taiwan) Corporation Statement of movements in investments accounted for using equity method For the year ended December 31, 2022

(Expressed in Thousands of New Taiwan Dollars)

Balance at January 1 Shares Amount 70,300 $ 90,134 2,890,000 495 $ 90,629	Acquisition Shares Amount - 34,267 - 55 34,322	Acquisition Shares Amount - 34,267 - 55 34,322	Disposal Shares Amount 17,600 27,387 - - 27,387	Disposal Shares Amount 17,600 27,387 - - 27,387	Balance at December 31 Shares Percentag e of ownershi p Amount 52,700 100.00% 97,014 2,890,000 40.00% 550 97,564	Balance at December 31 Shares Percentag e of ownershi p Amount 52,700 100.00% 97,014 2,890,000 40.00% 550 97,564	Balance at December 31 Shares Percentag e of ownershi p Amount 52,700 100.00% 97,014 2,890,000 40.00% 550 97,564	Market value or net assets value Unit price Total amount 1.84 97,014 0.00019 550 97,564	Market value or net assets value Unit price Total amount 1.84 97,014 0.00019 550 97,564
	Shares		Shares 17,600 -		Shares 52,700 2,890,000	Percentag e of ownershi p 100.00% 40.00%		Unit price 1.84 0.00019
	- -
$ 90,629		34,322		27,387			97,564		97,564

～ 51 ～

Abnova (Taiwan) Corporation Statement of accounts payable December 31, 2022

(Expressed in Thousands of New Taiwan Dollars)

Name		Amount $ 935 922 795 12,343	Amount $ 935 922 795 12,343
Company A Company B Company C Other Total Item
		$ 14,995
Salaries and wages payable Labor and health insurance and pension payable Other Total	Salaries and wages, overtime pay and bonus Accrued labor and health insurance and pension payable Accrued expenses payables
			$ 36,541

～ 52 ～

Abnova (Taiwan) Corporation Statement of operating costs For the year ended December 31, 2022

(Expressed in Thousands of New Taiwan Dollars)

Item Raw materials and supplies, beginning of year Add: Materials purchased Less: Inventory, end of year Scrapped raw materials and supplies Transferred to expenses Transferred to intangible assets Transferred to other expenses Supplies consumed Direct labor Manufacturing expenses Manufacturing cost Add: Work in process, beginning of year Semi-finished goods, beginning of year Materials purchased Less: Work in process, end of year Semi-finished goods, end of year Scrapped semi-finished goods Transferred to expenses Transferred to other expenses Cost of finished goods Add: Finished goods, beginning of year Testing instruments, beginning of year Merchandise inventory, beginning of year Inventory purchased Less: Finished goods, end of year Testing instruments, end of year Merchandise inventory, end of year Transferred to expenses Transferred to other expenses Scrapped finished goods Scrapped merchandise inventory Cost of inventory sold Inventory disposal loss Gain from price recovery of inventory valuation and obsolescence Total operating costs	Amount Subtotal Total $ 60,108 32,864 (60,253) (1,175) (1,241) (6,655) (2,147) 21,501 11,597 85,028 118,126 2,498 625,560 5,121 (6,503) (600,608) (48,119) (129) (4,042) 91,904 196,657 9,790 8,737 80,264 (189,195) (9,243) (9,066) (79) (5,493) (10,536) (186) 163,554 60,016 (13,243) $ 210,327	Amount Subtotal Total $ 60,108 32,864 (60,253) (1,175) (1,241) (6,655) (2,147) 21,501 11,597 85,028 118,126 2,498 625,560 5,121 (6,503) (600,608) (48,119) (129) (4,042) 91,904 196,657 9,790 8,737 80,264 (189,195) (9,243) (9,066) (79) (5,493) (10,536) (186) 163,554 60,016 (13,243) $ 210,327	Amount Subtotal Total $ 60,108 32,864 (60,253) (1,175) (1,241) (6,655) (2,147) 21,501 11,597 85,028 118,126 2,498 625,560 5,121 (6,503) (600,608) (48,119) (129) (4,042) 91,904 196,657 9,790 8,737 80,264 (189,195) (9,243) (9,066) (79) (5,493) (10,536) (186) 163,554 60,016 (13,243) $ 210,327
			118,126 2,498 625,560 5,121 (6,503) (600,608) (48,119) (129) (4,042)
			91,904 196,657 9,790 8,737 80,264 (189,195) (9,243) (9,066) (79) (5,493) (10,536) (186)
			163,554 60,016 (13,243)
		$ 210,327

～ 53 ～

Abnova (Taiwan) Corporation Statement of marketing expenses For the year ended December 31, 2022

(Expressed in Thousands of New Taiwan Dollars)

Item	Description	Amount $ 11,731 12,497 2,518 4,660 8,943	Note
Salaries and wages Freight Advertisement expenses Packing expenses Other expenses	Salaries and wages, overtime pay and bonus		Each amount does not exceed 5% of the account balance.
		$ 40,349

Statement of administrative expenses

Item	Description	Amount $ 21,923 2,040 5,326 2,101 9,749	Note
Salaries and wages Remuneration to directors and supervisors Services expenses Miscellaneous expenses Other expenses	Salaries and wages, overtime pay and bonus		Each amount does not exceed 5% of the account balance.
		$ 41,139

～ 54 ～

Abnova (Taiwan) Corporation Statement of research and development expenses For the year ended December 31, 2022

(Expressed in Thousands of New Taiwan Dollars)

Item	Description	Amount $ 9,289 10,630 4,652 11,792 2,408 9,969	Note
Salaries and wages Materials for R&D Experiment expenses Depreciation Amortization Other expenses	Salaries and wages, overtime pay and bonus		Each amount does not exceed 5% of the account balance.
		$ 48,740

～ 55 ～

AI assistant

Abnova — Audit Report / Information 2022

52384_rns_2022-11-10_16f42c41-95a7-4193-96f4-e32a3c589bc3.pdf

Abnova (Taiwan) Corporation Parent Company Only Financial Statements

With Independent Auditors’ Report

Table of Contents

Independent Auditors’ Report

Opinion

Basis for Opinion

Key audit matter

1. Inventory valuation

Description of key audit matter:

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

Auditor’s responsibilities for the audit of the financial statements

KPMG

Abnova (Taiwan) Corporation

Balance Sheets

December 31, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Abnova (Taiwan) Corporation Statements of Comprehensive Income For the years ended December 31, 2022 and 2021 (Expressed in Thousands of New Taiwan Dollars)

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

Abnova (Taiwan) Corporation Statements of Cash Flows

For the years ended December 31, 2022 and 2021 (Expressed in Thousands of New Taiwan Dollars)

Abnova (Taiwan) 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

2. Approval date and procedures of the financial statements

3. New standards, amendments and interpretations adopted

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

4. Summary of significant accounting policies

(1) Statement of compliance

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

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

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

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

(7) Inventories

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

(12) Leases

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

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

amount.

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

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

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

(1) Valuation of inventories

6. Explanation of significant accounts

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

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

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

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

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

(6) Investments accounted for using equity method

Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

(7) Property, plant and equipment

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

(8) Right-of-use assets

Abnova (Taiwan) Corporation

(9) Intangible assets

Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

A. Buildings and structures leases

Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

(c) Movements in fair value of plan assets

(d) Expenses recognized in profit or loss

(e) Actuarial assumptions

Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

(12) Income taxes

A. Tax expense

B. Deferred tax assets and liabilities

C. Assessment of tax

(13) Capital and other equity

B. Capital surplus

(b) Special reserve

(c) Earnings distribution

D. Other equity interest

Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

(14) Earnings per share

Abnova Audit Report / Information 2022