Altek — AGM Information 2018

Jul 2, 2018

Altek Corporation 2018 Annual General Shareholders’ Meeting Minutes (Translation)

Time and Date: June 15, 2018 at 9 a.m.

Place: No.2, Zhanye 1st Rd., Hsinchu City, Taiwan

Total outstanding shares:

270,355,825 shares (excluding 3,433,000 shares without voting right as stipulated in

Article 179 of the Company Law)

Total shares represented by shareholders present in person or by proxy:

183,260,844 shares (including 24,718,614 shares voted via electronic transmission)

Percentage of shares held by shareholders present in person or by proxy: 67.78 %

Chairman: Alex Hsia, the Chairman of the Board of Directors

、 Attendees: Ching Jen Hu, Independent Director& Chairman of the Audit Committee

、 、 David Lin, Director Belle Liang, Director Dian-Yi Lee, CPA of

PricewaterhouseCoopers Taiwan and Jennifer Chen, Attorney.

Recorder: Carol Chen

A.Commencement (The aggregate shareholding of the shareholders present in person or by proxy constituted a quorum. The Chairman called the meeting to order.)

B.Chairman’s Address (omitted)

C.Report Items

• I. Reported the 2017 business report (see Attachment 1 )

• II. Audit Committee’s review report (see Attachment 2)

III. Reported Distribution of employees’ compensation as well as the remuneration for the

Directors and Supervisors

Explanations:

• i. According to Article 25 of the Company’s Articles of Incorporation, the Company shall appropriate 10%~20% of the annual earnings, if any, as compensation to employees and appropriate no more than 2% of the annual earnings as remuneration to Directors and Supervisors.

• ii. It’s proposed to appropriate 15% of the annual earnings, equivalent to NT$3,159,426, as compensation to employees and 2% of the annual earnings, equivalent to NT$421,256, as remuneration to Directors and Supervisors. The aforementioned amounts are the same as the amounts estimated in 2017 and they will all be paid in cash.

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• IV. Reported the merge of the Company and its wholly-owned subsidiary – Altek

Autotronics Corp.

Explanations:

• i.The Company and its wholly-owned subsidiary – Altek Autotronics Corp. (hereinafter referred to as Altek Autotronics) underwent short-form merger with the resolution adopted by the Directors of Board from both sides on May 5, 2017, pursuant to Article 19 of Business Mergers and Acquisition Acts. The Company shall become the surviving company and Altek Autotronics shall become the ceasing company while the surviving company shall still be named as “Altek Corporation” after the merger, with the reference date of merger set up on June 30, 2017. The case was approved by the Hsinchu Science Park Bureau, Ministry of Science and Technology via letter number Zhu-Shan-Zi-Di No. 1060019283 dated July 17, 2017 with registration of change.

• ii.This merger was an organizational re-engineering of the group, which did not involve behaviors of agreement on stock exchange ratio, shares issued to shareholders payable in cash or other properties, and consequently did not affect shareholder’s equity.

D.Recognition Items

• I. 2017 business report and financial statements (Proposed by the Board of Directors)

Explanations:

• i.The Company’s 2017 financial statements were audited by CPA Dian-Yi Lee and CPA Yu-Kuan Lin of PricewaterhouseCoopers Taiwan which were presented and resolved along with the business report in the 4th board meeting of the 8th term of Board of Directors as well as reviewed by the Audit Committee.

• ii.Please refer to Attachment 1 for the business report and Attachment 3 for the independent auditor’s report and financial statements.

Resolution: The result is as follows:

• 183,260,844 shares were represented at the time of voting (including 24,718,614 shares voted via electronic transmission), Votes in favor: 175,234,240 votes (95.62% of total represented shares), Votes against: 9,888 votes (0.00% of total represented shares), Votes abstained: 8,016,716 votes (4.37% of total represented shares), Votes invalid: 0 vote (0.00% of total represented shares).

• It was resolved that the above proposal be and hereby were accepted as submitted.

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II. Distribution of 2017 earnings (Proposed by the Board of Directors)

Explanations:

i.The Company plans to distribute the 2017 earnings in accordance with the Company Law and the Company’s Articles of Incorporation as follows:

		Unit: NTD
Item		Amount
Unappropriated earnings – beginning Less:The actuarial benefits of the current defined benefit plan Add: The 2017 net income Less: 10% legal reserve Less: Special reserve Current earnings available for distribution Distribution: Cash dividend (NT$0.5 per share) Unappropriated earnings - ending		2,725,115,653 (1,492,045) 13,402,316 (1,340,232) (283,124,010)
		2,452,561,682
		(135,177,913)
		2,317,383,769
Note 1: The cash dividend per share for the aforementioned shareholders is computed in accordance with the 270,355,825 shares entitled to the dividend distribution as of March 14, 2018. The cash dividend less than NT$1 for the odd shares will be booked as other income of the Company. Note 2: The distribution of earnings is based on the earnings generated in 2017 and the insufficient amount, if any, is to be replenished with the earnings ofpreviousyears accordingto the last-in-first-outprinciple.

• ii.The Board of Directors resolved to authorize the Chairman to schedule the ex-dividend date, dividend distribution date, and other relevant matters as soon as the proposal of earnings distribution resolved in the 2018 annual general shareholders’ meeting. If the outstanding shares are affected by the changes in the capital stock of the Company and thus affects the distribution ratio to shareholders, the Chairman is authorized to handle the relevant matters discretionally.

Resolution: The result is as follows:

183,260,844 shares were represented at the time of voting (including 24,718,614 shares voted via electronic transmission), Votes in favor: 175,211,239 votes (95.60% of total represented shares), Votes against: 32,889 votes (0.01% of total represented shares), Votes abstained: 8,016,716 votes (4.37% of total represented shares), Votes invalid: 0 vote (0.00% of total represented shares).

It was resolved that the above proposal be and hereby were accepted as submitted.

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E.Discussion Items

• I. To approve the issuance of Restricted Stock Awards (Proposed by the Board of Directors)

Explanations:

• i. To attract, retain professional personnel and to enhance company competitiveness, growth and profitability, it is proposed to issue restricted stock awards (“RSA”).

• ii. Principal terms and conditions

• 1.Total amounts(shares) of issuance:

The number of shares issued under this plan shall not exceed 3,000,000 common shares with par value at NT10, for a total amount of NTD 30,000,000.

• The issuance shall be filed to the competent authority in one tranche or multiple tranches within one (1) year from the date of the resolution of the Shareholders Meeting, and be granted in one tranche or multiple tranches within one (1) year from the date when the application becomes effective.

• 2.Conditions of Issuance

• (1).Issuance Price: The issuing price is gratuitous.

• (2).Vested Conditions:

  • Employees continuously employing with the Company through the vesting dates to the following vested periods with personal performance B+ or higher, no violation any work rules, will receive the vested shares as below:

One Year: 40% of shares acquired. Two Years: 30% of shares acquired. Three Years: 30% of shares acquired.

• (3).Type of shares to be issued: common shares.

• (4).Handling of employee’s failure to meet the vested conditions or in the event of inheritance.

The Company will redeem the issued RSA and cancel the full number of the shares in accordance with the terms of the issuance rules set by the Company.

• 3.Qualification, requirements and number of shares granted

• (1).Qualification, requirements

  • The awards shall be limited to regular employees of the company who have already employed on the date that the RSAs are granted.

  • The number of granted shares shall be determined by seniority, position, performance, overall contribution, special contribution and other factors in management. The list and shares to be granted shall be reviewed by the Chairman and be approved by Board. However, for employees who are managerial officers or Board members, the award of such shares shall obtain approval of the Compensation Committee in advance.

• (2).Number of shares granted

The number of shares to be granted to each employee may not exceed the amount limit specified under Article 60-9 of “Regulations Governing the Offering and Issuance of Securities by Securities Issuers.”

• 4.Necessity for issuing restricted stock awards

To attract and retain professional personnel, to motivate employees and enhance their

centripetal force so as to jointly create the Company’s and shareholders’ interests.

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• 5.Estimated expense amount

• The Company shall evaluate the shares’ fair market value on delivery day and recognize expenses annually during the vested period. The estimated maximum amount based on the closing price of March 14, 2018 is NTD 89,250,000. The estimated amortized expense from 2018 to 2021 is NTD 7,438,000, NTD 29,750,000, NTD 29,750,000 and NTD 22,312,000, respectively, under the assumption of issuance at the end of September 2018.

• 6.Dilution of EPS and other factors affecting shareholder’s equity

• The maximum dilution of the Company’s EPS from 2018 to 2021 is NTD 0.03, 0.11, 0.11, and 0.08, respectively. The influence on the Company EPS is limited, hence there’s no material impact on the shareholder’s equity.

• iii. Please refer to Attachment 4 for the Regulations Governing the First Grant of Restricted Stock Awards OF 2018.

• iv. If some revision or adjustment has to be made, after the proposal has been adopted by the 2018 Annual Shareholders Meeting, due to competent authority’s instruction, amendment to the laws and regulations or other matters not mentioned herein, it is proposed that the Shareholders Meeting authorizes the Board of Directors with full power to handle all issues regarding the issuance of restricted stock awards.

Resolution: The result is as follows:

• 183,260,844 shares were represented at the time of voting (including 24,718,614 shares voted via electronic transmission), Votes in favor: 168,313,654 votes (91.84% of total represented shares), Votes against: 6,930,396votes (3.78% of total represented shares), Votes abstained: 8,016,794 votes (4.37% of total represented shares), Votes invalid: 0 vote (0.00% of total represented shares).

It was resolved that the above proposal be and hereby were accepted as submitted.

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• II. To approve the issuance of new common shares in private placement and/or issuance of

• domestic or overseas convertible bonds in private placement. (Proposed by the Board

of Directors)

Explanations:

• i. To enrich working capital, repay borrowings, reinforce financial structures and support the Company’s development funding needs, taking fund-raising flexibility into consideration, it is proposed that the shareholders meeting to authorize the Board of Directors (“Board”), within the limit of 60,000,000 common shares, to raise funds through private placement based on the Company’s needs and market conditions.

• Afore-mentioned private placement includes single or combo instruments such as issuance of new common shares for cash in private placement ("Private Placement Common Shares") and/or issuance of overseas or domestic convertible bonds in private placement (“Private Placement CB”), and shall be executed by one or two run(s).

• For issuance of Private Placement CB, the number of common shares to be converted shall be calculated in accordance with the conversion price at the time of issuance and shall be no more than 60,000,000 shares. Please refer to Attachment 5 .

• ii. It’s proposed that the shareholders meeting to authorize the Board to adjust and process the Private Placements conditions, convertible bond issuance and conversion scheme, use of proceeds, schedule, anticipated benefit and other relevant matters based on the Company’s needs, market conditions, relevant laws and regulations, instruction by competent authority.

• iii. The Chairman or designated personnel shall be authorized to process all matters related to the Private Placement and sign relevant contracts on behalf of the Company.

• iv. For matters not mentioned herein, the Board shall be authorized to process fully by relevant laws and regulations.

Resolution: The result is as follows:

• 183,260,844 shares were represented at the time of voting (including 24,718,614 shares voted via electronic transmission), Votes in favor: 174,767,936 votes (95.36% of total represented shares), Votes against: 476,151votes (0.25% of total represented shares), Votes abstained: 8,016,757 votes (4.37% of total represented shares), Votes invalid: 0 vote (0.00% of total represented shares).

It was resolved that the above proposal be and hereby were accepted as submitted.

F.Extraordinary Motions: None

G.Adjournment: Meeting ended at 09:34 am

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Attachment 1

Altek Corporation

2017 Business Report

With the support of all shareholders and colleagues, Altek has been actively transformed into a digital imaging solution provider to service customers with digital image processing chip, dual camera module and image processing technology licensing. After years of development, our depth image processing and chip technology have been recognized by world-class mobile phone companies and semiconductor manufacturers. Nonetheless, due to the fast change in wearable image product market, and the late shipment of chips and dual camera modules, the consolidated revenue amounted to NT$10.6 billion in 2017, representing a decrease of approximately 9% from the previous year while the consolidated gross profit rate was 14%, the net income was NT$13.402 million, and the earnings per share was NT$0.05.

Altek has been dedicated in depth computing and algorithm technology for years and has held plenty of patents in Taiwan, China and the United States. Altek’s 3D-Depth Sensing Chip, together with active IR (infrared) light will further enhance the real-time depth quality and computing to support a wide range of applications. In 2018, most mainstream models of smart phones will be equipped with dual camera functions that will substantially boost the penetration rate of dual-camera mobile phone. In addition, surveillance, autonomous vehicle, smart home assistant, drone, sweeping robot.., etc, will all feature 3D sensing and even AI function soon. The application of imaging technology in relevant fields will become increasingly thriving and play key roles. We will continue to invest more R&D resources to develop more products meeting market demand and grasp the opportunity of growth.

This year, we’re still facing the rapid changes in new technologies, new materials and business environments. Therefore, Altek colleagues need to overcome those challenges, deepen the core technology of digital image, enhance product added value, and strengthen system, procedure so that we can expand the market share and strengthen

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the company competitiveness, growth and profitability. Altek management team and employees will continue to pursue the best interests of all shareholders.

One more time we would like to thank our shareholders for your supports and encouragement to the Company.

Chairman & CEO

Alex Hsia

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Attachment 2

Audit Committee’s Review Report

To: The 2018 Annual General Shareholders’ Meeting

The Board of Directors has prepared the Company’s 2017 Business Report, Financial Statements and proposal for allocation of earnings. The CPA firm of PricewaterhouseCoopers was retained to audit Altek’s Financial Statements and has issued an audit report relating to the Financial Statements. The Business Report, Financial Statements, and earnings allocation proposal have been reviewed and determined to be correct and accurate by the Audit Committee members of Altek Corporation. According to relevant requirements of the Securities Exchange Act and the Company Law, we hereby submit this report.

Altek Corporation

Chairman of the Audit Committee

Ching Jen Hu

March 23, 2018

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Attachment 3

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

PWCR 17000244 (In Thousands of New Taiwan Dollars) To the Board of Directors and Shareholders of Altek Corporation

Opinion

We have audited the accompanying consolidated balance sheets of Altek Corporation and its subsidiaries (the “Group”) as at December 31, 2017 and 2016, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2017 and 2016, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the “Regulations Governing the Preparations of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Group’s consolidated financial statements of the current period are stated as follows:

Allowance for inventory valuation losses

Description

Please refer to Note 4(12) for description of accounting policy on inventory valuation. Please refer to Note 5(2) for accounting estimates and assumption uncertainty in relation to inventory valuation. Please refer to Note 6(4) for description of allowance for inventory

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valuation losses.

The Group is primarily engaged in manufacturing and sales of digital image application products. As the Group is in a rapidly changing industry and the short life cycle of electronic products and the highly competitive nature of the market, there is a higher risk of incurring inventory valuation losses or having obsolete inventory. The Group measures inventories sold at the lower of cost and net realisable value. For inventory that is over a certain age and individually identified obsolete or damaged inventory, the company recognises losses at net realisable value. Aforementioned allowance for inventory valuation losses mainly arises from individually identified obsolete or damaged inventory. Since the value of inventories is significant, involves various types of inventory, and the individual identification of inventory usually involves management judgement which is an area that also needs to be assessed using our judgement during the audit process. Thus, we identified valuation of allowance for inventory losses as one of the key audit matters.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

• A. Obtained an understanding and assessed the provision policy on inventory valuation losses.

• B. Obtained the statement of individually identified obsolete inventory prepared by management and checked the accuracy of stock age analysis report and relevant information.

• C. Checked the accuracy of net realizable value of inventory, assessed the consistency between valuation of market value decline and its provision policy, and assessed the reasonableness of allowance for valuation losses determined by the Group.

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Timing of sales revenue recognition

Description

Please refer to Note 4(27) for accounting policies of revenue recognition. The Company and its subsidiaries’ revenue mainly arises from export sales and the cash amounts are material. As the sales terms vary from customers who are located in Mainland China, Europe and America, the terms in customer orders and contracts needs to be properly assessed. Since this involves judgement in the determination of timing of ownership transfer, we consider the timing of revenue recognition as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

• A. Assessed the appropriation of policies on sales revenue recognition.

• B. Assessed and tested the design of internal controls that are relevant to sales revenue recognition and the effectiveness of execution.

• C. Performed cutoff test on sales revenue in specific period around balance sheet date.

• D. Performed confirmation and substantive test on the balance of accounts receivable at the end of period to confirm accounts receivable and that relevant sales revenue have been recorded in the proper period.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of Altek Corporation as at and for the years ended December 31, 2017 and 2016.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the “Regulations Governing the Preparations of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance are responsible for overseeing the Group’s financial reporting process.

Auditor’s responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated

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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 ROC GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with ROC GAAS, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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

Li, Tien-Yi

Lin, Yu-Kuan

For and on behalf of PricewaterhouseCoopers, Taiwan

March 23, 2018

---

The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2017 AND 2016

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(3) 6(4) 6(5) 6(6) 6(7) 6(8) 6(9) 6(26) 6(10)	December 31, 2017 AMOUNT % $ 5,874,982 39 584,799 4 30,335 - 2,342,369 16 18,976 - 3,339 - 1,165,926 8 176,696 1 16,080 - 10,213,502 68 138,011 1 - - 3,648,788 24 777,368 5 121,538 1 82,415 1 67,349 - 4,835,469 32 $ 15,048,971 100	December 31, 2016	December 31, 2016
		AMOUNT $ 5,874,982 584,799 30,335 2,342,369 18,976 3,339 1,165,926 176,696 16,080 10,213,502 138,011 - 3,648,788 777,368 121,538 82,415 67,349 4,835,469 $ 15,048,971	AMOUNT $ 4,849,989 693,709 349 2,783,145 19,943 3,628 1,470,971 210,016 19,772 10,051,522 147,834 126,757 4,657,848 - 92,917 69,782 80,472 5,175,610 $ 15,227,132	%
Current assets 1100 Cash and cash equivalents 1110 Current financial assets at fair value through profit or loss 1150 Notes receivable, net 1170 Accounts receivable, net 1200 Other receivables 1220 Current income tax assets 130X Inventories, net 1410 Prepayments 1470 Other current assets 11XX Current Assets Non-current assets 1543 Non-current financial assets at cost 1550 Investments accounted for using equity method 1600 Property, plant and equipment, net 1760 Investment property, net 1780 Intangible assets, net 1840 Deferred income tax assets 1900 Other non-current assets 15XX Non-current assets 1XXX Total assets				32 5 - 18 - - 10 1 -
				66
				1 1 31 - 1 - -
				34
				100

(Continued)

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ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2017 AND 2016

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity

December 31, 2017 December 31, 2016 Notes AMOUNT % AMOUNT % 6(11) $ 2,021,000 14 $ 2,415,000 16 6(12) 199,797 2 - - 30,335 - - - 2,097,254 14 2,417,239 16 420,452 3 445,206 3 62,053 - 79,253 1 6(15) 30,177 - 52,247 - 181,824 1 204,924 1 5,042,892 34 5,613,869 37 6(15) 93,818 - 121,819 1 6(26) 394,939 3 442,112 3 32,097 - 16,339 - 520,854 3 580,270 4 5,563,746 37 6,194,139 41 6(16) 2,738,188 18 2,739,788 18 6(17) 2,256,692 15 1,862,914 12 6(18) 1,379,754 9 1,374,374 9 142,456 1 142,456 1 2,737,026 18 2,946,092 19 6(19) ( 302,339 ) ( 2) ( 25,521) - 6(16) ( 96,138 ) - ( 129,393) ( 1) 8,855,639 59 8,910,710 58 6(28) 629,586 4 122,283 1 9,485,225 63 9,032,993 59 9 11 $ 15,048,971 100 $ 15,227,132 100

Current liabilities 2100 Short-term borrowings 2110 Short-term notes and bills payable 2150 Notes payable 2170 Accounts payable 2200 Other payables 2230 Current income tax liabilities 2250 Provisions for liabilities - current 2300 Other current liabilities 21XX Current Liabilities Non-current liabilities 2550 Provisions for liabilities - noncurrent 2570 Deferred income tax liabilities 2600 Other non-current liabilities 25XX Non-current liabilities 2XXX Total Liabilities Equity attributable to owners of parent Share capital 3110 Common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 3500 Treasury stocks 31XX Equity attributable to owners of the parent 36XX Non-controlling interest 3XXX Total equity Significant contingent liabilities and unrecognized contract commitments Significant subsequent event 3X2X Total liabilities and equity

The accompanying notes are an integral part of these consolidated financial statements.

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ALTEK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016

(Expressed in thousands of New Taiwan dollars, except earnings per share amounts)

Items

YearendedDecember31 2017 2016 Notes AMOUNT % AMOUNT % 6(20) $ 10,552,773 100 $ 11,577,046 100 6(4)(24)(25) ( 9,117,731 ) ( 86) ( 10,021,302) ( 87) 1,435,042 14 1,555,744 13 6(24)(25) ( 69,687 ) ( 1) ( 93,892) ( 1) ( 331,083 ) ( 3) ( 383,011) ( 3) ( 874,826 ) ( 9) ( 1,033,082) ( 9) ( 1,275,596 ) ( 13) ( 1,509,985) ( 13) 159,446 1 45,759 - 6(21) 110,676 1 98,970 1 6(22) ( 105,995 ) ( 1) 71,965 1 6(23) ( 26,565 ) - ( 26,119) - ( 21,884 ) - 144,816 2 137,562 1 190,575 2 6(26) ( 87,975 ) ( 1) ( 90,467) ( 1) $ 49,587 - $ 100,108 1

4000 Sales revenue 5000 Operating costs 5900 Net operating margin Operating expenses 6100 Selling expenses 6200 General & administrative expenses 6300 Research and development expenses 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7010 Other income 7020 Other gains and losses 7050 Finance costs 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year

(Continued)

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ALTEK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016

(Expressed in thousands of New Taiwan dollars, except earnings per share amounts)

Items

YearendedDecember31 2017 2016 Notes AMOUNT % AMOUNT % ($ 1,798 ) - $ 7,847 - 6(26) 306 - ( 1,334) - ( 1,492 ) - 6,513 - ( 392,098 ) ( 4) ( 524,091) ( 5) 1,520 - ( 11,547) - 6(26) 65,160 1 90,685 1 ( 325,418 ) ( 3) ( 444,953) ( 4) ($ 326,910 ) ( 3) ($ 438,440) ( 4) ($ 277,323 ) ( 3) ($ 338,332) ( 3) $ 13,402 - $ 53,800 1 36,185 - 46,308 - $ 49,587 - $ 100,108 1 ($ 306,223 ) ( 3) ($ 382,446) ( 3) 28,900 - 44,114 - ($ 277,323 ) ( 3) ($ 338,332) ( 3) 6(27) $ 0.05 $ 0.20 6(27) $ 0.05 $ 0.20

Other comprehensive income 8311 Other comprehensive income, before tax, actuarial gains (losses) on defined benefit plans 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8310 Components of other comprehensive income that will not be reclassified to profit or loss 8361 Currency translation differences of foreign operations 8370 Share of other comprehensive income (loss) of associates and joint ventures accounted for uner equity method 8399 Income tax relating to the components of other comprehensive income 8360 Components of other comprehensive loss that will be reclassified to profit or loss 8300 Total other comprehensive loss for the year 8500 Total comprehensive income for the year Profit (loss), attributable to: 8610 Owners of the parent 8620 Non-controlling interest Profit for the year Comprehensive (loss) income attributable to: 8710 Owners of the parent 8720 Non-controlling interest Total comprehensive loss for the year 9750 Basic earnings per share 9850 Diluted earnings per share

The accompanying notes are an integral part of these consolidated financial statements.

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ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31

(Expressed in thousands of New Taiwan dollars)

2016 Balance at January 1, 2016 Appropriation of 2015 earnings Legal reserve Cash dividends and capital surplus used to issue cash to shareholders Share-based payment transactions Restricted stock Retirement of employee restricted shares Difference between consideration and carrying amount of subsidiaries acquired Profit for the year Other comprehensive loss for the year Non-controlling interest Balance at December 31, 2016 2017 Balance at January 1, 2017 Appropriation of 2016 earnings Legal reserve Cash dividends Share-based payment transactions Retirement of employee restricted shares Sales of treasury shares Changes in ownership interests in subsidiaries Profit for the year Other comprehensive loss for the year Non-controlling interest Balance at December 31, 2017	Notes						Equity att	ributable to owners of	the parent	the parent			Non-controlling interest	Total equity
		Common stock	Capital surplus				RetainedEarnings		Otherequityinterest		Treasurystocks	Total
					Legal reserve		Special reserve	Unappropriated retained earnings	Currency translation differences of foreign operations	Other equity - others
	6(18) 6(17)(18) 6(14)(17) 6(14)(16)(17) 6(14)(16)(17) 6(28) 6(19) 6(18) 6(14)(17)(19) 6(14)(17)(19) 6(16)(17) 6(17)(28) 6(19)	$ 2,726,938 - - - 15,600 ( 2,750 ) - - - - $ 2,739,788 $ 2,739,788 - - 1,300 ( 2,900 ) - - - - - $ 2,738,188	$ 1,975,772 - ( 134,140 ) 236 25,713 ( 4,620 ) ( 47 ) - - - $ 1,862,914 $ 1,862,914 - - 2,404 ( 4,609 ) 209 395,774 - - - $ 2,256,692		$ 1,347,010 27,364 - - - - - - - - $ 1,374,374 $ 1,374,374 5,380 - - - - - - - - $ 1,379,754		$ 142,456 - - - - - - - - - $ 142,456 $ 142,456 - - - - - - - - - $ 142,456	$ 3,047,283 ( 27,364 ) ( 134,140 ) - - - - 53,800 6,513 - $ 2,946,092 $ 2,946,092 ( 5,380 ) ( 215,596 ) - - - - 13,402 ( 1,492 ) - $ 2,737,026	$ 477,768 - - - - - - - ( 442,759 ) - $ 35,009 $ 35,009 - - - - - - - ( 318,133 ) - ($ 283,124 )	($ 63,121 ) - - 36,534 ( 41,313 ) 7,370 - - - - ($ 60,530 ) ($ 60,530 ) - - 33,806 7,509 - - - - - ($ 19,215 )	($ 129,393 ) - - - - - - - - - ($ 129,393 ) ($ 129,393 ) - - - - 33,255 - - - - ($ 96,138 )	$ 9,524,713 - ( 268,280 ) 36,770 - - ( 47 ) 53,800 ( 436,246 ) - $ 8,910,710 $ 8,910,710 - ( 215,596 ) 37,510 - 33,464 395,774 13,402 ( 319,625 ) - $ 8,855,639	$ 104,139 - - - - - 47 46,308 ( 2,194 ) ( 26,017 ) $ 122,283 $ 122,283 - - - - - ( 395,774 ) 36,185 ( 7,285 ) 874,177 $ 629,586	$ 9,628,852 - ( 268,280 ) 36,770 - - - 100,108 ( 438,440 ) ( 26,017 ) $ 9,032,993 $ 9,032,993 - ( 215,596 ) 37,510 - 33,464 - 49,587 ( 326,910 ) 874,177 $ 9,485,225

The accompanying notes are an integral part of these consolidated financial statements.

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ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation Amortisation Provision (reversal of) for doubtful accounts Net loss (gain) on financial assets at fair value through profit or loss Interest expense Interest income Cash dividends income Share-based payment compensation cost Gain on disposal of property, plant and equipment Impairment loss on financial assets Loss on disposal of investment Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss - current Notes receivable Accounts receivable Other receivables Inventories Prepayments Other current assets Changes in operating liabilities Notes payable Accounts payable Other payables Provisions for liabilities Other current liabilities Other non-current liabilities Cash inflow (outflow) generated from operations Interest received Cash dividends received Interest paid Income tax paid Net cash flows from (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at cost Loss on disposal of investments accounted for under the equity method Proceeds from capital reduction of financial assets at cost Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in intangible assets Decrease in deposits received Net cash flows from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in short-term borrowings Proceeds from issuance of short-term notes and bills payable Increase in deposits-in Proceeds from sales of treasury shares Cash dividends for capital surplus Employee stock options exercised Changes in non-controlling interest Net cash flows from financing activities Effect of exchange rate Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Notes 2017 2016 $ 137,562 $ 190,575 6(7)(8)(24) 264,329 340,366 6(9)(10)(24) 15,232 14,911 6(3) ( 672 ) 9,093 6(2)(21) 206 ( 761 ) 6(23) 26,565 26,119 6(21) ( 76,647 ) ( 52,135 ) 6(21) ( 3,113 ) ( 7,509 ) 6(14)(25) 33,806 36,770 6(22) ( 470 ) ( 2,405 ) 6(5)(22) 17,050 - 6(22) 4,191 - 108,704 ( 265,417 ) ( 29,667 ) 16,962 414,902 ( 614,037 ) 3,252 ( 4,800 ) 272,099 ( 509,643 ) 31,027 ( 102,393 ) 3,414 ( 189 ) 30,011 - ( 278,214 ) 175,121 ( 30,977 ) ( 8,234 ) ( 50,081 ) 38,188 ( 22,568 ) ( 149,947 ) 130 ( 5,676 ) 870,071 ( 875,041 ) 73,946 57,071 3,113 7,509 ( 26,802 ) ( 25,839 ) ( 99,059 ) ( 69,180 ) 821,269 ( 905,480 ) ( 13,517 ) ( 14,583 ) 123,571 - 5,661 7,998 6(30) ( 92,123 ) ( 99,656 ) 21,339 22,248 6(30) ( 52,941 ) ( 6,348 ) 11,352 7,376 3,342 ( 82,965 ) ( 394,000 ) 685,000 199,724 - 13,954 4,230 33,464 - 6(18) ( 215,596 ) ( 268,280 ) 3,704 - 6(28) 874,177 ( 26,017 ) 515,427 394,933 ( 315,045 ) ( 298,472 ) 1,024,993 ( 891,984 ) 6(1) 4,849,989 5,741,973 6(1) $ 5,874,982 $ 4,849,989

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Attachment 4

Regulations Governing the First Grant of Restricted Stock Awards of 2018

1. Purpose

To attract and retain professional personnel, to motivate employees and enhance their centripetal force so as to jointly create the Company’s and shareholders’ interests, the Company hereby sets the Regulations Governing the First Grant of Restricted Stock Awards (hereinafter referred to as the Regulations) pursuant to Article 267 of Company Act and relevant provisions prescribed under “Regulations Governing the Offering and Issuance of Securities by Securities Issuers” (hereinafter referred to as “Offering and Issuance Regulations” promulgated by Financial Supervisory Commission.

2. Grant Period

The issuance shall be filed to the competent authority in one tranche or multiple tranches within one (1) year from the date of the resolution of the Shareholders Meeting, and be granted in one tranche or multiple tranches within one (1) year from the date when the application becomes effective. The Chairman is authorized by the Board of Directors to determine the actual grant date.

1. Qualifications and Conditions for the Awards

2. (1)The awards shall be limited to regular employees of the company who have already employed on the date that the RSAs are granted.

3. (2)The number of granted shares shall be determined by seniority, position, performance, overall contribution, special contribution and other factors in management. The list and shares to be granted shall be reviewed by the Chairman and be approved by Board. However, for employees who are managerial officers or Board members, the award of such shares shall obtain approval of the Compensation Committee in advance.

4. (3)For each employee, the cumulative number of shares of employee stock warrants to be subscribed, plus the cumulative number of new restricted employee shares granted, may not exceed 0.3 percent of the Company’s total issued shares. And the above in combination with the cumulative number of shares of employee stock warrants to be subscribed, may not exceed 1 percent of the issuer’s total issued shares.

5. Total amounts (shares) of issuance

6. The number of shares issued under this plan shall not exceed 3,000,000 common shares with par value at NT10, for a total amount of NTD (the same hereinafter) 30,000,000.

5. Conditions of Issuance

• (1) Issuance Price: The issuing price is gratuitous.

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(2) Vested Conditions:

Employees continuously employing with the Company through the vesting dates to the

following vested periods with personal performance B+ or higher, no violation any work rules, will receive the vested shares as below:

One Year: 40% of shares acquired. Two Years: 30% of shares acquired.

Three Years: 30% of shares acquired.

• (3) Type of shares to be issued: common shares.

• (4) Handling of employee’s failure to meet the vested conditions

• A. The Company shall redeem shares for free from employee failing to meet the vested conditions.

• B. For employees voluntarily design, unemployed, laid-off and retired without being granted for vested shares, the Company shall buy back from employees for free.

• C. Leave without pay: In case the employee leaves without pay on the vested day, the employee shall be deemed as nonconformance with vested conditions and the Company shall recover the restricted stock awards.

• D. Transfer to affiliated company: In case the employee is approved by the Company for transfer to affiliated companies needed for company operation, the rights and obligations of non-vested restricted stock awards will not be affected but will still be processed by the regulations.

• E. In case the employee could not continue the job due physical disability as a result of occupational accident, the non-vested Restricted Stock Awards shall be deed as conforming vested conditions annually by the period of vested conditions.

• F. For employee death due to occupational accident or natural death without vested Restricted Stock Awards, the successor can be deemed as completing the vested condition by the annual period of vested conditions upon the death of employees. The successor by law will complete the law necessary procedures and provide relevant document of proof pursuant to the relevant clauses of Civil Code and the inheritance transfer related provisions of “Criteria Governing Handling of Stock Affairs by Public Stock Companies” after the occurrence of facts to acquire the shares by agreement.

• G. Prior to the completion of vested conditions and if employees breach contract of item (7) of this Article, the Company shall buy back the stocks from employees for free.

• (5) The Company shall cancel the redeemed restricted stock awards.

• (6) Circumstances of nonconformance with previous restricted stock awards:

• A. Employees may not sell, pledge, transfer, give to other people, collateralize or dispose in other modes with the restricted stock awards during the vested period.

• B. In case the Company applies for capital reduction by cash and other capital reduction

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other than capital reduction by law during the vested period, Restricted Stock Awards shall be cancelled by pro rata of capital reduction. In case of capital reduction by cash, the cash returned must be given to trust and shall only be given to employees after meeting the vested conditions and period. Nonetheless in case the employees fail to meet the vested conditions upon the expiration, the Company shall recover the cash.

• (7) Other matters of agreement:

  • A. Restricted Stock Awards should be immediately given to trust after issuance and the trustee may not be returned by request through any reason or mean prior to the completion of vested conditions.

  • B. Restricted Stock Awards are eligible to participate in stock dividend, dividends and stock options at cash capital increase during the vested period. The Company shall give stock dividend and dividends received during the vested period to employees for free.

• Contract signing and confidentiality

• (1) After verifying the total units, subscription price, principles of allocation and the list of receivers for the granting Restricted Stock Awards, the unit in charge shall notify the employees to sign the “Restricted Stock Awards Consent Form.” Employees without signing the consent by requirement shall be deemed as waiving the eligibility for being granted with Restricted Stock Awards.

• (2) Employees shall comply with terms and conditions of confidentiality and not to disclose the relevant content of the proposal and personal rights and interest to others.

• (3) Holders acquiring Restricted Stock Awards and the rights and interests derived via the Regulations shall comply with the Regulations and the provisions specified under “Restricted Stock Awards Consent Form.” Persons breaching contract will be disciplined according to the relevant regulations of the Company.

• Other important matters

• (1) After the Regulations have been approved by the Board of Directors, with two thirds directors attending the meeting and the majority of attending directors reach agreement, the Regulations shall be submitted to the competent authority for approval. The same procedures shall apply to the revision before the Restricted Stock Awards are to be granted. In case a revision is requested by the competent authority, the Chairman is authorized to amend the Regulations and submit to the Board of Directors for ratification afterwards prior to the grant.

• (2) Prior to meeting vested conditions, the attendance, proposal, speaking, right to vote and other shareholder’s equity related matters for the shareholder’s meeting shall all be commissioned to the trust custodian for exercise.

• (3) Any other matters not set forth herein shall be dealt with in accordance with the Applicable Laws and/or the Articles.

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Attachment 5

Fund Raising Methods and Handling Principles of Private Placement

• I.Amount of shares

It is proposed that the shareholders meeting to authorize the Board of Directors (“Board”), within the limit of 60,000,000 common shares, to raise funds through private placement based on the Company’s needs and market conditions. Afore-mentioned private placement includes single or combo instruments such as issuance of new common shares for cash in private placement ("Private Placement Common Shares") and/or issuance of overseas or domestic convertible bonds in private placement (“Private Placement CB”), and shall be executed by one or two run(s). For issuance of Private Placement CB, the number of common shares to be converted shall be calculated in accordance with the conversion price at the time of issuance and shall be no more than 60,000,000 shares.

II.Issuance of Private Placement Common Shares

• 1.Basis and rationality to determine the issue price:

• (1) The reference price is set as the higher of the following two calculation methods: (a) the simple average closing price from either 1, 3 or 5 trading days prior to the pricing date; (b) the simple average closing price of 30 trading days prior to the pricing date, minus dividends adjustments, plus price discount due to capital reduction.

• (2) The issue price shall be no less than 80% of the reference price. It is proposed to authorize the Board to determine the issue price based on the results of negotiation with specific investors and market conditions.

• (3) The issue price of Private Placement Common Shares will be determined referring to the Company’s share prices and Directions for Public Companies Conducting Private Placements of Securities which has set a no-trading period of 3 years on private placement securities. Therefore, determination of the issue price should be considered reasonable.

• 2.The method of determining specific investors, objective, necessity and anticipated benefit: The specific investors shall meet the qualifications regulated in Article 43-6 of the Securities and Exchange Act and are limited to strategic investors. Priority will be given to the individual or institutional investors who could benefit the Company's long term development and competitiveness. The Board is fully authorized to determine the specific investors. By leveraging the strategic investor’s capability and experience in technology, knowledge, business, finance or marketing channel, the Company could benefit from technology upgrades, product development, cost reduction, market expansion and ultimately to strengthen the Company’s competitiveness and to enhance its operational efficiency and long term development.

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• 3.The necessity for issuance of Private Placement Common Shares ：

• Considering the capital market’s effectiveness, feasibility and costs to raise capital, the benefits to maintain long-term relationship with strategic partners and the no-trading period of 3 years by such security issuance of private placement, the Company proposed to raise funds through private placement, rather than public offering.

The private placement will be executed by one or two run(s) according to the results of negotiation with specific investors and market conditions.

• 4.Use of proceeds and the anticipated benefit:

• (1).Private placement with one run (adding issued Private Placement CB shall be no more than 60,000,000 shares in aggregate):

  • The proceeds will be used to invest in digital imaging related equipment and technology, expanding market, enriching working capital, repaying borrowings and reinforcing financial structures which will in turn strengthen the company's competitiveness, operating efficiency and boost shareholders’ equity.

• (2).Private placement with two runs

The first run: 10,000,000 ~ 50,000,000 shares (adding issued Private Placement CB shall be no more than 60,000,000 shares in aggregate)

The proceeds will be used to invest in digital imaging related equipment and technology, expanding market, enriching working capital, repaying borrowings and reinforcing financial structures which will in turn strengthen the company's competitiveness, operating efficiency and boost shareholders’ equity.

The second run:10,000,000 ~ 50,000,000 shares (adding issued Private Placement Common Shares and issued Private Placement CB shall be no more than 60,000,000 shares in aggregate)

The proceeds will be used to invest in digital imaging related equipment and

technology, expanding market, enriching working capital, repaying borrowings and reinforcing financial structures which will in turn strengthen the company's

competitiveness, operating efficiency and boost shareholders’ equity.

• 5.The rights and obligations of Private Placement Common Shares are the same as the issued common shares except for the restriction on transfers specified in Article 43-8 of the Securities and Exchange Act.

III.Issuance of Private Placement CB

• 1.Duration ： No more than seven years.

• 2.Rate ： It is proposed to authorize the Board to decide the rate based on market conditions.

• 3.Par Value ： NTD 100,000 or its multiple times ； USD 10, 000 or its multiple times.

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• 4.Basis and rationality to determine the issue price:

• (1)The issue price of Private Placement CB shall not be lower than 80% of the theoretical price which is determined by a pricing model considering all options in the issuance terms.

• (2)It is proposed to authorize the Board to determine the issue price based on the results of negotiation with specific investors and market conditions.

• (3)The issue price of the Private Placement CB will be determined referring to the Company’s share prices and Directions for Public Companies Conducting Private Placements of Securities which has set a no-trading period of 3 years on private placement securities. Therefore, determination of the issue price should be considered reasonable.

• 5.The method of determining specific investors, objective, necessity and anticipated benefit:

• The specific investors shall meet the qualifications regulated in Article 43-6 of the Securities and Exchange Act and are limited to strategic investors. Priority will be given to the individual or institutional investors who could benefit the Company's long term development and competitiveness. The Board is fully authorized to determine the specific investors. By leveraging the strategic investor’s capability and experience in technology, knowledge, business, finance or marketing channel, the Company could benefit from technology upgrades, product development, cost reduction, market expansion and ultimately to strengthen the Company’s competitiveness and to enhance its operational efficiency and long term development.

• 6.The necessity for issuance of Private Placement CB ：

• Considering the capital market’s effectiveness, feasibility and costs to raise capital, the benefits to maintain long-term relationship with strategic partners and the no-trading period of 3 years by such security issuance of private placement, the Company proposed to raise funds through private placement, rather than public offering.

The private placement will be executed by one or two run(s) according to the results of negotiation with specific investors and market conditions.

• 7.Use of proceeds and the anticipated benefits:

• (1).Private placement with one run ： (adding issued Private Placement Common Shares shall be no more than 60,000,000 shares in aggregate) The proceeds will be used to invest in digital imaging related equipment and technology, expanding market, enriching working capital, repaying borrowings and reinforcing financial structures which will in turn strengthen the company's

• competitiveness, operating efficiency and boost shareholders’ equity.

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• (2).Private placement with two runs

The first run: 10,000,000 ~ 50,000,000 shares (adding issued Private Placement Common Shares shall be no more than 60,000,000 shares in aggregate) The proceeds will be used to invest in digital imaging related equipment and technology, expanding market, enriching working capital, repaying borrowings and reinforcing financial structures which will in turn strengthen the company's competitiveness, operating efficiency and boost shareholders’ equity.

The second run:10,000,000 ~ 50,000,000 shares (adding issued Private Placement Common Shares and issued Private Placement CB shall be no more than 60,000,000 shares in aggregate)

The proceeds will be used to invest in digital imaging related equipment and technology, expanding market, enriching working capital, repaying borrowings and reinforcing financial structures which will in turn strengthen the company's competitiveness, operating efficiency and boost shareholders’ equity.

• 8.The restriction on transfer of Private Placement CB complies with Article 43-8 of the Securities and Exchange Act.

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