LTC — AGM Information 2019

Nov 1, 2019

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Stock code
2301
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Lite-On Technology Corporation

Extraordinary General Meeting of Shareholders for 2019

Meeting Minutes Date: October 25, 2019

Lite-On Technology Corporation 2019 Extraordinary General Shareholders’ Meeting Minutes

Date: 1:00 p.m., October 25, 2019

Location: 1F, No. 392, Ruey Kuang Road, Neihu Dist., Taipei City (International Convention Center, Lite-On Technology Building)

Attending shareholders and proxy representing:

1,984,131,996 shares (among them, 1,478,623,571 shares voted via electronic transmission), which accounts for 85.37% of total 2,324,025,532 outstanding shares (excluding 26,841,500 non-voting shares)

Director attendees:

Raymond Soong, Warren Chen, CH Chen, Albert Hsueh, Mike Yang

Non-shareholding attendees :

Deloitte Touche Tohmatsu International Taiwan , Meng-Chieh Chiu, CPA HUANG AND PARTNERS ATTORNEYS-AT-LAW Yun-Ju, Huang, Attorney Baker McKenzie Taiwan, James Hsiao, Attorney

Chairman: Raymond Soong

Recorder: Yawen Yang

I. Chairperson Calls Meeting to Order

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

II. Opening Remarks by the Chairperson (omitted)

III. Proposals and Discussions

Proposed by the Board of Directors

i. Proposal: Spin off Solid State Storage Business Unit to “SOLID STATE STORAGE CORPORATION”.

Explanation:

1. In accordance with Article 35 of the Business Mergers and Acquisitions Act, Lite-On Technology Corp plans to spin-off the operation and assets of solid state storage business to 100% owned subsidiary “SOLID STATE STORAGE TECHNOLOGY CORPORATION” in order to facilitate group strategic goal and also enhance competitiveness of SSD business.

2. Net asset value of SSD business is NT$4,482,404,000. The calculation of net asset value is based on 2019.6.30 audited report. SOLID STATE STORAGE TECHNOLOGY CORPORATION will issue 448,240,400 new common shares at NT$10 per share to acquire the spin-off net asset. Lite-On

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Technology Corp. will receive 448,240,400 new common shares at NT$10 per share of SOLID STATE STORAGE TECHNOLOGY CORPORATION after the completion of spin- off. Independent expert’s report on the fairness of spin-off value prepared by BDO Taiwan can be referred to spin-off plan. (Schedule 2 in attachment 1)

1. The spin-off plan is made in accordance with the Business Mergers and Acquisitions Act, Company Act and other related regulations. (Please refer to attachment 1)

2. Propose to authorize chairman in full charge of dealing with the spin-off scope and amount (include assets, liabilities and operation) and other related issues under applicable laws on the aforesaid solid state storage business spin-off.

3. The spin-off reference date is tentatively set at 2019.12.12. If the reference date needed to be adjusted, propose to authorize chairman to make decision on the change of spin off reference date.

4. Please proceed to adopt.

Summary of shareholders’ statements:

1. Questions raised by shareholder no. 111992 、 530256 、 530984 were omitted. The chairman and the persons designated by the chairman fully responded and answered in the meeting. The contents of these statements are well recorded for future inquiry.

2. Suggestions raised by shareholder no. 211436, to amend the explanation 4 as follows: Propose to authorize chairman or the persons designated by the chairman in full charge of dealing with the spin-off scope and amount (include assets, liabilities and operation) and other related issues under applicable laws on the aforesaid solid state storage business spin-off (include but not limit to the buying back of shares from dissenting shareholders in accordance with Article 12 of the Business Mergers and Acquisitions Act).

Chairman: Does any shareholder veto for the amendment?

• Shareholder no. 166279: I veto for the amendment.

Chairman: The amendment was approved as suggested by shareholder no. 211436.

Resolution:

83.19% voted for the proposal. The proposal was approved as the number of votes supporting the

proposal exceeded the number of votes required by law and company policies.

Item	Shares (include shares voted via electronic transmission)	%
Shares represented at the time of voting	1,917,342,610 shares(1,478,623,571 shares)	100%
Shares voted for theproposal	1,595,105,282 shares(1,159,508,147 shares)	83.19%
Shares voted against theproposal	0,0005,981,562 shares(5,981,562 shares)	0.31%
Abstained shares	0,316,255,766 shares(313,133,862 shares)	16.49%
Invalid shares	0,000,000,000 shares(0 shares)	0%

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IV. Provisional Motions: None

V. Adjournment

There being no other special motion, upon a motion by the Chairman, the meeting was adjourned.

(This EGM minutes outlines main points of the meeting. Video recording of the meeting shall prevail as actual record of meeting procedure and contents)

Chairman: Raymond Soong Recorder: Yawen Yang

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Attachment 1

LITE-ON Technology Corporation

Solid State Storage Technology Corporation

Spin-Off Plan

Parties to the Plan: LITE-ON Technology Corporation (hereinafter referred to as Party A) Solid State Storage Technology Corporation (hereinafter referred to as Party B)

To promote the future development of the Group and improve business performance and market competitiveness, Party A plans to spin-off and transfer one hundred percent of the operations of the Solid-State Drive Business Unit in Taiwan (including assets, liabilities, and operations) to Party B as the consideration for Party B's issuance of new shares to Party A (hereinafter referred to as the "Spin-Off"). The Spin-Off Plan (hereinafter referred to as the "Plan") is established in accordance with the Business Mergers and Acquisitions Act, Company Act, and related regulations of the Republic of China and provided as follows:

Article 1 Participants of the company spin-off:

• I. Spun-off company

• LITE-ON Technology Corporation (unified business number: 23357403) with a nominal capital of NT$35,000,000,000 divided into 3,500,000,000 shares with a book value of NT$10 per share and paid-up capital of NT$23,508,670,320 divided into 2,350,867,032 shares.

• II. Existing company succeeding the business of the company spun-off Solid State Storage Technology Corporation (unified business number: 82834183) with a nominal capital of $50,000 divided into 5,000 shares with a book value of NT$10 per share and paid-up capital of $50,000 divided into 5,000 shares.

Article 2 Items that require changes in the Articles of Incorporation of the existing company succeeding the business of the company spun- off:

• Where Party B is required to modify its Articles of Incorporation due to the spin off, it shall cooperate and complete the modifications.

Article 3

• Method of the spin-off:

• The spin-off shall be processed in accordance with Article 35 of the Business Mergers and Acquisitions Act by a spin-off of the parent and subsidiary company.

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Party A shall transfer the operations of the Solid-State Drive Business Unit in Taiwan (including assets, liabilities, and operations) to Party B on the spin-off reference date as the consideration for Party B's issuance of new shares to Party A.

Article 4 Business scope, business value, assets, and liabilities assumed by the company

spun-off:

• I. Business scope of the company spun-off included in the Spin-Off Plan

• 1 Operations of Party A's Solid-State Drive Business Unit in Taiwan.

• 2 Related assets and liabilities required for the operations of Party A's Solid-State Drive Business Unit in Taiwan.

• 3 Related contracts required for the operations of Party A's Solid-State Drive Business Unit in Taiwan (including without limitation: sales and purchase contracts, lease contracts, loan contracts, and other relevant contracts), litigation cases, legal relationships, legal status, licenses, permits, and relevant interests. Where the transfer of a contract requires the approval of the counterparty or other third parties in the original contract in accordance with regulations or the contract, the contract shall be effective after the counterparty or third party grants approval.

• 4 Intellectual property rights including patents, trademarks, technology, and trade secrets of the operations of Solid-State Drive Business Unit in Taiwan owned by Party A prior to the spin-off reference date and a list of patents and trademarks. Party A and Party B shall cooperate with each other in the procedures for the transfer of the aforementioned intellectual property rights and technologies, procedures for the maintenance of rights, and provision of related data, files, and programs so that the other party may exercise related rights. The expenses for the maintenance of rights after the spin-off reference date shall be borne by Party B. The spin-off of intellectual property rights herein does not affect the rights and confidentiality obligations of other authorized individuals before the spin-off.

• 5 Other tax incentives, licenses, permits, and related legal relationships, de facto relationships, and positions prior to expiration or deduction derived from assets, liabilities, rights and obligations, benefits, and spin-offs related to the operations of Party A's Solid-State Drive Business Unit in Taiwan.

• II. Business value of the spin-off

• The business value of the spin-off shall be calculated based on the assets

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spun-off and transferred minus liabilities and it is estimated at NT$4,482,404,000 as shown in Appendix 1.

• III. Assets spun-off and transferred The sum of the assets spun-off and transferred is estimated at NT$7,034,678,967.

• IV. Liabilities spun-off and transferred The sum of the liabilities spun-off and transferred is estimated at NT$2,552,274,967.

• V. The aforementioned business value, assets, and liabilities in the spin-off are temporarily calculated based on the figures in Party A's financial statements that were audited by the CPA on June 30, 2019. Depreciation and capital expenditures and estimates are estimations calculated based on the book value as of the spin-off reference date. However, the actual amount shall be the book value as of the spin-off reference date.

• VI. Where adjustments are required for the assets acquired and liabilities assumed in the spin-off, the board of directors of Party A and Party B may authorize the chairmen to negotiate and adjust. The same shall apply where adjustments are required for the business value and the number of shares issued by the existing company.

• Article 5 The ratio of the issuance of new shares acquired by the company spun-off (Party A) in return for the business value, assets, and liabilities assumed by the existing company in the spin -off and calculation method:

• I. Proportion of issued shares acquired Party A plans to spin-off and transfer the business value of the Solid-State Drive Business Unit with a value of NT$4,482,404,000 in exchange for 448,240,400 common shares issued by party B at a value of NT$10 per share based on the conversion rate of NT$10 of the business value in exchange for 1 share. Where there is a difference between Party A's actual business value of the spin -off on the spin-off reference date and the originally estimated spin-off and transfer value, Party A and Party B shall use cash to make up for the difference to each other.

• II. Calculation method

  • The aforementioned share exchange ratio is established based on the book value of the assets and liabilities Party A intends to transfer, net value per share, and expert opinions regarding the spin-off and share exchange ratio. The independent expert report on the fairness of spin-off value is detailed in

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Appendix 2.

Article 6 Adjustments of the number of shares to be issued by the existing company and acquired by the company spun-off in return for the business value, assets, and liabilities assumed by the existing company in the spin-off: The board of directors of Party A and Party B may authorize the chairmen to negotiate and adjust the number of shares issued and/or price per share of new shares issued by Party B in the Spin-Off in the event of the following conditions; the business value assumed by Party B based on the Spin-Off shall also be adjusted accordingly:

  - I. Where assets obtained by Party A after the signing of the Plan are included in the scope of assets in the spin-off and transfer;

  - II. Where the assets and liabilities to be spun-off and transferred by Party A are subject to asset revaluation, depreciation, amortization, addition, or impairment due to business, investment, or financing activities and causes changes to the detailed statements or amounts;

  - III. Where the business value is subject to a material increase or decrease due to business operations of the spin-off and transfer, changes in the scope of assets or liabilities, or other reasons as of the spin-off reference date and adjustments are required;

  - IV. Other cases where changes in laws or regulations or instructions from related competent authorities make it necessary to adjust the proportion of the number of shares issued by Party B in accordance with Article 5.

• Article 7 Total number, type, and quantities of new shares issued by the existing company succeeding the business of the company spun-off:

• I. Party B shall issue 448,240,400 common shares to Party A in exchange for the business value it succeeds in the Spin- Off Plan.

• II. Party B shall complete registration and issue common shares to Party A after the spin-off reference date in accordance with laws.

• III. After the completion of the spin-off, Party B's paid-up capital shall be increased to NT$4,482,454,000 which is divided into 448,245,400 shares with a book value of NT$10 per share. Party A shall still own 100% of Party B's shares.

Article 8 All rights and obligations assumed and related matters:

• I. All rights and obligations for the assets and liabilities spun-off and transferred by Party A to Party B in the Spin-Off Plan shall be assumed by Party B as of the spin-off reference date Where related transfer procedures

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are required, Party A shall provide cooperation.

• II. With the exception of liabilities before the spin-off and transfer and Party A's debts before the spin-off which can be divided, Party B shall bear joint and several liabilities with Party A for the liabilities for repayment of Party A's debts within the scope of its capital contribution in the form of the business operations it assumed in accordance with Article 35, Paragraph 6 of the Business Mergers and Acquisitions Act. However, the creditor's right to claim repayment for joint and several liabilities shall be extinguished by prescription if it is not exercised within two years of the spin-off reference date.

Article 9 Procedures for the transfer and appointment of employees:

• Party A and Party B shall negotiate the retention of employees in accordance with related regulations in the Business Mergers and Acquisitions Act and the Labor Standards Act. They agree that Party B shall recognize the years of service of retained employees during their employment at Party A before the spin-off reference date. Alternatively, Party A may, pursuant to the Labor Standards Act, negotiate with employees to guarantee their due rights and interests.

Article 10 Spin-off reference date, progress schedule for plan execution, and expected completion date, and procedures for delays

• I. After the Spin-Off is approved by the board of directors of Party A and Party B, the board of directors of each party shall be authorized to negotiate and establish the spin-off reference date. The spin-off reference date is currently set for December 12, 2019. Where it is necessary to adjust the spin-off reference date due to the implementation of related regulatory procedures or practical requirements, the chairmen of the two parties shall be authorized to negotiate and make adjustments accordingly.

• II. Matters in the Plan and estimated implementation schedule that remain unresolved after the spin-off reference date shall be processed by the board of directors of the two parties based on actual conditions and requirements.

Article 11 Purchase and cancellation of shares of objecting shareholders:

• Where a shareholder of Party A issued an objection in writing or verbally regarding related items in the Spin-Off or the Spin-Off Plan before or during the shareholders' meeting in which the spin-off is determined in a resolution and such objection is recorded, if the shareholder waives its right to the vote, it may request a repurchase of the shares and Party A shall repurchase the shares held by the objecting shareholder in accordance with related laws and regulations.

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Article 12 Creditor notices, announcement obligations, and related matters:

• I. After the spin-off is passed in resolutions of the meetings of the board of directors of Party A and Party B, they shall formulate individual balance sheets and inventory of property, notify their creditors, issue announcements, and specify a period of at least thirty days for creditors to file objections within the period. Where a creditor of one of the companies files an objection within the designated period, the company shall process the objection in accordance with related laws and regulations.

• II. Where the debt repaid by Party A to the creditor that has raised the objection in accordance with the regulations provided in the preceding paragraph is within the scope of the spin-off and transfer of the Plan, the board of directors of Party A and Party B shall adjust the business scope, business value, assets, and liabilities specified in Article 4. The same shall apply if adjustments are required for the ratio or price of shares issued by Party B.

Article 13 Apportionment of taxes and expenses:

• I. Unless otherwise specified in the Spin-Off Plan, Party A and Party B shall each pay half of all taxes or expenses derived from the signing or performance of the Spin-Off Plan except for those that meet regulations for the exemption of taxes or expenses. Where the Spin-Off Plan is not approved by related competent authorities or where it is not effective due to other reasons, the expenses for attorneys and accountants and other expenses already incurred shall be borne by Party A.

• II. Where the Spin-Off Plan is eligible for applicable tax incentives, Party A and Party B shall cooperate and help each other in obtaining such incentives.

Article 14 Liability for breach of contract:

• I. Where Party A or Party B violates related regulations in the Plan and a party issues a written notice to the other party to request corrections within thirty days but the other party fails to complete corrections, the party may issue a written notice to the other party to terminate the Plan.

• II. Where a party is in violation of the Plan and fails to implement corrections within the period specified in the other party's notice or where the violation is severe and causes damage to any party, the party in breach of the contract shall pay compensation for all fees (including but not limited to the expenses for attorneys and accountants, related expenses, losses, or other

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damage) to the party that suffered the damage. The parties also agree that in the event of any losses caused to any third party due to reasons attributable to themselves (including but not limited to requests for compensation from third parties) in the implementation of related matters in the Plan, the liable party shall pay compensation to the party that suffered the damage.

Article 15 Applicable law:

• I. The Spin-Off Plan is processed in accordance with the Business Mergers and Acquisitions Act. Where new laws and regulations are promulgated and implemented (including those promulgated after the spin-off reference date) and such laws and regulations are more favorable, the Spin-Off Plan shall be governed by the most favorable laws and regulations.

• II. The Plan shall be interpreted in accordance with the laws of the Republic of China. In the event of any dispute in the Plan, Taiwan Shihlin District Court shall be the court of first instance.

Article 16 Other matters:

• I. In the event that any provision in the Plan is in violation of related regulations and is voided, only the parts in violation shall be voided and the other terms in the Plan shall remain valid. The provisions voided due to violation of related laws and regulations shall be negotiated separately by the board of directors of Party A and Party B within the legal scope in accordance with related laws and regulations.

• II. Where changes are required for any provision in the Plan in accordance with instructions from related competent authorities, the Plan shall be amended in accordance with the instructions from related competent authorities or by the board of directors of Party A and Party B in accordance with such instructions.

• III. Where the Plan is not authorized or approved by related competent authorities, the Plan shall be deemed as invalid from the start.

• IV. The registration of changes to the rights to properties spun-off and transferred by Party A to Party B in the Spin-Off Plan shall be completed within six months of Party B's completion of the spin-off except where a longer period is required in other laws or where a force majeure factor applies.

• V. Where the number of entities or companies in the Spin-Off is increased, decreased, or changed, all currently completed legal proceedings shall be implemented once again.

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• VI. Issues not addressed in the Plan shall be processed in accordance with related laws and regulations and the regulations of the competent authority. Issues not addressed in laws or regulations of the competent authority responsible shall be processed by the board of directors of Party A and Party B at their sole discretion.

The Plan is executed in two original copies with Party A and Party B each holding one original copy.

Parties to the Plan: LITE-ON Technology Corporation Audit Committee Convener: Albert Hsueh

Solid State Storage Technology Corporation Chairman: Raymond Soong August 30, 2019

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Schedule 1

Book Value of the Assets and Liabilities Spun-Off and Transferred Share conversion ratio calculation baseline date: June 30, 2019

Unit: NT$

Name of Assets and Liabilities	Business Value (Book Value)	Remarks
Cash and bank deposits	1,000,000,330
Inventory - minus allowance for inventory devaluation	2,272,632,947
Net notes and accounts receivable	2,905,090,231
Other receivables	4,921,469
Other current assets	152,416,369
Net fixed assets	629,307,320
Right-of-use assets	58,462,161
Other non-current assets	11,848,140
Total assets (A)	7,034,678,967
Accounts payable	2,158,171,933
Other payables	323,842,877
Unearned revenues	8,774,573
Other current assets	4,763,568
Other non-current liabilities	56,722,016
Guarantee deposits and margins received
Warranty and maintenance reserve
Total liabilities (B)	2,552,274,967
Business value of the spin-off (A-B)	4,482,404,000

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Schedule 2

Fairness of Business Value, Spin-Off and Share Exchange Ratio

Independent Expert Opinion

Recipient: LITE-ON Technology Corporation

Subject: The CPA has been appointed by LITE-ON Technology Corporation for the review of the fairness of business value, spin-off and share exchange ratio of its Solid-State Drive Business Unit (including assets and liabilities) (hereinafter referred to as "SSD BU"). The CPA has adopted necessary analysis and review procedures and completed the review. The results of the review are provided as follows.

Explanation:

• I. Transaction background information

According to LITE-ON Technology Corporation (hereinafter referred to as "LITE-ON"), the company intends to spin-off and transfer parts of the businesses of the SSD BU of the Group (including assets and liabilities) (hereinafter referred to as "Valuation Subject") to its newly-established and wholly-owned subsidiary company Solid State Storage Technology Corporation (hereinafter referred to as "Solid State Storage") based on the Group's strategy and optimization of its organizational structure. Solid State Storage shall issue new shares as the consideration for the transfer. The transaction procedures are explained in the illustration below:

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Introduction and terminology of transaction companies, related business units, and affiliated enterprises

No.	Full Name of Company/Business Unit	Abbreviated Name of Company/Busines s Unit	Business Introduction of Company/Business Unit
1.	LITE-ON Technology Corporation	LITE-ON	Manufacturing and sales of computer peripheral products and non-computer peripheral products.
2.	Solid State Storage Technology Corporation	Solid State Storage	Electronic parts and components manufacturing, data storage media manufacturing and duplicating
3.	Solid-State Drive Business Unit	SSD BU	Design, R&D, production, and sales of storage parts and components. Products consist of solid-state drives, CD-ROMS, etc.

Source: LITE-ON audited 2019 Q2 financial report and compiled by BDO Taiwan.

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II. Purpose of the fairness evaluation

LITE-ON seeks to learn about the business value of the Valuation Subject and appoints the CPA to conduct necessary review procedures and express opinions on the fairness of the business value in accordance with the "Regulations Governing the Acquisition and Disposal of Assets by Public Companies". The evaluation of this case was completed by the CPA.

III. Declarations

The CPA remains independent from LITE-ON and fully implements due professional attention in the review and opinion expressed regarding the value of the Valuation Subject and the fairness of the share exchange ratio. The contents of the Opinion contain financial information including the balance sheet of the SSD BU as of June 30, 2019 provided by LITE-ON, introduction of related industries, and information obtained from written to digital reference information. Due to the scope of the appointment, the CPA has not adopted the generally accepted auditing standards for the audit of the aforementioned information nor conducted independent verification regarding the accuracy and adequacy of such information. The CPA assumed such information to be truthful, reliable, and trustworthy. Therefore, the CPA does not provide any opinion or any guarantee regarding the contents of such financial information. The "correctness" specified in this statement refers to appropriate and reasonable use of the sources of information.

IV. Review opinions for the fairness of the business value in the spin-off

The baseline date of the valuation in this case is June 30, 2019. The CPA has reviewed and inspected the book value of assets and liabilities of the Valuation Subject, referenced the related financial statements provided by the Valuation Subject, the balances of other accounts, and related accounting practices as of the baseline date of the valuation. The CPA hereby provides an explanation on the fairness of the transaction price:

As the Valuation Subject and Solid State Storage are businesses under joint control (LITE-ON) and LITE-ON had retained the business value of the Valuation Subject before the transaction, LITE-ON still indirectly holds the business value of the Valuation Subject after the completion of the transaction. As the Valuation Subject shall be held by Solid State Storage, there is no real transfer of the management and control rights. As a principle, LITE-ON's spin-off and transfer of the business value of the Valuation Subject to the newly-established Solid State Storage is essentially a reorganization.

The business value of the Valuation Subject which LITE-ON intends to spin-off is NT$4,482,404,000. The estimated book value of the assets and liabilities to be spun-off as of the baseline date of the evaluation is shown as follows:

The estimated book value of the assets and evaluation is shown as follows:	liabilities to be spun-off as of the baseline date of the
(Unit: NT$)	June 30, 2019
Account	Book Value
Assets
Current assets	$6,335,061,346
Non-current assets	699,617,621
Totalassets (A)	7,034,678,967
Liabilities
Currentliabilities	2,495,552,951
Non-current liabilities	56,722,016
Total liabilities (B)	2,552,274,967
Business value (A-B)	$4,482,404,000
Source: Provided by LITE-ON and compiled by BDO Taiwan

As described above, the CPA believes that the aforementioned spin-off and transfer should be considered a merger of businesses under joint control and they meet requirements specified in Section 2 (c) of International Financial Reporting Standards No. 3 "Business Combinations" (hereinafter referred to as "IFRS 3"). Therefore, related accounting procedures in IFRS 3 do not apply. According to the response provided by the Accounting Research and Development Foundation in the IFRS Q&A published on October 26, 2018, as IFRS 3 does not provide express regulations on business combinations under joint

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control, it shall remain governed by regulations in related interpretations issued in Taiwan and the "book value approach" shall be adopted for accounting procedures.

According to the (2002) Ji-Mi No. 128 Letter issued by the Accounting Research and Development Foundation on June 14, 2002, "For accounting procedures for the spin-off of companies, where the enterprise (transferor company) assigns its businesses to another company (transferee company) and obtains shares issued by the transferee company, if the transferor company and transferee company are affiliate companies, the nature of the transfer shall be deemed as a reorganization and the accounting procedures shall be processed based on the net value of book value of the original assets (where assets are impaired, it shall be based on the amount after the losses are recognized) minus the liabilities which shall be used as the cost of the acquisition of shares and not recognized as an exchange of interest. The transferee company shall also use the book value of the original assets and liabilities of the transferor company (where assets are impaired, it shall be based on the amount after the losses are recognized) as the cost of the acquisition of assets and liabilities. The net value of the two shall be used as the basis. The book value shall be used as capital stock and the parts in excess of the book value shall be used as capital reserve."

Therefore, the establishment of Solid State Storage, its issuance of new shares to pay for the value of the Valuation Subject spun-off from LITE-ON, and LITE-ON's spin-off of the book value of net assets of NT$4,482,404,000 meet related accounting regulations.

V. Explanation of general assumptions

It is assumed in this case that there has been no material changes in the overall economic, political, and investment environment, other external conditions, the business activities of LITE-ON and its professional management team, and other internal conditions from the baseline date of the valuation to the report date and that all financial statements of LITE-ON Group have been formulated in accordance with IFRSs. In addition, the use of the spin-off evaluation for different purposes of valuation or the adoption of different assumptions or valuation baseline dates may cause material impact on the results of the evaluation. The CPA does not guarantee that the evaluation results of the Opinion would remain the same if the Valuation Subject is subject to the aforementioned changes.

VI. Conclusion on the fairness of the share exchange ratio

The CPA believes that the calculation regarding the spin-off value of certain related businesses of the Solid-State Drive Business Unit of LITE-ON is based on the book value of related assets and liabilities of the Valuation Subject on June 30, 2019 and processed in accordance with related Q&A and interpretation letters of the Accounting Research and Development Foundation. Therefore, Solid State Storage's issuance of 448,240,400 common shares at the book value price of NTD 10 to LITE-ON as consideration for the acquisition of net assets is considered reasonable.

VII. Restrictions on the use of the Opinion

1. This Opinion is only valid for the aforementioned item and may not be expanded to include the entire financial statements of the Valuation Subject.

2. The CPA only evaluated the fairness of the transfer price as an independent third party and does not actually participate in the design and planning of the transaction framework. The data used in the Opinion are data valid as of June 30, 2019, the baseline date of the evaluation. Therefore, no change thereafter was considered for the Opinion. Where the actual contents sold differ from the description above, the conclusion of the Opinion shall also be changed. The CPA shall not be responsible for updating the Opinion in the event of changes in actual conditions after the Opinion is submitted unless the CPA is reappointed to conduct a new evaluation.

3. The evaluation results of the Opinion are only provided as references for decision-making by internal management of LITE-ON and related individuals in the potential transaction and for filing documents to the competent authority in accordance with regulations. Without the written consent of the CPA, no contents of the report may be photocopied or delivered in any way to a third party.

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BDO Taiwan Union & Co.

CPA: Shu-Cheng Chang

Securities competent authority approval certificate number: (1997) Tai-Cai-Zheng (6)- 74537

August 21, 2019

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Independence Statement

I was appointed to provide related opinions for LITE-ON Technology Corporation to assess the business value of its Solid-State Drive Business Unit and the fairness of the business value, spin-off and share exchange ratio.

I hereby declare that I have maintained my independence in the performance of the aforementioned businesses and none of the following conditions apply:

1. I am a related party or (related party in substance) of the aforementioned company as defined in IAS 24.

2. I or my spouse is currently employed by the aforementioned company, serve as a regular employee, or receive fixed salary therefrom.

3. I or my spouse was previously employed by the aforementioned company and less than two years have elapsed since dismissal.

4. I or my spouse serve in a company which is a related party of the aforementioned company.

5. I am the spouse or a relative within second degree of kinship with the person in charge or managerial officer of the aforementioned company.

6. I or my spouse engage in joint investments or benefit sharing with the aforementioned company.

7. I am the attesting CPA of the aforementioned company.

8. I am a current director, supervisor, or the spouse or a relative within second degree of kinship of a director or supervisor of Taiwan Stock Exchange Corporation or Taipei Exchange.

9. I or my spouse serve in a company which has business relationships with the aforementioned company.

Evaluator: Shu-Cheng Chang

August 21, 2019

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Qualifications of the Independent Expert

Name:	Shu-Cheng Chang	Shu-Cheng Chang
Qualified in examination:	Qualified	in the high-level national
	examination for Certified		Public
	Accountant	of the Republic of China
Current position:	BDO Taiwan Union & Co.
Education background:	Master in	Accounting, National	Taipei	Accounting	Partner
	University
	Graduated	from the Accounting
	Department	of Chung Yuan Christian
	University
Experience:	Taipei CPA	Association		Member of	the Industry
				and	Commerce
				Committee

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