SCI - Interim / Quarterly Report 2024

Stock Code:4119

SCI PHARMTECH, INC. AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Review Report For the Nine Months Ended September 30, 2024 and 2023

Address: No.61, LN. 309, HAIHUN.RD., LUZHU DIST., TAOYUAN CITY 33856, TAIWAN (R.O.C) Telephone: (03)354-3133

The independent auditors’ review report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ review report and consolidated financial statements, the Chinese version shall prevail.

Contents
1. Cover Page
2. Table of Contents
3. Independent Auditors’ Review Report
4. Consolidated Balance Sheets
5. Consolidated Statements of Comprehensive Income
6. Consolidated Statements of Changes in Equity
7. Consolidated Statements of Cash Flows
8. Notes to the Consolidated Financial Statements
(1)
Company history
(2)
Approval date and procedures of the consolidated financial statements
(3)
New standards, amendments and interpretations adopted
(4)
Summary of material accounting policies
(5)
Significant accounting assumptions and judgments, and major sources
of estimation uncertainty
(6)
Explanation of significant accounts
(7)
Related-party transactions
(8)
Pledged assets
(9)
Commitments and contingencies
(10) Losses Due to Major Disasters
(11) Subsequent Events
(12) Other
(13) Other disclosures
(a) Information on significant transactions
(b) Information on investees
(c) Information on investment in mainland China
(d) Major shareholders
(14) Segment information Page

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Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Review Report 4. Consolidated Balance Sheets 5. Consolidated Statements of Comprehensive Income 6. Consolidated Statements of Changes in Equity 7. Consolidated Statements of Cash Flows 8. Notes to the Consolidated Financial Statements (1) Company history (2) Approval date and procedures of the consolidated financial statements (3) New standards, amendments and interpretations adopted (4) Summary of material accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Pledged assets (9) Commitments and contingencies (10) Losses Due to Major Disasters (11) Subsequent Events (12) Other (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in mainland China (d) Major shareholders (14) Segment information	Page
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KPMG

台北市110615信義路5段7號68樓(台北101大樓) 電話 Tel + 886 2 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, 傳真 Fax + 886 2 8101 6667 Xinyi Road, Taipei City 110615, Taiwan (R.O.C.) 網址 Web kpmg.com/tw

Independent Auditors’ Review Report

To the Board of Directors of SCI Pharmtech, Inc.:

Introduction

We have reviewed the accompanying consolidated balance sheets of SCI Pharmtech, Inc. and its subsidiaries as of September 30, 2024 and 2023, and the related consolidated statements of comprehensive income for the three months and nine months ended September 30, 2024 and 2023, and changes in equity and cash flows for the nine months ended September 30, 2024 and 2023, and notes to the consolidated financial statements, including a summary of significant accounting policies. 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 International Accounting Standard 34, “ Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

Except as explained in the Basis for Qualified Conclusion paragraph, we conducted our reviews in accordance with the Standard on Review Engagements 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” of the Republic of China. A review of the consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the Standards on Auditing of the Republic of China and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

As stated in Note 6(g), the other equity accounted investments of the SCI Pharmtech, Inc. and its subsidiaries in its investee companies of $155,763 thousand and $150,132 thousand as of September 30, 2024 and 2023, respectively, and its equity in net earnings (losses) on these investee companies of $(6,059) thousand, $(6,018) thousand, $(13,882) thousand and $(8,515) thousand for the three months and nine months ended September 30, 2024 and 2023, respectively, were recognized solely on the financial statements prepared by these investee companies, but not reviewed by independent auditors.

KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

3-1

Qualified Conclusion

Except for the adjustments, if any, as might have been determined to be necessary had the consolidated financial statements of certain equity accounted investee companies described in the Basis for Qualified Conclusion paragraph above been reviewed by independent auditors, based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements, do not present fairly, in all material respects, the consolidated financial position of SCI Pharmtech, Inc. and its subsidiaries as of September 30, 2024 and 2023, and of its consolidated financial performance for the three months and nine months ended September 30, 2024 and 2023, as well as its consolidated cash flows for the nine months ended September 30, 2024 and 2023 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

The engagement partners on the review resulting in this independent auditors’ report are Hsin, Yu-Ting and Huang, Keng-Chia.

KPMG

Taipei, Taiwan (Republic of China) November 8, 2024

Notes to Readers

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

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

SCI PHARMTECH, INC. AND SUBSIDIARIES Consolidated Balance Sheets

September 30, 2024, December 31, 2023, and September 30, 2023

(expressed in thousands of New Taiwan dollars)

September 30, 2024 Amount % $ 513,936 7 29,577 - 334,281 5 535,252 7 615,271 9 107,992 2 2,136,309 30 89,441 1 155,763 2 4,272,504 59 4,874 - 228,012 3 39,844 1 153,277 2 149,298 2 5,093,013 70 $ 7,229,322 100	September 30, 2023 Amount % 140,515 2 90,744 2 278,745 5 78 - 519,079 9 82,260 2 1,111,421 20 112,064 2 150,132 3 3,699,462 66 5,278 - 228,012 4 48,251 1 167,252 3 33,631 1 4,444,082 80 5,555,503 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (note 6(k)) 2170 Notes and accounts payable 2130 Current contract liabilities (note 6(t)) 2200 Other payables 2213 Payables on contractors and equipment 2230 Current tax liabilities 2250 Current provisions (notes 6(n) and 10) 2280 Current lease liabilities (note 6(m)) 2300 Other current liabilities 2322 Long-term borrowings, current portion (note 6(l)) Non-Current liabilities: 2541 Long-term borrowings (note 6(l)) 2580 Non-current lease liabilities (note 6(m)) 2570 Deferred tax liabilities 2630 Deferred income (note 6(l)) 2640 Provisions for employee benefits, non-current 2600 Other non-current liabilities (note 7) Total liabilities Equity attributable to owners of parent (note 6(q)): 3100 Ordinary Share 3200 Capital surplus 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings 3400 Other components of equity Total equity Total liabilities and equity	September 30,	2024	December 31, 2023	September 30, 2023	September 30, 2023
Amount $ 513,936 29,577 334,281 535,252 615,271 107,992 2,136,309 89,441 155,763 4,272,504 4,874 228,012 39,844 153,277 149,298 5,093,013 $ 7,229,322	Amount 140,515 90,744 278,745 78 519,079 82,260 1,111,421 112,064 150,132 3,699,462 5,278 228,012 48,251 167,252 33,631 4,444,082 5,555,503	Amount	%	Amount % 175,000 3 44,251 1 38,367 1 169,538 3 68,840 1 11,536 - 29,058 - 1,946 - 11,351 - 20,000 - 569,887 9 842,670 13 2,858 - 146,000 2 6,837 - 21,536 - 1,000 - 1,020,901 15 1,590,788 24 1,195,087 18 2,233,590 33 462,435 7 54,727 1 1,128,657 17 25,457 - 5,099,953 76 6,690,741 100	Amount 140,000 31,669 31,555 171,039 58,415 75,244 37,598 2,002 10,570 - 558,092 735,828 3,298 103,811 6,066 18,585 1,000 868,588 1,426,680 1,075,087 1,377,270 462,435 54,727 1,124,227 35,077 4,128,823 5,555,503	%
		$ 101,000 63,082 53,922 175,713 159,980 88,446 24,976 1,991 5,469 232,820 907,399 764,885 2,933 103,811 7,448 20,968 1,000 901,045 1,808,444 1,195,087 2,224,802 504,024 - 1,478,881 18,084 5,420,878 $ 7,229,322	1 1 1 3 2 1 - - - 4			2 1 1 3 1 1 1 - - -
			13			10
			11 - 1 - - -			13 - 2 - 1 -
			12			16
			25			26
			17 31 7 - 20 -			19 25 8 1 20 1
			75			74
			100			100

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

SCI PHARMTECH, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months and nine months ended September 30, 2024 and 2023

(expressed in Thousands of New Taiwan Dollars, except for earnings per share)

For the three months ended September 30, 2024 2023 Amount % Amount % $ 419,294 100 257,849 100 303,290 72 177,696 69 116,004 28 80,153 31 18,831 5 14,978 6 35,604 8 15,266 6 10,645 3 13,648 5 65,080 16 43,892 17 50,924 12 36,261 14 353 - 135 - 1,950 - 1,532 1 438,748 105 2,663 1 793 - 1,460 1 (1,627) - (1,183) (1) (3,212) (1) (1,469) (1) - - - - (5,599) (1) 11,042 4 (6,059) (1) (6,018) (2) 425,347 102 8,162 3 476,271 114 44,423 17 95,125 23 9,047 3 381,146 91 35,376 14 (320) - (37,958) (15) - - - - (320) - (37,958) (15) $ 380,826 91 (2,582) (1) $ 3.19 0.33 $ 3.18 0.33	For the nine months ended September 30,	For the nine months ended September 30,
2024 Amount % $ 419,294 100 303,290 72 116,004 28 18,831 5 35,604 8 10,645 3 65,080 16 50,924 12 353 - 1,950 - 438,748 105 793 - (1,627) - (3,212) (1) - - (5,599) (1) (6,059) (1) 425,347 102 476,271 114 95,125 23 381,146 91 (320) - - - (320) - $ 380,826 91 $ 3.19 $ 3.18	2024	2023
	Amount	Amount
	1,121,889 806,068	912,743 629,815
	315,821	282,928
	55,920 76,918 31,958	45,448 47,854 38,237
	164,796	131,539
	151,025	151,389

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

SCI PHARMTECH, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the nine months ended September 30, 2024 and 2023

(expressed in Thousands of New Taiwan Dollars)

Equity attributable to owners of parent

Ordinary shares	Capital surplus	Retained earnings	Retained earnings	Retained earnings	Other equity interest Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income

		Legal reserve	Special reserve Unappropriated retained earnings
$ 953,824 - - - - - - 119,228 - - 2,035 $ 1,075,087 $ 1,195,087 - - - - - - - $ 1,195,087	1,357,127	431,874 - - - 30,561 - - - - - - 462,435 462,435 - - - 41,589 - - - 504,024	48,929 - - - - 5,798 - - - - - 54,727 54,727 - - - - (54,727) - - -	892,197	(54,727) - 203,605 203,605 - - - - - (113,801) - 35,077 25,457 - (7,373) (7,373) - - - - 18,084
	- -			298,332 -
	-			298,332
	- - - - - - 20,143
	1,377,270
	2,233,590
	- -
	-

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

SCI PHARMTECH, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the nine months ended September 30, 2024 and 2023

(expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit before tax Adjustments for: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Net loss (profit) on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of loss of associates and joint ventures accounted for using equity method Reversal of major disasters Others Total adjustments to reconcile profit Changes in operating assets and liabilities: Increase in notes and accounts receivable Increase in inventories (Increase) decrease in other receivables and other current assets Increase (decrease) in contract liabilities Increase (decrease) in notes and accounts payable Increase (decrease) in other payable Decrease in provisions (Decrease) increase in other current liabilities Decrease in provision for employee benefits, non-current Total changes in operating assets and liabilities Total adjustments Cash flow from (used in) operations Interest received Dividends received Interest paid Income taxes paid Net cash flows from (used in) operating activities Cash flows from (used in) investing activities: Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through profit or loss Acquisition of financial assets at fair value through profit or loss Acquisition of investments accounted for using equity method Acquisition of property, plant and equipment Increase in refundable deposits Increase in prepayments of property, plant and equipment Net cash flows from (used in) investing activities Cash flows from (used in) financing activities: (Decrease) increase in short-term borrowings Proceeds from long-term borrowings Payment of lease liabilities Cash dividends paid Net cash flows from (used in) financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	For the nine months ended September 30 2024 2023 $ 594,535 374,483 165,743 94,079 6,303 6,331 (2,819) 127 4,473 4,765 (4,385) (1,416) (1,950) (1,532) 13,882 8,515 - (373) 3,043 537 184,290 111,033 (26,912) (105,180) (85,738) (5,649) (557,968) 8,653 15,555 (218) 18,831 (16,967) 6,175 (102,800) (4,082) (73,413) (5,882) 5,346 (568) (945) (640,589) (291,173) (456,299) (180,140) 138,236 194,343 4,385 1,416 1,950 1,532 (4,473) (4,765) (71,960) (4,730) 68,138 187,796 - (3,981) - 162,245 62,469 6,674 (229) - (35,000) (18,000) (282,872) (636,412) - (110) (148,378) (31,203) (404,010) (520,787) (74,000) 28,000 132,787 303,922 (1,649) (1,398) (149,387) (23,846) (92,249) 306,678 (428,121) (26,313) 942,057 166,828 $ 513,936 140,515
	2024 $ 594,535 165,743 6,303 (2,819) 4,473 (4,385) (1,950) 13,882 - 3,043 184,290 (26,912) (85,738) (557,968) 15,555 18,831 6,175 (4,082) (5,882) (568) (640,589) (456,299) 138,236 4,385 1,950 (4,473) (71,960) 68,138 - - 62,469 (229) (35,000) (282,872) - (148,378) (404,010) (74,000) 132,787 (1,649) (149,387) (92,249) (428,121) 942,057 $ 513,936

Cash flows from (used in) operating activities:
Profit before tax
Adjustments for:
Adjustments to reconcile profit (loss):
Depreciation expense
Amortization expense
Net loss (profit) on financial assets or liabilities at fair value through profit or loss
Interest expense
Interest income
Dividend income
Share of loss of associates and joint ventures accounted for using equity method
Reversal of major disasters
Others
Total adjustments to reconcile profit
Changes in operating assets and liabilities:
Increase in notes and accounts receivable
Increase in inventories
(Increase) decrease in other receivables and other current assets
Increase (decrease) in contract liabilities
Increase (decrease) in notes and accounts payable
Increase (decrease) in other payable
Decrease in provisions
(Decrease) increase in other current liabilities
Decrease in provision for employee benefits, non-current
Total changes in operating assets and liabilities
Total adjustments
Cash flow from (used in) operations
Interest received
Dividends received
Interest paid
Income taxes paid
Net cash flows from (used in) operating activities
Cash flows from (used in) investing activities:
Acquisition of financial assets at fair value through other comprehensive income
Proceeds from disposal of financial assets at fair value through other comprehensive income
Proceeds from disposal of financial assets at fair value through profit or loss
Acquisition of financial assets at fair value through profit or loss
Acquisition of investments accounted for using equity method
Acquisition of property, plant and equipment
Increase in refundable deposits
Increase in prepayments of property, plant and equipment
Net cash flows from (used in) investing activities
Cash flows from (used in) financing activities:
(Decrease) increase in short-term borrowings
Proceeds from long-term borrowings
Payment of lease liabilities
Cash dividends paid
Net cash flows from (used in) financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

For the nine months
ended September 30
2024
2023
$ 594,535
374,483
165,743
94,079
6,303
6,331
(2,819)
127
4,473
4,765
(4,385)
(1,416)
(1,950)
(1,532)
13,882
8,515
-
(373)
3,043
537
184,290
111,033
(26,912)
(105,180)
(85,738)
(5,649)
(557,968)
8,653
15,555
(218)
18,831
(16,967)
6,175
(102,800)
(4,082)
(73,413)
(5,882)
5,346
(568)
(945)
(640,589)
(291,173)
(456,299)
(180,140)
138,236
194,343
4,385
1,416
1,950
1,532
(4,473)
(4,765)
(71,960)
(4,730)
68,138
187,796
-
(3,981)
-
162,245
62,469
6,674
(229)
-
(35,000)
(18,000)
(282,872)
(636,412)
-
(110)
(148,378)
(31,203)
(404,010)
(520,787)
(74,000)
28,000
132,787
303,922
(1,649)
(1,398)
(149,387)
(23,846)
(92,249)
306,678
(428,121)
(26,313)
942,057
166,828
$
513,936
140,515

2024
$ 594,535
165,743
6,303
(2,819)
4,473
(4,385)
(1,950)
13,882
-
3,043
184,290
(26,912)
(85,738)
(557,968)
15,555
18,831
6,175
(4,082)
(5,882)
(568)
(640,589)
(456,299)
138,236
4,385
1,950
(4,473)
(71,960)
68,138
-
-
62,469
(229)
(35,000)
(282,872)
-
(148,378)
(404,010)
(74,000)
132,787
(1,649)
(149,387)
(92,249)
(428,121)
942,057
$
513,936

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements September 30, 2024 and 2023

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company history

SCI Pharmtech, Inc. (the “Company”) was incorporated in September 18, 1987 as a company limited by shares and registered under the Ministry of Economic Affairs, R.O.C. The major business activities of the Company are the research and development, manufacture and sale of Active Pharmaceutical Ingredients (“ API” ), Intermediates, specialty chemicals. The consolidated financial statements of the Company comprise the Company and its subsidiaries (together referred to as the “Group” and individually as the “ Group entities” ). Please refer to note 4(b) for related information of the Group primarily business activities. Mercuries & Associates, Holding Ltd. is the parent company of the Company.

(2) Approval date and procedures of the consolidated financial statements

These consolidated financial statements were authorized for issuance by the Board of Directors on November 8, 2024.

(3) New standards, amendments and interpretations adopted:

(a) The impact of the IFRS Accounting Standards endorsed by the Financial Supervisory Commission, R.O.C. which have already been adopted.

The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2024:

●Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”
●Amendments to IAS 1 “Non-current Liabilities with Covenants”
●Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements”
●Amendments to IFRS 16 “Lease Liability in a Sale and Leaseback”
(b) The impact of IFRS issued by the FSC but not yet effective

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2025, would not have a significant impact on its consolidated financial statements:

●Amendments to IAS21 “Lack of Exchangeability”

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The following new and amended standards, which may be relevant to the Group, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Standards or
Interpretations
IFRS 18 “Presentation and
Disclosure in Financial
Statements”

Content of amendment
Effective date per
IASB
The
new
standard
introduces
three
categories of income and expenses, two
income statement subtotals and one single
note
on
management
performance
measures.
The
three
amendments,
combined with enhanced guidance on how
to disaggregate information, set the stage
for better and more consistent information
for users, and will affect all the entities.
January 1, 2027

●A more structured income statement: under current standards, companies use different formats to present their results, making it difficult for investors to compare financial performance across companies. The new standard promotes a more structured income statement, introducing a newly defined ‘operating profit’ subtotal and a requirement for all income and expenses to be allocated between three new distinct categories based on a company’ s main business activities.
●Management performance measures (MPMs): the new standard introduces a definition for management performance measures, and requires companies to explain in a single note to the financial statements why the measure provides useful information, how it is calculated and reconcile it to an amount determined under IFRS Accounting Standards.
●Greater disaggregation of information: the new standard includes enhanced guidance on how companies group information in the financial statements. This includes guidance on whether information is included in the primary financial statements or is further disaggregated in the notes.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group is evaluating the impact on its consolidated financial position and consolidated financial performance upon the initial adoption of the abovementioned standards or interpretations. The results thereof will be disclosed when the Group completes its evaluation.

The Group does not expect the following other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its consolidated financial statements:

●Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”
●IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”
●IFRS 19 “Subsidiaries without Public Accountability: Disclosures”
●Amendments to IFRS 9 and IFRS 7 “Amendments to the Classification and Measurement of Financial Instruments”
●Annual Improvements to IFRS Accounting Standards—Volume 11

(4) Summary of material accounting policies:

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the preparation and guidelines of IAS 34 “Interim Financial Reporting” which are endorsed and issued into effect by FSC, and do not include all of the information required by the Regulations and International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC Interpretations endorsed and issued into effect by the FSC (hereinafter referred to IFRS endorsed by the FSC) for a complete set of the annual consolidated financial statements.

Except the following accounting policies mentioned below, the significant accounting policies adopted in the consolidated financial statements are the same as those in the consolidated financial statement for the year ended December 31, 2023. For the related information, please refer to note 4 of the consolidated financial statements for the year ended December 31, 2023.

(b) Basis of Consolidation

Name of investor	Name of subsidiary	Principal activity The research and development, manufacture and sale of API	Shareholding	Shareholding
			September 30, 2024 % 100.00	December 31, 2023 September 30, 2023 % 100.00 % 100.00
The Company	Yushan Pharmaceuticals Inc. (Yushan)

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group classifies the asset as current under one of the following criteria, and all other assets are classified as non current.

(i) It expects to realize the asset, or intends to sell or consume it, in its normal operating cycle;
(ii) It holds the asset primarily for the purpose of trading;
(iii) It expects to realize the asset within twelve months after the reporting period; or
(iv) The asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

The Group classifies the liability as current under one of the following criteria, and all other liabilities are classified as non current.

(i) It expects to settle the liability in its normal operating cycle;
(ii) It holds the liability primarily for the purpose of trading;
(iii) The liability is due to be settled within twelve months after the reporting period; or
(iv) It does not have the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period.
(d) Employee benefits

The pension cost in the interim period was calculated and disclosed on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior fiscal year.

(e) Income taxes

The income tax expenses have been prepared and disclosed in accordance with paragraph B12 of International Financial Reporting Standards 34, Interim Reporting.

Income tax expenses for the period are measured by multiplying together the pre-tax income for the interim reporting period and the management’s best estimate of effective annual tax rate. This should be recognized fully as tax expense for the current period.

Temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases shall be measured based on the tax rates that have been enacted or substantively enacted at the time of the asset or liability is recovered or settled, and be recognized directly in equity or other comprehensive income as tax expense.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

The preparation of the consolidated financial statements in conformity with the Regulations and IFRSs (in accordance with IAS 34 “Interim Financial Reporting” and endorsed by the FSC) requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

The preparation of the consolidated interim financial statements, estimates and underlying assumptions are reviewed on an ongoing basis which are in conformity with the consolidated financial statements for the year ended December 31, 2023. For the related information, please refer to note 5 of the consolidated financial statements for the year ended December 31, 2023.

(6) Explanation of significant accounts:

Except for the following disclosures, there is no significant difference as compared with those disclosed in the consolidated financial statements for the year ended December 31, 2023. Please refer to note 6 of the 2023 annual consolidated financial statements.

(a) Cash and cash equivalents

Cash on hand Checking accounts and demand deposits Time deposits Cash and cash equivalents in the consolidated statement of cash flows	September 30, 2024 $ 460 507,063 6,413 $ 513,936	December 31, 2023 499 907,102 34,456 942,057	September 30, 2023
			516 104,067 35,932
			140,515

(i) The Group did not provide cash and cash equivalents as collateral for its loans.
(ii) Please refer to note 6(w) for the interest rate risk and sensitivity analysis of the financial assets and liabilities of the Group.
(b) Financial assets at fair value through profit or loss

Mandatorily measured at fair value through profit or loss: Non-derivative financial assets Beneficiary certificate Stocks listed on domestic markets Total	September 30, 2024 $ 1,063 28,514 $ 29,577	December 31, 2023 1,052 87,946 88,998	September 30, 2023
			1,049 89,695
			90,744

The Group did not provide any aforementioned financial assets as collateral for its loans as of September 30, 2024, December 31 and September 30, 2023, respectively.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Financial assets at fair value through other comprehensive income: Stocks listed on domestic markets Emerging stocks	September 30, 2024 $ 89,441 - $ 89,441	December 31, 2023 96,814 - 96,814	September 30, 2023
			96,174 15,890
			112,064

(i) The Group designated the investments shown above as equity securities as at fair value through other comprehensive income because these equity securities represent those investments that the Group intends to hold for long-term for strategic purposes.
(ii) In the second and third quarter of 2023, the Group had sold some part of its shares held in Sunny Pharmtech Inc., which is accounted under equity investments measured at fair value through other comprehensive income, with a fair value of $162,245 at the time of disposal, and the cumulative gain on disposal amounted to $113,801. Therefore, the Group has transferred the aforesaid cumulative gain on disposal from other equity to retained earnings. In addition, the Group had sold all of its shares held in Sunny Pharmtech Inc. in the fourth quarter of 2023.
(iii) Energenesis Biomedical Co., Ltd., was originally an emerging company and became listed in June 2023.
(iv) Please refer to note 6(w) for market risk of the Group.
(v) As of September 30, 2024, December 31 and September 30, 2023, the Group did not provide any aforementioned financial assets as collateral for its loans.
(d) Notes and accounts receivable

Accounts receivable Less: Loss allowance	September 30, 2024 334,281 - $ 334,281	December 31, 2023 307,369 - 307,369	September 30, 2023 278,745 - 278,745

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables, as well as incorporated forward looking information, including the reasonable prediction of historical credit loss experience and future economic situation (macroeconomic and relevant industry information). The loss allowance provision was determined as follows:

September 30, 2024	September 30, 2024
Gross carrying amount Rate of loss allowance provision $ 209,845 - 95,389 - - - 14,103 - 14,944 - $ 334,281 December 31, 2023		Loss allowance provision
		- - - - -
		-

		Loss allowance provision
		- - - - - -
		-

	Rate of loss allowance provision - - - - -	Loss allowance provision
		- - - - -
		-

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The movement in the allowance for notes and trade receivable was as follows:

Balance at January 1 (Balance at September 30)	For the nine months ended September 30,	For the nine months ended September 30,
	2024 $ -	2023
		-

As of September 30, 2024, December 31 and September 30, 2023, the Group did not provide any aforementioned notes and accounts receivable as collaterals for its loans.

(e) Inventories

Raw materials Work in progress Finished goods	September 30, 2024 $ 103,491 135,774 376,006 $ 615,271	December 31, 2023	September 30, 2023
		92,404 85,692 351,437 529,533	123,431 93,035 302,613
			519,079

Inventory cost recognized as operating costs for the three months and nine months ended September 30, 2024 and 2023 were as follows:

For the three months ended September 30, 2024 2023 $ 251,527 151,283 5,132 3,181 4,293 517 42,338 22,715 $ 303,290 177,696	For the nine months ended September 30,	For the nine months ended September 30,
2024 $ 251,527 5,132 4,293 42,338 $ 303,290	2024 683,036 (11,962) 23,140 111,854 806,068	2023
		554,725 13,860 1,898 59,332
		629,815

As of September 30, 2024, December 31 and September 30, 2023, the Group did not provide any inventories as collaterals for its loans.

(f) Other receivables

Insurance claim receivable Others	September 30, 2024 $ 534,933 319 $ 535,252	December 31, 2023 September 30, 2023 - - 151 78 151 78	December 31, 2023 September 30, 2023 - - 151 78 151 78
			- 78
			78

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(g) Investments accounted for using equity method

The components of investments accounted for using equity method at the reporting date were as follows:

Associates	September 30, 2024 $ 155,763	December 31, 2023 144,808	September 30, 2023
			150,132

(i) Except for the following, there was no significant change for investments accounted for using the equity method for the nine months ended September 30, 2024 and 2023. For the related information, please refer to note 6(g) of the consolidated financial statements for the year ended December 31, 2023.
(ii) In May 2023, the Group subscribed to the newly issued shares of HoneyBear Biosciences, Inc.(HoneyBear) amounting to $18,000, at a percentage disproportionate from its existing ownership percentage, resulting in the ownership of HoneyBear by the Group to increase from 6.09% to 11.54%, and the retained earnings to decrease by $670. In August 2024, the Group subscribed to the newly issued shares of HoneyBear amounting to $35,000, at a percentage disproportionate from its existing ownership percentage, resulting in the ownership of HoneyBear by the Group to increase from 11.54% to 14.35%, the capital surplus to decrease by $8,788, and the retained earnings to decrease by $1,375.
(iii) The Group’s financial information on investments accounted for using equity method that are individually insignificant was as follows:

			September	September	September	30,	December 31,	September 30,	September 30,
				2024			2023		2023
Carrying amount of individually
insignificant associates' equity			$		155,763		144,808		150,132
	For	the three months				ended	For the nine	months ended
		September 30,					September		30,
		2024			2023		2024		2023
Attributable to the Group:
Profit (loss)	$	(6,059)				(6,018)	(13,882)		(8,515)
Other comprehensive income
(loss)		-				-	-		-
Total comprehensive income
(loss)	$	(6,059)				(6,018)	(13,882)		(8,515)

(iv) Pledge to secure

The Group did not provide any investment accounted for using equity method as collaterals for its loans.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(v) The investments were accounted for using the equity method, and the share of profit or loss and other comprehensive income of those investments were calculated based on the financial statements that have not been reviewed.

(h) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Group , were as follows:

Buildings and construction	Machinery and equipment	Office equipment	Other
707,002 - - 15,902	1,714,324 42,334 (10,074) 604,734 2,351,318 1,116,895 56,817 (765) 316,002 1,488,949 489,788 140,170 (10,074) 619,884 385,715 69,754 (228) 455,241 1,224,536 1,731,434 731,180 1,033,708	58,337 116 - 271	12,968 - - -
722,904		58,724	12,968
700,232 - - -		55,466 219 - 2,376	12,968 - - -
700,232		58,061	12,968
311,735 19,657 -		28,553 3,470 -	7,970 779 -
331,392		32,023	8,749
287,084 18,407 -		23,635 3,729 -	6,931 779 -
305,491		27,364	7,710
395,267		29,784	4,998
391,512		26,701	4,219
413,148		31,831	6,037
394,741		30,697	5,258

Except for the following, the information on significant transactions of the Group's property, plant and equipment, please refer to note 6(h) of the consolidated financial statements for the year ended December 31, 2023.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) As of September 30, 2024, December 31 and September 30, 2023, the Group’s prepayments for equipment purchases amounted to $148,378, $155,759 and $32,711, respectively, which were recorded as other non-current assets.
(ii) As of September 30, 2024, December 31 and September 30, 2023, part of the property, plant and equipment of the Group had been pledged as collateral. Please refer to note 8 for the details.
(i)

Right-of-use assets

The Group leases many assets including land and company cars. Information about leases for which the Group as a lessee is presented below:

Cost: Balance on January 1, 2024 Additions Balance on September 30, 2024 Balance on January 1, 2023 Additions Reductions Balance on September 30, 2023 Accumulated depreciation: Balance on January 1, 2024 Depreciation for the period Balance on September 30, 2024 Balance on January 1, 2023 Depreciation for the period Reductions Balance on September 30, 2023 Carrying amount: Balance on January 1, 2024 Balance on September 30, 2024 Balance on January 1, 2023 Balance on September 30, 2023	Land		Others 2,626 1,769 4,395 4,922 2,109 (4,233) 2,798 945 1,132 2,077 3,909 1,113 (4,233) 789 1,681 2,318 1,013 2,009	Total 6,192 1,769 7,961 4,922 5,675 (4,233) 6,364 1,420 1,667 3,087 3,909 1,410 (4,233) 1,086 4,772 4,874 1,013 5,278
	$ 3,566 - $ 3,566 $ - 3,566 - $ 3,566 $ 475 535 $ 1,010 $ - 297 - $ 297 $ 3,091 $ 2,556 $ - $ 3,269

(j) Investments property
(i) Investment property, with a carrying amount of $228,012, with lease that has fixed rental income and contains an initial non-cancellable lease term of 50 years (extendable upon maturity) based on the agreement, comprises lands owned by the Group.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) There were no significant additions, disposal, or recognition and reversal of impairment losses of investment property for the nine months ended September 30, 2024 and 2023. Please refer to note 6(j) of the consolidated financial statements for the year ended December 31, 2023.
(iii) There were no significant changes in the fair value of the Group’ s investment property as disclosed in note 6(j) of the consolidated financial statements for the year ended December 31, 2023.
(iv) The Group rented out investment property for related parties. Please refer to note 7 for the details of rental income.
(v) The Group did not provide any investment properties as collaterals for its loan.
(k) Short-term borrowings

The details of short-term borrowings were as following:

Unsecured bank loans Secured bank loans Total Unused short-term credit lines Range of interest rates	September 30, 2024 $ 101,000 - $ 101,000 $ 653,545 1.9%~2.225%	December 31, 2023 125,000 50,000 175,000 695,000 1.7%~2.1%	September 30, 2023
			120,000 20,000
			140,000
			750,000
			1.7%~1.925%

(i) For the collateral of the Group's assets for short-term borrowings, please refer to note 8.
(ii) For the information on the Group's exposure to the interest rate risk and liquidity risk, please refer to note 6(w).
(l) Long-term borrowings

The details of long-term borrowings were as following:

Secured bank loans`－`Maturity year 2025.3~2027.2 Unsecured bank loans`－`Maturity year 2025.11 and 2026.9 Less: current portion Less: Deferred income Unused credit lines Range of interest rates	September 30, 2024 $ 818,359 181,000 (232,820) (1,654) $ 764,885 $ 9,000 1.675%~2.05%	December 31, 2023 686,572 180,000 (20,000) (3,902) 842,670 363,428 1.05%~1.925%	September 30, 2023 559,689 180,000 - (3,861) 735,828 490,311 1.55%~1.925%

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) For the nine months ended September 30, 2024 and 2023, the Group had the additional longterm borrowings amounting to $132,787 and $303,922, respectively, and the repayment amounted to $0.
(ii) The Group’ s application for a low-interest loan for the construction of plants, purchasing equipment, and support medium-term working capital, had been approved by the National Development Fund, Executive Yuan in 2022, with Mega International Commercial Bank providing the non-revolving loan of $1,000,000, which was recognized and measured by using the market rates, with the margin interests calculated by using the rates between the actual rates and the market rates, recognized as deferred income, based on the Government grants. As of September 30, 2024, the Group had used the credit amount of $818,359.

(iii) For the collateral for long-term borrowings, please refer to note 8.

(m) Lease liabilities

The carrying amount of lease liabilities was as follows:

			September 30,	September 30,	December 31,	December 31,	September 30,
				2024		2023	2023
Current			$	1,991		1,946	2,002
Non-current			$	2,933		2,858	3,298
Please refer to note 6(w) for maturity		analysis.
		For the three months ended				For the nine	months ended
			September 30,			September 30,
			2024	2023		2024	2023
The amounts recognized in profit or
loss were as follows:
Interest on lease liabilities		$	28		30	73	51
Expenses relating to short-term
leases		$	20	187		155	510
Variable lease payments not
included in the measurement
of lease liabilities		$	-		5	-	8
Expense relating to leases of
low-value assets,
excluding short-term leases of
low-value assets		$	201	166		631	493
					For the nine months ended
						September 30,
						2024	2023
The amounts recognized in the statement of cash flows for the
Group	were as follows:
Total cash outflow for leases					$	2,508	2,460
							(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) The Group leases land and company cars: The leases typically run for a period of three to six years.

(ii) Other leases

The Group leases vehicles and office equipment. These leases are short-term or leases of lowvalue items. The Group has elected not to recognize right-of-use assets and lease liabilities for these leases.

(n) Provisions

Except for the following disclosure, there was no significant change for provisions for the nine months ended September 30, 2024 and 2023. For the related information, please refer to note 6(o) of the consolidated financial statements for the year ended December 31, 2023.

Balance on January 1, 2024 Provisions made during the year Provisions used during the year Balance on September 30, 2024 Balance on January 1, 2023 Provisions made (reversed) during the year Provisions used during the year Balance on September 30, 2023	Environmental protection costs		Fire disaster indemnity - - - - 68,159 (373) (61,346) 6,440	Total 29,058 27,726 (31,808) 24,976 111,384 8,504 (82,290) 37,598

Please refer to note 10 for the above fire indemnity.

(o) Employee benefits

(i) Defined benefit plans

Management believes that there was no material volatility of the market, no material reimbursement and settlement or other material one-time events since prior fiscal year. As a result, the pension cost in the accompanying interim period was measured and disclosed according to the actuarial report as of December 31, 2023 and 2022.

The expenses recognized in profit or loss for the Group were as follows:

For the three months ended September 30, 2024 2023 $ 288 147 109 60 $ 397 207	For the nine months ended September 30,	For the nine months ended September 30,
2024 $ 288 109 $ 397	2024 865 326 1,191	2023
		421 200
		621

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Defined contribution plans

The Group’s expenses under the pension plan cost to the Bureau of Labor Insurance were as follows:

For the three months ended September 30, 2024 2023 $ 1,693 1,407 542 488 $ 2,235 1,895	For the nine months ended September 30,	For the nine months ended September 30,
2024 $ 1,693 542 $ 2,235	2024 5,000 1,620 6,620	2023
		4,070 1,444
		5,514

(p) Income taxes

(i) The Group’s income tax expense in the interim financial statements is measured and disclosed accordance to paragraph B12 of IAS 34 “Interim Financial Reporting”.
(ii) The Group’s income tax expenses for the three months and nine months ended September 30, 2024 and 2023 were calculated as follows:

For the three months ended September 30, 2024 2023 $ 95,125 9,047 - - 95,125 9,047 - - $ 95,125 9,047	For the nine months ended September 30,	For the nine months ended September 30,
2024	2024 118,344 30,532 148,876 (42,189) 106,687	2023
$ 95,125 - 95,125 - $ 95,125		76,151 -
		76,151
		-
		76,151

(iii) For the three months and nine months ended September 30, 2024 and 2023, the Group did not recognize income tax expense in equity and other comprehensive income.

(iv) Examination and approval

The ROC tax authorities have examined the Company’ s and Yushan’ s income tax returns through 2022.

(q) Capital and other equity

Except for the following disclosure, there was no significant change for capital and other equity for the periods from January 1 to September 30, 2024 and 2023. For the related information, please refer to note 6(r) of the consolidated financial statements for the year ended December 31, 2023.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Ordinary shares

Based on the resolution of the stockholders’ meeting held on June 19, 2023, the Company increased its common stock through the issuance of stock dividends by transferring retained earnings amounting to $119,228. The newly issued shares totaled 11,923 thousand shares with a par value of NTD 10 per share. The effective date is August 2, 2023, and the registration procedures has been completed.

Based on the resolution of the stockholders’ meeting held on June 19, 2023, the Company decided to issue 203 thousand new shares with par value of NTD10 per share as employees’ remuneration amounting to $22,178. The registration procedures have been completed, please refer to note 6(u).

(ii) Capital surplus

The balances of capital surplus as of September 30, 2024, December 31 and September 30, 2023 were as follows:

September 30, 2024 Additional paid-in capital $ 2,127,990 Cash capital increase reserved for employees' subscription 18,720 Gain on disposal of assets 980 Stock options 71,530 Changes in equity of associates and joint ventures accounted for using equity method - Employee stock options 5,582 $ 2,224,802	December 31, 2023 September 30, 2023 2,127,990 1,290,390 18,720 - 980 980 71,530 71,530 8,788 8,788 5,582 5,582 2,233,590 1,377,270	December 31, 2023 September 30, 2023 2,127,990 1,290,390 18,720 - 980 980 71,530 71,530 8,788 8,788 5,582 5,582 2,233,590 1,377,270
		1,290,390 - 980 71,530 8,788 5,582
		1,377,270

(iii) Retained Earnings

The Company’s article of incorporation stipulates that Company’s net earnings should first be used to offset the prior years’ deficits, if any, after paying any income taxes. Of the remaining balance, 10% is to be appropriated as legal reserve, and special reserves are supposed to set aside in accordance with the relevant regulations or as required by the government. And then any undistributed retained earnings shall be distributed according to the distribution plan proposed by the Board of Directors and submitted to the stockholders’ meeting for approval.

According to the Company’s dividend policy, the type of dividends should be determined after considering the Company’ s capital and financial structure, operating conditions, operating surplus, industrial characteristics and cycle. The distribution of net earnings should not be lower than 50% of the current profit before tax. Cash dividends to stockholders should not be lower than 10% of the total dividends.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iv) Earnings distribution

Based on the resolution of stockholders’ meeting held on May 30, 2024 and June 19, 2023, the appropriation of earnings for the year 2023 and 2022 was approved. The above dividends per share were appropriated as follows:

2023
Amount
per share
(dollars)
Total
amount
Dividends distributed to
ordinary shareholders:
Cash
$ 1.25
149,387
Stock
-
-
Total
$
149,387
Other equity (net of tax)
Balance at January 1, 2024
Unrealized gains (losses) from financial assets measured at fair
value through other comprehensive income
Balance at September 30, 2024
Balance at January 1, 2023
Unrealized gains (losses) from financial assets measured at fair
value through other comprehensive income
Disposal of investments in equity instruments designated at fair
value through other comprehensive income
Balance at September 30, 2023

2022
Amount
per share
(dollars)
Total
amount
0.25
23,846
1.25
119,228
143,074
Unrealized gains
(losses) from
financial assets
measured at fair
value through
other
comprehensive
income
$ 25,457
(7,373)
$
18,084
$ (54,727)
203,605
(113,801)
$
35,077

(v) Other equity (net of tax)

(r) Share-based payment

Based on the resolution of the Board of Directors held on August 10, 2023, the Company decided to conduct a cash capital increase, with November 6, 2023, as the date of capital increase. Information related to the share-based payment resulting from the reserved employees' subscription, please refer to note 6(s) of the consolidated financial statements for the year ended December 31, 2023.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(s) Earnings per share

The Company’s earnings per share was calculated as follows:

For the three months ended September 30, 2024 2023 $ 381,146 35,376 119,509 107,509 $ 3.19 0.33 $ 381,146 35,376 119,509 107,509 333 219 119,842 107,728 $ 3.18 0.33	For the nine months ended September 30,	For the nine months ended September 30,
2024 $ 381,146 119,509 $ 3.19 $ 381,146 119,509 333 119,842 $ 3.18	2024 487,848 119,509 4.08 487,848 119,509 405 119,914 4.07	2023
		298,332
		107,454
		2.78
		298,332
		107,454 283
		107,737
		2.77

The above mentioned weighted average number of ordinary shares has been retroactively adjusted for the shares obtained as stock dividends, with August 2, 2023 as the date of capital increase.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(t) Revenue from contracts with customers

(i) Disaggregation of revenue

For the three months ended September 30, 2024 2023 $ 55,447 55,550 127,316 - 27,718 8,702 44,950 24,060 44,861 - 36,143 15,510 29,475 10,147 - 26,984 854 44,963 52,530 71,933 $ 419,294 257,849 $ 318,804 181,991 93,687 67,462 6,803 8,396 $ 419,294 257,849	For the nine months ended September 30,	For the nine months ended September 30,
2024 $ 55,447 127,316 27,718 44,950 44,861 36,143 29,475 - 854 52,530 $ 419,294 $ 318,804 93,687 6,803 $ 419,294	2024 191,804 127,316 111,308 110,190 101,646 85,090 83,744 81,802 36,594 192,395 1,121,889 819,091 286,390 16,408 1,121,889	2023
		234,820 9,935 48,791 65,391 16,666 89,682 81,963 54,009 99,674 211,812
		912,743
		568,935 332,511 11,297
		912,743

(ii) Contract balances

Notes and accounts receivable Less: Loss allowance Total Contract liabilities (sales received in advance)	September 30, 2024 $ 334,281 - $ 334,281 $ 53,922	December 31, 2023 307,369 - 307,369 38,367	September 30, 2023
			278,745 -
			278,745
			31,555

Please refer to note 6(d) for the information of accounts receivable and the impairment.

The amount of revenue recognized for the nine months ended September 30, 2024 and 2023, that was included in the contract liability balance at the beginning of the period was $6,917 and $323, respectively.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The changes of contract liabilities are arising from the difference of time point, which the Group transfers the ownership of goods and which customers do the payment.

(u) Remuneration to employees and directors

In accordance with the Articles of incorporation, the Company should contribute no less than 3% of the profit as employee remuneration and less than 2% as directors’ remuneration when there is profit for the year. However, if the Company has accumulated deficits, the profit should be reserved to offset the deficit. The aforementioned employees’ compensation will be distributed in shares or cash. The recipients may include the employees of the subordinate of the Company who meet certain specific requirements.

For the three months and nine months ended September 30, 2024 and 2023, the remunerations to employees amounted to $17,892, $7,200, $29,934 and $20,943, respectively, and the remunerations to directors amounted to $3,650, $600, $5,000 and $4,800, respectively. These amounts were calculated using the Company’s net income before tax without the remunerations to employees and directors for each period, multiplied by the proposed percentage which is stated under the Company's proposed Article of Incorporation. These remunerations were expensed under operating costs or expenses for each period. Shares distributed to employees as employees’ remuneration are calculated based on the closing price of the Company’s shares on the day before the approval by the Board of Directors.

For the years ended December 31, 2023 and 2022, the remunerations to employees amounted to $24,407 and $26,091, respectively, and the remunerations to directors amounted to $3,936 and $4,250, respectively. The remunerations to employees in 2022 amounting to $22,178, are calculated with the closing market prices of ordinary shares on the day before the resolution of the board of directors to distribute the remuneration to employee on March 14, 2023, and 203 thousand shares were distributed. The remunerations above are identical to those of the actual distributions. The information is available on the Market Observation Post System website.

(v) Other Income

Other Income
Provisions reversal of fire indemnity Insurance claim income, net Rental income and others	For the three months ended September 30,		For the nine months ended September 30,
	2024 $ - 431,455 7,293 $ 438,748	2023	2024 - 431,455 12,777 444,232	2023
		- - 2,663		373 210,943 6,414
		2,663		217,730

(w) Financial Instruments

Except for the contention mentioned below, there was no significant change in the fair value of the Group’s financial instruments and degree of exposure to credit risk, liquidity risk and market risk arising from financial instruments. For the related information, please refer to note 6(x) of the consolidated financial statements for the year ended December 31, 2023.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Credit risk

1) Credit risk exposure

The carrying amount of financial assets represent the maximum amount exposed to credit risk.

2) Concentration of credit risk

As of September 30, 2024, December 31 and September 30, 2023, there were seven, five and six major customers, respectively, that accounted for 74%, 76% and 75%, respectively, of notes and accounts receivable. Thus, credit risk is significantly centralized. In order to minimize credit risk, the Group periodically evaluates the major clients’ financial positions and the possibility of collecting notes and accounts receivables to ensure the uncollectible amount is recognized appropriately as loss allowance.

3) Receivables and debt securities
a) For credit risk exposure of notes and trade receivables, please refer to note 6(d).
b) Other financial assets at amortized cost include other receivables and time deposits. The counterparties of the time deposits held by the Group are the financial institutions with investment grade credit ratings. Therefore, the credit risk is considered to be low.

(ii) Liquidity Risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments:

September 30, 2024 Non-derivative financial liabilities: Short-term borrowings Notes and accounts payable Lease liabilities (including current and non-current) Other payables Payables on contractors and equipment Long-term borrowings (including current portion) Guarantee deposits received	Carrying Amount $ 101,000 63,082 4,924 175,713 159,980 997,705 1,000 $ 1,503,404	Contractual cash flows (101,281) (63,082) (5,079) (175,713) (159,980) (1,028,093) (1,000) (1,534,228)	Within a year (101,281) (63,082) (2,072) (175,713) (159,980) (249,207) - (751,335)	1 ~ 2 years - - (1,361) - - (466,116) - (467,477)	Over 2 years - - (1,646) - - (312,770) (1,000) (315,416)

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

December 31, 2023 Non-derivative financial liabilities: Short-term borrowings Notes and accounts payable Lease liabilities (including current and non-current) Other payables Payables on contractors and equipment Long-term borrowings (including current portion) Guarantee deposits received September 30, 2023 Non-derivative financial liabilities: Short-term borrowings Notes and accounts payable Lease liabilities (including current and non-current) Other payables Payables on contractors and equipment Long-term borrowings Guarantee deposits received	Carrying Amount $ 175,000 44,251 4,804 169,538 68,840 862,670 1,000 $ 1,326,103 $ 140,000 31,669 5,300 171,039 58,415 735,828 1,000 $ 1,143,251	Contractual cash flows (175,404) (44,251) (4,971) (169,538) (68,840) (898,412) (1,000) (1,362,416) (140,377) (31,669) (5,494) (171,039) (58,415) (769,763) (1,000) (1,177,757)	Within a year (175,404) (44,251) (2,026) (169,538) (68,840) (32,789) - (492,848) (140,377) (31,669) (2,091) (171,039) (58,415) (10,810) - (414,401)	1 ~ 2 years - - (1,193) - - (409,607) - (410,800) - - (1,463) - - (175,130) - (176,593)	Over 2 years - - (1,752) - - (456,016) (1,000) (458,768) - - (1,940) - - (583,823) (1,000) (586,763)

The Group is not expecting that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amount.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Currency risk

1) Exposure to foreign currency risk

The Group’s significant exposure to foreign currency risk was as follow:

Foreign currency: in thousands of dollars

Financial assets Monetary items USD to TWD EUR to TWD Financial liabilities Monetary items USD to TWD	September 30, 20	September 30, 20	24 TWD 284,684 54,036 13,809	De Foreign currency	cember 31, 20	23	September 30, 2023 Foreign currency Exchange rate TWD 9,365 32.22 301,740 1,834 33.71 61,824 542 32.22 17,463	September 30, 2023 Foreign currency Exchange rate TWD 9,365 32.22 301,740 1,834 33.71 61,824 542 32.22 17,463
	Foreign currency	Exchange rate			Exchange rate	TWD		Exchange rate TWD 32.22 301,740 33.71 61,824 32.22 17,463
	$ 9,009 1,536 437	31.6 35.18 31.6		11,322 303 633	30.655 33.78 30.655	347,076 10,235 19,405	9,365 1,834 542

2) Sensitivity analysis

The Group’s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, accounts receivable, loans and borrowings, accounts payable, accrued expenses and other payables that are denominated in foreign currency.

The analysis assumes that all other variables remain constant. A strengthening (weakening) 1% of the functional currency against each foreign currency for the nine months ended September 30, 2024 and 2023, would have affected the net profit before tax increased or decreased $3,249 and $3,461, respectively. The analysis is performed on the same basis for both periods.

3) Foreign exchange gain and loss on monetary items

The exchange gains and losses of monetary items, including realized and unrealized, are changed into functional currency, which is the Group’s presentation currency. For the three months and nine months ended September 30, 2024 and 2023, the exchange gains (losses), including realized and unrealized, are $(5,599), $11,042, $13,140 and $18,271, respectively.

(iv) Interest rate analysis

For the details of financial assets and liabilities exposed to interest rate risk, please refer to financial risk management.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The details of financial assets and liabilities exposed to interest rate risk were as follows:

Variable rate instruments: Financial assets Financial liabilities	Carrying amount
	September 30, 2024 September 30, 2023 $ 506,792 103,857 1,100,359 879,689

The following sensitivity analysis is based on the exposure to the interest rate risk of nonderivative financial instruments on the reporting date. Regarding assets with variable interest rates, the analysis is based on the assumption that the amount of assets outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 0.25% when reporting to management internally, which also represents the Group management’s assessment of the reasonably possible interest rate change.

If the interest rate had increased or decreased by 0.25%, the Group's net profit before tax would have decreased by $1,113 and $1,455, respectively, for the nine months ended September 30, 2024 and 2023, with all other variable factors remaining constant. This is mainly due to the Group’s bank savings and borrowings with variable interest rates.

(v) Other market price risks

For the years ended September 30, 2024 and 2023, the sensitivity analyses for the changes in the securities price at the reporting date were performed using the same basis for both analysis, and assuming that the other variables were unchanged, the effects on the comprehensive income were as follows:

Price of securities at the reporting date Increasing 5% Decreasing 5%	For the nine months ended September 30,	For the nine months ended September 30,
	2024 Other comprehensive income after tax Profit or loss before tax $ 4,472 1,479 $ (4,472) (1,479)	2023 Other comprehensive income after tax Profit or loss before tax 5,603 4,537 (5,603) (4,537)
	Other comprehensive income after tax $ 4,472 $ (4,472)	Other comprehensive income after tax 5,603 (5,603)

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(vi) Fair value

1) Fair value hierarchy

The fair value of financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income are measured on a recurring basis. The carrying amount and fair value of the Group’s financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required:

	September 30, 2024	September 30, 2024	September 30, 2024
Book value		Fair Value
	Level 1 29,577 89,441 - - - - - - - - - - -	Level 2 - - - - - - - - - - - - -	Level 3 Total - 29,577 - 89,441 - - - - - - - - - - - - - - - - - - - - - -
$ 29,577 89,441 513,936 334,281 535,252 920 1,384,389 $ 1,503,407 $ 101,000 63,082 4,924 175,713 159,980 997,705 1,000 $ 1,503,404

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	December 31, 2023	December 31, 2023	December 31, 2023
Book value		Fair Value
	Level 1 88,998 96,814 - - - - - - - - - - -	Level 2 - - - - - - - - - - - - -	Level 3 Total - 88,998 - 96,814 - - - - - - - - - - - - - - - - - - - - - -
$ 88,998 96,814 942,057 307,369 151 920 1,250,497 $ 1,436,309 $ 175,000 44,251 4,804 169,538 68,840 862,670 1,000 $ 1,326,103

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	September 30, 2023	September 30, 2023
Book value		Fair Value
	Level 1 90,744 112,064 - - - - - - - - - - -	Level 2 Level 3 Total - - 90,744 - - 112,064 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
$ 90,744 112,064 140,515 278,745 78 920 420,258 $ 623,066 $ 140,000 31,669 5,300 171,039 58,415 735,828 1,000 $ 1,143,251

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) Valuation techniques for financial instruments not measured at fair value

The Group’ s valuation techniques and assumptions used for financial instruments not measured at fair value are as follows:

a) Financial assets and liabilities measured at amortized cost

If there is quoted price generated by transactions, the recent transaction price and quoted price data is used as the basis for fair value measurement. However, if no quoted prices are available, the discounted cash flows are used to estimate fair values.

3) Valuation techniques for financial instruments measured at fair value
a) Non-derivative financial instruments

Financial instruments trade in active markets is based on quoted market prices. The quoted price of a financial instrument obtained from main exchanges and on-therun bonds from Taipei Exchange can be used as a base to determine the fair value of the listed companies’ equity instrument and debt instrument of the quoted price in an active market.

If a quoted price of a financial instrument can be obtained in time and often from exchanges, brokers, underwriters, industrial union, pricing institute, or authorities and such price can reflect those actual trading and frequently happen in the market, then the financial instrument is considered to have a quoted price in an active market. If a financial instrument is not in accord with the definition mentioned above, then it is considered to be without a quoted price in an active market. In general, market with low trading volume or high bid-ask spreads is an indication of a non-active market.

Listed stocks are financial assets traded on the active market, and their fair value is determined by market quotations.

Measurements of fair value of financial instruments without an active market are based on a valuation technique or quoted price from a competitor. Fair value measured by a valuation technique can be extrapolated from similar financial instruments, the discounted cash flow method, or other valuation technique including a model using observable market data at the reporting date.

The measurement of fair value of a non-active market financial instruments held by the Group which do not have quoted market prices are based on the comparable market approach, with the use of price-book ratio multiple or earnings multiple of comparable companies as its basic measurement. These assumptions have been adjusted for the effect of discount without the marketability of the equity securities.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

4) Transfers between Levels

The Group holds investment in equity shares, which are classified as financial assets at fair value through other comprehensive income, with the fair value of $89,441, $96,814 and $112,064 as of September 30, 2024, December 31 and September 30, 2023, respectively.

In June, 2023, one of the above financial assets, Sunny Pharmtech Inc., listed its equity shares on an exchange and became publicly quoted on an active market. Furthermore, the degree of the stock trading activity of Energenesis, an emerging company, meets the definition of an active market. Therefore, the fair value measurement was transferred from Level 3 to Level 1 of the fair value hierarchy as of June 30, 2023. For the nine months ended September 30, 2024, the Group has no any transfer between fair value.

5) Reconciliation of Level 3 fair values

For the nine months ended September 30, 2024, the Group has no financial assets and liabilities of Level 3 fair values.

January 1, 2023 Total gains and losses recognized: In profit or loss In other comprehensive income Reclassifications Disposal September 30, 2023	Fair value through other comprehensive income Unquoted equity instruments $ 66,723 - 241,563 (241,377) (66,909) $ -

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(x) Financial risk management

There were no significant changes in the Group’ s financial risk management and policies as disclosed in note 6(y) of the consolidated financial statements for the year ended December 31, 2023.

(y) Capital management

Management believes that the objectives, policies and processes of capital management of the Group has been applied consistently with those described in the consolidated financial statements for the year ended December 31, 2023. Also, management believes that there were no significant changes in the Group’s capital management information as disclosed for the year ended December 31, 2023. Please refer to note 6(z) of the consolidated financial statements for the year ended December 31, 2023.

(z) Investing and financing activities not affecting current cash flow

The Group’s investing and financing activities which did not affect the current cash flow for the nine months ended September 30, 2024 and 2023, were as follows:

(i) For the acquisition of right-of-use assets by lease for the nine months ended September 30, 2024 and 2023, please refer to note 6(i).
(ii) Reconciliation of liabilities arising from financing activities for the nine months ended September 30, 2024 and 2023, were as follows:

Short-term borrowings Long-term borrowings (including current portion) Lease liabilities Short-term borrowings Long-term borrowings Lease liabilities	January 1, 2024 $ 175,000 862,670 4,804 $ 1,042,474 January 1, 2023 $ 112,000 432,356 1,023 $ 545,379	Cash flows (74,000) 132,787 (1,649) 57,138 Cash flows 28,000 303,922 (1,398) 330,524	Non-cash	changes Others - 2,248 - 2,248 changes Others - (450) - (450)	September 30, 2024
			Acquisition - - 1,769 1,769 Non-cash
					101,000 997,705 4,924
					1,103,629
					September 30, 2023
			Acquisition - - 5,675 5,675
					140,000 735,828 5,300
					881,128

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(7) Related-party transactions:

(a) Names and relationship with related parties:

Name of related party Weichyun Wong Framosa Co., Ltd. (Framosa) HoneyBear Biosciences, Inc. (HoneyBear)

Relationship with the Group

The chairman of the Company The associate of the Company 〃

(b) Significant transaction with related parties:
(i) Sales

The amounts of sales by the Group to related parties were as follow:

Associates	For the three months ended September 30, 2024 2023 $ - 8,000	For the nine months ended September 30,	For the nine months ended September 30,
	2024 $ -	2024 -	2023
			8,000

There were no comparative sales prices between the related parties and other customers, and the payment term was 30 days. There no significant differences in the payment term between the related parties and other customers. As of September 30, 2024, all the above transaction price have been received.

(ii) Lease

The Group rented out land and laboratory for related party, the details of the above lease transactions were as follows:

			Rental	income			Other receivables from	Other receivables from
			(recorded as	other income)			related parties
		For the three months		For the nine months ended
		ended September 30,		September 30,		September 30, December 31,		September 30,
		2024	2023	2024	2023		2024 2023		2023
Associates-
Framosa	$	1,657	1,616	4,927	4,697		- -		-
						Guarantee deposits received
					(recorded as other non-current			liability)
					September		December September
					30,	2024	31, 2023	30,	2023
Associates-Framosa					$	1,000 1,000			1,000
(iii) Property	transactions

The Group entrusted Framosa with the construction of its wastewater treatment equipment, the total contract price is $248,818 (before tax), as of September 30, 2024, December 31 and September 30, 2023, the amount of $144,786, $90,238 and $71,605, respectively, was recorded as construction in progress. As of September 30, 2024, the above transaction price of construction in progress has been paid.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iv) Guarantee

September 30, 2024 Associates-Framosa $ 400,000	December 31, 2023 September 30, 2023 400,000 -

Please refer to note 13(a)ii for the detail.

(v) Others

The title deed of a certain portion of the land was registered in the name of Mr. Weichyun Wong due to certain legal requirements for the nine months ended September 30, 2024 and 2023. Please refer to note 6(h).

Salary and short-term employee benefits	For the three months ended September 30, 2024 2023 $ 7,194 7,743	For the nine months ended September 30,	For the nine months ended September 30,
	2024 $ 7,194	2024 18,382	2023
			19,06

(8) Pledged assets:

The carrying values of pledged assets were as follows:

Assets Land Building	Subject Pledged as collaterals $ `〃` $	September 30, 2024 42,736 2,113 44,849	December 31, 2023 42,736 2,315 45,051

(9) Commitments and contingencies:

(a) As of September 30, 2024, December 31 and September 30, 2023, the unused balance of the Group’s outstanding standby letters of credit amounted to $84,062, $35,813 and $6,799, respectively.
(b) The significant outstanding purchase commitments for property, plant and equipment were as follows:

Acquisitions of property, plant and equipment	September 30, 2024 $ 562,645	December 31, 2023 614,765	September 30, 2023
			535,983

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(10) Losses Due to Major Disasters:

A major fire occurred on December 20, 2020, and caused damage to some of the Company's buildings, equipment, construction in progress and inventories, and spread to several nearby plants, resulting in damage to their property and interruption of their operations. In 2020, the Company derecognized damaged assets, including buildings, equipment and construction in progress and inventories and estimated the amount of fire indemnity for the nearby companies.

The Company is currently in the process of negotiating with the above-mentioned damaged companies for fire indemnity payments. For the indemnity payment, please refer to note 6(m) for the details. As of December 31, 2023, the indemnity payment had been fully completed.

The Company has already entered into related property insurance and public liability insurance contracts, wherein it received insurance claims progressively from 2021. The insurance claim applied by the Company in September 2024 totaled $534,933, including the compensation of maintenance expense of $103,478, with the remaining amount being compensated for the newly purchased equipment. Since the above mentioned insurance claims has yet to be received as of September 30, 2024, it was recorded under other receivables. For the three months and nine months ended September 30, 2024 and 2023, the Company received insurance claim income amounting to $431,455, $0, $431,455 and $210,943, respectively, which was recorded under other income, please refer to note 6(f) and 6(v).

(11) Subsequent Events: None.

(12) Other:

(a) The followings are the summary statement of current period employee benefits, depreciation and amortization expenses by function:

By function By item	For the three months ended September 30, 2024	For the three months ended September 30, 2024	For the three months ended September 30, 2024	For the three months ended September 30, 2023	For the three months ended September 30, 2023	For the three months ended September 30, 2023
	Cost of sales	Operating expenses	Total	Cost of sales	Operating expenses	Total
Employee benefits Salary Labor and health insurance Pension Remuneration of directors Others Depreciation Amortization	47,667 4,533 1,981 - 1,087 52,326 1,032	31,937 1,428 651 3,650 2,347 6,602 1,065	79,604 5,961 2,632 3,650 3,434 58,928 2,097	42,366 3,359 1,554 - 931 27,280 1,038	17,489 1,165 548 600 2,052 6,603 1,069	59,855 4,524 2,102 600 2,983 33,883 2,107

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

By function By item	For the nine months ended September 30, 2024	For the nine months ended September 30, 2024	For the nine months ended September 30, 2024	For the nine months ended September 30, 2023	For the nine months ended September 30, 2023	For the nine months ended September 30, 2023
	Cost of sales	Operating expenses	Total	Cost of sales	Operating expenses	Total
Employee benefits Salary Labor and health insurance Pension Remuneration of directors Others Depreciation Amortization	139,459 13,115 5,865 - 3,226 146,240 3,108	68,487 4,096 1,946 5,000 7,060 19,503 3,195	207,946 17,211 7,811 5,000 10,286 165,743 6,303	121,581 9,858 4,491 - 2,692 73,778 3,118	53,701 3,514 1,644 4,800 5,631 20,301 3,213	175,282 13,372 6,135 4,800 8,323 94,079 6,331

(b) Seasonality of operations

The Group’s operations were not affected by seasonality or cyclicality factors.

(13) Other disclosures:

(a) Information on significant transactions:

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Group for the nine months ended September 30, 2024:

(i) Loans to other parties: None.

(ii) Guarantees and endorsements for other parties:

No.	Name of guarantor	Counter-party of guarantee and endorsement	Counter-party of guarantee and endorsement	Limitation on amount of guarantees and endorsements for a specific enterprise	Highest balance for guarantees and endorsements during the period	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period	Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements	Parent company endorsements/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsements/ guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of companies in Mainland China
		Name	Relationship with the Company
0	The Company	Framosa Co., Ltd	The associate of the Company	542,087	400,000	400,000	110,416	-	% 7.38	2,168,351	N	N	N

Note 1: The total amount of endorsements and guarantees provided by the Company to third parties shall not exceed 40% of the latest net worth as reported in the financial statements. The maximum limit for endorsements and guarantees provided to a single enterprise shall not exceed 10% of the Company's net worth. In addition the total amount of endorsements and guarantees provided by the Company and subsidiaries to third parties shall not exceed 40% of the latest net worth as reported in the financial statements. The maximum limit for endorsements and guarantees provided to a single enterprise shall not exceed 10% of the Company's net worth.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Securities held as of September 30, 2024 (excluding investment in subsidiaries, associates and joint ventures):

							Unit: thousan	d shares
Name of holder	Category and name of security	Relationship with company	Account title		Ending	balance		Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
The Company `〃` `〃` `〃` `〃`	Beneficiary Certificate (UPAMC James Bond Money Market Fund) Stock (Cathay Financial Holding Co., Ltd. Preferred Stock A) Stock (CTBC Financial Holding Co., Ltd. Preferred Shares B) Stock (Shin Kong Financial Holding Co., Ltd. Preferred Shares A) Stock (Energenesis Biomedical Co., Ltd.)	- - - - -	Current Financial asset at fair value through profit or loss `〃` `〃` `〃` Financial assets at fair value through other comprehensive income	61 50 333 148 1,603	1,063 3,025 20,146 5,343 89,441	- - - - 2.10 %	1,063 3,025 20,146 5,343 89,441	- - - - -

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of $300 million or 20% of the capital stock: None.

(v) Acquisition of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:

Name of company	Name of property	Transaction date	Transaction amount	Status of payment	Counter- party	Relationship with the Company	If the counter-party is a related party, disclose the previous transfer information	If the counter-party is a related party, disclose the previous transfer information	If the counter-party is a related party, disclose the previous transfer information	If the counter-party is a related party, disclose the previous transfer information	References for determining price	Purpose of acquisition and current condition	Others
							Owner	Relationship with the Company	Date of transfer	Amount
The Company	Buildings	2021.10.19	$ 630,000	$ 567,000	ECO Technical Services Co., Ltd.	None	Not applicable	Not applicable	Not applicable	-	Price negotiation	to expand production

(vi) Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock: None.

(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of $100 million or 20% of the capital stock: None.
(viii) Receivables from related parties with amounts exceeding the lower of $100 million or 20% of the capital stock: None.
(ix) Trading in derivative instruments: None.
(x) Business relationships and significant intercompany transactions: None.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(b) Information on investees:

The following is the information on investees for the nine months ended September 30, 2024 (excluding information on investees in Mainland China):

Unit: thousand dollars/ thousand shares

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Ending balance	Ending balance	Ending balance	Net income (losses) of investee	Share of profits/losses of investee	Note
				September 30, 2024	December 31, 2023	Shares (thousands)	Percentage of ownership	Carrying value
The Company `〃` `〃` Yushan Pharmaceuticals Inc.	Yushan Pharmaceuticals Inc. Framosa Co., Ltd. HoneyBear Biosciences, Inc. HoneyBear Biosciences, Inc.	R.O.C. R.O.C. R.O.C R.O.C	The research and development, manufacture and sale of API Circular economy by purifying and utilizing used solvents Biotechnology services Biotechnology services	351,761 143,750 35,000 33,000	351,761 143,750 - 33,000	35,190 14,375 1,750 3,300	% 100 % 25 % 4.97 % 9.38	359,100 108,357 16,420 30,986	(1,834) (26,664) (37,774) (37,774)	(1,412) (8,458) (652) (4,772)	Note 1

Note 1 ： The transactions had been eliminated in the consolidated financial statements.

(c) Information on investment in mainland China: None.
(d) Major shareholders:

Unit: shares

		Unit: shares
Shareholding Shareholders' Name	Shares	Percentage
Mercuries & Associates Holding Ltd.	35,590,777	% 29.78

(14) Segment information:

The Group only uses one segment to assess its performance and allocate resources. Hence, there is no need to disclose the information.

AI assistant

SCI — Interim / Quarterly Report 2024

52383_rns_2024-11-08_25147208-606b-4975-944e-6df1b4800472.pdf

SCI PHARMTECH, INC. AND SUBSIDIARIES

Consolidated Financial Statements

Table of contents

KPMG

Independent Auditors’ Review Report

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

KPMG

Notes to Readers

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

SCI PHARMTECH, INC. AND SUBSIDIARIES Consolidated Balance Sheets

September 30, 2024, December 31, 2023, and September 30, 2023

SCI PHARMTECH, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months and nine months ended September 30, 2024 and 2023

(expressed in Thousands of New Taiwan Dollars, except for earnings per share)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

SCI PHARMTECH, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the nine months ended September 30, 2024 and 2023

Equity attributable to owners of parent

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

SCI PHARMTECH, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the nine months ended September 30, 2024 and 2023

(expressed in Thousands of New Taiwan Dollars)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements September 30, 2024 and 2023

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company history

(2) Approval date and procedures of the consolidated financial statements

(3) New standards, amendments and interpretations adopted:

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(4) Summary of material accounting policies:

(a) Statement of compliance

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

(6) Explanation of significant accounts:

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(e) Inventories

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(g) Investments accounted for using equity method

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(h) Property, plant and equipment

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Right-of-use assets

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Other leases

(n) Provisions

(o) Employee benefits

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Defined contribution plans

(p) Income taxes

(iv) Examination and approval

(q) Capital and other equity

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Ordinary shares

(ii) Capital surplus

(iii) Retained Earnings

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iv) Earnings distribution

(r) Share-based payment

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(s) Earnings per share

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(t) Revenue from contracts with customers

(i) Disaggregation of revenue

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(u) Remuneration to employees and directors

(v) Other Income

SCI Interim / Quarterly Report 2024