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POLARIS GROUP AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS' REPORT

DECEMBER 31, 2025 AND 2024

For the convenience of readers and for information purpose only, the 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. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

POLARIS GROUP AND SUBSIDIARIES
DECEMBER 31, 2025 AND 2024 CONSOLIDATED FINANCIAL STATEMENTS
AND INDEPENDENT AUDITORS’ REPORT
TABLE OF CONTENTS

Contents	Page
1. Cover Page	1
2. Table of Contents	2 ~ 3
3. Independent Auditors’ Report	4 ~ 12
4. Consolidated Balance Sheets	13 ~ 14
5. Consolidated Statements of Comprehensive Income	15
6. Consolidated Statements of Changes in Equity	16
7. Consolidated Statements of Cash Flows	17 ~ 18
8. Notes to the Consolidated Financial Statements	19 ~ 69
(1) History and Organisation	19
(2) The Date of Authorisation for Issuance of the Financial Statements and Procedures for Authorisation	19
(3) Application of New Standards, Amendments and Interpretations	19 ~ 20
(4) Summary of Material Accounting Policies	21 ~ 31
(5) Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty	31 ~ 33
(6) Details of Significant Accounts	33 ~ 59

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Contents

(7) Related Party Transactions 59~60
(8) Pledged Assets 60
(9) Significant Contingent Liabilities and Unrecognised Contract 61

Commitments

(10) Significant Disaster Loss 61
(11) Significant Events after the Balance Sheet Date 61~62
(12) Others 62~68
(13) Supplementary Disclosures 68~69
(14) Segment Information 69

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INDEPENDENT AUDITORS' REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of Polaris Group

Opinion

We have audited the accompanying consolidated balance sheets of Polaris Group and subsidiaries (the "Group") as at December 31, 2025 and 2024, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of material accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2025 and 2024, 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 and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagement of Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with 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 2025 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Group’s 2025 consolidated financial statements are stated as follows:

Key audit matter - impairment assessment of property, plant and equipment

Description

The Group is primarily engaged in the research and development of new drugs. The property, plant and equipment currently purchased are mainly used for the purposes of research and development or future production and their utilisation is closely related to the results of the Company’s research and development of new drug. The property, plant and equipment amounted to NT$3,464,897 thousand, constituting 43% of the consolidated total assets as at December 31, 2025. Refer to Notes 4(12) and 4(16) for the accounting policies on the acquisition and subsequent measurement of the property, plant and equipment, Note 5(2) A. for the accounting estimation uncertainty of property, plant and equipment and Notes 6(8) and 6(12) for the details and related impairment amount of property, plant and equipment. The management of the Group assesses the recoverable amounts of the property, plant and equipment where there is an indication that they are impaired as the basis of impairment assessment under IAS 36 ‘Impairment of Assets’. Given that the calculation of recoverable amount is considered to be a critical accounting estimate, involves the management’s subjective judgement and contains uncertainty, we

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consider the impairment assessment of property, plant and equipment as a key audit matter of the consolidated financial statements for the year ended December 31, 2025 based on the overall assessment.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter according to the entities:

Property, plant and equipment of the subsidiaries - DesigneRx Pharmaceuticals (Chengdu) Co., Ltd. and North Star Pharmaceuticals, Ltd.

Obtained an understanding on and assessed the related policies and procedures of the Group's impairment assessment of property, plant and equipment and obtained an understanding on the Group's procedures of assessing whether there is any indication that each cash-generating unit may be impaired and assessed the reasonableness of the procedures.
Obtained an assets appraisal report issued by an external expert appointed by the Group for the cash-generating units with indications of impairment.
Conducted the following audit procedures of impairment test in accordance with the assets appraisal report issued by an external expert appointed by the Group:

(1) Obtained an understanding on and assessed the independence, objectivity and competence of the external expert.
(2) Obtained an understanding on and assessed the reasonableness of the valuation method adopted in the appraisal report.
(3) Obtained an understanding on and assessed the reasonableness of the main valuation key assumptions adopted in the appraisal report and recalculated to ascertain the accuracy of the calculation of the impairment amount.

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Property, plant and equipment of the subsidiaries - Genovior Biotech Corporation and DesigneRx Pharmaceuticals Inc.

Obtained an understanding on and assessed the related policies and procedures of the Group’s impairment assessment of property, plant and equipment and obtained an understanding on the Group’s procedures of assessing whether there is any indication that each cash-generating unit may be impaired and assessed the reasonableness of the procedures.
Obtained an impairment test conducted by the Group based on the financial forecast for the next seven years for the cash-generating units with indications of impairment.
In accordance with the Group’s audit procedures of impairment test:

(1) Obtained an understanding on and assessed the reasonableness of the Group’s impairment test method.

(2) Obtained an understanding on and assessed the expected growth rate used and compared it with the management’s operating plans and forecast trend literature in the industry.

(3) Obtained an understanding on and assessed the reasonableness of the discount rate used in the impairment test, recalculated to ascertain the accuracy of the calculation and verified the reasonableness of the assumptions on capital cost of cash-generating units.

(4) Assessed the future cash flow sensitivity analysis prepared by management based on the alternative assumption for different discount rates and growth rates, and conforming whether management has adequately managed the possible impact on the estimation uncertainty of impairment assessment.

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Key audit matter – impairment assessment of goodwill and project under research and development and drug permit license arising from business combination of Lin Yang

Description

Refer to Note 4(16) Impairment of non-financial assets for the accounting policy on goodwill and project under research and development and drug permit license impairment, Note 5(2) B. for the uncertainty of goodwill and project under research and development and drug permit license impairment and Note 6(11) for the details of goodwill and project under research and development and drug permit license impairment.

As of December 31, 2025, the goodwill recognised by the Group from the acquisition of equity interests in Lin Yang was all provisioned as impairment losses with a total impairment loss of NT$541,300 thousand. The project under research and development and drug permit license amounted to NT$761,049 thousand, and the total impairment loss of NT$458,459 thousand was recognised.

After identifying the smallest cash-generating unit which can generate independent cash flows, the Group measures the recoverable amount of the cash-generating unit by using each cash-generating unit’s estimated future cash flows and proper discount rate, which was used as the basis of impairment assessment of goodwill and project under research and development and drug permit license. As the amount of goodwill and project under research and development and drug permit license arising from business combination is significant and the process of calculating the recoverable amount of each cash-generating unit involves numerous assumptions, including expected growth rates, discount rates and the future financial forecast, and the assumptions involve the management’s subjective judgement and contain uncertainty, which have a significant impact on the measurement result of recoverable amount, and further affect the estimates of goodwill and project under research and development and drug permit license impairment, we consider the impairment assessment of goodwill and project under research and development and drug permit license as a key audit matter of the consolidated financial statements for the year ended December 31, 2025 based on the overall assessment.

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How our audit addressed the matter

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

Verified the accuracy of management’s valuation model calculation.
Conducted the following audit procedures for the reasonableness of significant assumptions adopting in the management’s valuation models:

(1) Compared the expected growth rate used with the management’s operating plans and forecast literature reports in the industry.
(2) Verified the reasonableness of the assumptions on capital cost of cash-generating units of the discount rate used.
(3) Assessed the future cash flow sensitivity analysis prepared by management based on the alternative assumption for different discount rates and growth rates, and conforming whether management has adequately managed the possible impact on the estimation uncertainty of impairment assessment.

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 Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless

management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

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

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

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of 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 Standards on Auditing of the Republic of China, we exercise professional judgment and 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

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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 auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
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 appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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

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

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

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POLARIS GROUP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2025 AND 2024
(Expressed in thousands of New Taiwan dollars)

Assets	Notes	December 31, 2025		December 31, 2024
		AMOUNT	%	AMOUNT	%
Current assets
1100	Cash and cash equivalents	6(1)	$ 1,830,396	22	$ 1,946,210	22
1136	Financial assets at amortised cost - current	6(3) and 8
			911,470	11	1,175,205	13
1170	Trade receivables	6(4)	2,553	-	2,704	-
1200	Other receivables		32,307	-	21,785	-
130X	Inventories	6(5)	121,884	2	67,375	1
1410	Prepayments	6(6)	79,751	1	86,594	1
1476	Other current financial assets	6(1) and 8	1,534	-	1,938	-
1479	Other current assets, others		37,458	1	23,337	-
11XX	Current Assets		3,017,353	37	3,325,148	37
Non-current assets
1550	Investments accounted for using equity method	6(7)
			207,896	3	-	-
1600	Property, plant and equipment	6(8)(12)	3,464,897	43	2,725,805	30
1755	Right-of-use assets	6(9)	276,408	3	241,348	3
1760	Investment property, net	6(10)	185,662	2	193,667	2
1780	Intangible assets	6(11)	762,484	9	2,180,637	24
1920	Guarantee deposits paid		20,162	-	21,007	-
1980	Other non-current financial assets	6(1) and 8	15,000	-	-	-
1990	Other non-current assets, others	6(13)	218,067	3	402,828	4
15XX	Non-current assets		5,150,576	63	5,765,292	63
1XXX	Total assets		$ 8,167,929	100	$ 9,090,440	100

(Continued)

POLARIS GROUP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2025 AND 2024
(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity	Notes	December 31, 2025		December 31, 2024
		AMOUNT	%	AMOUNT	%
Current liabilities
2100	Short-term borrowings	6(14)	$ 42,792	1	$ 15,592	-
2130	Contract liabilities - current	6(23)	8,000	-	25,073	-
2170	Accounts payable		9,120	-	2,325	-
2200	Other payables	6(15)	452,659	6	279,506	3
2220	Other payables to related parties	7	-	-	80,482	1
2250	Current provisions		8,028	-	-	-
2280	Current lease liabilities		26,345	-	42,439	1
2320	Long-term liabilities, current portion	6(16)	38,916	-	23,477	-
21XX	Current Liabilities		585,860	7	468,894	5
Non-current liabilities
2540	Long-term borrowings	6(16)	2,089,340	26	1,622,377	18
2580	Non-current lease liabilities		149,895	2	177,835	2
2670	Other non-current liabilities, others	6(17)	46,677	-	50,739	1
25XX	Non-current liabilities		2,285,912	28	1,850,951	21
2XXX	Total Liabilities		2,871,772	35	2,319,845	26
Equity attributable to owners of parent
	Share capital	6(20)
3110	Common stock		8,598,927	105	7,702,513	84
3140	Advance receipts for share capital		-	-	60	-
	Capital surplus	6(21)
3200	Capital surplus		14,732,045	180	12,828,313	141
	Retained earnings	6(22)
3350	Accumulated deficit		( 18,494,894 )	( 226 )	( 14,567,766 )	( 160 )
	Other equity interest
3400	Other equity interest		460,079	6	732,294	8
31XX	Equity attributable to owners of the parent		5,296,157	65	6,695,414	73
36XX	Non-controlling interests		-	-	75,181	1
3XXX	Total equity		5,296,157	65	6,770,595	74
3X2X	Total liabilities and equity		$ 8,167,929	100	$ 9,090,440	100

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

POLARIS GROUP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31, 2025 AND 2024

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

	Items	Notes	Year ended December 31
			2025		2024
			AMOUNT	%	AMOUNT	%
4000	Operating revenue	6(23)	$ 40,602	100	$ 107,000	100
5000	Operating costs	6(23)(26)(27)	( 310,926)	( 766)	( 183,923)	( 172)
5900	Gross (loss) profit from operations		( 270,324)	( 666)	( 76,923)	( 72)
	Operating expenses	6(26)(27)
6100	Selling expenses		( 35,909)	( 88)	( 34,847)	( 33)
6200	Administrative expenses		( 310,197)	( 764)	( 330,531)	( 309)
6300	Research and development expenses		( 2,262,281)	( 5572)	( 2,192,469)	( 2049)
6450	Expected credit (loss) reversal		115	-	( 115)	-
6000	Total operating expenses		( 2,608,272)	( 6424)	( 2,557,962)	( 2391)
6900	Operating loss		( 2,878,596)	( 7090)	( 2,634,885)	( 2463)
	Non-operating income and expenses
7100	Interest income		71,710	177	144,301	135
7020	Other gains and losses	6(24)	( 1,026,284)	( 2528)	2,103	2
7050	Finance costs	6(25)	( 99,360)	( 245)	( 57,062)	( 53)
7060	Share of loss of associates and joint ventures accounted for using equity method		( 12,174)	( 30)	-	-
7000	Total non-operating income and expenses		( 1,066,108)	( 2626)	89,342	84
7900	Loss before income tax		( 3,944,704)	( 9716)	( 2,545,543)	( 2379)
7950	Income tax expense	6(28)	( 390)	( 1)	( 5,210)	( 5)
8200	Loss for the year		( $ 3,945,094)	( 9717)	( $ 2,550,753)	( 2384)
	Components of other comprehensive income, net, that will not be reclassified to profit or loss
8361	Exchange differences on translation		( $ 281,160)	( 692)	$ 491,042	459
	Components of other comprehensive income, net, that will be reclassified to profit or loss
8361	Exchange differences on translation		8,945	22	( 94,887)	( 89)
8300	Other comprehensive (loss) income		( $ 272,215)	( 670)	$ 396,155	370
8500	Total comprehensive loss		( $ 4,217,309)	( 10387)	( $ 2,154,598)	( 2014)
	Loss, attributable to:
8610	Owners of the parent		( $ 3,927,128)	( 9673)	( $ 2,502,642)	( 2339)
8620	Non-controlling interest		( 17,966)	( 44)	( 48,111)	( 45)
			( $ 3,945,094)	( 9717)	( $ 2,550,753)	( 2384)
	Comprehensive loss attributable to:
8710	Owners of the parent		( $ 4,199,343)	( 10343)	( $ 2,106,487)	( 1969)
8720	Non-controlling interest		( 17,966)	( 44)	( 48,111)	( 45)
			( $ 4,217,309)	( 10387)	( $ 2,154,598)	( 2014)
	Loss per share
9750	Basic and diluted loss per share	6(29)	( $ 5.10)	( $ 3.35)

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

POLARIS GROUP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

YEARS ENDED DECEMBER 31, 2025 AND 2024

(Expressed in thousands of New Taiwan dollars)

	Notes	Equity attributable to owners of the parent							Non-controlling interests
		Share capital		Capital surplus, additional paid-in capital	Accumulated deficit	Financial statements translation differences of foreign operations	Total
		Share capital - common stock	Advance receipts for share capital
2024
Balance at January 1, 2024		$ 7,437,592	$ -	$ 11,696,587	($ 12,065,124)	$ 336,139	$ 7,405,194	$ 267,143	$ 7,672,337
Loss for the year		-	-	-	( 2,502,642 )	-	( 2,502,642 )	( 48,111 )	( 2,550,753 )
Other comprehensive income for the year		-	-	-	-	396,155	396,155	-	396,155
Total comprehensive income (loss)		-	-	-	( 2,502,642 )	396,155	( 2,106,487 )	( 48,111 )	( 2,154,598 )
Issuance of shares	6(19)(21)	240,000	-	936,000	-	-	1,176,000	-	1,176,000
Exercise of employee stock options	6(19)(21)	24,921	60	22,548	-	-	47,529	-	47,529
Compensation cost of employee stock options	6(19)(21)	-	-	173,178	-	-	173,178	-	173,178
Non-controlling interests		-	-	-	-	-	-	( 143,851 )	( 143,851 )
Balance at December 31, 2024		$ 7,702,513	$ 60	$ 12,828,313	($ 14,567,766 )	$ 732,294	$ 6,695,414	$ 75,181	$ 6,770,595
2025
Balance at January 1, 2025		$ 7,702,513	$ 60	$ 12,828,313	($ 14,567,766 )	$ 732,294	$ 6,695,414	$ 75,181	$ 6,770,595
Loss for the year		-	-	-	( 3,927,128 )	-	( 3,927,128 )	( 17,966 )	( 3,945,094 )
Other comprehensive loss for the year		-	-	-	-	( 272,215 )	( 272,215 )	-	( 272,215 )
Total comprehensive loss		-	-	-	( 3,927,128 )	( 272,215 )	( 4,199,343 )	( 17,966 )	( 4,217,309 )
Issuance of shares	6(20)(21)	894,197	-	1,788,393	-	-	2,682,590	-	2,682,590
Exercise of employee stock options	6(19)(21)	2,217	( 60 )	771	-	-	2,928	-	2,928
Compensation cost of employee stock options	6(19)(21)	-	-	114,568	-	-	114,568	-	114,568
Sale of subsidiaries		-	-	-	-	-	-	( 57,215 )	( 57,215 )
Balance at December 31, 2025		$ 8,598,927	$ -	$ 14,732,045	($ 18,494,894 )	$ 460,079	$ 5,296,157	$ -	$ 5,296,157

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

POLARIS GROUP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2025 AND 2024
(Expressed in thousands of New Taiwan dollars)

	Year ended December 31
	Notes	2025	2024
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax	($)	3,944,704)	($) 2,545,543)
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expense	6(8)(9)(26)	273,913	206,543
Amortisation expense	6(11)(26)	102,446	108,576
Compensation cost of employee stock options	6(19)(27)	114,568	173,178
Interest expense	6(25)	94,838	57,062
Interest revenue		(71,710)	(144,301)
Loss on disposal of property, plant and equipment	6(8)(24)	2,287	3,506
Loss on disposal of right-of-use assets		-	61
Gain on valuation of financial assets at fair value through profit or loss	6(2)(24)	-	(32,410)
Loss on disposal of financial assets at fair value through profit or loss	6(2)(24)	-	31,798
Share of loss of associates accounted for using equity method	6(7)	12,174	-
Gain on disposal of investments accounted for using equity method		(51,205)	-
Gain in government grants	6(24)	(798)	(1,611)
Reversal of expected credit losses		(115)	(343)
Impairment loss on non-financial assets	6(24)	1,079,155	-
Changes in operating assets and liabilities
Changes in operating assets
Trade receivables		235	2,758
Inventories		(57,645)	(31,020)
Other receivables		(10,580)	(1,759)
Prepayments		6,475	(7,754)
Other current assets, others		(14,121)	(7,173)
Other non-current assets, others		(4,601)	40,557
Changes in operating liabilities
Accounts payable		6,795	182
Contract liabilities-current		(17,073)	15,013
Other payables		97,692	25,462
Current provisions		7,776	-
Cash outflow generated from operations		(2,374,198)	(2,107,218)
Income tax paid	6(28)	(390)	(5,210)
Interest paid		(91,413)	(57,606)
Interest received		71,710	144,301
Net cash flows used in operating activities		(2,394,291)	(2,025,733)

(Continued)

POLARIS GROUP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2025 AND 2024
(Expressed in thousands of New Taiwan dollars)

	Year ended December 31
	Notes	2025	2024
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment	6(30)	($ 793,829)	($ 1,664,709)
Proceeds from disposal of property, plant and equipment		-	9,883
Acquisition of intangible assets	6(11)	( 1,454 )	-
Proceeds from disposal of financial assets at fair value through profit or loss	6(2)	-	185,230
Acquisition of financial assets at amortised cost	6(3)	( 525,050 )	( 217,011 )
Proceeds from disposal of financial assets at amortised cost	6(3)	676,590	196,481
Increase in other current financial assets		-	( 430 )
Decrease in other current financial assets	6(1)	404	-
Increase in other non-current financial assets		( 15,000 )	-
Increase in guarantee deposits		( 1,527 )	-
Decrease in guarantee deposits		202	4,954
Acquisition of non-controlling interest		-	( 143,851 )
Net cash flows used in investing activities		( 659,664 )	( 1,629,453 )
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of short-term borrowings	6(14)(31)	( 1,386,425 )	( 93,711 )
Proceeds from short-term borrowings	6(14)(31)	1,351,627	15,592
Proceeds from related party loan	7	17,090	80,482
Repayment of loans from related parties		( 91,335 )	-
Repayments of long-term debt	6(16)(31)	( 515,496 )	( 10,200 )
Proceeds from long-term debt	6(16)(31)	1,019,552	679,745
Payments of lease liabilities	6(31)	( 119,291 )	( 44,328 )
Exercise of employee stock options		2,928	47,529
Proceeds from issuance of shares	6(20)	2,682,590	1,176,000
Net cash flows from financing activities		2,961,240	1,851,109
Effect of exchange rate changes on cash and cash equivalents		( 23,099 )	134,806
Net decrease in cash and cash equivalents		( 115,814 )	( 1,669,271 )
Cash and cash equivalents at beginning of year		1,946,210	3,615,481
Cash and cash equivalents at end of year		$ 1,830,396	$ 1,946,210

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

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POLARIS GROUP AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2025 AND 2024

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. History and Organisation

THE POLARIS GROUP, LLC (Polaris Group, the “Company”) was incorporated in the Cayman Islands on February 9, 2006. The address of the Company’s registered office is PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. The Company and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in the biotechnology services, drug testing, contract development and manufacturing services and research, development, manufacture and sales of new drugs. The Group’s core research is the ADI-PEG 20 which is currently undergoing human clinical trials for various cancer indications.

The review of initial application for primary listing of stock filed by the Company had been completed on March 4, 2022. The application for listing had been approved by the Board of Directors of the Taiwan Stock Exchange on March 22, 2022. The Company’s stocks have been listed on the Taiwan Stock Exchange on June 6, 2022.

2. The Date of Authorisation for Issuance of the Financial Statements and Procedures for Authorisation

These consolidated financial statements were authorised for issuance by the Board of Directors on March 11, 2026.

3. Application of New Standards, Amendments and Interpretations

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS®”) Accounting Standards that came into effect as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by the FSC and became effective from 2025 are as follows:

New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IAS 21, ‘Lack of exchangeability’	January 1, 2025

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

(2) Effect of new issuances of or amendments to IFRS Accounting Standards as endorsed by the FSC but not yet adopted by the Group

New standards, interpretations and amendments endorsed by the FSC effective from 2026 are as follows:

New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
Specific provisions of Amendments to IFRS 9 and IFRS 7, ‘Amendments to the classification and measurement of financial instruments’	January 1, 2026
Amendments to IFRS 9 and IFRS 7, ‘Contracts referencing nature-dependent electricity’	January 1, 2026
IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendment to IFRS 17, ‘Initial application of IFRS 17 and IFRS 9 – comparative information’	January 1, 2023
Annual Improvements to IFRS Accounting Standards—Volume 11	January 1, 2026
The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

(3) IFRS Accounting Standards issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRS Accounting Standards as endorsed by the FSC are as follows:

New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’	To be determined by International Accounting Standards Board
IFRS 18, ‘Presentation and disclosure in financial statements’	January 1, 2027(Note)
IFRS 19, ‘Subsidiaries without public accountability: disclosures’	January 1, 2027
Amendments to IAS 21, ‘Translation to a Hyperinflationary Presentation Currency’	January 1, 2027

Note : The FSC has announced in a press release on September 25, 2025 that public companies will apply IFRS 18 starting from the fiscal year 2028. Additionally, entities can choose to adopt IFRS 18 earlier based on their requirements after the FSC endorses IFRS 18.

Except for the following, the above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

IFRS 18, ‘Presentation and disclosure in financial statements’

IFRS 18, ‘Presentation and disclosure in financial statements’ replaces IAS 1. The standard introduces a defined structure of the statement of profit or loss, disclosure requirements related to management-defined performance measures, and enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes.

4. Summary of Material Accounting Policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers", International Financial Reporting Standards, International Accounting Standards, IFRIC® Interpretations, and SIC® Interpretations that came into effect as endorsed by the FSC (collectively referred herein as the "IFRSs").

(2) Basis of preparation

A. The consolidated financial statements have been prepared under the historical cost convention.
B. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

A. Basis for preparation of consolidated financial statements:

(a) All subsidiaries are included in the Group's consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.
(b) Inter-company transactions, balances and unrealised gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

B. Subsidiaries included in the consolidated financial statements:

Name of investor	Name of subsidiary	Main business activities	Ownership(%)
			December 31, 2025	December 31, 2024
The Company	Polaris Pharmaceuticals, Inc.	Research and development of biotechnology	100	100
The Company	DesigneRx Europe Limited	Research and development of biotechnology	100	100
The Company	Polaris Pharmaceuticals Australia Pty Ltd.	Research and development of biotechnology	100	100
The Company	Polaris Pharmaceuticals Ireland Limited	Research and development of biotechnology	100	100
The Company	Polaris Pharmaceuticals (Taiwan), Inc.	Biotechnology services and medicine inspection	100	100

Name of investor	Name of subsidiary	Main business activities	Ownership(%)		Description
			December 31, 2025	December 31, 2024
The Company	DesigneRx Pharmaceuticals, Inc.	Research, development and manufacture of new drugs	100	100
The Company	TDW HK Limited	Holding company	100	100
TDW HK Limited	DesigneRx Pharmaceuticals (Shanghai) Inc.	Research and development of new drugs	-	100	(Note 1)
TDW HK Limited	DesigneRx Pharmaceuticals (Chengdu) Co., Ltd.	Research, development and manufacture of new drugs	100	100
The Company	Nanotein Technologies, Inc.	Biotechnology services and medicine inspection	43.78	54.89	(Note 4)
TDW HK Limited	Lin Yang Biopharm, Ltd.	Holding company	100	100
The Company	Genovior Biotech Corporation	Research, development, manufacture and production of drugs	72.27	65.05	(Note 2)
Lin Yang Biopharm, Ltd.	Genovior Biotech Corporation	Research, development, manufacture and production of drugs	27.73	34.95	(Note 2)
TDW HK Limited	North Star Pharmaceuticals, Ltd.	Manufacture and production of drugs	100	100	(Note 3)

Note1: On January 20, 2025, DesigneRx Pharmaceuticals (Shanghai) Inc. applied for deregistration in accordance with the law. The company has been deregistered in accordance with the law and no longer exists.
Note 2: Genovior Biotech Corporation increased capital amounting to $200,000 and increased capital through the debt for equity swaps amounting to$ 328,712 in the first and the fourth quarter of 2025, respectively, which was 100% subscribed by the Company. Therefore, the Company's shareholding ratio was increased and Lin Yang Biopharm, Ltd.'s shareholding ratio was decreased.
Note 3: The Company established the subsidiary, North Star Pharmaceuticals, Ltd., in Fujian, China through investment in the subsidiary, TDW HK Limited. The date of registration for the establishment was on November 21, 2024.
Note 4: Nanotein Technologies, Inc. increased capital in the third quarter of 2025. However, the Company did not continue to participate in the capital increase, resulting in a decrease in the Company's shareholding ratio to $43.78\%$ . Consequently, the Company lost its control over the company, but still has significant influence over it. Therefore, starting from July 9, 2025, it was changed to be recognised under investments accounted for using equity method and was not included in the consolidated financial statements. A gain on disposal of investments amounting to $\$51,205$ was recognised, and the gain was recognised under other gains and losses in the statement of comprehensive income.
C. Subsidiaries not included in the consolidated financial statements: None.
D. Adjustments for subsidiaries with different balance sheet dates: None.
E. Significant restrictions: Cash of the Company's subsidiaries, DesigneRx Pharmaceuticals (Chengdu) Co., Ltd. and North Star Pharmaceuticals, Ltd., amounted to $203,980 and$ 131,812,

respectively, deposited in mainland China are under local foreign exchange control which restricts the capital to be remitted outside the borders.

F. Subsidiaries that have non-controlling interests that are material to the Group: None.

(4) Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The Group’s functional currency is United States dollars; however, the consolidated financial statements are presented in New Taiwan dollars under the regulations of the country where the consolidated financial statements are reported to the regulatory authorities.

A. Foreign currency transactions and balances

(a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.

(b) Monetary assets and liabilities denominated in foreign currencies at the period end are re-translated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.

(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

(d) All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.

B. Translation of foreign operations

The operating results and financial position of all the group entities, associates and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(a) Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

(b) Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

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(5) Classification of current and non-current items

A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

(a) Assets that are expected to be realised, or are intended to be sold or consumed in the normal operating cycle (12 months);

(b) Assets that are held primarily for the purpose of trading;

(d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities for at least twelve months after the reporting period.

B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

(a) Liabilities that are expected to be settled in the normal operating cycle (12 months);

(b) Liabilities that are held primarily for the purpose of trading;

(d) It does not have the right at the end of the reporting period to defer settlement of the liability at least twelve months after the reporting period.

(6) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

(7) Financial assets at amortised cost

The Group’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

(8) Trade receivable

A. Trade and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.

B. The short-term trade and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(9) Impairment of financial assets

For debt instruments measured at fair value through other comprehensive income and financial assets at amortised cost, at each reporting date, the Group recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Group

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recognises the impairment provision for lifetime ECLs.

(10) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

(11) Investments accounted for using equity method - associates

A. Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognised at cost.

B. The Group's share of its associates' post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

C. When changes in an associate's equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Group's ownership percentage of the associate, the Group recognises change in ownership interests in the associate in 'capital surplus' in proportion to its ownership.

D. Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

E. When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

F. At the balance sheet date, the Group performs an impairment test for an investment in an associate when there is an indication that the investment may be impaired. The entire carrying amount of the investment (including goodwill) is tested for impairment as a single asset, by

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comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its carrying amount. Any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

(12) Property, plant and equipment

A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.

B. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

D. The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets' residual values and useful lives differ from previous estimates or the patterns of consumption of the assets' future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, 'Accounting Policies, Changes in Accounting Estimates and Errors', from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Buildings	20 ~ 50 years
Testing equipment	5 ~ 11 years
Production equipment	5 ~ 10 years
Computer equipment	3 ~ 7 years
Office equipment	3 ~ 7 years
Leasehold improvements	The shorter of useful lives and lease terms

(13) Leasing arrangements (lessee)—right-of-use assets/ lease liabilities

A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of low-value assets, lease payments are recognised as an expense on a straight-line basis over the lease term.

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B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of the following:

(a) Fixed payments, less any lease incentives receivable; and
(b) Variable lease payments that depend on an index or a rate.

The Group subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

C. At the commencement date, the right-of-use asset is stated at cost comprising the following:

(a) The amount of the initial measurement of lease liability;
(b) Any lease payments made at or before the commencement date;
(c) Any initial direct costs incurred by the lessee; and
(d) An estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.

D. For lease modifications that decrease the scope of the lease, the lessee shall decrease the carrying amount of the right-of-use asset and remeasure the lease liability to reflect the partial or full termination of the lease, and recognise the difference in profit or loss. For all other lease modifications, the lessee shall remeasure the lease liability and adjust the right-of-use asset, correspondingly.

(14) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life.

(15) Intangible assets

A. Goodwill

Goodwill arises in a business combination accounted for by applying the acquisition method.

B. Computer software

Computer software is stated at cost and amortised on a straight-line basis over its estimated useful life of 3 years.

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C. Core technology – Nanotein medium
Nanotein medium is stated at cost and amortised on a straight-line basis over their estimated useful life of 20 years.

D. Project under research and development and drug permit license
Project under research and development and drug permit license are stated at cost and amortised on a straight-line basis over its estimated useful life of 14 years.

(16) Impairment of non-financial assets
A. The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognising impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

B. The recoverable amounts of goodwill, intangible assets with an indefinite useful life and intangible assets that have not yet been available for use are evaluated periodically. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognised in profit or loss shall not be reversed in the following years.

C. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that is/are expected to benefit from the synergies of the business combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

(17) Borrowings
Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

(18) Notes and accounts payable
A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

B. The Group initially measures notes and accounts payable at fair value and subsequently measured at amortised cost using the effective interest method. However, short-term notes payable without bearing interest are subsequently measured at initial invoice amount as the

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effect of discounting is immaterial.

(19) Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognised as interest expense. Provisions are not recognised for future operating losses.

(20) Employee benefits

A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expense in that period when the employees render service.

B. Pensions

Defined contribution plans

For defined contribution plans, the contributions are recognised as pension expense when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

C. Employees' compensation and directors' and supervisors' remuneration

Employees' compensation and directors' and supervisors' remuneration are recognised as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is paid by shares, the Group calculates the number of shares based on the close price before the Board resolution day.

(21) Employee share-based payment

For the equity-settled share-based payment arrangements, the employee services received are measured at the fair value of the equity instruments granted at the grant date, and are recognised as compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value of the equity instruments granted shall reflect the impact of market vesting conditions and non-vesting conditions. Compensation cost is subject to adjustment based on the service conditions that are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. Ultimately, the amount of compensation cost recognised is based on the number of equity instruments that eventually vest.

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(22) Income tax

A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.

B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences. Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.

E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.

F. A deferred tax asset shall be recognised for the carryforward of unused tax credits resulting from acquisitions of equipment or technology, research and development expenditures and equity investments to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilised.

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(23) Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

(24) Revenue recognition

A. Sale of services

(a) The Group provides biopharmaceutical manufacturing services to the customers. Operating revenue is recognised in the accounting period in which the services are rendered. For fixed-price contracts, revenue is recognised based on the actual cost of services provided to the end of the reporting period as a proportion of the total cost of services to be provided. The customer pays at the time specified in the payment schedule. If the services rendered exceed the payment, a contract asset is recognised. If the payments exceed the services rendered, a contract liability is recognised.

(b) The Group provides services of research and development testing. Revenue is recognised when the commissioned service is completed by the Group and the acceptance of the results of the services provided is confirmed by the customers.

B. Sale of goods

Revenue is recognised when the customer obtains control over the goods, which is the point at which the performance obligation is satisfied.

(25) Government grants

Government grants are recognised at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises expenses for the related costs for which the grants are intended to compensate. Government grants related to property, plant and equipment are recognised as non-current liabilities and are amortised to profit or loss over the estimated useful lives of the related assets using the straight-line method.

(26) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The Group's chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.

Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group's accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

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(1) Critical judgements in applying the Group’s accounting policies

The going concern basis of accounting

The Group’s management assesses the Group’s ability to continue as a going concern, and uses this assessment to determine whether the use of the going concern basis of accounting is appropriate. When conducting relevant assessments, management shall make significant judgement and assumptions regarding the matters that may affect the Group’s operations and financial condition in the future, including expected future operating cash flows, profitability, changes in the operating environment, the availability of financing arrangements and other related factors.

When assessing the going concern assumption, management takes into comprehensive consideration the Group’s current financial condition, available sources of capital, the feasibility of operating plan, and other relevant supporting information. Any variations in economic environment, industrial environment, and laws and regulations might cause material impacts to the aforementioned judgements and assumptions, thereby affecting the assessment results of the Group’s ability to continue as a going concern.

As of the end of the reporting period, management has adopted relevant information in the foreseeable period that it considers appropriate for conducting the aforementioned assessment, and has determined that the use of the going concern basis of accounting remains appropriate.

(2) Critical accounting estimates and assumptions

A. Impairment assessment of tangible assets

The Group assesses impairment based on its subjective judgement and determines the separate cash flows of a specific group of assets, useful lives of assets and the future possible income and expenses arising from the assets depending on how assets are utilised and industrial characteristics. Any changes of economic circumstances or estimates due to the change of Group strategy might cause material impairment on assets in the future. Please refer to Notes 6(8) and 6(12) for the information of the impairment assessment of tangible assets. As of December 31, 2025, the Group recognised equipment, net of impairment loss, amounting to $3,464,897.

B. Impairment assessment of intangible asset

The impairment assessment of goodwill and project under research and development and drug permit license relies on the Group’s subjective judgement, including identifying cash-generating units, allocating assets and liabilities as well as goodwill to related cash-generating units, and determining the recoverable amounts of related cash-generating units. As of December 31, 2025, the Group recognised impairment loss of $541,300 and $458,459 for goodwill and project under research and development and drug permit license, respectively. The carrying amount of project under research and development and drug permit license was $761,049. Goodwill was all provisioned as impairment losses, which shall not be reversed in the following years. Please refer to Note 6(11) for the information of goodwill and project under

~32~

research and development and drug permit license impairment.

6. Details of Significant Accounts

(1) Cash and cash equivalents

	December 31, 2025	December 31, 2024
Cash on hand	$ 160	$ 241
Checking accounts and demand deposits	1,814,521	1,514,869
Time deposits	15,715	400,174
Cash equivalents	-	30,926
	$ 1,830,396	$ 1,946,210

A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote. The financial institutions in which the Group deposits are mainly located in Taiwan and the principal currency of the deposits are NT Dollar, US Dollar and RMB.

B. As of December 31, 2025 and 2024, cash and cash equivalents that were pledged to others as collateral and classified as financial assets at amortised cost, other current financial assets, other non-current financial assets and guarantee deposits amounted to $934,804 and $1,177,143, respectively. Please refer to Notes 6(3), (14), (16) and 8 for details.

C. As of December 31, 2024, cash equivalents referred to the capital that the investee of the Group, Nanotein, deposited in the cash management company amounting to $30,926, of which $27,648, had been used to purchase money market funds and $3,278 had not been invested and had been deposited by the cash management company in its cooperative bank. The Company lost its control over Nanotein starting from July 9, 2025. However, the Company still has significant influence over Nanotein. Therefore, it was changed to be recognised under investments accounted for using equity method and was not included in the consolidated financial statements. Details are provided in Note 6(7).

(2) Financial assets at fair value through profit or loss

A. As of December 31, 2025 and 2024, there were no financial assets at fair value through profit or loss.

B. Amounts recognised in profit or loss in relation to financial assets at fair value through profit or loss are listed below:

Item	2025	2024
Equity instruments	$ -	($ 272)
Debt instruments	-	1,304
Beneficiary certificates	-	( 420)
	$ -	$ 612

(3) Financial assets at amortised cost

Items	December 31, 2025	December 31, 2024
Deposits over Three Months	$ -	$ 6,800
Deposits - Pledged as Collateral	911,470	1,168,405
	$ 911,470	$ 1,175,205

A. Details of the Group’s financial assets at amortised cost pledged to others as collateral are provided in Notes 6(16) and 8.

B. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

(4) Trade receivables.

	December 31, 2025	December 31, 2024
Trade receivables	$ 2,553	$ 2,819
Less: Allowance for uncollectible accounts	-	( 115)
	$ 2,553	$ 2,704

The aging analysis of trade receivables that were past due but not impaired is as follows:

| | December 31, 2025
Trade receivables | December 31, 2024
Trade receivables |
| --- | --- | --- |
| Not past due | $ 2,553 | $ 2,445 |
| Up to 90 days | - | 259 |
| Over 90 days | - | 115 |
| | $ 2,553 | $ 2,819 |

The above aging analysis was based on past due date.

(5) Inventories

	December 31, 2025
	Cost	Allowance for valuation loss	Book value
Raw materials	$ 76,363	($ 2,818)	$ 73,545
Work in progress	13,766	-	13,766
Finished goods	52,762	( 18,189)	34,573
	$ 142,891	($ 21,007)	$ 121,884
	December 31, 2024
	Cost	Allowance for valuation loss	Book value
Raw materials	$ 20,672	($ 5,525)	$ 15,147
Work in progress	17,796	( 1,845)	15,951
Finished goods	50,719	( 14,442)	36,277
	$ 89,187	($ 21,812)	$ 67,375

The cost of inventories recognised as expense for the year:

	2025	2024
Cost of goods sold	$ 74,684	$ 42,353
(Gain on reversal of) loss for market price decline and obsolete and slow-moving inventories	( 785)	14,618
Inventory write-off loss	9,884	2,674
Unamortised manufacturing costs	217,441	109,135
	$ 301,224	$ 168,780

(6) Prepayment

	December 31, 2025	December 31, 2024
Prepaid clinical trial	$ 40,171	$ 58,566
Prepaid service fees	6,840	1,579
Prepaid insurance	5,319	5,739
Prepaid rents	1,401	1,378
Prepaid goods	680	31
Others	25,340	19,301
	$ 79,751	$ 86,594

In order to actively expand the clinical trials of Globlastoma, the Company's US subsidiary, Polaris Pharmaceuticals, Inc., entered into a clinical trial contract with a US research institution in 2022. Certain payments were classified to long-term prepaid clinical trials as the trial period was more than a year based on the assessment. Please refer to Note 6(13) Other non-current assets-others.

(7) Investments accounted for using equity method

	2025	2024
At January 1	$ -	$ -
Consolidated entities transferred to associates	203,848	-
Share of profit or loss of investments accounted for using equity method	(12,174)	-
Net exchange differences	16,222	-
At December 31	$ 207,896	$ -

A. Associates

(a) The basic information of the associates that are material to the Group is as follows:

Company name	Principal place of business	Shareholding ratio	Shareholding ratio
		December 31, 2025	December 31, 2024
Nanotein Technologies, Inc.	US	43.78%	54.89%

(b) The summarised financial information of the associates that are material to the Group is as follows:

Balance sheet

	December 31, 2025
Current assets	$ 47,637
Non-current assets	35,501
Current liabilities	( 215)
Total net assets	$ 82,923
Share in associate's net assets	$ 36,304

Statement of comprehensive income

	Year ended December 31, 2025
Revenue	$ 2,811
Loss for the period from continuing operations/ Total comprehensive loss	($ 67,229)

(c) Nanotein increased capital on July 9, 2025. The Group resolved not to participate in the capital increase, resulting in a decrease in its shareholding ratio from 54.89% to 43.78%. The Group is the single largest shareholder of the company. However, after considering all potential voting power factors, including share options and restricted stocks, the Group's actual shareholding ratio was adjusted to approximately 36.06%. At the same time, Nanotein's other major shareholders, including the founder and Sartorius Stedim North America Inc., collectively hold approximately 45.68% of the potential voting power. They jointly established a Joint Steering Committee, which is responsible for Nanotein's significant operating decisions. Furthermore, the founder and Sartorius Stedim North America Inc. have three directors out of four in its Board, while the Group only holds one seat. In summary, the Group has no substantial ability to direct the relevant activities of Nanotein, the Group has no control, but only has significant influence over Nanotein. As a result, starting from July 9, 2025, it was classified to investments accounted for using equity method, and gain or loss on disposal was recognised. Details are provided in Note 6(24).

(8) Property, plant and equipment

	2025
	Land	Buildings	Testing equipment	Transportation equipment	Office equipment	Leasehold improvements	Unfinished construction and equipment under acceptance	Total
At January 1
Cost	$ 53,389	$ 1,752,922	$ 1,590,094	$ 3,670	$ 44,256	$ 442,618	$ 480,597	$ 4,367,546
Accumulated depreciation	-	( 212,963)	( 961,558)	( 1,451)	( 24,230)	( 441,539)	-	( 1,641,741)
and impairment	$ 53,389	$ 1,539,959	$ 628,536	$ 2,219	$ 20,026	$ 1,079	$ 480,597	$ 2,725,805
Opening net book amount
as at January 1	$ 53,389	$ 1,539,959	$ 628,536	$ 2,219	$ 20,026	$ 1,079	$ 480,597	$ 2,725,805
Additions	-	331,280	467,270	458	2,253	-	252,665	1,053,926
Disposals	-	-	( 2,268)	-	( 19)	-	-	( 2,287)
Transfers	-	71,354	226,652	-	2,778	2,086	( 302,870)	-
Effect of changes in ownership
interests in subsidiaries	-	-	( 5,576)	-	( 64)	( 78)	-	( 5,718)
Depreciation charge	-	( 65,192)	( 157,129)	( 603)	( 6,713)	( 234)	-	( 229,871)
Impairment loss	-	( 79,396)	-	-	-	-	-	( 79,396)
Net exchange
differences	( 2,206)	6,366	9,104	( 54)	( 560)	( 13)	( 10,199)	2,438
Closing net book amount
as at December 31	$ 51,183	$ 1,804,371	$ 1,166,589	$ 2,020	$ 17,701	$ 2,840	$ 420,193	$ 3,464,897
At December 31
Cost	$ 51,183	$ 2,164,312	$ 2,117,760	$ 4,042	$ 46,780	$ 425,827	$ 420,193	$ 5,230,097
Accumulated depreciation	-	( 359,941)	( 951,171)	( 2,022)	( 29,079)	( 422,987)	-	( 1,765,200)
and impairment	$ 51,183	$ 1,804,371	$ 1,166,589	$ 2,020	$ 17,701	$ 2,840	$ 420,193	$ 3,464,897

~37~

	2024
	Land	Buildings	Testing equipment	Transportation equipment	Office equipment	Leasehold improvements	Unfinished construction and equipment under acceptance	Total
At January 1
Cost	$50,002	$1,036,305	$1,227,546	$2,660	$30,190	$420,442	$127,273	$2,894,418
Accumulated depreciation	-	(160,713)	(861,481)	(913)	(18,328)	(415,126)	-	(1,456,561)
and impairment	$50,002	$875,592	$366,065	$1,747	$11,862	$5,316	$127,273	$1,437,857
Opening net book amount
as at January 1	$50,002	$875,592	$366,065	$1,747	$11,862	$5,316	$127,273	$1,437,857
Additions	-	678,253	253,342	827	7,845	118	418,009	1,358,394
Disposals	-	-	(9,716)	-	(322)	(3,351)	-	(13,389)
Transfers	-	-	115,874	-	5,443	-	(121,317)	-
Depreciation charge	-	(46,586)	(105,521)	(497)	(5,477)	(1,254)	-	(159,335)
Net exchange
differences	3,387	32,700	8,492	142	675	250	56,632	102,278
Closing net book amount
as at December 31	$53,389	$1,539,959	$628,536	$2,219	$20,026	$1,079	$480,597	$2,725,805
At December 31
Cost	$53,389	$1,752,922	$1,590,094	$3,670	$44,256	$442,618	$480,597	$4,367,546
Accumulated depreciation	-	(212,963)	(961,558)	(1,451)	(24,230)	(441,539)	-	(1,641,741)
and impairment	$53,389	$1,539,959	$628,536	$2,219	$20,026	$1,079	$480,597	$2,725,805

A. Information about the property, plant and equipment that were pledged to others as collaterals is provided in Notes 6(16) and 8.
B. Impairment information about the property, plant and equipment is provided in Note 6(12). The accumulated impairment amount recorded as of December 31, 2025 was $154,764.

(9) Leasing arrangements—lessee

A. The Group leases various assets including buildings, offices, land and office equipment. Except for the land use right whose lease period is 20~50 years, other rental contracts are typically made for periods of 1 to 6 year(s). Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.
B. Short-term leases with a lease term of 12 months or less comprise certain offices. Low-value assets comprise certain offices and office equipment.
C. The carrying amount of right-of-use assets and the depreciation charge are as follows:

	December 31, 2025	December 31, 2024
	Carrying amount	Carrying amount
Land use right	$ 210,993	$ 136,381
Buildings and offices	65,415	104,967
	$ 276,408	$ 241,348
	2025	2024
	Depreciation charge	Depreciation charge
Land use right	$ 7,703	$ 4,546
Buildings and offices	36,339	42,662
	$ 44,042	$ 47,208

D. On August 6, 2013, the second-tier subsidiary of the Group, DesigneRx Pharmaceuticals (Chengdu) Co., Ltd., signed a land use right contract with the People's Republic of China for the use of the land in the Southwest area of the Chengdu high-tech west zone with a term of 50 years. All rentals had been paid on the contract date.
E. In the second quarter of 2025, the second-tier subsidiary of the Group, North Star Pharmaceuticals, Ltd., signed a land use right contract with the People's Republic of China for the use of the land in the Quangang Petrochemical Industrial Park with a term of 50 years. All rentals had been paid on the contract date.
F. For the years ended December 31, 2025 and 2024, the additions to right-of-use assets were $78,749 and $121,356, respectively. For the year ended December 31, 2024, the Group leased land from the Hsinchu Science Park Bureau amounting to $112,008 due to an adjustment in operating strategy to construct a plant in Zhunan.

~39~

G. The information on profit and loss accounts relating to lease contracts is as follows:

	2025	2024
Items affecting profit or loss
Interest expense on lease liabilities	$ 5,192	$ 5,721
Expense on short-term lease contracts	1,787	2,168
Expense on leases of low-value assets	3,204	1,456

H. For the years ended December 31, 2025 and 2024, the Group's total cash outflow for leases were $129,474 and $53,673, respectively.

(10) Investment property

	December 31, 2025	December 31, 2024
	Land	Land
At January 1
Cost	$ 193,667	$ 181,380
Accumulated depreciation	-	-
	$ 193,667	$ 181,380
Opening net book amount as at January 1	$ 193,667	$ 181,380
Reclassifications	-	-
Net exchange differences	( 8,005)	12,287
Closing net book amount as at December 31	$ 185,662	$ 193,667
At December 31
Cost	$ 185,662	$ 193,667
Accumulated depreciation	-	-
	$ 185,662	$ 193,667

The fair value of the investment property held by the Group as at December 31, 2025 and 2024 was $266,215 and $220,531, respectively. Valuations were made based on the selling price of the comparable properties by comparing the recent transaction price of the land in similar location, which were categorised within Level 3 in the fair value hierarchy.

(11) Intangible assets

	2025
	Computer software	Goodwill	Core technologies	Project under research and development and drug permit license	Total
At January 1
Cost	$628	$755,417	$44,729	$1,501,122	$2,301,896
Accumulated amortisation and impairment	(628)	-	(4,473)	(116,158)	(121,259)
	$-	$755,417	$40,256	$1,384,964	$2,180,637
Opening net book amount as at January 1	$-	$755,417	$40,256	$1,384,964	$2,180,637
Additions	1,454	-	-	-	1,454
Disposals	-	(159,797)	(35,461)	-	(195,258)
Amortisation charge	(84)	-	(1,373)	(101,951)	(103,408)
Impairment loss	-	(541,300)	-	(458,459)	(999,759)
Net exchange differences	65	(54,320)	(3,422)	(63,505)	(121,182)
Closing net book amount as at December 31	$1,435	$-	$-	$761,049	$762,484
At December 31
Cost	$2,177	$556,391	$-	$1,439,081	$1,997,649
Accumulated amortisation and impairment	(742)	(556,391)	-	(678,032)	(1,235,165)
	$1,435	$-	$-	$761,049	$762,484

	2024
	Computer software	Goodwill	Core technologies	Project under research and development and drug permit license	Total
At January 1 (restatement)
Cost	$628	$707,491	$41,891	$1,405,885	$2,155,895
Accumulated amortisation and impairment	(628)	-	(1,543)	(8,368)	(10,539)
	$-	$707,491	$40,348	$1,397,517	$2,145,356
Opening net book amount as at January 1 (restatement)	$-	$707,491	$40,348	$1,397,517	$2,145,356
Amortisation charge	-	-	(2,767)	(105,809)	(108,576)
Net exchange differences	-	47,926	2,675	93,256	143,857
Closing net book amount as at December 31	$-	$755,417	$40,256	$1,384,964	$2,180,637
At December 31
Cost	$628	$755,417	$44,729	$1,501,122	$2,301,896
Accumulated amortisation and impairment	(628)	-	(4,473)	(116,158)	(121,259)
	$-	$755,417	$40,256	$1,384,964	$2,180,637

A. Goodwill is allocated as follows to the Group's cash-generating units:

	December 31, 2025	December 31, 2024
Nanotein	$ -	$ 166,256
Lin Yang	-	555,329
Net Exchange Difference	-	33,832
	$ -	$ 755,417

Acquisition prices in the business combination are calculated by the price of acquisition plus related direct costs. Goodwill is recognised at the difference of the acquisition prices less net fair value of identifiable assets acquired. The allocation duration of acquisition price may not exceed one year after the acquisition. The allocation of the acquisition price of Lin Yang had been completed in the fourth quarter of 2024. In accordance with the regulations of IFRS 3 Business combinations, the tentative amount recognised on the acquisition date was adjusted retrospectively during the measurement period. The Group lost its control over Nanotein starting from July 9, 2025, and only has significant influence over it. Details of disposal of related intangible assets of Nanotein are provided in Note 6(7).

B. The Group's goodwill arising from business combination is mainly expected benefits from the growth of the acquired companies. Acquisition prices in the business combination are calculated by the price of acquisition plus related direct costs. Goodwill is recognised at the difference of the acquisition prices less net fair value of identifiable assets acquired. In accordance with IAS 36, goodwill acquired from business combination shall be tested for impairment periodically. The impairment testing of goodwill is to allocate the goodwill to the cash-generating units that are expected to benefit from the synergies of the business combination. The recoverable amount of all cash-generating units has been determined based on value-in-use calculations. These calculations use future pre-tax cash flow projections assessed by the management.

Nanotein and Lin Yang may be cash-generating units which can generate independent cash flows and the impairment of goodwill is calculated based on value in use and carrying amount of net assets of Nanotein and Lin Yang.

For Nanotein, the Group calculates the value in use according to the allocation report of the acquisition price issued by the expert and Nanotein's operational condition after acquisition, as Nanotein's products are in the early stages of launch, the management adopts future cash flow projections based on their expectations of market development and the main assumptions used in forecasting cash flow are pre-tax discount rate of $23.90\%$ , the launching promotion schedule of its product, Nanotein medium, and the expected operating revenue from the product.

For Lin Yang, the Group calculates the value in use according to the allocation report of the acquisition price issued by the expert and Lin Yang's operational condition after acquisition,

the management adopts future cash flow projections based on their expectations of market development and the main assumptions used in forecasting cash flow are pre-tax discount rate of 15.09% and the growth trend of operating of operating revenue from services and products launched in the future. As of the fourth quarter of 2025, the Group recognised impairment loss of $541,300 and $458,459 for goodwill and project under research and development and drug permit license, respectively. This was mainly due to the progress of the newly established factory of the subsidiary, Lin Yang, was not as planned, which delayed the timeline for launch of related products and operating revenue contribution. At the same time, the number of volunteers enrolled in ADI-PEG20 and the progress of factory inspection were also delayed, affecting the timeline for obtaining the drug permit license. As the overall timeline is delayed, future operating revenue will be affected by competing suppliers accelerated entering the market after the patent expires. The prices of GLP-1 related products are expected to face downward pressure, which will affect the overall recoverable amount. Therefore, the Company conducted an impairment test and recognised impairment loss for the asset in accordance with IAS 36.

C. Details of amortisation on intangible assets are as follows:

	2025	2024
Research and development expenses	$ 103,408	$ 108,576

(12) Impairment of non-financial assets

Impairment of property, plant and equipment of DesigneRx Pharmaceuticals (Chengdu) Co., Ltd. For the years ended December 31, 2025 and 2024, the Group assessed the impairment of property and plant in China based on the China PMI index, Chengdu housing price trends and the national real estate investment increase index. The recoverable amount is the property's fair value less costs of disposal, estimated in accordance with the comparison approach and replacement cost method. For the land use right, the weighted-average price of the comparison targets was calculated and the balance as of December 31, 2025 were calculated based on the remaining period of the land use right. For the buildings, their estimated economic lives are 30.8 years. For the machinery and equipment, their estimated economic life is 5 to 15 years based on their nature. Valuations of the non-financial assets were categorised within Level 3 in the fair value hierarchy. There was no significant impairment for the year ended December 31, 2024. For the year ended December 31, 2025, an impairment loss of $79,396 was recognised due to the factors such as the poor economic situation in Mainland China. As of December 31, 2025 and 2024, the Group's accumulated impairment amounted to $154,764 and $75,368, respectively.

Impairment of property, plant and equipment of Genovior Biotech Corporation

For the years ended December 31, 2025 and 2024, the Group assessed impairment by comparing the carrying amount of the property, plant, and equipment to the value in use, based on cash flow projections of Genovior Biotech Corporation for the next seven years and using a discount rate calculated with a weighted average cost of capital of 15.09%. As of December 31, 2025, and 2024,

~44~

there was no impairment of the aforementioned property, plant, and equipment.

(13) Other non-current assets – others

	December 31, 2025	December 31, 2024
Prepaid machinery and equipment	$ 143,701	$ 332,619
Prepaid clinical trial	-	23,735
Overpaid VAT	74,277	45,977
Others	89	497
	$ 218,067	$ 402,828

(14) Short-term borrowings

Type of borrowings	December 31, 2025	Interest rate range
Bank borrowings
Unsecured borrowings (A)	$ 15,000	2.52%
Unsecured borrowings (B)	27,792	2.49%
	$ 42,792
Type of borrowings	December 31, 2024	Interest rate range
Bank borrowings
Unsecured borrowings (A)	$ 15,592	3.10%

A. The borrowing was the subsidiary's borrowing, which was jointly guaranteed by the Company. The contract term ends on March 26, 2026. The borrowing period is 6 months from the date of drawdown of each capital. The interest is repayable monthly and principal is repayable at the maturity date.
B. The borrowing was the subsidiary's borrowing, which was jointly guaranteed by the Company. The borrowing period is from May 29, 2025 to May 28, 2026. The interest is repayable monthly and principal is repayable at the maturity date.

(15) Other payables

	December 31, 2025	December 31, 2024
Payable on clinical trials and consumables	$ 149,028	$ 74,754
Payable on construction, machinery and equipment	131,359	59,323
Payable on wages and salaries	82,098	60,636
Payable on interests	6,219	2,794
Payable on service fees	1,475	2,658
Others	82,480	79,341
	$ 452,659	$ 279,506

(16) Long-term borrowings

Type of borrowings	Interest rate range	Collateral	December 31, 2025
Secured borrowings (A)	2.03%~6.16%	Certificates of time deposit	$ 305,625
Secured borrowings (B)	1.92%~4.47%	Certificates of time deposit	$ 611,251
Secured borrowings (C)	2.04%~3.01%	Certificates of time deposit	$ -
Secured borrowings (D)	2.52%~2.73%	Certificates of time deposit	$ 239,107
Secured borrowings (E)	2.22%~2.72%	Property, Plant, and Equipment	$ 41,200
Secured borrowings (F)	2.43%	Property, Plant, and Equipment	500,000
Unsecured borrowings (G)	2.22%~2.72%	None	38,946
Unsecured borrowings (H)	2.22%~2.47%	None	281,581
Secured borrowings (I)	2.50%	Demand deposit and Property, Plant, and Equipment	65,600
Secured borrowings (J)	2.50%	Property, Plant, and Equipment	44,946
Less: Current portion			2,128,256
			( 38,916)
			$ 2,089,340
Type of borrowings	Interest rate range	Collateral	December 31, 2024
Secured borrowings (A)	2.67%~6.16%	Certificates of time deposit	$ 304,533
Secured borrowings (B)	2.15%~4.47%	Certificates of time deposit	$ 609,067
Secured borrowings (C)	3.01%	Certificates of time deposit	$ 156,745
Secured borrowings (E)	2.22%~2.72%	Property, Plant, and Equipment	$ 59,805
Secured borrowings (F)	2.43%	Property, Plant, and Equipment	$ 500,000
Unsecured borrowings (G)	2.22%~2.72%	None	15,704
Less: Current portion			1,645,854
			( 23,477)
			$ 1,622,377

A. The borrowing period of the long-term borrowings is from October 12, 2023 to October 11, 2028 and the principal is repayable in full amount at the maturity date. The credit line of the borrowings is RMB 68 million, and the borrowings were pledged by the Company's USD certificates of time deposit. Please refer to Note 8 for details.

B. The borrowing period of the long-term borrowings is from March 26, 2024 to March 26, 2029 and the principal is repayable in full amount at the maturity date. The credit line of the borrowings is RMB 136 million. The borrowings were pledged by the Company's USD certificates of time deposit. Please refer to Note 8 for details.

C. The borrowing period of the long-term borrowings is from December 16, 2024 to December 15, 2027 and the principal is repayable in full amount at the maturity date. The credit line of the borrowings is RMB 117 million. The borrowings were pledged by the Company's USD certificates of time deposit and were repaid ahead of schedule on August 29, 2025.

D. The borrowing period is from August 15, 2025 to August 14, 2030, and the borrowing is repayable in full amount at the maturity date. The credit line of the borrowings is RMB 53.2 million. The borrowings were pledged by the USD certificates of time deposit of the Company's chairman.

E. The borrowing contract was signed by the subsidiary, Genovior Biotech Corporation, with the bank on January 16, 2020, and Hsu, Jaan-Pyng, the subsidiary's chairman at that time, provided the credit guarantee. As of December 31, 2025, the credit guarantor was unchanged. The borrowing period is from January 20, 2020 to July 28, 2028, and the approved credit line of the borrowings amounted to NT$131,756 thousand. Part of the borrowings were pledged by property, plant and equipment. Please refer to Note 8 for details. The remaining borrowings were guaranteed by the Small and Medium Enterprise Credit Guarantee Fund of Taiwan.

F. The borrowing period of the borrowings is from June 27, 2024 to June 27, 2031, and the borrowings were pledged by property, plant and equipment. Please refer to Note 8 for details.

G. The borrowing contract was signed by the subsidiary, Genovior Biotech Corporation, with the bank on January 16, 2020, and Hsu, Jaan-Pyng, the subsidiary's chairman at that time, provided the credit guarantee. As of December 31, 2025, the credit guarantor was unchanged. The borrowing period is from January 20, 2020 to July 28, 2028.

H. The borrowing contract was signed by the subsidiary, Genovior Biotech Corporation, with the bank on December 18, 2024, and the Company and Hsu, Jaan-Pyng, the subsidiary's chairman at that time, provided the credit guarantee. As of December 31, 2025, the credit guarantors were unchanged. The borrowing period is from March 21, 2025 to March 20, 2031, and the approved credit line of the borrowings amounted to $440,000.

I. The borrowing was the subsidiary's borrowing. The borrowing period is from August 5, 2025 to August 5, 2030. The credit line of the borrowings is $100,000. The borrowings were pledged by demand deposits and property, plant and equipment. Please refer to Note 8 for details. In addition, the Small and Medium Enterprise Credit Guarantee Fund of Taiwan

~47~

provides 70% of the guarantee, and the Company provided the credit guarantee.

J. The borrowing period is from November 27, 2025 to November 26, 2028 and the principal is repayable in full amount at the maturity date. The credit line of the borrowings is RMB 10 million, and the borrowings were pledged by property, plant and equipment. Please refer to Note 8 for details.

(17) Other non-current liabilities, others

Long-term deferred revenue
Others

December 31, 2025	December 31, 2024
$ 30,715	$ 31,416
15,962	19,323
$ 46,677	$ 50,739

Long-term deferred revenue pertains to the subsidies of construction project granted by the management committee of Chengdu High-tech Industrial Development Zone, People's Republic of China to support the construction project of the base for the Group's research, development and production of ADI-PEG20 and other antineoplastic drugs. Long-term deferred revenue has been transferred to other gains year by year according to the remaining useful life of the plant. The amount transferred to other gains for the years ended December 31, 2025 and 2024 was $784 and $807, respectively. The remaining portion was the subsidies of machinery and equipment, and the Group transferred them to other operating revenue year by year based on the useful life of machinery and equipment.

(18) Pensions

A. The Group has adopted a defined contribution pension plan (the "New Plan") under the Labor Pension Act (the "Act"), covering all regular employees with R.O.C. Nationality. Other consolidated entities have also adopted a defined contribution pension plan under the local regulations and contribute salaries and wages of the local employees to the endowment insurance or pension fund. Other than the annual contributions, the entities have no further obligations. Under the New Plan, the Group contributes monthly an amount based on a certain percentage of the salaries and wages to the pension. Other than the monthly contributions, the Group has no further obligations.

B. The Group's subsidiary in the US, DesigneRx Pharmaceuticals, Ind., provides its employees 401(k) retirement savings plan according to subsection 401(k) of the US Internal Revenue Code. Under the plan, the employees contribute monthly an amount based on a certain percentage of their salaries and wages to their individual pension accounts during their employment period. The subsidiary could additionally contribute a certain amount as employee reward according to its policies.

C. The Company's mainland China subsidiaries, DesigneRx Pharmaceuticals (Chengdu) Co., Ltd. and North Star Pharmaceuticals, Ltd. have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People's Republic of China (PRC) are based on certain percentage

~48~

of employees' monthly salaries and wages. The contribution percentage for the years ended December 31, 2025 and 2024, was both 16%. Other than the monthly contributions, the Group has no further obligations.

D. Details of the relevant pension expense which the Group recognised for the years ended December 31, 2025 and 2024 are as follows:

	2025	2024
Defined contribution plans	$ 30,571	$ 23,628

(19) Share-based payment

A. As of December 31, 2025, the contents of the share-based payment arrangements issued by the Group whose object were the Company's stocks are as follows:

Equity settled

Type of arrangement	Grant date	Quantity granted	Contract period	Vesting conditions
Stock options	2015.04.15	519,999	10 years (matured)	4 years' service
Stock options	2015.07.07	128,000	10 years (matured)	4 years' service
Stock options	2015.10.30	312,000	10 years (matured)	4 years' service
Stock options	2015.11.17	3,128,000	10 years (matured)	4 years' service
Stock options	2018.01.03	6,111,000	10 years	4 years' service
Stock options	2018.05.31	210,000	10 years	4 years' service
Stock options	2019.11.20	1,788,000	10 years	4 years' service
Stock options	2020.04.01	4,697,000	10 years	4 years' service
Stock options	2021.06.24	818,000	10 years	4 years' service
Stock options	2021.12.13	640,000	10 years	4 years' service
Stock options	2022.05.10	570,000	10 years	4 years' service
Stock options	2022.12.14	7,262,500	10 years	4 years' service
Stock options	2023.06.20	1,450,000	10 years	4 years' service
Stock options	2023.12.21	2,820,000	10 years	4 years' service
Stock options	2024.07.01	2,570,000	10 years	4 years' service
Stock options	2024.11.14	1,880,000	10 years	4 years' service
Stock options	2025.10.01	4,390,000	10 years	4 years' service
Stock options	2025.11.25	1,680,000	10 years	4 years' service

B. Details of the Company's shared-based payment arrangements are as follows:

	2025		2024
	No. of options	Weighted-average exercise price (in USD)	No. of options	Weighted-average exercise price (in USD)
Options outstanding at January 1	19,111,984	$ 2.55	20,953,413	$ 2.44
Options granted	6,070,000	1.14	4,450,000	2.00
Options exercised	( 215,750)	0.42	( 2,498,119)	0.59
Options forfeited	( 3,369,421)	2.74	( 3,793,310)	2.59
Options outstanding at December 31	21,596,813	2.15	19,111,984	2.55
Options exercisable at December 31	7,604,187	2.60	7,127,316	2.51

C. The weighted-average stock price of stock options at exercise dates for the years ended December 31, 2025 and 2024 was US$1.40 (in dollars) and US$2.15 (in dollars), respectively.
D. At December 31, 2025 and 2024, the range of exercise prices of the Company's stock options issued and outstanding was both US$0.33 (in dollars) ~ US$4.15 (in dollars); the weighted-average remaining contractual period was 7.65 years and 7.43 years, respectively.
E. The fair value of stock options granted on grant date is measured using the Black-Scholes option pricing model. Relevant information on December 31, 2025 is as follows:

Type of arrangement	Grant date	Stock price (USD)	Exercise price (USD)	Expected price volatility (Note)	Expected option life (Year)	Expected dividends	Risk-free interest rate	Fair value per unit (USD)
Stock options	2015.04.15	2.50	2.50	64.00%	6.00	-	1.50%	1.47
Stock options	2015.07.07	2.50	2.50	63.00%	6.00	-	1.77%	1.46
Stock options	2015.10.30	2.50	2.50	63.50%	6.00	-	1.70%	1.46
Stock options	2015.11.17	3.30	3.30	63.50%	6.00	-	1.84%	1.94
Stock options	2018.01.03	1.95	1.68	45.00%	6.00	-	2.30%	0.98
Stock options	2018.05.31	1.93	1.68	45.00%	6.00	-	2.71%	0.98
Stock options	2019.11.20	0.35	0.33	45.00%	7.00	-	1.65%	0.17
Stock options	2020.04.01	0.47	0.47	45.00%	7.00	-	0.51%	0.22
Stock options	2021.06.24	2.40	2.39	47.46%	7.00	-	1.26%	1.19
Stock options	2021.12.13	2.57	2.56	45.71%	7.00	-	1.37%	1.24
Stock options	2022.05.10	4.17	4.15	46.37%	7.00	-	2.97%	2.16
Stock options	2022.12.14	3.32	3.32	45.79%	7.00	-	3.56%	1.74
Stock options	2023.06.20	2.72	2.72	44.07%	7.00	-	3.81%	1.40
Stock options	2023.12.21	2.26	2.26	43.84%	7.00	-	3.87%	1.16

Type of arrangement	Grant date	Stock price (USD)	Exercise price (USD)	Expected price volatility (Note)	Expected option life (Year)	Expected dividends	Risk-free interest rate	Fair value per unit (USD)
Stock options	2024.07.01	2.31	2.31	44.06%	7.00	-	4.40%	1.21
Stock options	2024.11.14	1.57	1.57	44.24%	7.00	-	4.33%	0.83
Stock options	2025.10.01	1.21	1.21	43.98%	7.00	-	3.84%	0.62
Stock options	2025.11.25	0.97	0.97	43.63%	7.00	-	3.73%	0.49

Note: Expected price volatility rate was estimated by using the stock prices of the most recent period with length of this period approximate to the length of the stock options' expected life, and the standard deviation of return on the stock during this period.

F. Expenses incurred on share-based payment transactions of the Company are shown below:

	2025	2024
Equity-settled
Compensation cost of employee stock options	$ 114,568	$ 165,461
Cash capital increase	-	7,717
	$ 114,568	$ 173,178

(20) Share capital

A. As of December 31, 2025, the Company's authorised capital was $20,000,000, consisting of 2,000,000 thousand shares of ordinary stock, and the paid-in capital was $8,598,927 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.

B. Movements in the number of the Company's ordinary shares outstanding are as follows:

	2025	2024
At January 1	770,251,272	743,759,153
Cash capital increase	89,419,666	24,000,000
Employee stock options exercised	221,750	2,492,119
At December 31	859,892,688	770,251,272

C. As of December 31, 2025, the Company exercised conversion of employee stock options amounting to 221,750 new shares, of which 6,000 shares were exercised and the proceeds from shares were collected in 2024. Moreover, the registration for the conversion to ordinary share was completed on January 2, 2025.

(21) Capital surplus

	2025
	Share premium	Employee stock options	Expired conversion options	Net change in equity of associates	Total
At January 1	$ 11,968,810	$ 844,918	$ 7,637	$ 6,948	$ 12,828,313
Capital increase	1,788,393	-	-	-	1,788,393
Employee stock options exercised	2,364	( 1,593)	-	-	771
Compensation cost of employee stock options	-	114,568	-	-	114,568
	$ 13,759,567	$ 957,893	$ 7,637	$ 6,948	$ 14,732,045
	2024
	Share premium	Employee stock options	Expired conversion options	Net change in equity of associates	Total
At January 1	$ 10,985,845	$ 696,157	$ 7,637	$ 6,948	$ 11,696,587
Capital increase	936,000	-	-	-	936,000
Employee stock options exercised	46,965	( 24,417)	-	-	22,548
Compensation cost of employee stock options	-	173,178	-	-	173,178
At December 31	$ 11,968,810	$ 844,918	$ 7,637	$ 6,948	$ 12,828,313

A. Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

B. Refer to Note 6(19) for the information of capital surplus - stock options.

(22) Retained earnings (Accumulated deficit)

A. Under the Company's Articles of Incorporation, the current year's earnings, if any, shall first be used to pay all taxes and offset prior years' operating losses and then 10% of the remaining amount shall be set aside as legal reserve. The remainder, if any, to be retained or to be appropriated shall be resolved by the stockholders at the stockholders' meeting.

B. Under the Company's Articles of Incorporation, at least 10% of the distributable earnings for the current year shall be appropriated as dividends, and cash dividends shall account for at least 10% of the total dividends distributed for the current year. As the Group remained in an accumulated deficit in 2025 and 2024, no dividends were distributed for the years ended

December 31, 2025 and 2024.

C. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

(23) Operating revenue

A. Disaggregation of revenue from contracts with customers

2025	Sales revenue	Service revenue	Other operating revenue	Total
Timing of revenue recognition
At a point in time	$ 3,624	$ 36,280	$ -	$ 39,904
Over time	-	698	-	698
	$ 3,624	$ 36,978	$ -	$ 40,602
2024	Sales revenue	Service revenue	Other operating revenue	Total
Timing of revenue recognition
At a point in time	$ 47,013	$ 56,065	$ 562	$ 103,640
Over time	-	-	3,360	3,360
	$ 47,013	$ 56,065	$ 3,922	$ 107,000
		2025		2024
Cost of goods sold		$ 83,783		$ 59,645
Service costs		9,702		15,143
Unamortised manufacturing costs		217,441		109,135
		$ 310,926		$ 183,923

B. Contract balance

(a) The Group has recognised the following revenue-related contract liabilities:

	December 31, 2025	December 31, 2024	January 1, 2024
Contract liabilities - current	$ 8,000	$ 25,073	$ 10,060

The change in contract liabilities mainly refers to the timing difference between performance obligations satisfied and customers' payment.

(b) Revenue recognised that was included in the contract liability balance at the beginning of the period

	2025	2024
Service revenue	$ 12,960	$ 3,468

(24) Other gains and losses

	2025	2024
Gains on government grants	$ 796	$ 1,611
Losses on disposal of property, plant and equipment	( 2,287)	( 3,506)
Losses on disposal of right-of-use assets	-	( 61)
Gains from disposal of subsidiaries’ equity	51,205	-
Gains on valuation of financial assets at fair value through profit or loss	-	32,410
Losses on disposal of financial assets at fair value through profit or loss	-	( 31,798)
Impairment losses on property, plant and equipment	( 79,396)	-
Impairment losses on intangible assets	( 999,759)	-
Foreign exchange gains (losses)	6,340	( 2,331)
Other (losses) gains	( 3,183)	5,778
	($ 1,026,284)	$ 2,103

(25) Finance costs

	2025	2024
Interest expense
Bank borrowings	$ 94,168	$ 51,341
Lease liabilities	5,192	5,721
	$ 99,360	$ 57,062

(26) Operating costs and expenses by nature

2025	Operating costs	Operating expenses	Total
Employee benefit expense	$ 124,462	$ 952,398	$ 1,076,860
Contracted research expense and consumables expense	48,722	927,249	975,971
Depreciation charges on property, plant and equipment	76,572	153,299	229,871
Depreciation charges on right-of-use assets	8,666	35,376	44,042
Amortisation charges on intangible assets	-	103,408	103,408

2024	Operating costs	Operating expenses	Total
Employee benefit expense	$ 75,363	$ 1,004,061	$ 1,079,424
Contracted research expense and consumables expense	37,298	948,231	985,529
Depreciation charges on property, plant and equipment	44,596	114,739	159,335
Depreciation charges on right-of-use assets	9,196	38,012	47,208
Amortisation charges on intangible assets	-	108,576	108,576

(27) Employee benefit expense

2025	Operating costs	Operating expenses	Total
Wages and salaries	$ 95,860	$ 598,626	$ 694,486
Employee stock options	13,730	100,838	114,568
Labour and health insurance fees	9,886	109,853	119,739
Pension costs	4,838	25,733	30,571
Other personnel expenses	148	117,348	117,496
	$ 124,462	$ 952,398	$ 1,076,860
2024	Operating costs	Operating expenses	Total
Wages and salaries	$ 60,342	$ 604,507	$ 664,849
Employee stock options	4,896	168,282	173,178
Labour and health insurance fees	6,612	97,393	104,005
Pension costs	3,237	20,391	23,628
Other personnel expenses	276	113,488	113,764
	$ 75,363	$ 1,004,061	$ 1,079,424

A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees' compensation and directors' remuneration. The ratio shall not be lower than 1% for employees' compensation and shall not be higher than 3% for directors' remuneration. The abovementioned information will be posted in the "Market Observation Post System" at the website of the Taiwan Stock Exchange.

B. The Company did not recognise employees' compensation and directors' remuneration for the years ended December 31, 2025 and 2024.

(28) Income tax

A. Income tax expense

(a) Components of income tax expense:

	2025	2024
Current tax:
Current tax on profits for the year	$ 390	$ 5,210

(b) Reconciliation between income tax expense and accounting profit

	2025	2024
Tax calculated based on profit before tax and statutory tax rate (Note)	($ 496,332)	($ 181,859)
Expenses disallowed by tax regulation	238,506	321,354
Tax relief for research and development expenses	( 293,632)	( 396,374)
Tax exempt income by tax regulation	( 2,778)	( 6,251)
Effect from Alternative Minimum Tax	17,499	5,166
Temporary difference and taxable loss not recognised as deferred tax assets	273,397	219,037
Others	263,730	44,137
Income tax expense	$ 390	$ 5,210

Note: The basis for computing the applicable tax rate are the rates applicable in the respective countries where the Group entities operate.

B. Expiration dates of unused tax losses and amounts of unrecognised deferred tax assets are as follows:

December 31, 2025
Year incurred	Unused amount	Unrecognised deferred tax assets	Expiry year
2009 to 2025	$ 6,782,600	$ 6,782,600	2026~indefinite
December 31, 2024
Year incurred	Unused amount	Unrecognised deferred tax assets	Expiry year
2009 to 2024	$ 5,778,799	$ 5,778,799	2025~indefinite

The abovementioned unused amount and unrecognised deferred tax assets mainly occurred in the subsidiaries of the Group, Polaris Pharmaceuticals, Inc., DesigneRx Pharmaceuticals, Inc., Polaris Pharmaceuticals (Taiwan), Inc., DesigneRx Pharmaceuticals (Chengdu) Co., Ltd and Genovior Biotech Corporation.

C. Details of the amount the Group is entitled as investment tax credit and unrecognised deferred tax assets are as follows:

December 31, 2025
Qualifying items	Year incurred	Unused tax credits-federal tax	Unrecognised deferred tax assets	Expiry year
Research and development expenditures	2007 to 2025	$ 128,656	$ 128,656	2027 to 2045
December 31, 2024
Qualifying items	Year incurred	Unused tax credits-federal tax	Unrecognised deferred tax assets	Expiry year
Research and development expenditures	2014 to 2024	$ 88,547	$ 88,547	2035 to 2044
December 31, 2025
Qualifying items	Year incurred	Unused tax credits-state tax	Unrecognised deferred tax assets	Expiry year
Research and development expenditures	2003 to 2025	$ 157,296	$ 157,296	Indefinite
December 31, 2024
Qualifying items	Year incurred	Unused tax credits-state tax	Unrecognised deferred tax assets	Expiry year
Research and development expenditures	2003 to 2024	$ 147,879	$ 147,879	Indefinite

The abovementioned unused tax credits and unrecognised deferred tax assets mainly occurred in the US subsidiaries of the Group, Polaris Pharmaceuticals, Inc. and DesigneRx Pharmaceuticals, Inc.

D. The amounts of deductible temporary difference that are not recognised as deferred tax assets are as follows:

Deductible temporary differences	December 31, 2025	December 31, 2024
	$ 739,778	$ 754,913

E. The income tax returns of the subsidiaries of the Group, Polaris Pharmaceuticals (Taiwan), Inc., and Genovior Biotech Corporation through 2024 and 2023 respectively have been assessed and approved by the Tax Authority.

(29) Loss per share

	2025
	Amount after tax	Weighted average number of ordinary shares outstanding (share in thousands)	Loss per share (in dollars)
Basic loss per share
Loss attributable to the ordinary shareholders of the parent	($ 3,927,128)	770,670	($ 5.10)
		2024
	Amount after tax	Weighted average number of ordinary shares outstanding (share in thousands)	Loss per share (in dollars)
Basic loss per share
Loss attributable to the ordinary shareholders of the parent	($ 2,502,642)	746,953	($ 3.35)

Note: Only the calculation of basic loss per share is shown as the Group had loss for the years ended December 31, 2025 and 2024 and anti-dilutive effect might arise if potential ordinary shares such as employee stock options were included in the calculation.

(30) Supplemental cash flow information

Investing activities with partial cash payments

	2025	2024
Purchase of property, plant and equipment	$ 1,053,926	$ 1,358,394
Opening balance of payable on equipment and construction	59,323	1,313
Ending balance of payable on equipment and construction	( 131,359)	( 59,323)
Beginning balance of prepaid machinery and equipment	( 332,619)	( 359)
Ending balance of prepaid machinery and equipment	143,701	332,619
Effect of foreign exchange	857	32,065
Cash paid during the period	$ 793,829	$ 1,664,709

(31) Changes in liabilities from financing activities

	2025
	Long-term and short-term borrowings	Loans from related parties	Long-term and short-term lease liabilities
At January 1	$ 1,661,446	$ 80,482	$ 220,274
Changes in cash flow from financing activities	469,258	( 74,245)	( 119,291)
Changes in other non-cash items	-	-	78,204
Effect of foreign exchange	40,344	( 6,237)	( 2,947)
At December 31	$ 2,171,048	$ -	$ 176,240
	2024
	Long-term and short-term borrowings	Loans from related parties	Long-term and short-term lease liabilities
At January 1	$ 1,059,016	$ -	$ 139,016
Changes in cash flow from financing activities	591,426	80,482	( 44,328)
Changes in other non-cash items	-	-	120,764
Effect of foreign exchange	11,004	-	4,822
At December 31	$ 1,661,446	$ 80,482	$ 220,274

Related Party Transactions

(1) Names of related parties and relationship

Names of related parties	Relationship with the Company
Acepodia Biotechnologies, Limited	Other related parties
Chen, Xian-Zhe	Chairman of the Company
Digital Mobile Venture Ltd.	Other related parties

(2) Significant related party transactions

Short-term borrowings

	2025	2024
Other related parties	$ -	$ 80,482

In January 2025 and December 2024, the Company's subsidiary, North Star Pharmaceuticals, Ltd., obtained a borrowing from the related party, Digital Mobile Venture Ltd., due to the short-term financing demand. The borrowing had been fully paid in the third quarter of 2025.

(3) Key management compensation

	2025	2024
Short-term employee benefits	$ 24,506	$ 33,356
Pensions	174	82
Share-based payments	3,398	36,407
	$ 28,078	$ 69,845

(4) Endorsements and guarantees provided to related parties

The long-term borrowings of the subsidiary, DesigneRx Pharmaceuticals (Chengdu) Co., Ltd., were pledged by the USD certificates of deposit of the Company's chairman. On December 31, 2025, the guarantee amounted to $239,107.

Pledged Assets

The Group’s assets pledged as collateral are as follows:

Pledged asset	Book value		Book value		Purpose
	December 31, 2025	December 31, 2024	December 31, 2024	December 31, 2024
Other current financial assets
Bank deposits	$ 1,534	$ 1,938			Special funds and restricted bank deposits (Notes 1 and 2)
Financial assets at amortised cost	$ 911,470	$ 1,168,405			Secured borrowings, refer to Note 6(16)
Other non-current financial assets					Secured borrowings, refer to Note 6(16)
Bank deposits	$ 15,000	$ -
Guarantee deposits paid
Lease - time deposits	$ 6,800	$ 6,800			Guarantee deposits of land leasing in Zhunan (Note 3)
Property, plant and equipment	$ 1,588,540	$ 672,341			Secured borrowings, refer to Notes 6(8) and (16)

Note 1: Certain deposits were deposited in the restricted bank account as such funds can only be used in the construction of plant and purchase of equipment according to the contract entered into with Chengdu Longquanyi District State-owned Assets Investment Management Co., Ltd. and ChinaMinsheng Bank branch in Chengdu.

Note 2: In the fourth quarter of 2024, the advance receipts for shares from exercise of employee stock options amounted to $60, and the effective date of share subscription was set on January 2, 2025.

Note 3: Referring to guarantee deposits of leasing for the land of the Hsinchu Science Park leased by the subsidiary, Genovior Biotech Corporation, on April 30, 2024.

~61~

9. Significant Contingent Liabilities and Unrecognised Contract Commitments

A. Contingencies

The Company entered into an agreement with a research institution in January 2011 to provide investigational drugs for the institution to conduct clinical trials related to the Company’s lead therapeutic. Pursuant to the agreement, the Company will subsidise the institution with US$950 thousand of research costs if any of the following events occurred: (1) authorising a third party to commercialise and sell the Company’s lead therapeutic; (2) sales of the commercialisation rights of the lead therapeutic to a third party; or (3) the Company’s acquisition by a third party. As there were still uncertainties in the development of the Company’s lead therapeutic, the occurrence possibility, timing and contingent liabilities of the aforementioned events could not be reasonably estimated yet.

B. Commitments

a. The Group’s expenditure contracted for at the balance sheet date but not yet incurred is summarised as follows:

	December 31, 2025	December 31, 2024
Property, plant and equipment	$ 186,824	$ 1,000,592
Clinical trial plans	26,389	2,891
	$ 213,213	$ 1,003,483

10. Significant Disaster Loss

None.

11. Significant Events after the Balance Sheet Date

A. Due to fluctuations in exchange rate leading to a decrease in the value of collateral, on January 22, 2026, the Company’s Board of Directors resolved to provide an additional US$500,000 time deposits as collateral for the long-term borrowing from KGI Commercial Bank to its subsidiary, DesigneRx Pharmaceuticals (Chengdu) Co., Ltd.

B. On February 24, 2026, the Company’s Board of Directors resolved to increase capital for the subsidiary, DesigneRx Pharmaceuticals, Inc., which amounted to US$25 million.

C. To strengthen financial structure, on March 11, 2026, the Company’s Board of Directors resolved to carry out a capital reduction to offset deficits with an estimated capital reduction amount of $4,299,463. A total of 429,946,344 issued ordinary shares would be retired, and the ratio of capital reduction was 50%.

D. On March 11, 2026, the Company’s Board of Directors resolved to offset deficits with capital surplus. As of December 31, 2025, the total accumulated deficits amounted to $18,494,894. After offsetting the deficits with capital surplus of $13,759,567, the accumulated deficits to be covered would be $4,735,327.

E. In response to overall operational plan and reorganisation, the Company’s subsidiary, Genovior Biotech Corporation, submitted a mass layoff plan to the Hsinchu Science Park Bureau and Southern Taiwan Science Park Bureau on February 23, 2026. In addition, the company notified relevant employees and carried out subsequent procedures according to regulations.

F. In response to overall operational plan and the consideration of resource allocation, on March 11, 2026, the Company’s Board of Directors resolved to close the operations of the plants of its subsidiary, Genovior Biotech Corporation, located in the Southern Taiwan Science Park.

12. Others

(1) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to support the needs of the expansion and upgrading of plants and equipment. Therefore, the Group’s capital management is to ensure that there are necessary financial resources and operating plans to maintain or adjust capital structure to support the needs of working capital, capital expenditures, research and development expenses, debt repayment and dividend expenditures in the next year.

The Group will continue to optimise internal management processes, strengthen cost control, and actively expand into new markets to drive revenue growth. At the same time, the Group remains committed to maintaining product quality and advancing innovative research and development to sustain its competitiveness. In addition, the Group regularly assesses its financial condition and risk exposure to ensure adequate liquidity and repayment capacity, and adjusts capital allocation in response to market changes and operational needs to ensure the Company’s stable operations and sustainable development.

(2) Financial instruments

A. Fair value information of financial instruments

The carrying amounts of the Group’s financial instruments at amortised cost (including cash and cash equivalents, current financial assets at amortised cost, trade receivables, other receivables, other financial assets, guarantee deposits paid, other payables, short-term borrowings, long-term borrowings and lease liabilities) are approximate to their fair values. In addition, refer to Note 12(3) for the fair value information of financial instruments measured at fair value.

B. Financial risk management policies

(a) The Group’s activities expose it to a variety of financial risks: foreign exchange risk, credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial position and financial performance.

(b) Risk management is carried out by a central treasury department (Group treasury) under policies approved by the Board of Directors. Group treasury identifies, evaluates and hedges financial risks in close co-operation with the Company’s operating units.

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C. Significant financial risks and degrees of financial risks

(a) Market risk

Foreign exchange risk

i. The Group operates internationally and is exposed to foreign exchange risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to the RMB and NTD. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities and net investments in foreign operations.

ii. Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency. Foreign exchange risk arises when future commercial transactions and recognised assets or liabilities are denominated in a currency that is not the entity's functional currency.

iii. The Group's businesses involve some non-functional currency operations (the Company's and certain subsidiaries' functional currency: USD; other certain subsidiaries' functional currency: NTD and RMB). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows (unit: in thousands):

	December 31, 2025
	Foreign currency amount (In thousands)	Exchange rate	Functional currency (USD)	Book value (NTD)
(Foreign currency: functional currency)
Financial assets
Monetary items
RMB:USD	$ 74,575	0.14	$ 10,664	$ 335,170
NTD:USD	167,182	0.03	5,319	167,182
Financial liabilities
Monetary items
RMB:USD	$ 295,942	0.14	$ 42,320	$ 1,330,118
NTD:USD	1,217,090	0.03	38,724	1,217,090

~64~

	December 31, 2024
	Foreign currency amount (In thousands)	Exchange rate	Functional currency (USD)	Book value (NTD)
(Foreign currency: functional currency)
Financial assets
Monetary items
RMB:USD	$ 37,521	0.14	$ 5,125	$ 168,037
NTD:USD	239,297	0.03	7,299	239,297
Financial liabilities
Monetary items
RMB:USD	$ 253,510	0.14	$ 34,629	$ 1,135,327
NTD:USD	780,920	0.03	23,819	780,920

iv. Analysis of foreign currency market risk arising from significant foreign exchange variation (unit: in thousands):

	2025
	Sensitivity analysis
	Degree of variation	Effect on profit or loss (USD)	Effect on profit or loss (NTD)
(Foreign currency: functional currency)
Financial assets
Monetary items
RMB:USD	3%	$ 320	$ 10,055
NTD:USD	3%	160	5,015
Financial liabilities
Monetary items
RMB:USD	3%	$ 1,270	$ 39,904
NTD:USD	3%	1,162	36,513

	2024
Sensitivity analysis
Degree of variation	Effect on profit or loss (USD)
(Foreign currency: functional currency)
Financial assets
Monetary items
RMB:USD	3%
NTD:USD	3%
Financial liabilities
Monetary items
RMB:USD	3%
NTD:USD	3%

v. The total exchange gains (losses), including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2025 and 2024 amounted to $6,340 and ($2,331), respectively.

Cash flow and fair value Interest rate risk

i. The Group’s interest rate risk arises from bank deposits and long-term and short-term borrowings. The borrowings with variable rates are short-term borrowings, which expose the Group to cash flow interest rate risk. The risk of variations in the interest rates is performed and monitored by the Group treasury. As of December 31, 2025, the Group’s borrowings at variable rate were mainly denominated in NTD and RMB.

ii. For the years ended December 31, 2025 and 2024, if the borrowings interest rates of NTD and RMB had increased/decreased by 3%, with all other variables held constant, profit, net of tax, would have increased/decreased by $63,783 and $49,376, respectively. The main factor is that changes in interest expense result in floating-rate borrowings.

(b) Credit risk

i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the trade receivable based on the agreed terms, and the contract cash flows of debt instruments stated at amortised cost.

ii. The Group manages their credit risk taking into consideration the entire group’s concern. For banks and financial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal

risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions. For banks and financial institutions, only rated parties with an optimal credit rating are accepted.

iii. The Group adopts the assumptions under IFRS 9, the default occurs when the contract payments are past due over 90 days. The Group’s trade receivable was generated from the customers with an optimal credit. The carrying amount of trade receivable on December 31, 2025 and 2024 was $2,553 and $2,704, respectively. The expected credit impairment is insignificant based on the assessment.

i. Cash flow forecasting is performed by Group treasury. Group treasury continuously monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational and research and development needs. Such forecasting preparation is compliance with internal project technology research and development schedule targets.

Financing plans are all formulated based on management’s five-year operating plan, with the corresponding budgets prepared accordingly and are submitted with cash flow forecasts for the next two years to management and the Board of Directors. Any financing plans are executed pursuant to the directives of management and the Board of Directors. Financing methods include, but are not limited to, cash capital increase, private placements, and bank borrowings. At least once each quarter, the treasury department and the Chief Executive Officer report to the Board of Directors on the Group’s operating performance and financial position.

ii. The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows:

December 31, 2025	Less than 1 year	Between 1 and 2 years	Between 2 and 5 years	Over 5 years
Non-derivative financial liabilities
Accounts payable	$ 9,120	$ -	$ -	$ -
Other payables	452,659	-	-	-
Long-term and short-term borrowings	145,047	200,615	1,931,354	-
Lease liabilities	38,615	38,817	32,095	88,046

December 31, 2024	Less than 1 year	Between 1 and 2 years	Between 2 and 5 years	Over 5 years
Non-derivative financial liabilities
Accounts payable	$ 2,325	$ -	$ -	$ -
Other payables	279,506	-	-	-
Other payables - related parties	80,482	-	-	-
Long-term and short-term borrowings	89,958	69,393	1,530,936	191,097
Lease liabilities	47,373	53,984	57,649	88,046

The Group establishes guidelines and limits for all capital activities through financial projections and budget preparation, and strictly controls the capital liquidity to ensure sufficient cash flows for the Group. At the same time, the Group has also initiated a cost-saving plan, including reviewing the necessity of significant capital expenditures, adjusting labor costs and operating expenses to improve resource utilisation efficiency. Furthermore, the Group has implemented control measures on capital expenditures through a hierarchical authorisation mechanism to ensure that all capital expenditures achieve maximum benefits.

On November 7, 2025, the Company's Board of Directors resolved to issue ordinary shares through private placement up to a maximum of 150,000,000 shares. The private placement was resolved during shareholders' second extraordinary meeting on December 26, 2025, and will be carried out in four installments within one year. The Company completed the first private placement of 89,419,666 shares on December 30, 2025.

Considering the operating expenses and current liabilities for the next year, and taking into account the balance of cash and cash equivalents as of December 31, 2025, the raised capital is expected to be used to repay bank borrowings and replenish working capital. If there are additional cash needs in the future, the Company plans to raise working capital through equity financing, bank borrowings and other methods.

(3) Fair value information

A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group's investment in beneficiary certificates, and on-the-run US corporate bonds is included in Level 1.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the

asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in unlisted stocks and stock is included in Level 3.

B. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities at December 31, 2025 and 2024 is as follows:

(a) As of December 31, 2025 and 2024, the Group had no financial and non-financial instruments measured at fair value.

(b) The methods and assumptions the Group used to measure fair value are as follows:

i. The Group used market quoted prices as the fair values (that is, Level 1) of the corporate bonds and beneficiary certificates.

ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date.

C. For the years ended December 31, 2024, there was no transfer between Level 1 and Level 2.

D. The following chart is the movement of Level 3 for the year ended December 31, 2024:

	2024
At January 1	$ 63,803
Gains and losses recognised in profit or loss	31,075
Transfers into level 3	( 98,118)
Effect of foreign exchange	3,240
At December 31	$ -

E. Because the shares of LaunXP Biomedical Co., Ltd. whose shares were purchased by the Group have been traded as emerging shares on the Taipei Exchange from January 18, 2024 and the transaction volume in the market has steadily increased, and there is sufficient observable market information available, the Group has transferred the fair value from Level 3 into Level 2 at the end of the month when the event occurred.

13. Supplementary Disclosures

(1) Significant transactions information

A. Loans to others: Please refer to table 1.

B. Provision of endorsements and guarantees to others: Please refer to table 2.

C. Holding of significant marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): None.

D. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in

~68~

capital or more: None.

E. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 3.
F. Significant inter-company transactions during the reporting periods: Please refer to table 4.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 5.

(3) Information on investments in Mainland China

A. Basic information: Please refer to table 6.
B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: None.

Segment Information

(1) General information

The Group operates business only in a single industry which is the development of new drugs. The chief operating decision-maker, (Board of Directors) who allocates resources and assesses performance of the Group as a whole, has identified that the Group has only one reportable operating segment.

(2) Measurement of segment information

A. Segment income (loss) of the Group is measured using loss before income tax and is used as a basis for performance assessment. The accounting policies and accounting estimates of operating segment are in agreement with the summary of significant accounting policies and the critical accounting estimates and assumption described in Notes 4 and 5.
B. The financial information reported to the chief operating decision-maker is consistent with the financial information in the consolidated statement of comprehensive income and use a consistent measurement method.

(3) Geographical information

Geographical information for the years ended December 31, 2025 and 2024 is as follows:

	2025		2024
	Revenue	Non-current assets	Revenue	Non-current assets
US	$ 431	$ 509,978	$ 1,520	$ 566,513
China	698	1,731,538	-	1,581,404
Taiwan	39,074	2,666,002	102,120	3,811,128
Japan	399	-	3,360	-
	$ 40,602	$ 4,907,518	$ 107,000	$ 5,959,045

Non-current assets refer to property, plant and equipment, right-of-use assets, investment property, intangible assets and other non-current assets, others.

Polaris Group and subsidiaries

Loans to others

Year ended December 31, 2025

Table 1
Expressed in thousands of NTD
(Except as otherwise indicated)

No. (Note 1)	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the year ended December 31,	Balance at December 31, 2025	Actual amount drawn down	Interest rate	Nature of loan	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Collateral		Limit on loans granted to a single party	Ceiling on total loans granted	Footnote
													Item	Value
0	Polaris Group	DesigneRx Pharmaceuticals (Chengdu) Co., Ltd.	Finance receivables due from related parties	Yes	$ 691,460	$ 471,450	$ 47,145	2.55%	Short-term financing	-	Working capital	-	-	-	$ 529,616	$ 2,118,463	Notes 2 and 3
0	Polaris Group	Genovior Biotech Corporation	Finance receivables due from related parties	Yes	660,030	471,450	249,869	2.55%	Short-term financing	-	Working capital	-	-	-	529,616	2,118,463	Notes 2 and 3
0	Polaris Group	Polaris Pharmaceuticals (Taiwan), Inc.	Finance receivables due from related parties	Yes	471,450	471,450	-	-	Short-term financing	-	Working capital	-	-	-	529,616	2,118,463	Notes 2 and 3
1	Polaris Pharmaceutical, Inc.	Polaris Pharmaceuticals Australia Pty Ltd.	Finance receivables due from related parties	Yes	31,430	31,430	27,973	5.61%	Short-term financing	-	Working capital	-	-	-	242,466	242,466	Note 4
2	Genovior Biotech Corporation	Polaris Pharmaceuticals (Taiwan), Inc.	Finance receivables due from related parties	Yes	75,432	37,716	-	-	Short-term financing	-	Working capital	-	-	-	58,152	58,152	Note 5

No. (Note 1)	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the year ended December 31,	Balance at December 31, 2025	Actual amount drawn down	Interest rate	Nature of loan	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Collateral		Limit on loans granted to a single party	Ceiling on total loans granted	Footnote
													Item	Value
3	Polaris Pharmaceuticals (Taiwan), Inc.	Genovior Biotech Corporation	Finance receivables due from related parties	Yes	4,715	-	-	-	Short-term financing	-	Working capital	-	-	-	4,909	4,909	Note 5
4	TDW HK Limited	North Star Pharmaceuticals, Ltd.	Finance receivables due from related parties	Yes	94,290	94,290	-	-	Short-term financing	-	Loan repayment	-	-	-	2,622,859	2,622,859	Note 4

Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:
(1) The Company is '0'.
(2) The subsidiaries are numbered in order starting from '1'.
Note 2: Limit on loans for short-term financing granted by the Company to a single party is $10\%$ of the Company's net assets in the latest audited and attested or reviewed financial statements.
Note 3: Ceiling on total loans for short-term financing granted by the Company to a single party is $40\%$ of the Company's net assets in the latest audited and attested or reviewed financial statements.
Note 4: Limit on loans and ceiling on total loans for short-term financing granted between the overseas subsidiaries whose voting rights are wholly-owned by the Company is the creditor's net assets in the latest audited and attested or reviewed financial statements.
Note 5: The amount and total limit of short-term financing loans between the Company's subsidiaries shall not exceed $10\%$ of the Company's net assets in the latest audited and attested or reviewed financial statements.

Polaris Group and subsidiaries

Provision of endorsements and guarantees to others

Year ended December 31, 2025

Table 2

Expressed in thousands of NTD

(Except as otherwise indicated)

Number (Note 1)	Endorser/guarantor	Party being endorsed/ guaranteed		Limit on endorsements/ guarantees provided for a single party (Note 3)	Maximum outstanding endorsement/ guarantee amount as of December 31, 2025 (Note 4)	Outstanding endorsement/ guarantee amount at December 31, 2025 (Note 5)	Actual amount drawn down (Note 6)	Amount of endorsements /guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/guarantor company	Ceiling on total amount of endorsements/ guarantees provided (Note 3)	Provision of endorsements/ guarantees by parent company to subsidiary (Note 7)	Provision of endorsements/ guarantees by subsidiary to parent company (Note 7)	Provision of endorsements/ guarantees to the party in Mainland China (Note 7)	Footnote
		Company name	Relationship with the endorser/guarantor (Note 2)
0	Polaris Group	DesigneRx Pharmaceuticals (Chengdu) Co., Ltd.	4	$ 10,592,314	$ 1,602,930	$ 911,470	$ 916,876	$ 911,470	17.21%	$ 15,888,471	Y	N	Y	Note 3
0	Polaris Group	Genovior Biotech Corporation	4	10,592,314	570,000	570,000	418,088	-	10.76%	15,888,471	Y	N	N	Note 3

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:
(1) The Company is '0'.
(2) The subsidiaries are numbered in order starting from '1'.
Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories; fill in the number of category each case belongs to:
(1) Having business relationship.
(2) The endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary.
(3) The endorsed/guaranteed company owns directly and indirectly more than 50% voting shares of the endorser/guarantor parent company.
(4) The endorser/guarantor parent company owns directly and indirectly more than 90% voting shares of the endorsed/guaranteed company.
(5) Mutual guarantee of the trade made by the endorsed/guaranteed company or joint contractor as required under the construction contract.
(6) Due to joint venture, all shareholders provide endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.
(7) Joint guarantee of the performance guarantee for pre-sold home sales contract as required under the Consumer Protection Act.
Note 3: Ceiling on total amount of endorsements/guarantees that the Company provided to others is 300% of the Company's net assets and limit on endorsements/guarantees provided for a single party is 200% of the Company's net assets.
Note 4: Fill in the year-to-date maximum outstanding balance of endorsements/guarantees provided as of the reporting period.
Note 5: Fill in the amount approved by the Board of Directors or the chairman if the chairman has been authorised by the Board of Directors based on subparagraph 8, Article 12 of the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies.
Note 6: Fill in the actual amount of endorsements/guarantees used by the endorsed/guaranteed company.
Note 7: Fill in 'Y' for those cases of provision of endorsements/guarantees by listed parent company to subsidiary and provision by subsidiary to listed parent company, and provision to the party in Mainland China.

Table 2, Page 1

Polaris Group and subsidiaries

Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more

Year ended December 31, 2025

Table 3
Expressed in thousands of NTD
(Except as otherwise indicated)

Creditor	Counterparty	Relationship with the counterparty	Balance as at December 31, 2025	Turnover rate	Overdue receivables		Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Action taken
Polaris Pharmaceutical, Inc.	Polaris Group	Parent company	$ 243,564	53%	$ -	-	$ 91,234	$ -

Table 3, Page 1

Polaris Group and subsidiaries

Significant inter-company transactions during the reporting periods

Year ended December 31, 2025

Table 4

Expressed in thousands of NTD

(Except as otherwise indicated)

Number (Note 1)	Company name	Counterparty	Relationship (Note 2)	Transaction
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or
0	Polaris Group	Polaris Pharmaceutical, Inc.	Parent company to subsidiary	Accounts payable - related parties	$ 243,564	Note 3	2.98%
0	Polaris Group	DesigneRx Pharmaceuticals, Inc.	Parent company to subsidiary	Research and development expenses	269,093	Note 3	662.76%

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:
(1) Parent company is '0'.
(2) The subsidiaries are numbered in order starting from '1'.

Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to (If transactions between parent company and subsidiaries or between subsidiaries refer to the same transaction, it is not required to disclose twice. For example, if the parent company has already disclosed its transaction with a subsidiary, then the subsidiary is not required to disclose the transaction for transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction.):
(1) Parent company to subsidiary.
(2) Subsidiary to parent company.
(3) Subsidiary to subsidiary.

Note 3: The transaction terms of significant inter-company transactions are similar with the normal transaction terms except for circumstances in which there are no similar transactions for reference and the terms will be negotiated and determined by both parties.

Note 4: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

Note 5: The Company may decide to disclose or not to disclose transaction details in this table based on the Materiality Principle.

Table 4, Page 1

Polaris Group and subsidiaries

Information on investees

Year ended December 31, 2025

Table 5
Expressed in thousands of NTD
(Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount		Shares held as at December 31, 2025			Net profit (loss) of the investee for the year ended December 31, 2025	Investment income (loss) recognised by the Company for the year ended December 31, 2025	Footnote
				Balance as at December 31, 2025	Balance as at December 31, 2024	Number of shares	Ownership (%)	Book value
The Company	Polaris Pharmaceuticals, Inc.	U.S.A	Biotechnology services	$ 150,995	$ 150,995	23,000	100%	$ 242,466 ($	6,563) ($	6,563)
The Company	DesigneRx Europe Limited	U.K.	Biotechnology services	-	-	1	100%	-	-	-	Note 1
The Company	Polaris Pharmaceuticals Australia Pty Ltd.	Australia	Biotechnology services	2	2	100	100%	( 36,383) (	2,502) (	2,502)
The Company	Polaris Pharmaceuticals Ireland Limited	Ireland	Biotechnology services	4	4	100	100%	-	-	-
The Company	DesigneRx Pharmaceuticals, Inc.	U.S.A	Research, development and manufacture of new drugs	3,886,197	3,668,874	144,179,257	100%	445,265 (	464,045) (	464,045)
The Company	Polaris Pharmaceuticals (Taiwan), Inc.	Taiwan	Biotechnology services and medicine inspection	903,612	903,612	43,800,000	100%	49,089 (	13,549) (	13,549)
The Company	TDW HK Limited	Hong Kong	Holding company	3,714,358	2,803,713	118,750,001	100%	2,622,859 (	452,042) (	480,213)
The Company	Nanotein Technologies, Inc.	U.S.A	Biotechnology services and medicine inspection	226,584	226,584	6,347,330	43.78%	207,896 (	66,107) (	50,920)
TDW HK Limited	Lin Yang Biopharm, Ltd.	Cayman	Holding company	1,110,347	1,110,347	168,138,001	100%	594,911 (	229,948) (	229,948)
Lin Yang Biopharm, Ltd.	Genovior Biotech Corporation	Taiwan	Research, development, manufacture and production of medicine	428,750	428,750	42,875,000	27.73%	155,180 (	739,256) (	229,948)
The Company	Genovior Biotech Corporation	Taiwan	Research, development, manufacture and production of medicine	2,216,763	1,688,051	111,720,133	72.27%	404,430 (	739,256) (	582,727)

Note 1: The initial investment amount is 1 GBP.

Polaris Group and subsidiaries

Information on investments in Mainland China

Year ended December 31, 2025

Table 6

Expressed in thousands of NTD

(Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in capital	Investment method (Note 1)	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2025	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31, 2025		Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2025	Net income of investee as of December 31, 2025	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31, 2025 (Note 2)	Book value of investments in Mainland China as of December 31, 2025	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2025
					Remitted to Mainland China	Remitted back to Taiwan
DesigneRx Pharmaceuticals (Chengdu) Co., Ltd.	Research and development of new drugs	$ 2,229,748	Note 1	$ 1,621,858	$ 607,890	$ -	$ 2,229,748	($ 435,321)	100%	($ 435,321)	$ 438,487	$ -
North Star Pharmaceuticals, Ltd.	Manufacture and sale of the drugs	306,400	Note 1	-	306,400	-	306,400	( 9,582)	100%	( 9,582)	312,418	-

Note 1: Through investing in TDW HK Limited, which then invested in the investee in Mainland China.
Note 2: The investment income (loss) was recognised based on the financial statements that were audited by the Group's CPA.

AI assistant

PG — Audit Report / Information 2025

52582_rns_2026-04-24_a1b6b8c0-a084-42e9-b52d-54eeebf39378.pdf

INDEPENDENT AUDITORS' REPORT TRANSLATED FROM CHINESE

Opinion

Basis for opinion

Key audit matters

Key audit matter - impairment assessment of property, plant and equipment

Description

How our audit addressed the matter

Key audit matter – impairment assessment of goodwill and project under research and development and drug permit license arising from business combination of Lin Yang

Description

How our audit addressed the matter

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

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

POLARIS GROUP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31, 2025 AND 2024

POLARIS GROUP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

YEARS ENDED DECEMBER 31, 2025 AND 2024

POLARIS GROUP AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2025 AND 2024

1. History and Organisation

2. The Date of Authorisation for Issuance of the Financial Statements and Procedures for Authorisation

3. Application of New Standards, Amendments and Interpretations

4. Summary of Material Accounting Policies

(1) Compliance statement

(2) Basis of preparation

(3) Basis of consolidation

(10) Inventories

(11) Investments accounted for using equity method - associates

(12) Property, plant and equipment

(13) Leasing arrangements (lessee)—right-of-use assets/ lease liabilities

(19) Provisions

(20) Employee benefits

(21) Employee share-based payment

6. Details of Significant Accounts

(1) Cash and cash equivalents

(2) Financial assets at fair value through profit or loss

(6) Prepayment

(7) Investments accounted for using equity method

A. Associates

(19) Share-based payment

(23) Operating revenue

9. Significant Contingent Liabilities and Unrecognised Contract Commitments

A. Contingencies

B. Commitments

10. Significant Disaster Loss

11. Significant Events after the Balance Sheet Date

12. Others

(1) Capital management

(2) Financial instruments

A. Fair value information of financial instruments

B. Financial risk management policies

Cash flow and fair value Interest rate risk

(b) Credit risk

(3) Fair value information

13. Supplementary Disclosures

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PG Audit Report / Information 2025