Stock Code: 1795

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Lotus Pharmaceutical Co., Ltd.

Handbook for the 2021 Annual Meeting of Shareholders 【 Translation 】

Meeting Time: 9:00am, Thursday, June 17[th] , 2021 Location: 1F., No.9, SongRen Rd., Xin-yi Dist., Taipei, Taiwan

In case of any discrepancy between the English and the Chinese version, the Chinese version shall prevail.

I.	Meeting Agenda ............................................................................................................... 1	Meeting Agenda ............................................................................................................... 1
	i.	Reporting Items .......................................................................................................... 2
	ii.	Recognition Items ....................................................................................................... 3
	iii.	Discussion Items ......................................................................................................... 4
	iv.	Special Motions .......................................................................................................... 4
II.	Attachment ....................................................................................................................... 5
	i.	2020 Business Report ................................................................................................. 5
	ii.	2020 Audit Committee Review Report ...................................................................... 11
	iii.	2020 Employees’ Profit-sharing Bonus and Directors’ Compensation ...................... 12
	iv.	Private Placement to Strategic Investors in 2014 ....................................................... 13
	v.	Private Placement to Strategic Investors in 2020 ....................................................... 15
	vi.	2020 Financial Statements .......................................................................................... 17
	vii.	2020 Deficit Compensation Statement ....................................................................... 38
	viii.	The Comparison Table of Amendments to Procedures for Acquisition or
		Disposal of Assets ....................................................................................................... 39
III.	Appendix ........................................................................................................................... 43
	i.	Articles of Incorporation ............................................................................................ 43
	ii.	Rules and Procedures of Shareholders’ Meeting ........................................................ 49
	iii.	Shareholding of Directors ........................................................................................... 54

Lotus Pharmaceutical Co., Ltd.

2021 Agenda of Annual Meeting of Shareholders

Time: 9:00 a.m. on Thursday, June 17[th] , 2021

Location: 1F., No.9, SongRen Rd., Xin-yi Dist., Taipei, Taiwan

Call the Meeting to Order

Chairperson Remarks

Reporting Items

2020 Business Report
Audit Committee’s Review Report on 2020 Financial Statements
2020 employees’ profit-sharing bonus and directors’ compensation
2020 earnings distribution in cash
Report for private placement to strategic investors in 2014
Report for private placement to strategic investors in 2020

Recognition Items

To adopt FY2020 Business Report and Financial Statements
To adopt the accumulated deficits offset/distribution proposal out of FY2020 profits

Discussion Items

Proposal for amendments to certain articles of the Company’s “Procedures for Acquisition or Disposal of Assets”
Proposal for releasing the non-compete restriction on Director

Special Motions

Adjournment

Reporting Items

Item No. 1: 2020 Business Report.

Explanation: Please refer to Attachment 1.

Item No. 2: Audit Committee’s Review Report on 2020 Financial Statements. Explanation: Please refer to Attachment 2.

Item No. 3: 2020 employees’ profit-sharing bonus and directors’ compensation. Explanation: Please refer to Attachment 3.

Item No. 4: 2020 earnings distribution in cash.

Explanation: I. In accordance with Article 19-1 of the Company’s Articles of Incorporation, among the Company would like to distribute the distributable dividends and bonuses in whole or in part in cash, such cash dividends and bonuses can be distributed 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 report to the shareholders’ meeting; and
II. It is proposed to pay NT$0.35 per share in cash as cash dividends. Such cash dividends for each shareholder shall be paid at least NT$1, and the total amount of the distributive amount of less than NT$1 shall be included as other income of the Company; and
III. It is proposed to authorize the Chairman to handle all the matters related to the issuance, including but not limited to setting the reference date of earnings distribution, the number of outstanding shares change to result the dividend rate changes and needs to be revised

Item No. 5: Report for private placement to strategic investors in 2014. Explanation: Please refer to Attachment 4.

Item No. 6: Report for private placement to strategic investors in 2020. Explanation: Please refer to Attachment 5.

Recognition Items

Item No. 1: To adopt FY2020 Business Report and Financial Statements. (Proposed by the Board of Directors)
Explanation: I. The Company’s FY2020 Standalone and Consolidated Financial Reports have been audited and compiled by Deloitte. The Company’s 2020 Business Report has been approved by the Audit Committee and the Board.
II. The Company’s 2020 Business Report, external Auditors’ Report, and the aforementioned Financial Statements are attached hereto as Attachments 1 and 6.

Resolution:

Item No. 2: To adopt the accumulated deficits offset/distribution proposal out of FY2020 profits. (Proposed by the Board of Directors)
Explanation: Please refer to Attachments 7 for details.

Resolution:

Discussion Items

Item No. 1: Proposal for amendments to certain articles of the Company’s “Procedures for Acquisition or Disposal of Assets”. (Proposed by the Board of Directors)
Explanation: Considering the operational status-quo of the Company, it is proposed to amend certain articles of the Company’s “Procedures for Acquisition or Disposal of Assets”. Please refer to Attachments 8 for details.

Resolution:

Item No. 2: Proposal for releasing the non-compete restriction on Director. (Proposed by the Board of Directors)
Explanation: I. According to Article 209 of the Company Law of the Republic of China, a Director who does anything for himself/herself or on behalf of another person within the scope of the Company’s business shall explain to the shareholders’ meeting about the major contents of such act and obtain the shareholders’ approval; and
II. To render supports from the Director on their exceptional professions and valuable experience, it is proposed to obtain shareholders’ approval to release the prohibition on Director from participation in competitive business as following:

Name	Competitive Business	Representative of Juristic Person	Investment of Juristic Person
Amporn Charoensomsak	Managing Director, Innobic (Asia) Co., Ltd.	Representative of Alvogen Emerging Markets Holdings Ltd.	N/A

Resolution:

Special Motions

Adjournment

Attachment 1

Business Report

1. Operational Results of 2020

1.1 Implement Results of Business Plan

2020 is a remarkable year for Lotus marked by several notable achievements delivered through our unique turnkey business model and first-to-market global launches. We have successfully launched Buprenorphine/Naloxone sublingual film for the treatment of opioid dependence in the US, Lenalidomide for the treatment of multiple myeloma in Europe, Gefitinib for the treatment of non-small-cell lung cancer in 20 European markets on patent expiry date, and the first generic Vinorelbine in form of softgel capsules with high entry barrier across development and manufacturing. Besides, we have received tentative approval from US FDA for our blockbuster product Lenalidomide. Currently Lotus is the only generic company that obtained the tentative approval from US FDA and will be the among the first to launch in the US market. We’ve also hit another record high in both annual sales and net profits, and all these tremendous efforts have been highly recognized by major awards, including Asia Responsible Enterprise Awards (AREA). We believe this is a strong testimonial and recognition of our strengthened competitiveness for long term growth.

FY2020 Financial Results

Unit: NTD’000

			Unit: NTD’000
Item	Year	FY2020	FY2019
Financial Revenue and Expenditure	Operating revenue	10,728,583	9,611,195
	Gross Profit	4,596,623	4,421,960
	Profit/loss before tax	1,304,235	977,024
Earnings Power	Return on equity (%)	11.77%	9.91%
	Profit before tax to capital ratio (%)	53.16%	40.19%
	Earnings pershare (NTD)	$4.22	$2.74

To provide affordable solutions to patients and to maximize benefits and values for our employees and shareholders are always Lotus’ top priorities. For sustainable growth, we keep expanding accessible markets worldwide with made-in-Taiwan products of high-quality and further enhanced our commercial networks via strategic alliance with Fuji Pharma Co., Ltd. on top of our global licensing platform. We also keep investing in upgrading facilities in Nantou factory for developing and manufacturing cytotoxic and high potency products to reinforce our product manufacturing ability. We are confident that we will be the one of the most competitive players in global pharma industry with a strong foundation of all the differentiated expertise.

Lotus possesses unparalleled commercial networks to global markets as being part of Alvogen Group, which enables Lotus to maximize R&D abilities and value of intelligence property. Therefore, we are able to grow firmly and steadily with diversified portfolios while facing dynamically changing environment in global generic industry. Looking ahead, we will

keep focus on expanding profit margins and geographical footprint. In addition, we make it a top priority to contribute our professional experiences in pharmaceutical industry. We would like to encourage young talents to purse their career life in this sector. Our board members and management team will diligently continue to march toward our goals.

1.2 Implementation Results of Budget:

In 2020, the Company only set its internal budget targets and did not make financial forecasts guidance to the public. The overall implementation results were generally consistent with the range contemplated by the Company.

1.3 Financial income or expenditure and profitability Analysis:

In 2020, the Company’s main expenditure are R&D investment in generic drugs with high entry barriers. The Company’s investment in R&D aims at accumulating the energy of future product launches and growth in operating income.

1.4 Research and Development Status:

Strategic alliance with Alvogen Group makes Lotus become Alvogen’s R&D and operational center in APAC. Lotus has done the reverse acquisition of Kunwha Pharmaceuticals in 2012 in Korea. In 2014, Lotus also acquired Korea’s Dream Pharma and India’s Norwich Clinical Services. In June of 2015, Kunwha Pharmaceuticals and Dream Pharma merged into Alvogen Korea Co., Ltd. as the subsidiary of the Company. Thus, Lotus, an international corporation was formed as a vertically integrated ecosystem.

Lotus has successfully launched Buprenorphine/Naloxone in the US market. It also successfully developed and launched numerous oncology products including Temozolomide for the treatment of brain cancer and Lenalidomide for the treatment of multiple myeloma. So far, at least 10 license applications already at reviewing process in the US and Europe.

Business Plan Outline of the Current Year

2.1 Management Guidelines:

2.1.1 A solid foundation

2.1.1.1 Continued optimization of portfolio:

The Company has chosen to develop medications with a high added value and a high entry threshold, such as cytotoxic drugs for cancer treatment and hormone medicines for women. Lotus is the first Taiwanese pharmaceutical firm to export generic cancer drugs to Japan, Korea, and Southeast Asia. Through Alvogen’s global network, Lotus enters the European market successfully as well. The Company also commits to expand its market access through strategic partnership with regional leaders by leveraging its superior R&D capability and comprehensive business development networks for global launches.

Lotus’ subsidiary, Alvogen Korea Co., Ltd., focus on developing new compound drugs and incrementally modified drugs. During mid-2015, Alvogen Korea successfully launched antiplatelet drug, Sarpogrelate. The product soon gained high percentage of market share. The launch of the lipid-lowering

compound drug Rosuvastatin/Ezetimibe in 2016 also generated significant returns in its first month, making it one of the Company’s top 15 products in consolidated revenues. The new pharmaceutical product Rosuvastatin/Candesartan was launched in 2017, successfully extending the life cycles of the product. In recent years, Lotus has achieved outstanding performance with its expansion into the market for oral contraceptives and cancer drugs through pipeline acquisitions. In 2019, it has another successful launch of Qysmia, a 2nd generation anti-obesity brand drug licensed from a third party, to further solidify its leading position in overall Korea anti-obesity market. Another licensed-in product, Mercilon, has also ranked 1st for 9 consecutive years among oral contraceptive products and has been recognized as the most preferred OTC oral contraceptive brand in Korea. Alvogen Korea Co., Ltd. has also managed to excel in its area of expertise, taking the lion’s share in the local market for anti-obesity drugs and oral contraceptives, and breaking the shackles in Korea’s competitive generics market, in which the market share of each pharmaceutical firm is usually in the single digit.

2.1.1.2 Continued to provide outstanding service:

The Company has established a broad range of in-depth services. In terms of market coverage, it has established business teams in its major markets like Taiwan, Korea, Thailand, and Vietnam to serve local customers from hospitals, clinics, and pharmacies. The Company also provides global clients ”One Stop Shopping” solution including R&D formulation, global regulatory consultation, global licensing partnership, and cost-efficient manufacturing in Taiwan. We wish to grow with all of our strategic partners with possible business opportunities in global oncology and high value generics markets.

2.1.1.3 Continued quality assurance:

Since passing its first US FDA inspection in 2010, Lotus has never received any Warning Letter from the US FDA. In July of 2019, the Nantou manufacturing facility passed its 5th regular US FDA inspection. The Company continues to stand by its high quality standards and thus has built its excellent reputation in industry. As a company that has passed inspections by the drug regulatory agencies from US, Japan, Europe, and Taiwan, Lotus promises the greatest quality assurance standards in each aspect to improve customers and shareholders benefits.

2.1.2 Seizing advantages in niche markets

2.1.2.1 Target time-to-market in timely fashion:

After merged with Alvogen, Lotus has become a vertically integrated company with dedicated teams assigned to every stop across the supply chain, R&D, clinical trials, and pharmacovigilance to downstream distribution. Norwich Clinical Services, our Indian subsidiary based in Bengaluru, is a 72-bed contract research organization that provides professional bioequivalence studies, clinical research, and pharmacovigilance services to internal customers

of the group, effectively reducing the cost and testing time of high value drugs such as cancer drugs.

In addition, Alvogen’s partnership network build up in more than 35 countries globally. Countries with niche dynamics or collaborations with local distributors ensure speedy entry of approved products into local markets. Lotus has the greatest global reach among Taiwanese generic pharmaceutical companies with an average post-approval time-to-market of less than six months.

2.1.2.2 Increased profitability through sustainable pipeline strategy of high value drugs:

The Company incorporates different marketing strategies to cultivate the “global export markets” based on its core competences in oncology. Lotus is the most aggressive non-Indian pharmaceutical company to foster a pipeline with high value drugs, which in the long run will effectively improve the Company’s gross margin. The Company’s consolidated revenues has been gradually growing since 2015. For better operational margin growth, Lotus will strictly keep control its SGNA to maximize group synergy and to accelerate operational leverage.

2.1.2.3 Continuous invest in high quality manufacturing facilities to ensure solid foundation for sustainable growth:

The Company’s manufacturing site in Nantou Taiwan has been approved by the regulatory authorities in US, EU, Japan, China, and Taiwan and is the core competence for extending its addressable markets around the world. The facilities in Nantou Taiwan will also be the base for its next blockbuster products to be launched in more than 100 markets globally. Therefore, commitment to further upgrade the manufacturing equipment, overall quality management system, supply chain planning, and inventory management is important to the Company for expanding the export business and sustainable growth.

2.2 Sales volume forecasts of products and the forecasting bases:

The Company will focus on executing its two-pronged strategy covering Asian Business and Export Business with developing complex prescription drugs for domestic, Asian and global markets to create critical mass use of its approved generic products as well as expanding its addressable markets through strategic partnership for its in-house developed pipeline or licensed-in products to further boost its sales momentum. The Company shall also focus on improving legacy business while maximizing operating cash inflow to serve as a strong financial foundation for long-term growth.

The Company shall utilize its and Alvogen’s global market reach to introduce its generic products or in-license brand name drugs to multiply the commercial potentials across domestic and global markets by securing pipelines. The Company shall continue to integrate into the Asian market through a flexible product strategy and financial structure, with the goal of becoming Alvogen Group’s sales and R&D center in Asia.

The Company shall screen carefully when building its pipeline to ensure they represent high value, complex opportunities with limited competition. An active and robust R&D project management system can increase R&D hit rate, shorten development time, thus achieving first-to-file or first-wave opportunities for major high-value generic drugs.

2.3 Major Production and Sales Policies:
2.3.1 Production policies:
- 2.3.1.1 Reductions in average production costs through proper planning of production lines and personnel efficiency management.
- 2.3.1.2 Follow-up on regulations stipulated by the US Food and Drug Administration (FDA), the European Medicines Agency (EMA), and Japan’s Pharmaceuticals and Medical Devices Agency (PMDA) to ensure the compliance of Company production procedures and manufacturing facility operations with these stringent standards. The Company was also one of the first in Taiwan to introduce serialized packaging system in order to meet the ever-tightening quality control standard of the US FDA.
- 2.3.1.3 Enhancement of quality control in outsourced production with initiation of 2nd sourcing project to ensure product quality and cost efficiency
2.3.2 Sales policies:
- 2.3.2.1 Continued enhancement of strategic collaboration with Alvogen’s global business network to ride on the tailwind of existing international marketing channels and increase opportunities for commercial licensing agreements.
- 2.3.2.2 Increased investment in sales efficiency training to enhance productivity per sales across new and existing portfolio.
- 2.3.2.3 Strategic M&A on generic portfolio or brand products to increase the market awareness and meet unmet medical needs of each market and to maximize product value.
- 2.3.2.4 Targeted client base and creation of customer management system to lead marketing strategy.
2.4 Impact of External Environment, Regulatory Environment, and Overall Business Environment:

The aggressive market entry efforts of Chinese and Indian pharmaceutical companies with low-cost generics over the past few years has led to a reshuffling of the global generics market. Due to Taiwan’s National Health Insurance policy, the Group Purchasing Order, and the Ministry of Health and Welfare’s successive implementation of policies to upgrade the — industry including the Taiwan Drug Master File (TDMF), Good Clinical Practice (GCP), current Good Manufacturing Practice (cGMP), Pharmaceutical Inspection Co-operation Scheme (PIC/S), Data Exclusivity Protection, and the enforcement of the Patent Linkage — System the industry structure of Taiwanese pharmaceuticals has undergone major changes in the past 2 decades. Taiwanese generic pharmaceutical companies must therefore actively develop global markets and find a niche for their operations.

In recent years, the global pharmaceutical industry went through its most volatile transformation term. This was primarily caused by changes in the political environment in the US, which is the largest market place for generic drugs. Immediate obstacles such as increased bargaining power in regard to drug prices on the part of insurance institutions, medical institutions, and pharmacy benefit managers (PBM) due to M&As; and long-term complications such as earnings shrinkages (including those experienced by leading pharmaceutical companies in Israel and India) caused by the entry of technology companies into the pharmaceutical and drug distribution market have hurt the industry. These changes sent impacts rippling across the entire pharmaceutical industry and have forced pharmaceutical companies to implement austerity and liquidation measures such as laying off employees or non-core business divestments. However, the general trend toward encouraging the use of low-cost generics by many governments has not changed. FDA has promised to increase the efficiency of the review and approval process for generic drugs in order to ensure a fair game between generic pharmaceutical companies and originators. Meanwhile, demand of generics in China is rising due to the National Healthcare Security Administration’s implementation of its volume-based procurement program upon its establishment in 2018, creating new market opportunities for manufacturers of high quality generics.

In addition, the expiration of patents owned by original manufacturers will gradually extend from small molecule drugs to large molecule drugs, i.e., biologic drugs. This shall boost the demand for biosimilars and may spark a new wave of business growth in the pharmaceutical industry. In the US alone, over 70 patents for biologic drugs will expire by 2021, and Humira, the world’s best-selling drug for several years, will also lose its critical patent protection in Europe and the US. Given the complexity and difficulty to manufacture large molecule antibodies, many brand name pharmaceutical companies have been seeking shortcuts to the biosimilars market by forming alliances or conducting proprietary R&D.

In the face of international competition and regulatory policies, Lotus shall stand fast to its goals of proprietary R&D and entry into complex generic markets with high entry barriers. Through the deft use of commercial strategies, the Company will establish itself in the APAC region and acquire a global reach in the foreseeable future to reward its shareholders.

Attachment 2

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Attachment 3

For the year ended December 31, 2020, accruals for employees’ compensation and remuneration to directors were NTD 5,325,688 thousand and NTD 0, respectively; see calculation below:

Profits before tax before deducting employees’ compensation and remuneration to directors Less: Accumulated deficits as of December 31, 2019 Less: Other adjustments related to retained earnings Calculation base to accrue employees’ compensation and remuneration to directors 1% for employees’ compensation 0% for remuneration to directors	TWD
	1,205,702,670 ( 652,935,376) ( 20,198,458)
	532,568,836
	5,325,688
	0

Attachment 4

Attachment 4
Item	First private placement of securities in 2014 IssuingDate: August 27th,2014.
Types of the private placement	Common shares
Date and amount approved by shareholders meeting	February 17th, 2014/ 151,100,000 shares
The basis and rationale to determine the private placement price	The pricing principle of this private placement is based on the resolution determined by the EGM on February 17, 2014. February 17, 2014 is set as the pricing date, and use the simple average closing price of the common shares of the Company 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 (using the simple average closing price of the common shares on the business day before February 17) and the simple average closing price of the common shares of the Company for the thirty business days before the price determination date, after adjustment for any distribution of stock dividends, cash dividends, or capital reduction, the above calculation price is NT$98.7 as the reference price. The actual issue price shall not be less than 40% of the reference price. The private placement price is NT$ 39.5 which is 40.02% of the reference price, and is in line with the EGM’s resolution which shall not be less than 40% of the reference price. The private placement price per share is less than 80% of the reference price. Chun-Chen, Ke, accountant of Weyong International CPAs & Co. has provided an issuance of opinions on the reasonableness of theprivateplacementprice.
The method to determine specific parties	(1) The investor shall meet the qualifications set forth in Article 43-6 of the Securities Exchange Act and the relevant rulings promulgated by the competent authorities. (2) If the investor is a strategic investor, whether the investor is an individual or legal entities should dedicate to improve the Company’s profit, skills, qualities, cost reduction, efficiency improvement and market expansion, by their own experiences, skills, knowledge, brands or market channels, etc., to assist vertical and horizontal integration in the industry or joint research and development in product or market to increase the profit of the Company. (3) Based on the above principles, the Company adds Alvogen Asia Pacific Holdings Ltd. as the private placement investor. (Alvogen Asia Pacific Holdings Ltd. was officially renamed Alvogen EmergingMarkets Holdings Ltd. “Alvogen EMH”)
Reasons not to conduct public offering	This private placement is to strengthen the Company’s global market development and industry complementation, therefore is set to invite strategic investors. Considering the private placement need to be on time, efficient, as well as the three-year lockup can ensure the long-term cooperation between the Company and the strategic investor, the Company decides to conductprivateplacement instead ofpublic offering.
Date of completing collecting the price of the shares in full	August 11th, 2014
Information on subscribers	Buyers of the private placement	Qualification criteria	Subscription shares	Relationships with the Company	Participation in Company’s business
	Alvogen EMH	Satisfied Article 43-6, paragraph 1, subparagraph 2 of Securities and Exchange Act	151,100,000 shares	None	Note
Shares of subscriptionprice	NT$39.5 per share
Differences between the actual subscription price and the referenceprice	Subscription price of the private placement is NT$39.5 per share, which is 40.02% of the reference price of NT$98.7.

Item	First private placement of securities in 2014 IssuingDate: August 27th,2014.
Effect on shareholders’ equity by conducting private placement (such as resulted in the increase in cumulative losses, etc.)	(1) A total of 151,100,000 common shares were issued in this private placement and a total amount of NT$5,968,450,000 was raised and issued common shares via private placement approximately 67% of the Company's shareholding. The use of funds is to M&A the ALVOGEN Group’s business entities in APAC including Korea, Taiwan and India, so as to increase working capital and improve the global operational competitiveness and shareholders’ equity. Alvogen EMH should be able to assist the Company to expand its products, markets and opportunities by using its own experiences and skills under injection capital to improve operational competitiveness and profit. Although the Company’s earnings per share may be diluted in the short term, in the long- term use of the benefits brought by the resources of the ALVOGEN Group should have to add shareholder equity. (2) The issuance price of NT$39.5 per share is reasonable, according to Chun-Chen, Ke, accountant of Weyong International CPAs & Co.’s issuance of opinions on the reasonableness of the private placement price. The Company introduces investor by private placement has resulted in a major change in its operational rights, the introduction of investor’s funds and resources can improve the Company’s operational performance and profit, strengthen the Company’s financial structure, and improve overall shareholder equity. It should be positively beneficial to the Company's shareholders equity.
Application of funds from private placement and the execution progress of theplan	After raising capital from the private placement, the Alvogen EMH was introduced to obtain approximately 67% of the Company's shareholding. Under the same transaction structure, the Company obtained the ALVOGEN Group’s business entities in APAC including Korea, Taiwan and India in 2014.
Benefit result of private placement	The Company issued 151,100,000 common shares via private placement to Alvogen EMH approximately 67% of the Company's shareholding on August 11, 2014. Under the same transaction structure, the Company obtained the ALVOGEN Group’s business entities in APAC including Korea, Taiwan and India. The ALVOGEN Group has become a major shareholder of the Company, through the business model and marketing network of the ALVOGEN Group, it has helped the Company expand its global market. Since 2015, the revenues and profits have grown and the benefits of private placement have been to emerge.

Note: After the issuance common shares via private placement to Alvogen EMH, more than one-third of the Directors have been changed, resulting in major change in operational rights.

Attachment 5

Attachment 5
Item	First private placement of securities in 2021 IssuingDate: May18th, 2021
Types of the private placement	Common shares
Date and amount approved by shareholders meeting	June 30th,2020/ under 100,000,000 shares (Note)
The basis and rationale to determine the private placement price	The issuance price of the common share via private placement shall not be lower than 80% of the reference price. The reference price of issuing common shares via private placement shall be the higher of the below standards of calculation: (1) The simple average closing price of the common shares of the Company for either the 1, 3, or 5 business days before the pricing date, after adjustment for any distribution of stock dividends, cash dividends or capital reduction; and (2) The simple average closing price of the common shares of the Company for the 30 business days before the pricing date, after adjustment for any distribution of stock dividends, cash dividends, or capital reduction. The above-mentioned pricing basis is determined in accordance with the applicable laws and regulations, the conditions and future development of the Company and considering the three-year lockup restriction. Therefore, it should be reasonable. According the above calculation of issuance price, the Company designated the simple average closing price of the common shares of the Company for 5 business days before the pricing date that is NTD 82.0 to be the reference price of this private placement.
The method to determine specific parties	(1) The investor(s) shall meet the qualifications set forth in Article 43-6 of the Securities Exchange Act and the relevant rulings promulgated by the competent authorities and shall not be an insider or affiliated person of the Company; and (2) The investor(s) shall meet the above-mentioned qualifications and shall be a juristic person that, for the purpose of increasing the profit of the Company, provides assistance to the Company in terms of enhanced skills, improved quality, reduced cost, increased efficiency, enlarged market, or other benefits, achieved through vertical or horizontal integration in the industry or joint effort in product or market development or otherwise, and using the investor's own experience, skills, knowledge, brand, or channels; and (3) The Company plans to invite Innobic LL Holding Co., Ltd. to become the strategic investor and subscriber of this private placement of common shares.
Reasons not to conduct public offering	Considering the capital market condition, time effectiveness to raise capital, feasibility, issuance cost and the need to find strategic investor(s) as well as the three-year lockup which can ensure the long term cooperation between the Company and the strategic investor(s), the Company decides to conduct private placement, not public offering.
Date of completing collecting the price of the shares in full	April 21st, 2021
Information on subscribers	Buyers of the private placement	Qualification criteria	Subscription shares	Relationships with the Company	Participation in Company’s business
	Innobic LL Holding Co., Ltd.	Satisfied Article 43-6, paragraph 1, subparagraph 2 of Securities and Exchange Act	17,517,348 shares	None	None
Shares of subscriptionprice	NT$80.7 per share
Differences between the actual subscription price and the reference price	Subscription price of the private placement is NT$80.7 per share, which is 98.4% of the reference price of NT$82.0.

Item	First private placement of securities in 2021 IssuingDate: May18th, 2021
Effect on shareholders’ equity by conducting private placement (such as resulted in the increase in cumulative losses, etc.)	A total of 17,517,348 shares were issued in this private placement of common stock and a total of NT$1,413,649,984 was raised. The Company had a total paid-in capital of NT$2,628,713,120 after the private placement, which was put towards ensuring the Company’s stability and development and adding to shareholder equity.
Application of funds from private placement and the execution progress of the plan	After raising capital from the private placement, it will be used to increase working capital, to repay corporate debts, maintain to seek opportunities to acquire product lines and respond to other long term development needs of the Company.
Benefit result of private placement	Should be able to assist the Company to expand its market and distribution channels and provide various products, achieved through joint effort in product or market development or otherwise, by using its own experience, skills, knowledge, brand, or channels and the strategic alliance with the Company.

Note: The Company's Board of Directors has issued of 17,517,348 common shares at a price of NT$80.7 per share on April 16 th, 2021, in consideration of the capital market situation, the Company will not continue with the above private placement.

Attachment 6

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Lotus Pharmaceutical Co., Ltd.

Opinion

We have audited the accompanying consolidated financial statements of Lotus Pharmaceutical Co., Ltd. (the “Company”) and its subsidiaries (collectively referred to as the “Group”), which comprise the consolidated balance sheets as of December 31, 2020 and 2019, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the “consolidated financial statements”).

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Group’s consolidated financial statements for the year ended December 31, 2020. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matters of the Group’s consolidated financial statements for the year ended December 31, 2020 are as follows:

Goodwill Impairment Assessment

As described in Note 14, the goodwill amounted to NT$5,895,681 thousand, representing 30% of the Group’s consolidated total assets as of December 31, 2020; therefore, goodwill is material to the consolidated financial statements as a whole and considered as a key audit matter. Refer to Note 4, j. for the accounting policy on the impairment of goodwill. The management performs an impairment test under IAS 36 Impairment of Assets on an annual basis and whenever there is an indication of impairment.

The Group’s goodwill mainly resulted from the acquisitions of the equity investments of the Company and Dream Pharmaceutical Co., Ltd. The Group assessed the goodwill for impairment by comparing the recoverable amount with the carrying amount of the goodwill. The management estimated the recoverable amount of goodwill based on the estimated operating cash flows of the invested companies using a five-year period budget discounted at the weighted average cost of capital. The estimation mainly depended on subjective management judgments and may be affected by either the degree of future market competition or changes in economic situation. As a result, the assessment of goodwill for impairment loss is determined to be a key audit matter.

Audit Procedures for the Key Audit Matter

We performed the following audit procedures to evaluate the significant assumptions and estimations for future operating cash flows and discount rates used by the management in its assessment of goodwill for impairment:

We obtained an understanding of the process and control activities of the Group in its evaluation of goodwill for impairment.
For goodwill recognized from the acquisition of the equity investments of the Company:
2-1. We evaluated the competence, capabilities and objectivity of the external independent valuator engaged by the management, and we verified the eligibility of the external valuator. We inquired from the management and determined that nothing in the work scope and the engagement terms and conditions affect the valuator’s objectivity nor limit their work scope.
2-2. We assessed that the recent operating results, historical trends, new products’ estimated launch schedules and their expected probable generation of cash flows and industry overview have been reasonably taken into consideration in the determination of the future sales growth rates.
2-3. We consulted our firm’s internal experts regarding the discount rates used by the Company including assumptions of the risk-free rate, volatility and risk premium, and we determined that the weighted average cost of capital used for the pharmaceutical industry was appropriate.
For the assessment of impairment of goodwill from the acquisition of the equity investments of Dream Pharmaceutical Co., Ltd, we referred to the audit instruction sent to the auditor engaged by the subsidiary, Alvogen Korea Holdings Ltd., and we reviewed the related documents provided by the subsidiary’s auditor, read the independent valuation reports, and discussed with management and the subsidiary’s auditor, and we evaluated the appropriateness of the management’s evaluation process and conclusion for its goodwill impairment.

Emphasis of Matter

As disclosed in Notes 10 and 25 to the consolidated financial statements, the Group acquired 100% equity of Alvogen (Thailand) Ltd. from the Alvogen Group in the second quarter of 2020. In compliance with the “Comment on IFRS” and Interpretation 2012-301 issued by the Accounting Research and Development Foundation, the acquisition resulted in common control restructuring. In the preparation of the comparative consolidated financial statements, the acquisition is disclosed as if it had occurred before January 1, 2019, and the Group’s consolidated financial statements and related notes as of December 31, 2019 and for the year ended December 31, 2019 are restated. Our audit opinion is not modified in respect of this matter.

Other Matter

We have also audited the parent company only financial statements of Lotus Pharmaceutical Co., Ltd. as of and for the years ended December 31, 2020 and 2019, on which we have issued an unmodified opinion with emphasis of matter paragraph and an unmodified opinion, respectively.

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 Preparation of Financial Reports by Securities Issuer, International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ 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 generally accepted in the Republic of China 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 the auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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.
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.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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 auditors’ 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 auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
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.
Obtain sufficient and appropriate audit evidence regarding the financial information of 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.

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 for the year ended December 31, 2020 and are therefore the key audit matters. We describe these matters in our auditors’ 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.

The engagement partners on the audits resulting in this independent auditors’ report are Shiow-Ming Shue and Chih-Ming Shao.

Deloitte & Touche Taipei, Taiwan Republic of China

March 26, 2021

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.

LOTUS PHARMACEUTICAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 6) Contract assets - current (Notes 19 and 28) Notes and trade receivables, net (Notes 8 and 19) Trade receivables from related parties, net (Notes 19 and 28) Other receivables Other receivables from related parties (Note 28) Current tax assets (Note 21) Inventories (Note 9) Other current assets (Note 29) Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Note 7) Investment accounted for using the equity method (Note 11) Property, plant and equipment (Notes 12 and 29) Right-of-use assets (Note 13) Goodwill (Note 14) Other intangible assets (Notes 15 and 28) Deferred tax assets (Note 21) Other non-current assets (Note 29) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 16) Contract liabilities - current (Notes 19 and 28) Notes and trade payables Trade payables to related parties (Note 28) Other payables Other payables to related parties (Note 28) Current tax liabilities (Note 21) Provisions - current (Note 22) Lease liabilities - current (Note 13) Current portion of long-term borrowings (Note 16) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Contract liabilities - non-current (Note 19) Long-term borrowings, net of current portion (Note 16) Provisions - non-current (Note 22) Deferred tax liabilities (Note 21) Lease liabilities - non-current (Note 13) Loan payables to related parties - non-current (Note 28) Net defined benefit liabilities (Note 17) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY Share capital (Note 18) Capital surplus (Note 18) Unappropriated earnings (Accumulated deficit) Other equity Total equity attributable to owners of the Company EQUITY ATTRIBUTABLE TO FORMER OWNER OF BUSINESS COMBINATION UNDER COMMON CONTROL (Note 18) NON-CONTROLLING INTERESTS (Note 18) Total equity TOTAL		2020		2019 (After Restatement)
		Amount % $ 1,489,004 7 121,039 1 1,109,140 6 1,517,255 8 2,739 - 48,034 - 2,416 - 2,208,490 11 284,614 1 6,782,731 34 412,846 2 - - 2,193,068 11 112,377 1 5,895,681 30 3,830,990 19 364,608 2 161,117 1 12,970,687 66 $ 19,753,418 100 $ 410,000 2 132,098 1 615,615 3 1,116,109 6 910,621 5 19,754 - 226,619 1 37,908 - 40,430 - 1,359,086 7 14,841 - 4,883,081 25 111,784 1 4,947,560 25 27,872 - 144,688 1 76,577 - - - 570,071 3 246,371 1 6,124,923 31 11,008,004 56 2,453,540 12 6,799,186 34 353,662 2 (860,974) (4) 8,745,414 44 - - - - 8,745,414 44 $ 19,753,418 100		Amount % $ 1,276,865 7 - - 1,065,797 6 1,201,438 7 43,922 - 104,701 - 1,351 - 1,342,925 7 684,137 4 5,721,136 31 449,704 3 8,354 - 1,875,997 10 172,917 1 5,910,026 33 2,910,506 16 378,647 2 767,403 4 12,473,554 69 $ 18,194,690 100 $ 460,000 3 65,054 - 679,641 4 255,027 1 498,664 3 268,263 2 60,294 - 83,791 - 58,933 - 579,075 3 91,782 1 3,100,524 17 104,038 1 3,723,633 20 31,528 - 172,247 1 115,904 1 2,410,825 13 547,311 3 270,171 2 7,375,657 41 10,476,181 58 2,431,140 13 6,588,034 36 (652,936) (4) (624,223) (3) 7,742,015 42 (25,320) - 1,814 - 7,718,509 42 $ 18,194,690 100

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

LOTUS PHARMACEUTICAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

NET OPERATING REVENUE (Notes 19 and 28) OPERATING COSTS (Notes 9, 20 and 28) GROSS PROFIT OPERATING EXPENSES (Notes 20 and 28) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit (gain) loss Total operating expenses INCOME FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Interest income Other income (Note 28) Other gains and losses (Notes 20 and 28) Finance costs (Notes 20 and 28) Share of profit (loss) of associate (Note 11) Total non-operating expenses, net INCOME BEFORE INCOME TAX INCOME TAX EXPENSE (Note 21) NET INCOME FOR THE YEAR OTHER COMPREHENSIVE (LOSS) INCOME Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans (Note 17) Unrealized loss on investments in equity instruments at fair value through other comprehensive income		2020 Amount % $ 10,728,583 100 6,131,960 57 4,596,623 43 1,574,276 15 904,969 8 505,379 5 (664) - 2,983,960 28 1,612,663 15 3,763 - 30,058 - (12,247) - (333,780) (3) 3,778 - (308,428) (3) 1,304,235 12 (274,584) (2) 1,029,651 10 9,820 - (32,060) -		2019 (After Restatement)
				Amount % $ 9,611,195 100 5,189,235 54 4,421,960 46 1,849,539 19 818,027 9 553,569 6 467 - 3,221,602 34 1,200,358 12 7,859 - 12,240 - 107,605 1 (350,357) (3) (681) - (223,334) (2) 977,024 10 (209,780) (2) 767,244 8 (81,820) - (170,449) (2) (Continued)

LOTUS PHARMACEUTICAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Income tax relating to items that will not be reclassified subsequently to profit or loss (Note 21) Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations Income tax relating to items that may be reclassified subsequently to profit or loss (Note 21) Other comprehensive (loss) income for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR NET PROFIT ATTRIBUTABLE TO: Owners of the Company Former owner of business combination under common control Non-controlling interests TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Company Former owner of business combination under common control Non-controlling interests EARNINGS PER SHARE (Note 23) Basic Diluted		2020 Amount % $ (2,380) - (112,917) (1) 30,990 - (106,547) (1) $ 923,104 9 $ 1,026,796 10 2,431 - 424 - $ 1,029,651 10 $ 918,758 9 4,167 - 179 - $ 923,104 9 $ 4.22 $ 4.22		2019 (After Restatement)
				Amount % $ 17,780 - (290,594) (3) - - (525,083) (5) $ 242,161 3 $ 662,807 7 88,961 1 15,476 - $ 767,244 8 $ 156,279 2 83,453 1 2,429 - $ 242,161 3 $ 2.74 $ 2.74

		$		$
		$		$
		$		$
		$		$
		$		$

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

(Concluded)

LOTUS PHARMACEUTICAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Equity Attributable to	ners of the Company
Share Capital- Ordinary Shares Unappropriated Earnings Shares (Thousand) Amounts Capital Surplus (Accumulated Deficit) 238,201 $ 2,382,007 $ 6,020,558 $ (995,135) - - - - 238,201 2,382,007 6,020,558 (995,135) - - - 662,807 - - - (64,040) - - - 598,767 4,913 49,133 567,476 - - - - (256,568) 243,114 2,431,140 6,588,034 (652,936) - - - 1,026,796 - - - 7,440 - - - 1,034,236 - - - (24,834) - - - (522) 2,240 22,400 130,091 - - - - (2,282) - - 81,061 - 245,354 $ 2,453,540 $ 6,799,186 $ 353,662	Other Equity	nearned Share - ased Payment Expense $ - - - - - - - - - - - - - - (121,273) - - $ (121,273)
	Exchange Differences on Translating Unrealized Loss on Financial Assets at Fair Value Through Other U Foreign Operations Comprehensive Income B $ (181,735) $ - - - (181,735) - - - (272,039) (170,449) (272,039) (170,449) - - - - (453,774) (170,449) - - (83,418) (32,060) (83,418) (32,060) - - - - - - - - - - $ (537,192) $ (202,509)
Shares (Thousand) 238,201 - 238,201 - - - 4,913 - 243,114 - - - - - 2,240 - - 245,354

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

LOTUS PHARMACEUTICAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit loss (reversed) recognized on trade receivables Finance costs Interest income Dividend income Share-based payment expense Share of (profit) loss of associate Loss on disposal of property, plant and equipment Write-down of inventories Impairment loss on non-financial assets Unrealized foreign exchange gain Loss from early repayment of loans Loss on lease modification Changes in operating assets and liabilities Contract assets Notes and trade receivables Trade receivables from related parties Other receivables Other receivables from related parties Inventories Other current assets Other non-current assets Contract liabilities Notes and trade payables Trade payables to related parties Other payables Other payables to related parties Provisions Other current liabilities Net defined benefit liabilities Other non-current liabilities Cash generated from operations Interest received Interest paid Income tax paid Net cash generated from operating activities	2020 $ 1,304,235 242,951 466,673 (664) 333,780 (3,763) (10,404) 31,218 (3,778) 4,682 221,150 127,675 (25,333) 37,882 1,396 (121,039) (54,834) (320,424) 39,608 95,671 (1,097,508) (6,041) 226,457 72,510 127,293 869,160 39,317 (166,127) (47,291) (1,015) 32,789 12,471 2,428,697 2,993 (393,361) (89,647) 1,948,682	2019 (Restated) $ 977,024 259,880 332,355 467 350,357 (7,859) (4,296) - 681 9,446 88,106 211,247 (84,721) - - 9,867 63,146 (1,138,709) (40,921) (35,963) (261,617) (8,256) (240,428) 671 91,070 41,775 92,910 139,524 35,676 (19,810) (60,596) 1,681 802,707 9,932 (282,154) (110,534) 419,951 (Continued)

LOTUS PHARMACEUTICAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income Proceeds from liquidation of investments accounted for using equity method Equity attributable to former owner of business combination under common control Purchase of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (increase) in refundable deposits Purchase of intangible assets (including capitalized development expenses and prepayment) Decrease (increase) in other current assets Decrease (increase) in other non-current assets Dividend received Arising from adjustment of reverse acquisition Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Repayments of short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Increase in guarantee deposits received Net decrease from loan payables to related parties Repayments of the principal portion of lease liabilities Increase in other non-current liabilities Proceeds from issuance of ordinary shares Acquisition of non-controlling interests Net cash (used in) generated from financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2020 $ - 12,130 (3,681) (413,791) 45 1,133 (1,583,749) 407,019 364,596 10,404 81,061 (1,124,833) - (50,000) 5,549,538 (3,539,579) - (2,429,922) (76,690) 5,621 - (4,275) (545,307) (66,403) 212,139 1,276,865 $ 1,489,004	2019 (Restated) $ (616,498) - - (333,415) 32,887 (266) (772,116) (518,536) (184,818) 4,296 - (2,388,466) 170,000 (20,000) 3,077,903 (400,000) 402 (434,329) (77,747) - 616,609 (712,210) 2,220,628 (33,916) 218,197 1,058,668 $ 1,276,865

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

(Concluded)

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Lotus Pharmaceutical Co., Ltd.

Opinion

We have audited the accompanying financial statements of Lotus Pharmaceutical Co., Ltd. (the “Company”), which comprise the balance sheets as of December 31, 2020 and 2019, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the financial statements, including a summary of significant accounting policies (collectively referred to as the “financial statements”).

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, 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 generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements 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 Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Company’s financial statements for the year ended December 31, 2020. 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 of the Company’s financial statements for the year ended December 31, 2020 are as follows:

Goodwill Impairment Assessment

As described in Note 12, the goodwill amounted to NT$2,751,253 thousand, representing 20%, of the Company’s total assets as of December 31, 2020; therefore, goodwill is material to the financial statements as a whole and considered as a key audit matter. Refer to Note 4, i. for the accounting policy on the impairment of goodwill. The management performs an impairment test under IAS 36 Impairment of Assets on an annual basis and whenever there is an indication of impairment.

The Company’s goodwill resulted from the reverse acquisition of the equity of the Company. The Company assessed the goodwill for impairment by comparing the recoverable amount with the carrying amount of the goodwill. The management estimated the recoverable amount of goodwill based on the estimated operating cash flows of the invested companies using a five-year period budget discounted at the weighted average cost of capital. The estimation mainly depended on subjective management judgments and may be affected by either the degree of future market competition or changes in economic situation. As a result, the assessment of goodwill for impairment loss is determined to be a key audit matter.

Audit Procedures for the Key Audit Matter

We obtained an understanding of the process and control activities of the Company in its evaluation of goodwill for impairment.
We evaluated the competence, capabilities and objectivity of the external independent valuator engaged by the management, and we verified the eligibility of the external valuator. We inquired from the management and determined that nothing in the work scope and the engagement terms and conditions affect the valuator’s objectivity nor limit their work scope.
We assessed that the recent operating results, historical trends, new products’ estimated launch schedules and their expected probable generation of cash flows and industry overview have been reasonably taken into consideration in the determination of the future sales growth rates.
We consulted our firm’s internal experts regarding the discount rates used by the Company including assumptions of the risk-free rate, volatility and risk premium, and determined that the weighted average cost of capital used for the pharmaceutical industry is appropriate.

Goodwill Impairment Assessment of Investment Accounted for by Using the Equity Method

For the assessment of impairment of goodwill in the investment in Alvogen Korea Holdings Ltd., a subsidiary accounted for by using the equity method, amounted to 23% (NT$3,144,428 thousand) of the Company’s total assets as of December 31, 2020; therefore, the goodwill recognized in the investment accounted for by using the equity method is material to the financial statements as a whole and considered as a key audit matter. Please refer to Note 4, g. for the accounting policy on the impairment of investments accounted for by using the equity method.

Audit Procedures for the Key Audit Matter

We performed the following audit procedures to evaluate the reasonableness of the goodwill impairment assessment of investment accounted for by using the equity method done by the management: we referred to the audit instruction sent to the auditor engaged by the subsidiary, Alvogen Korea Holdings Ltd., and we reviewed the related documents provided by the subsidiary’s auditor, read the independent valuation reports, and discussed with management and the subsidiary’s auditor, and evaluated the appropriateness of the management’s evaluation process and conclusion for its goodwill impairment.

Emphasis of Matter

As disclosed in Notes 22 to the financial statements, the Company acquired 100% equity of Alvogen (Thailand) Ltd. from the Alvogen Group in the second quarter of 2020. In compliance with the “Comment on IFRS” and Interpretation 2012-301 issued by the Accounting Research and Development Foundation, the acquisition resulted in common control restructuring. In the preparation of comparative

financial statements, the acquisition is disclosed as if it had occurred before January 1, 2019, and the Company’s financial statements and related notes as of December 31, 2019 and for the year ended December 31, 2019 are restated. Our audit opinion is not modified in respect of this matter.

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 Issuer, 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.

Auditors’ 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 auditors’ 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 generally accepted in the Republic of China 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.

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 fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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 auditors’ 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 auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision, and performance of the audit. We remain solely responsible for our audit opinion.

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 for the year ended December 31, 2020 and are therefore the key audit matters. We describe these matters in our auditors’ 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.

The engagement partners on the audits resulting in this independent auditors’ report are Shiow-Ming Shue and Chih-Ming Shao.

Deloitte & Touche Taipei, Taiwan Republic of China

March 26, 2021

Notice to Readers

The accompanying financial statements are intended only to present the financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and financial statements shall prevail.

LOTUS PHARMACEUTICAL CO., LTD.

BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 6) Contract assets - current (Notes 17 and 25) Notes and trade receivables, net (Notes 7 and 17) Trade receivables from related parties, net (Notes 17 and 25) Other receivables Other receivables from related parties (Note 25) Current tax assets (Note 19) Inventories (Note 8) Other current assets Total current assets NON-CURRENT ASSETS Investment accounted for using the equity method (Notes 9 and 30) Property, plant and equipment (Notes 10 and 26) Right-of-use assets (Note 11) Goodwill (Note 12) Other intangible assets (Notes 13 and 25) Deferred tax assets (Note 19) Other non-current assets (Note 26) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 14) Contract liabilities - current (Notes 17 and 25) Notes and trade payables Trade payables to related parties (Note 25) Other payables Other payables to related parties (Note 25) Current tax liabilities (Note 19) Lease liabilities - current (Note 11) Current portion of long-term borrowings (Note 14) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Contract liabilities - non-current (Note 17) Long-term borrowings, net of current portion (Note 14) Deferred tax liabilities (Note 19) Lease liabilities - non-current (Note 11) Loan payables to related parties - non-current (Note 25) Net defined benefit liabilities (Note 15) Credit on investment accounted for using the equity method (Notes 9 and 30) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY Share capital (Note 16) Capital surplus (Note 16) Unappropriated earnings (Accumulated deficit) Other equity Total equity attributable to owners of the Company EQUITY ATTRIBUTABLE TO FORMER OWNER OF BUSINESS COMBINATION UNDER COMMON CONTROL (Note 16) Total equity TOTAL		2020		2019 (After Restatement)
		Amount % $ 544,389 4 121,039 1 242,203 2 1,509,544 11 - - 60,892 - 1,932 - 1,026,094 8 103,237 1 3,609,330 27 3,667,814 27 1,274,245 9 37,060 - 2,751,253 20 2,250,160 16 112,491 1 68,478 - 10,161,501 73 $ 13,770,831 100 $ 410,000 3 86,934 1 296,588 2 1,190,455 9 305,658 2 24,783 - 102,546 1 14,437 - 948,979 7 19,907 - 3,400,287 25 8,244 - 1,529,556 11 43,754 - 24,248 - - - 10,739 - 8 - 8,581 - 1,625,130 11 5,025,417 36 2,453,540 18 6,799,186 49 353,662 3 (860,974) (6) 8,745,414 64 - - 8,745,414 64 $ 13,770,831 100		Amount % $ 228,473 2 - - 234,434 2 1,135,939 9 995 - 728,766 6 1,293 - 500,474 4 99,912 - 2,930,286 23 3,586,374 28 933,149 7 61,902 - 2,751,253 22 2,234,831 18 171,438 1 69,107 1 9,808,054 77 $ 12,738,340 100 $ 460,000 4 42,708 - 126,682 1 317,146 3 164,905 1 186,548 1 - - 20,861 - - - 11,526 - 1,330,376 10 9,252 - 1,141,748 9 62,947 - 41,924 - 2,253,450 18 9,142 - 172,092 2 714 - 3,691,269 29 5,021,645 39 2,431,140 19 6,588,034 52 (652,936) (5) (624,223) (5) 7,742,015 61 (25,320) - 7,716,695 61 $ 12,738,340 100

The accompanying notes are an integral part of the financial statements. 32

LOTUS PHARMACEUTICAL CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

NET OPERATING REVENUE (Notes 17 and 25) OPERATING COSTS (Notes 8 and 25) GROSS PROFIT UNREALIZED GAIN ON TRANSACTIONS WITH SUBSIDIARIES AND ASSOCIATE REALIZED GAIN ON TRANSACTIONS WITH SUBSIDIARIES AND ASSOCIATE REALIZED GROSS PROFIT OPERATING EXPENSES (Notes 18 and 25) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit loss Total operating expenses INCOME FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Interest income (Note 25) Other income (Note 25) Other gains and losses (Note 18) Finance costs (Notes 18 and 25) Share of profit of subsidiaries and associates (Note 9) Total non-operating income, net INCOME BEFORE INCOME TAX INCOME TAX EXPENSE (Note 19) NET INCOME		2020 Amount % $ 4,936,162 100 2,949,897 60 1,986,265 40 (790) - - - 1,985,475 40 507,406 10 264,832 5 255,400 5 2,211 - 1,029,849 20 955,626 20 3,450 - 12,185 - (8,977) - (111,040) (2) 351,564 7 247,182 5 1,202,808 25 (173,581) (4) 1,029,227 21		2019 (After Restatement)
				Amount % $ 3,902,452 100 2,213,147 57 1,689,305 43 - - 4,772 - 1,694,077 43 483,993 12 231,095 6 366,864 9 7,159 - 1,089,111 27 604,966 16 12,762 - 6,651 - 41,131 1 (158,059) (4) 341,848 9 244,333 6 849,299 22 (97,531) (2) 751,768 20 (Continued)

LOTUS PHARMACEUTICAL CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OTHER COMPREHENSIVE INCOME (LOSS), NET Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Share of other comprehensive loss of subsidiaries and associate accounted for using the equity method Income tax relating to items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations Income tax relating to items that may be reclassified subsequently to profit or loss Other comprehensive (loss) income for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR NET PROFIT ATTRIBUTABLE TO: Owners of the Company Former owner of business combination under common control TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Company Former owner of business combination under common control EARNINGS PER SHARE (Note 20) Basic Diluted		2020 Amount % $ (1,447) - (23,462) - 289 - (112,672) (2) 30,990 - (106,302) (2) $ 922,925 19 $ 1,026,796 21 2,431 - $ 1,029,227 21 $ 918,758 19 4,167 - $ 922,925 19 $ 4.22 $ 4.22		2019 (After Restatement)
				Amount % $ 93 - (234,563) (6) (19) - (277,547) (7) - - (512,036) (13) $ 239,732 7 $ 662,807 17 88,961 3 $ 751,768 20 $ 156,279 4 83,453 3 $ 239,732 7 $ 2.74 $ 2.74

		$		$
		$		$
		$		$
		$		$
		$		$

The accompanying notes are an integral part of the financial statements.

(Concluded)

LOTUS PHARMACEUTICAL CO., LTD.

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

BALANCE AT JANUARY 1, 2019 Retrospective adjustment of equity attributable to former owner due to reorganization of entities under common control BALANCE AT JANUARY 1, 2019 AS RESTATED Net income for the year ended December 31, 2019 Other comprehensive income (loss) for the year ended December 31, 2019, net of income tax Total comprehensive income (loss) for the year ended December 31, 2019 Issuance of ordinary shares for cash Changes in investment in subsidiaries and associate accounted for using the equity method BALANCE AT DECEMBER 31, 2019 Net income for the year ended December 31, 2020 Other comprehensive income (loss) for the year ended December 31, 2020, net of income tax Total comprehensive income (loss) for the year ended December 31, 2020 Reorganization Changes in investment in subsidiaries and associate accounted for using the equity method Share-based payment Arising from adjustment of reverse acquisition BALANCE AT DECEMBER 31, 2020		Equity Attributable to Owners of	the	Company	Other Equity nrealized Loss on Financial Assets at Fair alue Through Other Unearned A Fo Foreign Operations Share-Based Payment Expense U $ - $ - - - - - - - (170,449) - (170,449) - - - - - (170,449) - - - (32,060) - (32,060) - - - - - - (121,273) - - $ (202,509) $ (121,273)	Equity ttributable to rmer Owner of Business Combination nder Common Control $ - (108,773) (108,773) 88,961 (5,508) 83,453 - - (25,320) 2,431 1,736 4,167 21,153 - - - $ -	Total Equity $ 7,225,695 (108,773) 7,116,922 751,768 (512,036) 239,732 616,609 (256,568) 7,716,695 1,029,227 (106,302) 922,925 (3,681) (2,804) 31,218 81,061 $ 8,745,414
		Share Capital- Ordinary Shares Unappropriated Earnings Shares (Thousands) Amount Capital Surplus (Accumulated Deficit) 238,201 $ 2,382,007 $ 6,020,558 $ (995,135) - - - - 238,201 2,382,007 6,020,558 (995,135) - - - 662,807 - - - (64,040) - - - 598,767 4,913 49,133 567,476 - - - - (256,568) 243,114 2,431,140 6,588,034 (652,936) - - - 1,026,796 - - - 7,440 - - - 1,034,236 - - - (24,834) - - - (2,804) 2,240 22,400 130,091 - - - 81,061 - 245,354 $ 2,453,540 $ 6,799,186 $ 353,662
				Exchange Differences on Translating U V Foreign Operations $ (181,735) - (181,735) - (272,039) (272,039) - - (453,774) - (83,418) (83,418) - - - - $ (537,192)
		Shares (Thousands) 238,201 - 238,201 - - - 4,913 - 243,114 - - - - - 2,240 - 245,354

The accompanying notes are an integral part of the financial statements.

LOTUS PHARMACEUTICAL CO., LTD.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit loss recognized on trade receivables Finance costs Interest income Share-based payment expense Share of profit of subsidiaries and associates Loss on disposal of property, plant and equipment Write-down of inventories Impairment loss on non-financial assets Unrealized gain on transactions with subsidiaries and associate Realized gain on transactions with subsidiaries and associate Unrealized foreign exchange gain Loss on lease modification Changes in operating assets and liabilities Contract assets Notes and trade receivables Trade receivables from related parties Other receivables Other receivables from related parties Inventories Other current assets Contract liabilities Notes and trade payables Trade payables to related parties Other payables Other payables to related parties Other current liabilities Net defined benefit liabilities Other non-current liabilities Cash generated from operations Interest paid Interest received Income tax paid Net cash generated from operating activities	2020 $ 1,202,808 100,595 293,042 2,211 111,040 (3,450) 31,218 (351,564) 2,087 40,677 85,475 790 - (21,766) 129 (121,039) (9,980) (373,605) 994 100,855 (566,297) (3,324) 43,217 169,906 872,466 62,776 (127,801) 8,381 150 2,246 1,552,237 (189,575) 365 203 1,363,230	2019 (Restated) $ 849,299 105,661 242,711 7,159 158,059 (12,762) - (341,848) 8,228 22,691 150,119 - (4,772) (65,962) - 9,867 (6,117) (1,133,178) (172) (16,891) (68,986) 11,027 43,514 22,823 113,243 36,480 76,341 2,006 145 - 208,685 (140,869) 5,936 (294) 73,458 (Continued)

LOTUS PHARMACEUTICAL CO., LTD.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Net cash inflow on disposal of associate Net cash outflow on acquisition of subsidiaries Net cash inflow on disposal of subsidiary Proceeds from capital reduction of investments accounted for using equity method Equity attributable to former owner of business combination under common control Purchase of property, plant and equipment Proceeds from disposal of property, plant and equipment Other receivables from related parties Decrease (increase) in refundable deposits Purchase of intangible assets (including capitalized development expenses) Increase in other non-current assets Arising from adjustment of reverse acquisition Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Repayments of short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Increase in guarantee deposits received Net decrease from loan payables to related parties Increase in other non-current liabilities Repayments of the principal portion of lease liabilities Proceeds from issuance of ordinary shares Net cash (used in) generated from financing activities NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2020 $ 12,130 (591,142) 2,111 1,143,387 (3,859) (326,626) - - 2,879 (435,449) (2,250) 81,061 (117,758) - (50,000) 1,830,000 (421,540) - (2,273,700) 5,621 (19,937) - (929,556) 315,916 228,473 $ 544,389	2019 (Restated) $ - - - - - (228,706) 31,242 (616,828) (10,514) (386,649) (15,000) - (1,226,455) 170,000 (20,000) 1,289,020 (400,000) 402 (434,330) - (20,536) 616,609 1,201,165 48,168 180,305 $ 228,473

The accompanying notes are an integral part of the financial statements.

(Concluded)

Attachment 7

Lotus Pharmaceutical Co., Ltd. Year 2020 Deficit Compensation Statement


Items		Unit: TWD


Accumulated deficit of prior years		($652,935,376)

Add (minus):
Remeasurement of defined benefit plans recognized in unappropriated earnings	7,439,792
Net income for the year	1,026,796,100
Changes in retained earnings of subsidiaries accounted for using equity method	(2,804,259)
Reorganization under common control (Note1)	(24,833,777)

Distributable earnings		353,662,480

Legal reserve (10%)	(35,366,248)
Special reserve for equity items of negative amount (Note2)	(115,476,429)
Cash dividend ($0.35 per share)	(92,004,959)

Undistributed earnings at the end of year		$110,814,844

Note 1：Please refer to financial report for the year of 2020. Note 2：Please refer to statement of changes in equity for the year of 2020.

Attachment 8

The Comparison Table of Amendments to PROCEDURES FOR ACQUISITION OR DISPOSAL OF ASSETS

	Amended Provisions	Current Provisions	Remark
	Approved on 2021/6/17	~~Approved on 2020/6/30~~	To update the amendment date
Article 4	Article 4 Operational procedures: 1. The acquisition or disposal of the Company’s assets shall be handled in accordance with the following limits and procedures: I. Other than investment in the mainland area, derivatives trading, and assets that are acquired or disposed through merger, spin-off, acquisition or share transfer, the acquisition or disposal of assets specified in Article 2 Paragraph 1 with transaction price of less than 20% of the Company's paid-in capital or NT$300 million shall be duly handled in accordance with the Company’s internal Delegation of Duty and Authority. Any transaction of transaction value more than 20% of the Company's paid-in capital or NT$300 million shall be reviewed and approved by the Board of Directors. II. The amount of transactions shall be calculated as follows: i. The amount of each transaction. ii. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterparty within one year. iii. The cumulative transaction amount of real estate or right-of-use assets acquisitions and disposals (cumulative acquisitions and disposals, respectively) for the same development project within one year. iv. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within one year. The term“within one year” refers to one year preceding the Date of Event of the	Article 4 Operational procedures: 1. The acquisition or disposal of the Company’s assets shall be handled in accordance with the following limits and procedures: ~~I.~~ ~~The acquisition or disposal of~~ ~~long/short term securities investment:~~ ~~any transaction with transaction price of~~ ~~less than NT$50 million shall be duly~~ ~~handled in accordance with the~~ ~~Company’s internal Delegation of Duty~~ ~~and Authority; any transaction of~~ ~~transaction value more than NT$50~~ ~~million shall be reviewed and approved~~ ~~by Chairman. Any transaction of~~ ~~transaction value more than 20% of the~~ ~~Company's paid-in capital or NT$300~~ ~~million shall be reviewed and approved~~ ~~by the Board of Directors.~~ ~~II. The acquisition or disposal of real~~ ~~estate and equipment: any transaction~~ ~~with transaction price of less than~~ ~~NT$50 million shall be duly handled in~~ ~~accordance with the Company’s~~ ~~internal Delegation of Duty and~~ ~~Authority; any transaction of~~ ~~transaction value more than NT$50~~ ~~million shall be reviewed and approved~~ ~~by Chairman. Any transaction of~~ ~~transaction value more than 20% of the~~ ~~Company's paid-in capital or NT$300~~ ~~million shall be reviewed and approved~~ ~~by the Board of Directors, while the~~ ~~Board can authorize the Chairman to~~ ~~handle the matter and report to the~~ ~~Board for recognition on an after-the-~~ ~~event basis.~~ ~~III. The acquisition or disposal of~~ ~~membership and intangible assets or~~	Wording changes to align with the Company’s “Delegation of Duty and Authority Procedure”
		~~.~~ ~~II~~
		~~.~~ ~~III~~
		~~.~~

	Amended Provisions		Current Provisions	Remark
	current transaction. Items that have been previously approved by the Board need not be counted toward the transaction amount. III.The acquisition or disposal of derivatives: it shall be duly handled in accordance with the procedures as set forth in Section 3. IV.Assets that are acquired or disposed through merger, spin-off, acquisition or share transfer: it shall be duly handled in accordance with the procedures as set forth in Section 4. V.The limits of amounts for the Company and each Subsidiary acquiring non- operating real estate and right-of-use assets or securities: i. The acquisition of real estate and right-of-use assets for non-operating purpose should not exceed 50% of the Company’s net worth. ii. The total amount of all long/short term security investments should not exceed 50% of the Company’s net worth (except for 1-year fixed income securities). iii. The amount of investment in each respective security should not exceed 10% of the Company’s net worth.	~~IV.~~ ~~V.~~ ~~VI.~~	~~right-of-use assets: any transaction with~~ ~~transaction price of less than NT$50~~ ~~million shall be duly handled in~~ ~~accordance with the Company’s~~ ~~internal Delegation of Duty and~~ ~~Authority; any transaction of~~ ~~transaction value more than NT$50~~ ~~million shall be reviewed and approved~~ ~~by Chairman. Any transaction of~~ ~~transaction value more than 20% of the~~ ~~Company's paid-in capital or NT$300~~ ~~million shall be reviewed and approved~~ ~~by the Board of Directors.~~ The acquisition or disposal of derivatives: it shall be duly handled in accordance with the procedures as set forth in Section 3. Assets that are acquired or disposed through merger, spin-off, acquisition or share transfer: it shall be duly handled in accordance with the procedures as set forth in Section 4. The limits of amounts for the Company and each Subsidiary acquiring non- operating real estate and right-of-use assets or securities: i. The acquisition of real estate and right-of-use assets for non-operating purpose should not exceed 50% of the Company’s net worth. ii. The total amount of all long/short term security investments should not exceed 50% of the Company’s net worth (except for 1-year fixed income securities). iii. The amount of investment in each respective security should not exceed 10% of the Company’s net worth.
Article 5	Article 5 Public Announcement and Declaration: 1. Under any of the following circumstances, the Company shall publicly announce and report in accordance with relevant regulations in the appropriate format as prescribed by the regulations within two days from the date of the event: I. ~ V.(omitted)	Article 5 Public Announcement and Declaration: 1. Under any of the following circumstances, the Company shall publicly announce and report in accordance with relevant regulations in the appropriate format as prescribed by the regulations within two days from the date of the event: I. ~ V.(omitted)		Wording changes

	Amended Provisions		Current Provisions	Remark
	VI. Where an asset transaction other than any of those referred to in the preceding five items or investment in the mainland area, the transaction amount reaches 20% of the Company’s paid-in capital or NT$300 million, provided that this shall not apply to the following circumstances: i. Trading of domestic government bonds; ii. Trading of government bonds or bonds under repurchase and resale agreements, or subscription or redemption of domestic money market funds; VII.The amount of transactions shall be calculated as follows: i. The amount of each transaction. ii. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterparty within one year. iii. The cumulative transaction amount of real estate or right-of- use assets acquisitions and disposals (cumulative acquisitions and disposals, respectively) for the same development project within one year. iv. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within one year. The term “within one year” refers to one year preceding the Date of Event of the current transaction. Items that	VI. VII.	Where an asset transaction other than any of those referred to in the preceding five items or investment in the mainland area~~which either 1) amount~~ ~~of each transaction, 2) The cumulative~~ ~~transaction amount of acquisitions and~~ ~~disposals of the same type of~~ ~~underlying asset with the same trading~~ ~~counterparty within one year, 3) The~~ ~~cumulative transaction amount of real~~ ~~estate or right-of-use assets acquisitions~~ ~~and disposals (cumulative acquisitions~~ ~~and disposals, respectively) for the~~ ~~same development project within one~~ ~~year, or 4) The cumulative transaction~~ ~~amount of acquisitions and disposals~~ ~~(cumulative acquisitions and disposals,~~ ~~respectively) of the same security~~ ~~within one year,~~reaches 20% of the Company’s paid-in capital or NT$300 million, provided that this shall not apply to the following circumstances: i. Trading of domestic government bonds; ii. Trading of government bonds or bonds under repurchase and resale agreements, or subscription or redemption of domestic money market funds; The term “within one year” refers to one year preceding the Date of Event of the current transaction. Items that have been previously~~approved by the~~ ~~Board~~need not be counted toward the transaction amount.

		Amended Provisions	Current Provisions	Remark
		have been previouslypublicly announcedneed not be counted toward the transaction amount.
Article 6	Article 6 The Company’s subsidiaries shall follow the following procedures when acquiring or disposing an asset: 1. The Company’s subsidiaries shall establish its own procedures for acquisition or disposal of assets in compliance with “Regulations Governing the Acquisition and Disposal of Assets by Public Companies”. Such procedures shall be discussed and approved by subsidiaries’ board of directors and reported to the Company’s Board of Directors. The same shall apply if any further amendment is made. 2. This procedure shall be applicable to the Company’s subsidiaries if a subsidiary has not established its own procedures for acquisition or disposal of assets. The guidance related to transaction price shall be calculated based on the paid-in capital, total assets or net worth of the subsidiary. (cut below)		Article 6 The Company’s subsidiaries shall follow the following procedures when acquiring or disposing an asset: 1. The Company’s subsidiaries shall establish its own procedures for acquisition or disposal of assets in compliance with “Regulations Governing the Acquisition and Disposal of Assets by Public Companies”~~. The~~procedures shall be discussed and approved by subsidiaries’ board of directors and reported to the Company’s Board of Directors. The same shall apply if any further amendment is made. 2.~~Any acquisition or disposal of assets by~~ ~~the Company’s subsidiaries shall follow~~ ~~its own procedures for acquisition or~~ ~~disposal of assets.~~ (cut below)	Wording changes to clarify that subsidiaries which have not established its own procedures should follow the Company’s procedures.

Appendix 1 ARTICLES OF INCORPORATION of

LOTUS PHARMACEUTICAL CO., LTD.

[English translation for reference only]

Section I - General Provisions

Article 1

The Company shall be incorporated, as a company limited by shares, under the Company Law of the Republic of China, and its name shall be 美時化學製藥股份有限公司 in the Chinese language, and Lotus Pharmaceutical Co., Ltd. in the English language.

Article 2

The scope of business of the Company shall be as follows:

C802041 Drugs and Medicines Manufacturing 2. F208021 Retail Sale of Drugs and Medicines 3. F208031 Retail sale of Medical Equipment 4. F401010 International Trade 5. C802110 Cosmetics Ingredients Manufacturing 6. F102170 Wholesale of Food and Grocery
F108040 Wholesale of Cosmetics 8. F203010 Retail sale of Food and Grocery 9. I199990 Other Consultancy 10. IG01010 Biotechnology Services 11. ZZ99999 All business items that are not prohibited or restricted by law, except those that are subject to special approval.

Article 3

The Company shall have its head office in Taipei, Taiwan, Republic of China, and shall be free, upon approval of government authorities in charge, to set up and dissolve factories, representative and branch offices at various locations within and without the territory of the Republic of China, wherever and whenever the Board of Directors deem it necessary or advisable to carry out any or all of its activities.

Article 4

The total amount of the Company’s reinvestment shall not be subject to the restriction of not more than forty percent of the Company paid-up capital. Any matters regarding the reinvestment must be approved and handled in accordance with the rules approved by the Board of Directors and the applicable laws and regulations.

Article 5

The Company may provide endorsement and guarantee and act as a guarantor to the matters related to the business of the Company.

Section II - Capital Stock

Article 6

The total capital of the Company is TWD 4 billion, divided into 400 million shares for a value of TWD 10 per share, to be issued in several tranches by the Board of Directors as authorized. Among the total capital in the first paragraph, an amount of TWD 100 million shall be reserved, to be divided into 10,000,000 shares for a value of TWD 10 per share, to be issued as employee stock options in several tranches by the Board of Directors as authorized according to the Company Law of the Republic of China and the applicable laws of the Republic of China.

Article 7

The share certificates of the Company shall be name-bearing share certificates signed by or affixed with the signatures or personal seals of the director representing the Company, and shall be duly certified or authenticated by the bank which is competent to certify shares under the laws before issuance. The Company may issue shares without printing share certificates and the shares shall be registered with a domestic securities depository enterprise as per relevant rules and regulations.

Article 8

Registration for transfer of shares shall be suspended sixty (60) days immediately before the date of regular meeting of shareholders, and thirty (30) days immediately before the date of any special meeting of shareholders, or within five (5) days before the day on which dividend, bonus, or any other benefit is scheduled to be paid by the Company.

Article 8-1

All transfer of stocks, pledge of rights, loss, succession, gift, loss of seal, amendment of seal, change of address or similar stock transaction conducted by shareholders of the Company shall follow the “Guidelines for Stock Operations for Public Companies” unless specified otherwise by law and securities regulations of the Republic of China.

Section III - Shareholders Meetings

Article 9

Shareholders’ meetings of the Company are of two types, namely: (1) regular meetings and (2) special meetings. Regular meetings shall be convened, by the Board of Directors, within six (6) months after the close of each fiscal year. Special meetings shall be convened whenever necessary in accordance with the relevant laws, rules and regulations of the Republic of China.

Article 9-1

Written notices shall be sent to all shareholders at their latest places of residence as registered with the Company for the convening of shareholders’ meetings, at least thirty (30) days in advance, in case of regular meetings; and at least fifteen (15) days in advance, in case of special meetings. The purpose(s) for convening any such meeting shall be clearly stated in the written notices and publicly announced. Upon agreed, the notices shall be sent by electronic means. The notices may be done via public announcement to the shareholders who have less than one thousand shares.

Article 10

If a shareholder is unable to attend a meeting, he/she may appoint a representative, with a Shareholder Proxy Form issued by the Company, to attend it, and to exercise, on his/her behalf, the rights specified in the Proxy Form at the meeting.

Article 11

Each share of stock shall be entitled to one vote, except shares under restrictions or shares held under Article 2 of 179 of the Company Law of the Republic of China.

Article 12

Except as provided in the Company Law of the Republic of China, shareholders’ meetings may be held if attended by shareholders in person or by proxy representing more than one half of the total issued and outstanding capital stock of the Company, and resolutions shall be adopted at the meeting with the concurrence of a majority of the votes held by shareholders present at the meeting. According to regulatory requirements, shareholders may also vote via an electronic voting system, and those who do shall be deemed as attending the shareholders’ meeting in person; electronic voting shall be conducted in accordance with the relevant laws and regulations.

Article 12-1

The resolutions of the shareholders’ meeting shall be recorded in the minutes, and such minutes shall be signed by or sealed with the chop of the chairman of the meeting and distributed to shareholders within twenty (20) days after the meeting. The meeting minutes may be distributed by

electronic means or publicly announced. Such minutes with record of the taken month/date/year, place, chairman’s name, minutes and resolutions, together with the attendance list and proxies, shall be filed and kept at the Company. The attending book of shareholders and the representative authorization forms shall be kept at least one year, or longer till the end of legal proceedings if shareholder file a lawsuit in accordance of Article 189 of the Company Law of the Republic of China.

Article 12-2

The Company shall only delist publicly-offered shares with special resolution of Shareholders’ meeting, and shall not amend this article when shares are listed on Taiwan Stock Exchange.

Section IV - Directors

Article 13

The Company shall have five (5) to eleven (11) Directors with a term of three (3) years, to be elected from among the persons of legal capacity at the general meeting and eligible for reelection.

Article 13-1

Among the above Directors, there shall be at least three (3) Independent Directors and no less than one-fifth (1/5) of the Directors shall be Independent Directors.

Directors shall be elected by adopting candidates’ nomination system as specified in Article 192-1 of the Company Law of the Republic of China. The nomination of directors and related announcement shall comply with the relevant regulations of the Company Law of the Republic of China and the Securities and Exchange Law. Independent Directors and non-independent Directors shall be elected at the same time with their votes separately counted. Professional qualifications, restrictions on shareholding and concurrent jobs, determination of independence, nomination and election methods, exercise of powers and authority, and other compliances with regard to Independent Directors shall be governed by the applicable regulations established by the regulatory securities authorities of the Republic of China.

Article 13-2

For election of Directors, cumulative voting method shall apply where each share is entitled to a number of votes identical to the number of Directors to be elected. All votes may be cast for a single candidate or multiple candidates. The candidates receiving the ballots representing the most voting rights will be elected as Directors.

Article 14

The Directors shall elect from among themselves a Chairman of the Board of Directors, and require a majority in a meeting attended by over two-thirds of the Directors. The Chairman of the Board of Directors shall have the authority to represent the Company. In the case where the Chairman of the Board is absent or otherwise unable to perform his/her duties, matters conducted on behalf of the Chairman shall be handled in accordance with Article 208 of the Company Law of the Republic of China.

Article 14-1

The meeting of the Board of Directors shall be held at least once every quarter upon written notice mailed/faxed/e-mailed to all the other Directors, at least seven days, unless in case of urgent circumstances, prior to the date of the meeting, specifying the date and place of the meeting and its agenda.

Article 14-2

A meeting of the Board of Directors may be held if attended by a majority of total Directors and resolutions shall be adopted with the concurrence of the majority of the Directors present at the meeting, unless otherwise provided in the Company Law of the Republic of China. A Director may, by written authorization, appoint another Director to attend on his/her behalf any meeting of the Board of Directors, and to vote for him/her on the matters specified in the written authorization at such meeting when he/she is unable to attend the meeting, but no Director may act as proxy for more than one other Director.

Article 15

Any Director attending the meeting via video conference shall be deemed to have attended the meeting in person.

The meeting minutes shall be signed or chopped by the Chairman and the recorder, and a copy of the minutes shall be distributed to each Director within 20 days after the meeting and shall be retained during the existence of the Company.

The meeting minutes under the preceding paragraph may be produced and distributed in electronic form.

Article 16

The Board of Directors shall be generally authorized to review and determine the remunerations for the Directors based on the involvement and contribution to the operation of the Company, regardless profits or losses of the Company, in consistent with the prevailing standards in the same industry.

Article 16-1

During the term of the Directors and key employees and to the extent of their performance of work, the Company may procure the liability insurance for them for damage claims filed by parties in interest.

Article 16-2

In consideration of strengthening supervision and management over the Company, Board of Directors may form Audit, Nomination, Risk Management or any other functional committees, taking into account the scale of Board of Directors and the number of Independent Directors. An Environmental Protection or related committee may also be included based on the consideration of corporate social responsibility and sustainable operation.

Article 16-3

The Company shall establish Audit Committee pursuant to Article 14-4 of Securities and Exchange Act which shall be composed by all Independent Directors.

Article 16-4

The composition, duty and authority, rules governing the proceedings of meetings and other rules governing the Audit Committee shall follow the applicable laws and regulations of the Republic of China and the bylaws of the Company.

Section V - Management

Article 17

The Company may appoint one General Manager, and one President for registered branch, and such officers designation, discharge and remuneration shall be in accordance with Article 29 of the Company Law of the Republic of China.

Section VI - Accounting

Article 18

After the close of each fiscal year, the following reports shall be prepared by the Board of Directors, and submitted to the regular meeting of shareholders for recognition, after being submitted to Audit Committee for review:

Business report,
Financial statements,
Proposal for distribution of profits or compensation for losses

Article 19

The Company shall, if any profits earned by the Company for a fiscal year, pay no less than 1% of the profits earned by the company as employees’ additional compensation and pay no more than 10% as directors’ remuneration on condition that the Company shall first use the profits to offset any accumulated losses.

The aforesaid “profits earned by the Company” refers to pre-tax profits before deducting the said employees’ additional compensation and directors’ remuneration.

The Company may pay such employees’ additional compensation in the form of cash or stock. The distribution method, amount and stock numbers shall be approved by a majority vote at a meeting of board of directors attended by at least two-thirds of the total number of directors and then reported to the shareholders’ meeting.

The Company shall pay such directors’ remuneration in cash. The distribution ratio shall be recommended by Remuneration Committee to the board of directors. The board of directors is authorized to determine the distribution ratio not exceeding the above upper limit. The distribution ratio will be approved by a majority vote at a meeting of board of directors attended by at least twothird of the total number of directors and then reported to the shareholders’ meeting.

Employees who are entitled to employees’ additional compensation are those officially hired by the Company with labor insurance and benefits and the employees of subsidiaries under certain conditions. Temporary employees and probationary employees are not included.

The Company may distribute the shares by way of new shares to be issued by the Company or existing shares to be re-purchased by the Company to qualified employees. The Company may also enter into a share subscription right agreement with or issue restricted stock for qualified employees. Qualification requirements of the employees include the employees of parent company or subsidiaries of the Company who meet certain requirements.

Article 19-1

The Company shall, after covering all losses incurred in the past years and paying all taxes and dues, set aside a legal capital reserve at 10 % of the profits left over, until the accumulated legal capital reserve has equaled the total capital of the Company, and then set aside special capital reserve in accordance with relevant laws or regulations of the Republic of China or as requested by the authorities. If any remaining profits are available, plus the beginning undistributed earnings, it will be the accumulated distributable earnings and Board of Directors will draft the proposal for earnings distribution or no distribution under scenarios approved by Board of Directors, and have it passed by the resolution of shareholders’ meeting before distribution or modification. If the Company would like to distribute the distributable dividends and bonuses in whole or in part in cash, such cash dividends and bonuses can be distributed 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 report to the shareholders’ meeting.

Article 19-2

Considering the Company is in an industry in a growth phase, profits may be distributed in total after taking into consideration financial, business, and operational factors, and to be distributed upon approved by the shareholders’ meeting. It is expected that the dividends, subject to the shareholders’ approval, are in the range of 10% to 100% of distributable profits of a year, among which cash dividend shall not be less than 10% of total distribution. Dividend payout may be adjusted by the Board of Directors based on changes in the internal and external environment.

Section VII - Supplementary Provisions

Article 20

In regard to all matters not provided for in these Articles of Incorporation, the Company Law of the Republic of China shall govern.

Article 21

The internal organization of the Company and the detailed procedures of business operation shall be determined by the Board of Directors.

Article 22

These Articles of Incorporation are agreed to and signed on May 25, 1966. The first Amendment was made on February 1st, 1974.

The second Amendment was made on August 17th, 1974.

The third Amendment was made on June 26th, 1975. The fourth Amendment was made on August 13th, 1976. The fifth Amendment was made on April 23rd, 1977. The sixth Amendment was made on December 9th, 1978. The seventh Amendment was made on April 24th, 1981. The eighth Amendment was made on December 10th, 1982. The ninth Amendment was made on July 16th, 1985. The tenth Amendment was made on September 2nd, 1989. The eleventh Amendment was made on October 11th, 1995. The twelfth Amendment was made on June 16th, 1998. The thirteenth Amendment was made on February 17th, 2001. The fourteenth Amendment was made on April 20th, 2002. The fifteenth Amendment was made on June 14th, 2003. The sixteenth Amendment was made on August 23rd, 2003. The seventeenth Amendment was made on June 18th, 2005. The eighteenth Amendment was made on June 23rd, 2006. The nineteenth Amendment was made on June 27th, 2008. The twentieth Amendment was made on June 16th, 2009. The twenty-first Amendment was made on June 17th, 2010. The twenty-second Amendment was made on June 5th, 2012. The twenty-third Amendment was made on June 3rd, 2013. The twenty-fourth Amendment was made on February 17th, 2014. The twenty-fifth amendment was made on March 3rd, 2015. The deletion of the articles in relation to Supervisors and the amendment to the articles in relation to the Audit Committee take effect on the date when the audit committee is established. The twenty-sixth Amendment was made on June 27th, 2016. The twenty-seventh Amendment was made on October 25th, 2016. The twenty-eighth Amendment was made on December 16th, 2016. The twenty-ninth Amendment was made on June 27th, 2017. The thirtieth Amendment was made on June 24th, 2019. The thirtieth-first Amendment was made on June 30th, 2020.

Appendix 2 LOTUS PHARMACEUTICAL CO., LTD

RULES AND PROCEDURES OF SHAREHOLDERS’ MEETING

[English translation for reference only]

Approved on 2020/06/30

Shareholders’ Meeting of the Company (the “Meeting”) shall be conducted in accordance with these Rules and Procedures unless otherwise provided by relevant laws and regulations.
The Company shall specify in its Meeting notices the time during which shareholder attendance registrations will be accepted, the place to register for attendance, and other matters for attention.

The time during which shareholder attendance registrations will be accepted, as stated in the preceding Paragraph, shall be at least 30 minutes prior to the time the Meeting commences. The place at which attendance registrations are accepted shall be clearly marked and a sufficient number of suitable personnel shall be assigned to handle the registrations. Shareholders or those appoint proxy shall attend the Meeting based on attendance cards, signin cards, or other certificates of attendance. The Company may not arbitrarily add requirements for other documents beyond those showing eligibility to attend presented by shareholders. Solicitors soliciting proxy forms shall also bring identification documents for verification. Shareholders attending the Meeting shall sign in on a sign-in book prepared by the Company or submit the attendance card for the purpose of signing in.

The Meeting shall be held at the head office of the Company or at any other appropriate place that is convenient for the shareholders to attend. The time to start the Meeting shall not be earlier than 9am or later than 3pm, and full consideration shall be given to the opinions of the independent directors with respect to the place and time of the Meeting.
If the Meeting is convened by the Board of Directors, the Chairman of Board of Directors shall preside at the Meeting. In case the Chairman is absence or otherwise unable to perform his/her duties, the Vice Chairman shall sit in as meeting chairman. If there is no Vice Chairman or the Vice Chairman is also absence or otherwise unable to perform his/her duties, the Chairman shall designate a managing director to sit in as meeting chairman. If there is no managing director, the Chairman shall designate a director to sit in as meeting chairman. If the Chairman does not designate a director, the managing directors or directors shall elect one from among themselves to act in lieu of the meeting chairman.

When a managing director or director serves as meeting chairman, as referred to in the preceding Paragraph, the managing director or director shall be one who has held that position for six months or more and who understands the financial and business conditions of the Company. The same rules shall apply for a representative of a juristic person director that serves as meeting chairman.

If the Meeting is convened by any person other than the Board of Director, who is entitled to convene the Meeting, the said person shall preside at the Meeting. If there are more than two persons calling for the Meeting, they shall elect from among themselves to act in lieu of the meeting chairman.

The Company may appoint designated counsel, CPA or other related persons to attend the Meeting.

Persons handling affairs of the Meeting shall wear ID cards or badges.

The Company, starting from the time it accepts shareholder attendance registrations, shall make an uninterrupted audio and video recording of the registration procedure, the proceedings

of the Meeting, and the voting and vote counting procedures. The recorded materials shall be retained for at least one (1) year. If a shareholder lawsuit has been instituted in accordance with Article 189 of the Company Law of the Republic of China, the tapes shall be preserved until the legal proceedings of the lawsuit have been concluded.

Chairman shall call the Meeting to order at the time scheduled for the Meeting. If the number of shares represented by the shareholders present at the Meeting has not yet constituted the quorum at the time scheduled for the Meeting, the chairman may postpone the time for the Meeting. The postponements shall be limited to two times at the most and Meeting shall not be postponed for longer than one hour in the aggregate. If the quorum has not met after two postponements and the attending shareholders still represent less than one-third (1/3) of the total issued shares, the chairman shall declare the Meeting adjourned.

If after two postponements no quorum can yet be constituted but the shareholders present at the Meeting represent more than one-third (1/3) of the total issued shares, tentative resolutions may be made in accordance with Section 1 of Article 175 of the Company Law of the Republic of China. The Company shall notify the shareholders of the tentative resolution and call another Meeting within 1 month.

If during the process of the Meeting the number of shares represented by the shareholders present becomes sufficient to constitute the quorum, the chairman may submit the tentative resolutions of the Meeting for approval in accordance with Article 174 of the Company Law of the Republic of China.

The agenda of the Meeting shall be set by the Board of Directors if the Meeting is convened by the Board of Directors. Unless otherwise resolved at the Meeting, the Meeting shall proceed in accordance with the agenda and approve the proposals by vote in sequence.

The aforesaid provision applies mutatis mutandis to cases where the Meeting is convened by any person other than the Board of Directors, entitled to convene such Meeting.

Unless otherwise resolved at the Meeting, the chairman cannot announce adjournment of the Meeting before all the discussion items (including special motions) listed in the agenda are resolved. If the chairman declares the Meeting adjourned in violation of the Rules, the other members of the Board of Directors shall promptly assist the attending shareholders in electing a new chairman in accordance with statutory procedures, by agreement of a majority of the votes represented by the attending shareholders, and then continue the Meeting.

Except otherwise specified in the relevant laws or regulations, the Meeting of the Company shall be convened by the Board of Directors.

The Company shall prepare electronic versions of the notice and proxy forms, and explanatory materials relating to all proposals, including proposals for ratification, matters for deliberation, or the election or dismissal of directors, and upload them to the Market Observation Post System (MOPS) thirty (30) days before the date of a regular Shareholders Meeting or fifteen (15) days before the date of a special Shareholders Meeting. The agenda of the Meeting shall be explicitly stated in notices and public announcements. When the relevant parties grant their consent, notification may be performed using electronic means.

The election or dismissal of directors, amendment to the Articles of Incorporation, the dissolution, merger, split up of the Company, or any other matters specified in Section 1 of Article 185 of the Company Law of the Republic of China shall be stated in the agenda of convention and shall not be proposed as special motions in the Meeting.

If an election is specified in the agenda of convention, the date of assumption of office shall also be specified and shall not be changed by special motion or other means during the same Meeting.

Shareholders holding at least 1% of the total number of issued shares may submit annual general meeting proposal to the Company for one discussion item. Any proposal with more

than one discussion items shall not be included in the agenda of the Meeting, with an exception of proposal(s) for the Company to enhance the public interests or social responsibility. A proposal involving any matters specified in Section 4 of Article 172-1 of the Company Law of the Republic of China may not be included in the agenda by resolution of the Board of Directors.

The Company shall publicly announce acceptance of shareholders’ proposals, the place of acceptance, and the acceptance period before the book closure date prior to the annual general meeting. The acceptance period may not be shorter than ten (10) days.

Shareholders’ proposal shall be within three hundred (300) characters in length. A proposal exceeding three hundred (300) characters in length shall not be included in the agenda. Proposing shareholders shall attend the annual general meeting in person or by proxy and participate in the discussion with regard to the proposed item.

The Company shall notify those shareholders who submit proposals of the results of process of their proposals prior to the notification of annual general meeting and include the proposals complied with aforesaid provisions in the agenda. With regard to any proposals not included in the agenda, the Board of Directors shall explain the reasons in the Meeting.

When a shareholder present at the Meeting wishes to speak, a Speech Note should be filled out with summary of the speech, the shareholder’s number (or the number of Attendance Card) and the name of the shareholder. The sequence of speeches by shareholders shall be decided by the chairman.

If any shareholder present at the Meeting submits a Speech Note but does not speak, no speech should be deemed to have been made by such shareholder. In case the contents of the speech of a shareholder are inconsistent with the contents of the Speech Note, the contents of actual speech shall prevail.

Unless otherwise permitted by the chairman and the shareholder in speaking, no shareholder shall interrupt the speeches of the other shareholders; otherwise the chairman shall stop such interruption.

Unless otherwise permitted by the chairman, each shareholder shall not, for each discussion item, speak more than two times and exceeding 5 minutes each time.
In case the speech of any shareholder violates the above provision or exceeds the scope of the discussion item, the chairman may stop the speech of such shareholder.
For each Meeting, a shareholder may appoint a proxy to attend the Meeting by providing the proxy form issued by the Company and stating the scope of the proxy's authorization.

A shareholder may issue only one proxy form and appoint only one proxy for any given Meeting, and shall deliver the proxy form to the Company five (5) days before the date of the Meeting. When duplicate proxy forms are delivered, the one received earliest shall prevail unless a declaration is made to cancel the previous proxy appointment.

When the government or a juristic person is a shareholder, it may be represented by more than one representative at the Meeting. Any legal entity designated as proxy by shareholder(s) to be present at the Meeting may appoint only one representative to attend the Meeting.

If a corporate shareholder designates two or more representatives to attend the Meeting, only one representative can speak for each discussion item.

After the speech of a shareholder, the chairman may respond himself/ herself or appoint an appropriate person to respond.
Voting at the Meeting shall be calculated based the number of shares.

With respect to resolutions of the Meeting, the number of shares held by a shareholder with no voting rights shall not be calculated as part of the total number of issued shares.

When a shareholder is an interested party in relation to an agenda item, and there is the likelihood that such a relationship would prejudice the interests of the Company, that shareholder shall not vote on that item, and shall not exercise voting rights as proxy for any other shareholder.

The number of shares for which voting rights shall not be exercised under the preceding Paragraph shall not be calculated as part of the voting rights represented by attending shareholders.

The chairman shall allow ample time during the Meeting for explanation and discussion of proposals, amendments or extraordinary motions proposed by shareholder(s); when the chairman is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the chairman may announce the discussion concluded and call for a vote.
A shareholder shall be entitled to one vote for each share held, except when the shares are restricted shares or are deemed non-voting shares under Article 179, Paragraph 2 of the Company Law of the Republic of China.

When the Company holds a Meeting, it shall adopt exercise of voting rights by either correspondence or electronic means. When voting rights are exercised by correspondence or electronic means, the method of exercise shall be specified in the Meeting notice. A shareholder exercising voting rights by correspondence or electronic means shall be deemed to have attended the Meeting in person and have waived his/ her rights with respect to the extraordinary motions and amendments to original proposals of that Meeting.

Except otherwise specified in the Company Law of the Republic of China or the Articles of Incorporation of the Company, a resolution shall be adopted by a majority of the votes represented by the shareholders present at the Meeting and announced on the MOPS with the details of voting results after the Meeting.

If there is amendment to or substitute for a discussion item, the chairman shall decide the sequence of voting for such discussion item, the amendment or the substitute. If any one of them has been adopted, the others shall be deemed vetoed and no further voting is necessary.
The person(s) to check and the person(s) to record the ballots during a vote by casting ballots shall be appointed by the chairman. The person(s) checking the ballots shall be a shareholder(s). The result of voting shall be announced at the Meeting and placed on record. Vote counting for the proposals or elections shall be conducted in public at the place of the Meeting. Immediately after vote counting has been completed, the results of the voting, including the statistical tallies of the numbers of votes, shall be announced on-site at the Meeting, and made as the record.

The ballots for the election referred to in the preceding Paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least one (1) year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Law of the Republic of China, the ballots shall be retained until the conclusion of the litigation.

Matters relating to the resolutions of a Meeting shall be recorded in the Meeting minutes. The Meeting minutes shall be signed or sealed by the chairman of the Meeting and a copy shall be distributed to each shareholder within twenty (20) days after the conclusion of the Meeting. The Meeting minutes may be produced and distributed in electronic form.

The Company may distribute the Meeting minutes of the preceding Paragraph by means of a public announcement on the MOPS.

The Meeting minutes shall accurately record the year, month, day, and place of the Meeting, the chairman's full name, the methods by which resolutions were adopted, a summary of the deliberations and their results, and the voting number of each elected director when there’s an election, and shall be retained for the duration of the existence of the Company.

During the Meeting, the chairman may, at his/her discretion, set time for intermission. In case of incident of force majeure, the chairman may decide to temporarily suspend the Meeting and announce, depending on the situation, when the Meeting will resume.
If the Meeting cannot continue to proceed at the place of Meeting before all the discussion items (including special motions) resolved, the Meeting shall be continued in any other place by resolution of the shareholders present at the Meeting. The Meeting may be resumed or postponed within five (5) days by resolution of the shareholders present at the Meeting in accordance with Article 182 of the Company Law of the Republic of China.
The chairman may conduct the disciplinary officers or the security guards to assist in keeping order of the Meeting place. Such disciplinary officers or security guards shall wear badges marked “Disciplinary Officers” for identification purpose.
When a shareholder violates the Rules and defies the chairman's correction, obstructs the proceedings and refuses to heed calls to stop, the chairman may instruct the disciplinary officers or security guards to escort the shareholder from the Meeting.
These Rules and Procedures shall be effective from the date it is approved by the Shareholders’ Meeting. The same applies in case of revision.

Appendix 3

Lotus Pharmaceutical Co., Ltd. Shareholding of Directors

			Book	closure date: April 19th, 2021	closure date: April 19th, 2021
Position	Name	Date elected	Current sh	areholding	Remarks
			Shares	Shareholding ratio (%)
Chairman	Robert Wessman (Alvogen Emerging Markets Holdings representative)	2020/06/30	151,100,000	61.58%
Director	Petar Vazharov (Alvogen Emerging Markets Holdings representative)	2020/06/30	151,100,000	61.58%
Director	Thor Kristjansson (Alvogen Emerging Markets Holdings representative)	2020/06/30	151,100,000	61.58%
Director	Arni Hardarson (Alvogen Emerging Markets Holdings representative)	2020/06/30	151,100,000	61.58%
Director	Joel Morales (Alvogen Emerging Markets Holdings representative)	2020/06/30	151,100,000	61.58%
Director	Hirofumi Imai	2020/06/30	0	0
Independent Director	Benjamin Ku	2020/06/30	0	0
Independent Director	Hjorleifur Palsson	2020/06/30	0	0
Independent Director	Hanfei Lin	2020/06/30	7,000	0.003%

AI assistant

Lotus Pharm — AGM Information 2021

51923_rns_2021-09-14_642a5753-0224-4230-a042-1cd45e65ff8d.pdf

Lotus Pharmaceutical Co., Ltd.

Handbook for the 2021 Annual Meeting of Shareholders 【 Translation 】

Table of Contents

Lotus Pharmaceutical Co., Ltd.

2021 Agenda of Annual Meeting of Shareholders

Chairperson Remarks

Reporting Items

Recognition Items

Discussion Items

Special Motions

Adjournment

Reporting Items

Recognition Items

Resolution:

Resolution:

Discussion Items

Resolution:

Resolution:

Special Motions

Adjournment

Attachment 1

Business Report

1. Operational Results of 2020

1.1 Implement Results of Business Plan

1.2 Implementation Results of Budget:

1.4 Research and Development Status:

2.1 Management Guidelines:

2.1.1 A solid foundation

2.1.1.1 Continued optimization of portfolio:

2.1.1.2 Continued to provide outstanding service:

2.1.1.3 Continued quality assurance:

2.1.2 Seizing advantages in niche markets

2.1.2.1 Target time-to-market in timely fashion:

2.1.2.2 Increased profitability through sustainable pipeline strategy of high value drugs:

2.2 Sales volume forecasts of products and the forecasting bases:

Attachment 3

Attachment 4

Attachment 5

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Goodwill Impairment Assessment

Audit Procedures for the Key Audit Matter

Emphasis of Matter

Other Matter

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

LOTUS PHARMACEUTICAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

LOTUS PHARMACEUTICAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

LOTUS PHARMACEUTICAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

LOTUS PHARMACEUTICAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

LOTUS PHARMACEUTICAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

LOTUS PHARMACEUTICAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Goodwill Impairment Assessment

Audit Procedures for the Key Audit Matter

Goodwill Impairment Assessment of Investment Accounted for by Using the Equity Method

Audit Procedures for the Key Audit Matter

Emphasis of Matter

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Auditors’ Responsibilities for the Audit of the Financial Statements

Notice to Readers

LOTUS PHARMACEUTICAL CO., LTD.

BALANCE SHEETS DECEMBER 31, 2020 AND 2019

LOTUS PHARMACEUTICAL CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Lotus Pharm AGM Information 2021