HannsTouch — AGM Information 2024

Aug 21, 2024

HannsTouch Holdings Company 2024 Annual General Shareholders’ Meeting Minutes (Translation)

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Time and date: 9 AM, May 31, 2024

Place: No. 7, Beiyuan 1st Road (Southern Taiwan Science Park), Shanhua District, Tainan City

Total outstanding shares: 802,010,529 shares

Total shares represented by shareholders present in person or by proxy: 505,086,118 Percentage of shares held by shareholders present in person or by proxy: 62.97 % Total shares having no voting right ： 0

Present:

Independent director TingWong,Cheng

Independent director JinFu, Chang

Independent director Tsung-Han Tsai Director ChihChung,Chou Director Bing-Yi,Shih

Ching-Chang Chen for and on behalf of Pricewaterhouse Coopers, Taiwan Lawrence Liang for and on behalf of Giantera International Law Office CFO Amon, Chien

Chairman: Wei-Hsin Ma, Chairman of the Board

Recorder: Yuhua, Yen

As of 9:00 AM, the aggregate shareholding of the shareholders present in person or by proxy constituted a quorum (505,086,116 shares). The Chairman called meeting to order. Chairman’s address: (omitted)

[Report Items]

I. Business Report for 2023

For the Company's 2023 business report, please refer to Attachment 1 of this Handbook.

• II. Audit Committee’s Review Report of 2023 Settlement Statements and Books.

For the audit committee's review report, please refer to page 41, Attachment II, of this Handbook.

III. Status report on the distributions of employee compensation and Director remuneration for 2023.

In accordance with Articles of Incorporation, Article 29, if the Company is profitable for the year, it shall appropriate 0.001% to 15% of the profit as employee compensation and not more than 2% as Director remuneration. The Company has operating loss for 2023, and thus no distribution will be made, as resolved by the Board of Directors on February 27, 2024.

IV. Report on 2023 Profit Distribution and Loss Compensation.

For 2023, the after-tax net loss was NT$899,775,361. After the special reserve reversal, the earnings to be distributed at the end of the period was NT$289,995,866. However, due to operating losses for the year, in accordance with Article 31 of the Articles of Incorporation, for the purpose of replenishing working capital, the Board of Directors has resolved to retain the same without distribution for the ratification of the shareholders' meeting.

V. Report of 2023 remuneration to directors:

The Director remuneration policy complies with the Company Act and Articles of Incorporation, and takes into account the annual performance assessment results (including the Director’s performance in the comprehension of the Company’s targets, missions and duties, the participation level of the management, fostering and communication of internal working relationship, professionalism and continuing education, internal control and other factors). The Remuneration Committee shall make the proposal pertaining to the Directors’ remuneration, which shall be executed after the resolution is passed by the Board of Directors. For the details and amount of remuneration to individual directors, please refer to Attachment III on of this Handbook.

VI. Status Report on Offering of Unsecured Ordinary Corporate Bonds.

For the Company's issuance of the first and second tranches of secured ordinary corporate bonds in 2021, please refer to Attachment IV on of this Handbook.

VII. Report on the Progress of the Company’s Share Repurchase:

	December 31, 2023
Repurchase no.	4th
Date of Board of Directors resolution	2023/02/20
Purpose of repurchase	To transfer repurchased shares to employees
Scheduled repurchase period	2023/02/21~2023/04/20
Number of shares intended to be	5,000,000 shares

repurchased
Repurchase price range	NT$7.18~13 per share
Types and number of shares bought back	3,750,000 common shares
Amount of shares repurchased/average price	NT$37,737,975/NT$10.06
Actual repurchase number to scheduled repurchase number(%)	75%
Implementation status	The 713,000 shares were actually transferred to employees, and the remaining 3,037,000 shares were fully cancelled as treasury shares and the change of registration for capital reduction were completed on November 13, 2023.

VIII. Other Report Items:

1. On May 29, 2023, the Annual General Shareholders’ Meeting passed a resolution, whereby for not exceeding 80 million shares, the Company shall “carry out a cash capital increase by issuing common shares through private placement, public offering, or a combination of both” to cater to the development of strategic alliances and the expansion of working capital. Considering the timing of issuance, the Company has yet to submit an application to the competent authority for the issuance. This is to inform that to provide flexibility to the Company in adjusting itself to the changes in the industry and economic climate. Another proposal shall be made for discussion. As such, the original fundraising plan cannot be carried out within the remaining time period.

2. For the 2024 Annual General Shareholders’ Meeting, during the proposal acceptance period (March 18 to March 28, 2024) announced by the Company, no shareholder has submitted any nomination proposal or any other proposal for discussion pursuant to the Company Act.

3. Material transactions with related parties in 2023: None. (This refers to a transaction such as material purchase and sale of goods, labor or technical services; acquisition or disposal of real estate or its right-of-use assets, or asset transactions other than real estate or its right-of-use assets for NT$300 million or more, between the Company and its related parties.)

[Ratification, Discussion And Election Items]

Proposal 1: Proposed by the Board of Directors

Subject: Ratification of the 2023 business report and financial statements.

Description:

1. The Financial Statements for 2023 of the Company have been audited by Ching-

Chang Chen and Fu-Ming Liao from PwC Taiwan. The aforementioned Financial Statements and Business Reports have been ratified by the Board of Directors on February 27, 2024 and submitted to the Audit Committee for review.

1. For Business Report and Financial Statements for 2023, please see Attachment 1 of the Handbook.

Resolution:proposal was approved after voting

approval votes ： 485,910,653 disapproval votes ： 590,069 invalid votes ： 0 abstention votes/no votes ： 18,585,396 total votes ： 505,086,118

Proposal 2: Proposed by the Board of Directors

Subject: Ratification of 2023 Profit Distribution and Loss Compensation. Description:

1. For 2023, the after-tax net loss was NT$899,775,361. After the special reserve reversal, the earnings to be distributed at the end of the period was NT$289,995,866. However, due to operating losses for the year, in accordance with Article 31 of the Articles of Incorporation, for the purpose of replenishing working capital, it is intended to retain the same without distribution. The schedule of profit distribution and loss compensation is as follows:

HannsTouch Holdings Company

Schedule of Profit Distribution and Loss Compensation

2023

2023
	Unit: NT$
Item	Amount
Earnings to be distributed at the beginning of the period (2023.01.01) Net loss after tax in the first half of 2023 Net loss after tax in the second half 2023 Reversal of special reserve $1,155,828,969 (270,154,946) (629,620,415) 33,942,258
Undistributed earnings at the end of theperiod	289,995,866
Distribution item Distribution of 2023: Shareholders - cash dividends distribution for the first and second half)	(no 0
Undistributed earnings at the end ofperiod(2023.12.31) 289,995,866
Chairman: Wei-Hsin Ma President: WeiHsin Ma	Head of Accounting: ChuHsia
Wong

1. The proposal was resolved by the Board on February 27, 2024 and submitted to the Audit Committee for review, which has since been completed.

Resolution: proposal was approved after voting

approval votes ： 486,657,283 disapproval votes ： 613,803 invalid votes ： 0 abstention votes/no votes ： 17,815,032 total votes ： 505,086,118

Proposal 3: Proposed by the Board of Directors

Subject: Discussion on the proposal to carry out a cash capital increase by issuing common shares through private placement, public offering, or a combination of both.

Description:

• I. To cater to the development of strategic alliances, the expansion of working capital and other capital needs, the Company proposes, not exceeding 80 million shares and with a face value of NT$10, to carry out a cash capital increase by issuing common shares through private placement, public offering, or a combination of both, or sponsoring issuance of overseas depositary receipt. The fund utilization plan and the expected benefits of capital increase has been made tentatively. Please see Attachment V of the Handbook.

• II. The Company proposes to request the Annual General Shareholders’ Meeting for 2024 to authorize the Board of Directors to select an option or a combination of options from the following methods and principles to raise funds:

• (I) If the Company opts to carry out a cash capital increase by issuing common shares through private placement to raise capital: In accordance with the Securities and Exchange Act, Article 43-6, a private placement of common shares shall be carried out within one year from the date of the resolution of the Annual General Shareholders’ Meeting.

  1. Reasons for private placement:

     • (1) Reasons for not selecting public offerings: The expediency and convenience of private placement in fulfilling the objectives of introducing strategic investors, as well as the restriction imposed on the transfer of securities of private placement within three years and the long-term cooperative relationship with strategic investors, are taken into consideration. Further, authorizing the Board of Directors to coordinate the private placement according to actual business needs would effectively increase the mobility and flexibility of the Company's fundraising activities.

     • (2) Amount of private placement: not exceeding 80 million common

shares.

• (3) Fund utilization and expected benefit of private placement:

  • A. Purpose of the funds: For the use of developing strategic alliances.

  • B. Expected benefits: To cater to the fast-changing industry environment, introducing strategic investors at a suitable time may strengthen the technologies, sales and marketing and supplies of key components that the Company needs for its business, thus enhancing its competitive advantages.

• The basis and reasonableness of the price set: Considering the restriction imposed on the transfer of ownership, the principle of setting the issue price for the common shares is not to be lower than 80% of the higher of the following two calculations:

• (1) The simple average closing price for either the one, three, or five business days before the price determination date, after adjustment for any distribution of stock dividends, cash dividends or capital reduction.

• (2) The simple average closing price for the 30 business days before the price determination date, after adjustment for any distribution of stock dividends, cash dividends, or capital reduction.

  • However, without violating the aforementioned principle, for the actual price-fixing date and issue price, it is proposed to the Annual General Shareholders’ Meeting to authorize the Board of Directors to set the price according to the market condition at the time, as well as the provision above. Based on the closing prices of the Company’s shares recently, the issue price may be lower than the par value of the common shares. Considering that the circulation of common shares issued through private placement is lower, the issue price is deemed reasonable as it is determined in accordance with “Directions for Public Companies Conducting Private Placements of Securities.”

• Method for selecting the specific persons: Selection is made in accordance with the Securities and Exchange Act, Article 43-6. The Company shall source placement from strategic investors that are able to strengthen the technologies, sales and marketing and supplies of key components that the Company needs in its business. The Board of Directors is authorized to review the qualification of potential appointees. The objectives, necessity and expected benefits of selecting qualified strategic investors using the aforementioned method are to cater to the

long-term development needs of the Company. The Company shall tap into the knowledge, technology, branding or distribution channels of the strategic investors to assist the Company in improving its technology, product quality, cost reduction, the stability of key component supplies, efficiency, and market expansion.

1. The rights and responsibilities for the common shares issued through the private placement are, in principle, the same as the common shares that the Company has issued previously. However, in accordance with the Securities and Exchange Act, for the common shares issued through the private placement, except for the parties as stipulated by the Securities and Exchange Act, Article 43-8, a three-year restriction is imposed on the transfer of the shares after issuance. Three years after issuance, in accordance with the Securities and Exchange Act, the Company shall apply for permission from the competent authority to publicly trade the common shares issued through the private placement.

2. (II) If the Company opts for carrying out a cash capital increase by issuing common shares through a public offering to raise capital: The Company proposes to request the Annual General Shareholders’ Meeting for the year to authorize the Board of Directors to select an option or a combination of options from the following methods and principles to raise funds. Depending on the Company's needs, the Board may undertake the issuance in single or multiple closings:

3. If the Company opts for carrying out a domestic cash capital increase by issuing common shares to raise capital:

   • The Company proposes to the Annual General Shareholders’ Meeting to authorize the Board of Directors to conduct the issuance by means of either book building or subscription.

   • (1) By means of book building: In accordance with the Company Act, Article 267, 10% to 15% of the new shares issued shall be reserved for subscription by employees of the Company. In accordance with the Securities and Exchange Act, Article 28-1, the remaining 85% to 90% of the new shares shall be offered publicly by means of book building. If there is an insufficient subscription by employees, the Chairperson is authorized to open the purchase of new shares to specific persons according to the issue price. In accordance with Taiwan Securities Association Regulations Governing the SelfRegulatory of Underwriters Advising Public Offering and Securities Issuance (hereafter, “Securities Association Self-Regulatory Regulations”), the issue price shall not be lower than 90% of the

simple average closing price for either the one, three, or five business days before the price determination base date, after adjustment for any distribution of stock dividends, cash dividends (or capital reduction). For the actual issue price, subsequently to the book building period, the Chairperson is authorized to consult with the underwriter in taking into consideration the status of the book building and the condition of the issuance market and make a final decision afterward.

• (2) By means of subscription: In accordance with the Company Act, Article 267, 10% to 15% of the new shares issued shall be reserved for subscription by employees of the Company. In accordance with the Securities and Exchange Act, Article 28-1, 10% of the new shares shall be publicly offered, while the remaining 75% to 80% of the new shares shall be offered for subscription to the existing shareholders (based on the shareholders’ register as at the base date of subscription) according to their shareholding percentage. If the subscription is less than one share or there is an insufficient subscription, the Chairperson is authorized to open the purchase of new shares to specific persons according to the issue price. In accordance with the Securities Association Self-Regulatory Regulations, the issue price shall not be lower than 70% of the simple average closing price for either the one, three, or five business days before the price determination base date, after adjustment for any distribution of stock dividends, cash dividends (or capital reduction). For the actual issue price and terms of issuance, the Chairperson is authorized to consult with the underwriter to consider the condition of the market and make a final decision afterward.

• If the Company opts for sponsoring issuance of overseas depositary receipts (hereafter, “GDR”) for cash capital increase: The Company proposes to the Annual General Shareholders’ Meeting that depending on the market conditions and the capital needs of the Company, to carry out a cash capital increase by sponsoring the issuance of GDR in accordance with the Articles of Incorporation and the relevant law and regulations. In accordance with the Company Act, Article 267, 10% to 15% of the new shares issued shall be reserved for subscription by employees of the Company. In accordance with the Securities and Exchange Act, Article 28-1, the existing shareholders forfeit the subscription rights. All of the remaining new shares shall be publicly offered as the securities of the GDR issuance. For the subscription rights

to new shares forfeited by employees, the Company proposes to authorize the Chairperson to open the purchase of new shares to specific persons, or depending on the market need, sponsor the issuance of GDR. In accordance with the Securities Association Self-Regulatory Regulations, the issue price shall not be lower than 90% of the simple average closing price for either the one, three, or five business days before the price determination date, after adjustment for any distribution of stock dividends, cash dividends (or capital reduction). However, for the actual issue price, the Chairperson is authorized to consult with the underwriter in taking into consideration the condition of the market and make a final decision afterward.

To coordinate the issuance of GDR, the Company proposes to authorize the Chairperson or designate a representative to sign agreements or documentation pertaining to the sponsoring of GDR issuance and other relevant matters.

1. Pertaining to the proposal of cash capital increase by issuing common shares or issuance plan of GDR, terms and conditions of issuance, quantity, issue price, the total amount of funds to be raised, the purpose of the funds, project particulars, implementation schedule, expected benefits, the record date of the capital increase and other related matters, including amendments made in accordance with instructions from the competent authority or a change in market condition and environment, the Company shall propose to the Annual General Shareholders’ Meeting to authorize the Board of Meeting for the undertaking.

2. III. In response to market changes, giving rise to a necessity whereby the issue price fall lower than the par value, it is reasonable for the Company to opt not to raise funds via the issuance of bonds due to considerations for maintaining steady management and a secure financial structure. If the issue price is set to be lower than par value, the Company shall comply with the regulations stipulated by the competent authority in determining the issue price. After the benefit of a capital increase is evident, the Company's financial structure shall improve substantially, which shall be beneficial to the Company's long-term growth. As such, it shall also be beneficial to the interest of the shareholders.

3. IV. If the ceiling of the number of new shares issued is set at 80 million shares, using the outstanding ordinary shares as of February 19, 2024, the maximum share dilution effect shall amount to 9.975%. Considering the funds raised are intended for the development of strategic alliances or the expansion of working capital, it is thus beneficial to the shareholders’ interest. As such, the issue of new shares shall not give rise to a significant share dilution effect.

4. V. For the issue price of the issuance (except for fixed price), terms and conditions of issuance, issuance method and other matters, such as the change in law and regulations, the opinion of the competent authority or the change in market conditions, the Company proposes to authorize the Board of Directors to take full charge in managing these matters as applicable.

5. VI. This proposal was resolved by the Board of Directors meeting on February 27, 2024.

Resolution: proposal was approved after voting

approval votes： 485,071,058 disapproval votes： 1,484,301 invalid votes： 0 abstention votes/no votes： 18,530,759 total votes： 505,086,118

Proposal 4: Proposed by the Board of Directors

Cause: Discussion of Proposal to amend the Regulations Governing the Acquisition and Disposal

of Assets

Description:

1. The Company intends to amend the “Operating Procedures for Acquisition and Disposal of Assets” in accordance with the “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” and the actual needs of the Company.

2. For a comparison table of the Regulations Governing the Acquisition and Disposal of Assets, please see Attachment 6 of the Handbook.

3. This proposal was resolved by the Board of Directors meeting on February 27, 2024.

Resolution: proposal was approved after voting

approval votes： 485,902,335 disapproval votes： 647,856 invalid votes： 0 abstention votes/no votes： 18,535,927 total votes： 505,086,118

Proposal 5: Proposed by the Board of Directors Subject: Election of the 10th Board of Directors Description:

1. The term of office of the 9th board of directors of the Company will expire on July 25, 2024. Pursuant to Articles 195 and 199-1, of the Company Act, the term of office of a director shall not exceed three years. However, they may be reelected and re-appointed. If a re-election is not made before the expiry of the term of office of directors, the term of office of the director shall be extended until the re-elected directors take office. If the shareholders' meeting re-elects all directors before the expiry of their term of office, it is deemed to be dismissed early if the directors do not resolve to be dismissed until the expiry of their term of office.

2. In accordance with the Articles 19 and 20 of Articles of Incorporation, the Company shall propose to the coming annual general shareholders’ meeting the re-election of all eight Directors (including four Independent Directors). Their term of office lasts for three years, commencing on May 31, 2024 and expiring on May 30, 2027. Directors who are re-elected may resume their positions and shall assume office immediately.

3. For the candidates list of directors and independent director of the 10th board, please see Attachment 8 of this Handbook.

Resolution:

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

1 Director WeiHsin Ma 1,337,873,129
2 Director [HUALI Investment Inc.][：][YuChi ] 692,382,459
Chiao
3 Director ChihChung Chou 477,278,920
4 Director PING-I SHIH 406,705,666
5 Independent Director TienShang Chang 272,977,450
6 Independent Director TingWong Cheng 264,100,730
7 Independent Director JinFu Chang 262,802,285
8 Independent Director Richard Tzong-Han Tsai 262,611,122
----- End of picture text -----

Proposal 6: Proposed by the Board of Directors

Subject: Discussion proposal for Lifting the non-competition restriction for new directors (including independent directors).

Description:

1. Pursuant to the Company Act, Article 209, Paragraph 1, “A director who does anything for himself or on behalf of another person that is within the scope of the company's business, shall explain to the meeting of shareholders the essential contents of such an act and secure its approval.”

2. For newly elected Directors who also assume concurrent director or manager positions in entities that engage in similar business activities as the Company, please see Attachment 9.

3. The Company proposes to the annual general shareholders’ meeting to lift noncompetition restrictions on the Directors, and not to seek disgorgement payments from the Directors for the period since they start holding concurrent positions in other entities.

Resolution:

• 6-1 Discussion proposal for Lifting the non-competition restriction for new directorsWeiHsin Ma

proposal was approved after voting approval votes ： 480,360,542 disapproval votes ： 769,165 invalid votes ： 0 abstention votes/no votes ： 17,201,586 total votes ： 498,331,293

• 6-2 Discussion proposal for Lifting the non-competition restriction for new directorsHUALI Investment Inc.

proposal was approved after voting approval votes ： 427,664,720 disapproval votes ： 786,093 invalid votes ： 0 abstention votes/no votes ： 17,195,521 total votes ： 445,646,334

• 6-3 Discussion proposal for Lifting the non-competition restriction for new directors-

• HUALI Investment Inc.：YuChi Chiao

proposal was approved after voting approval votes ： 427,664,792 disapproval votes ： 785,020 invalid votes ： 0 abstention votes/no votes ： 6,455,148 total votes ： 434,904,960

• 6-4 Discussion proposal for Lifting the non-competition restriction for new directorsChihChung Chou

proposal was approved after voting approval votes ： 487,155,544 disapproval votes ： 735,052 invalid votes ： 0

abstention votes/no votes ： 17,195,522 total votes ： 505,086,118

6-5 Discussion proposal for Lifting the non-competition restriction for new directorsPING-I SHIH

proposal was approved after voting approval votes ： 487,156,395 disapproval votes ： 723,295 invalid votes ： 0 abstention votes/no votes ： 17,206,428 total votes ： 505,086,118

6-6 Discussion proposal for Lifting the non-competition restriction for new directorsTienShang Chang proposal was approved after voting approval votes ： 487,154,894 disapproval votes ： 730,205 invalid votes ： 0 abstention votes/no votes ： 17,201,019 total votes ： 505,086,118

6-7 Discussion proposal for Lifting the non-competition restriction for new directorsTingWong Cheng proposal was approved after voting approval votes： 487,161,817 disapproval votes： 727,988 invalid votes： 0 abstention votes/no votes： 17,196,313 total votes： 505,086,118

[Extraordinary Motions] ： None

[Adjournment] ： 2024/05/31 09:42

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