Stock Code : 1734

Sinphar Pharmaceutical Co., Ltd and Subsidiaries

Consolidated Financial Statements for
the Years Ended December 31, 2025 and 2024 and
Independent Auditors’ Report

Tables of Contents

Item	Page
Representation Letter	-
Independent Auditors’ Report	-
Consolidated Balance Sheets	1
Consolidated Statements of Comprehensive Income	2
Consolidated Statements of Changes in Equity	3
Consolidated Statements of Cash Flows	4
Notes to Consolidated Financial Statements
1. General Information	5
2. The Authorization of the Consolidated Financial Statements	5
3. Application of New and Amended Standards and Interpretations	5~6
4. Summary of Significant Accounting Policies	7~22
5. Significant Accounting Judgments and Assumptions, and Major Sources of Estimation Uncertainty	23~24
6. Description of Significant Accounts	24~44
7. Related Party Transactions	44
8. Pledged Assets	44~45
9. Significant Contingent Liabilities and Unrecognized Contract Commitments	45
10. Significant Disaster Losses	45
11. Significant Subsequent Events	45
12. Others	45~53
13. Supplementary Disclosure
A. Significant transactions information	53
B. Information on investees	53
C. Information on investments in Mainland China	53
14. Segment Information	53~54

Sinphar Pharmaceutical Co., Ltd.

Representation Letter

The entities that are required to be included in the combined financial statements of Sinphar Pharmaceutical Co., Ltd. as of and for the year ended December 31, 2025 under the Criteria Governing the Preparation of Affiliation Report, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standard 10 “Consolidated Financial Statements.” In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Sinphar Pharmaceutical Co., Ltd. and Subsidiaries do not prepare a separate set of combined financial statements.

Very truly yours,

Sinphar Pharmaceutical Co., Ltd.

Mr. Chih Wen Lee
Chairman

March 10, 2026

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders of

Sinphar Pharmaceutical Co., Ltd.

Opinion

We have audited the accompanying consolidated financial statements of Sinphar Pharmaceutical Co., Ltd. and its subsidiaries (the "Group"), which comprise the consolidated balance sheet as of December 31, 2025 and 2024 and the consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2025 and 2024, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2025 and 2024, and its consolidated financial performance and its consolidated cash flows for the years ended December 31, 2025 and 2024, in accordance with the Regulation Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2025. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters for the Group's consolidated financial statements for the year ended December 31, 2025 are stated as follows:

Cash and Cash Equivalents

As of December 31, 2025, the cash and cash equivalent of the consolidated balance sheet was NT$ 864,139 thousand, which represented 14% of the Group's consolidated total assets. As the Group is still in the research and development phase, it is necessary to maintain sufficient cash and cash equivalent balance to support future research and development costs. However, it is taken as a key audit matters due to cash and cash equivalent is a high-risk item.

Our key audit procedures in response

Our procedures in relation to cash and cash equivalent included:

Evaluate the design and implementation of internal control related to cash and cash equivalent, performed test count of cash on hand, checked the bank deposit balance with the bank statements, and send bank confirmation letter in accordance with the Auditing Standards No.505. "External confirmation".
Performed a test audit of the supporting documents for large inflows and outflows of cash and bank deposits, paying attention to changes in cash and bank deposits immediately prior to and after the balance sheet date.

Inventory Valuation

Please refer to Note 4(8.) and 5(2.) in the accompanying consolidated financial statements for related disclosures of the Group's valuation of inventory accounting policies and critical accounting estimate and assumption.

The Group mainly engages in the production and sales of various types of drugs and food supplements. As the regulations to the pharmaceutical industry cause the cost to increase and meanwhile the selling prices are less likely to be affected as they are covered by the health insurance system. Furthermore, the price of food supplement inventory fluctuates due to market competition and the impacts aroused from advertisements. Management assesses that the net realizable value of inventory involves material judgment. Hence, it is taken as a one of the key audit matters.

Our key audit procedures in response

Our procedures in relation to inventory valuation included:

Understand and evaluate the design and implementation of the internal control in relation to inventory.
Perform inventory counts, to identify if there are any inventories which are obsolete or damaged.
Obtain Inventory aging reports to analyses the changes in inventory age, and check the records of inventory changes to verify the correctness of inventory.
Evaluate the reasonableness of its inventory valuation policy of unmarketable items and obsolescence, and check the latest inventory sales price to evaluate the reasonableness of the net realizable value of the inventory.
Obtain evaluation documents for subsequent measurement of inventories and assess whether they have been measured in accordance with established accounting policies and review if the management's disclosure on the evaluation of inventory is presented fairly.

Revenue Recognition

Please refer to Note 4(17.) and 5(2.) in the accompanying consolidated financial statements for related disclosures of the Group's revenue recognition accounting policies and critical accounting estimate and assumption.

Some products of the Group provide discounts or sales incentives based on the terms of the sales contract. Since the recognition of the revenue is measured on the net basis of the related discounts and incentives, we consider the revenue recognition as a key audit matter.

Our key audit procedures in response

Our procedures in relation to the revenue recognition included:

Evaluate the design and implementation of the internal control in relation to the revenue recognition.

Perform sales contract checks to verify whether the records on the recognition of sales revenue agree with the related contract, and evaluate the fairness of the management's estimated sales discounts and sales incentives.
Assess whether the management's accounting treatments and disclosure in relation to sales discounts and sales incentives are presented fairly.

Intangible Assets Impairment

Please refer to Note 4(13.) and 5(2.) in the accompanying consolidated financial statements for related disclosures of the Group's intangible assets impairment accounting policies and critical accounting estimate and assumption.

The accompanying consolidated financial statements for the year ended December 31, 2025 included intangible assets amounted to NT$ 59,516 thousand, which represented 1% of the Group's consolidated total assets. The intangible assets of the Group are mainly for the patent technology licensing of the "positively charged liposomes EndoTag-1 anti-tumor drugs". The Group will continue to develop new drugs based on these patented technologies. Because the drugs are still under development, no cash inflow can be generated. As of the balance sheet date, the Group considers external and internal information in determining whether the intangible asset is impaired. If any indication of impairment exists, an assessment of the recoverable amount of the asset is required to confirm the impairment of the intangible asset. Since the impairment assessment performed by management involves critical judgement, we consider impairment assessment of intangible asset as a key audit matter.

Our key audit procedures in response

Our procedures in relation to management's assessment of indicators of impairment included:

Reviewing the assessment of indicators of impairment provided by the management, and discussing with management to evaluate the following items:

(1) The product characteristics, target markets, technical trends, and possible derivative products of research and development projects and the patented technology licensing are still competitive in the marketplace;

(2) There is no significant delay in the progress of the main research and development projects;

(3) The total market value of the Group is higher than the net assets as of the balance sheet date.

Evaluating the reasonableness of management's adoption of the key assumption and sensitivity analysis including the cash-generating units, forecast of cash flows, the possibility for product commercialization and the discount rate.

Other Matter

We have also audited the parent company only financial statements of Sinphar Pharmaceutical Co., Ltd. as of and for the years ended December 31, 2025 and 2024 on which we have issued an unmodified opinion.

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

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

Those charged with governance (including members of the Audit Committee) are responsible for overseeing the Group's financial reporting process.

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the 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 maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentation, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieve 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 direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2025 and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors' report are Ya Quan Zhang And Chin Feng Lin.

Crowe (TW) CPAs
Taipei, Taiwan
Republic of China

March 10, 2026

For the convenience of readers and for information purpose only, the auditors' report and the acGrouping 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.

Sinphar Pharmaceutical Co., Ltd and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

ASSETS	Note	December 31, 2025		December 31, 2024
		Amount	%	Amount	%
CURRENT ASSETS
Cash and cash equivalents	6 (1)	$ 864,139	14	$ 1,075,672	17
Financial assets at fair value through profit or loss – current	6 (2)	7,071	-	6,956	-
Financial assets at amortized cost – current	6 (3)	123,416	2	95,409	2
Notes receivable, net	6 (4)	138,640	2	147,116	2
Accounts receivable, net	6 (5) and 6(21)	575,218	9	494,784	8
Inventories	6 (6)	724,686	12	714,906	12
Prepayments	6 (7)	86,245	2	84,212	1
Other current assets	8	9,817	-	5,300	-
Total current assets		2,529,232	41	2,624,355	42
NONCURRENT ASSETS
Financial assets at fair value through profit or loss, non-current	6 (2)	-	-	-	-
Financial assets at fair value through other comprehensive income, non-current	6 (8)	52,684	1	54,640	1
Property, plant and equipment	6 (9), 7(3) and 8	3,202,979	52	3,266,540	52
Right-of-use assets	6 (10) and 8	18,874	1	18,572	-
Intangible assets	6 (11) and 8	59,516	1	72,163	1
Deferred tax assets	6 (26)	195,485	3	185,366	3
Prepayments for equipment		58,532	1	30,698	1
Refundable deposits		18,305	-	19,410	-
Other non-current assets		17,443	-	26,511	-
Total non-current assets		3,623,818	59	3,673,900	58
TOTAL		$ 6,153,050	100	$ 6,298,255	100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term loans	6 (12) and 8	$ 188,000	3	$ 370,000	5
Current contract liabilities	6 (21)	103,355	2	97,424	2
Notes payable		149	-	233	-
Accounts payable		210,344	3	185,212	3
Other payable	6 (13)	359,893	6	336,786	5
Current tax liabilities		55,578	1	39,363	1
Lease liabilities – current	6 (10)	576	-	-	-
Long-term loans - current portion	6 (14) and 8	48,118	1	351,290	6
Other current liabilities, others		45,468	1	42,501	1
Total current liabilities		1,011,481	17	1,422,809	23
NONCURRENT LIABILITIES
Long-term loans	6 (14) and 8	1,272,759	20	1,181,205	19
Lease liabilities – non-current	6 (10)	308	-	-	-
Net defined benefit liability, non-current	6 (15)	22,265	1	15,089	-
Other non-current liabilities, others	6 (26)	131,060	2	132,975	2
Total non-current liabilities		1,426,392	23	1,329,269	21
Total liabilities		2,437,873	40	2,752,078	44
EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT
Capital stock	6 (16)	1,901,968	31	1,811,398	29
Capital surplus	6 (17)	924,140	15	924,140	15
Retained earnings	6 (18)
Appropriated as legal capital reserve		211,577	4	179,959	3
Appropriated as special capital reserve		137,171	2	137,171	2
Unappropriated retained earnings		364,268	6	331,295	5
Total retained earnings		713,016	12	648,425	10
Others equity interests	6 (19)	(95,251)	(2)	(120,762)	(2)
Total equity attributable to shareholders of the parent		3,443,873	56	3,263,201	52
non-controlling interests	6 (20)	271,304	4	282,976	4
Total equity		3,715,177	60	3,546,177	56
Total liabilities and equity		$ 6,153,050	100	$ 6,298,255	100

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

Sinphar Pharmaceutical Co., Ltd and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

ITEM	Note	2025		2024
		Amount	%	Amount	%
OPERATING REVENUE	6 (21)	$ 3,371,321	100	$ 3,150,628	100
OPERATING COSTS	6 (6, 24)	(1,914,430)	(57)	(1,913,612)	(61)
GROSS PROFIT		1,456,891	43	1,237,016	39
OPERATING EXPENSES	6 (24) and 7 (3)
Selling expenses		(641,692)	(19)	(543,126)	(17)
Administrative expenses		(252,973)	(8)	(248,522)	(8)
Research and development expenses		(145,368)	(4)	(151,362)	(5)
Expected credit impairment loss	6(5)	-	-	(142)	-
Total operating expenses		(1,040,033)	(31)	(943,152)	(30)
NET OPERATIONS INCOME		416,858	12	293,864	9
NON-OPERATING INCOME AND EXPENSES
Interest income		12,613	-	16,837	1
Other income	6 (22)	24,436	1	19,023	1
Other gains and losses	6 (23)	(18,536)	(1)	14,147	-
Finance costs	6 (25)	(33,847)	(1)	(36,771)	(1)
Total non-operating income and expenses		(15,334)	(1)	13,236	1
INCOME BEFORE INCOME TAX		401,524	11	307,100	10
INCOME TAX (EXPENSE) BENEFIT	6 (26)	(47,254)	(1)	(21,883)	(1)
NET INCOME		354,270	10	285,217	9
OTHER COMPREHENSIVE INCOME (LOSS)
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit obligation		(5,956)	-	11,471	-
Unrealized gain from investments in equity instruments
measured at fair value through other comprehensive income		(3,302)	-	(8,779)	-
		(9,258)	-	2,692	-
Items that may be reclassified subsequently to profit or loss:
Exchange differences arising on translation of foreign operations		6,147	-	33,683	1
Income tax related to components of other comprehensive income that will be reclassified to profit or loss		(1,019)	-	(5,567)	-
		5,128	-	28,116	1
Other comprehensive income (loss) for the year, net of income tax		(4,130)	-	30,808	1
TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE YEAR		$ 350,140	10	$ 316,025	10
PROFIT (LOSS) ATTRIBUTABLE TO :
Shareholders of the parent		$ 365,751	10	$ 304,705	10
Non-controlling interests		(11,481)	-	(19,488)	(1)
		$ 354,270	10	$ 285,217	9
TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO:
Shareholders of the parent		$ 361,812	10	$ 332,585	11
Non-controlling interests		(11,672)	-	(16,560)	(1)
		$ 350,140	10	$ 316,025	10
EARNINGS PER SHARE	6 (27)
Basic earnings per share		$ 1.92		$ 1.60
Diluted earnings per share		$ 1.92		$ 1.60

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

Sinphar Pharmaceutical Co., Ltd and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars)

ITEM	Equity Attributable to Owners of Parent
	Capital Stock		Retained Earning			Other Equity Interests			Total	Non-Controlling Interests
	Common Stock	Capital Surplus	Legal Capital Reserve	Special Capital Reserve	Unappropriated Retained Earnings	Foreign Currency Translation Reserve	Unrealized Gain(Loss) on Financial Assets at Fair Value Through Other Comprehensive Income	Total
Balance, January 1, 2024	$ 1,677,221	924,140	142,979	121,367	369,802	(92,720)	(44,451)	3,098,338	299,536	3,397,874
Appropriations of earnings
Legal reserve appropriated	-	-	36,980	-	(36,980)	-	-	-	-	-
Special reserve appropriated	-	-	-	15,804	(15,804)	-	-	-	-	-
Cash dividends of ordinary share					(167,722)	-	-	(167,722)	-	(167,722)
Stock dividends of ordinary share	134,177	-	-	-	(134,177)	-	-	-	-	-
Total appropriations of earnings	134,177	-	36,980	15,804	(354,683)	-	-	(167,722)	-	(167,722)
Net profit (loss) in 2024	-	-	-	-	304,705	-	-	304,705	(19,488)	285,217
Other comprehensive income (loss) in 2024, net of income tax	-	-	-	-	11,471	22,269	(5,860)	27,880	2,928	30,808
Total comprehensive income (loss) in 2024	-	-	-	-	316,176	22,269	(5,860)	332,585	(16,560)	316,025
Balance, December 31, 2024	1,811,398	924,140	179,959	137,171	331,295	(70,451)	(50,311)	3,263,201	282,976	3,546,177
Appropriations of earnings
Legal reserve appropriated	-	-	31,618	-	(31,618)	-	-	-	-	-
Cash dividends of ordinary share	-	-	-	-	(181,140)	-	-	(181,140)	-	(181,140)
Stock dividends of ordinary shares	90,570	-	-	-	(90,570)	-	-	-	-	-
Total appropriations of earnings	90,570	-	31,618	-	(303,328)	-	-	(181,140)	-	(181,140)
Net profit (loss) in 2025	-	-	-	-	365,751	-	-	365,751	(11,481)	354,270
Other comprehensive income (loss) in 2025, net of income tax	-	-	-	-	(5,956)	4,116	(2,099)	(3,939)	(191)	(4,130)
Total comprehensive income (loss) in 2025	-	-	-	-	359,795	4,116	(2,099)	361,812	(11,672)	350,140
Disposal of equity investments at fair value through other comprehensive income of subsidiaries	-	-	-	-	(23,494)	-	23,494	-	-	-
Balance, December 31, 2025	$ 1,901,968	$ 924,140	$ 211,577	$ 137,171	$ 364,268	$ (66,335)	$ (28,916)	$ 3,443,873	$ 271,304	$ 3,715,177

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

Sinphar Pharmaceutical Co., Ltd and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

ITEM	2025	2024
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	$ 401,524	$ 307,100
Adjustments for:
Adjustments to reconcile profit (loss)
Depreciation expense	230,360	224,048
Amortization expense	23,971	33,322
Expected credit impairment loss	-	142
Net loss (gain) on financial assets and liabilities at fair value through profit of loss	(115)	(296)
Interest expense	33,847	36,771
Interest income	(12,613)	(16,837)
Dividend income	(641)	-
Loss (gain) on disposal of property, plant and equipment	1,051	2,481
Changes in operating assets and liabilities:
Notes receivable, net	8,476	19,097
Accounts receivable, net	(80,439)	(17,699)
Inventories	(9,780)	124,288
Prepayments	(2,033)	(5,162)
Other current assets	(5,798)	1,492
Contract liabilities	5,931	11,770
Notes payable	(84)	71
Accounts payable	25,132	(105,996)
Other payable	24,383	(3,908)
Other current liabilities	2,967	5,140
Net defined benefit liability	1,220	(8,992)
Other operating liabilities	(462)	12,628
Cash generated from operations	646,897	619,460
Interest received	13,180	15,845
Dividend received	641	-
Interest paid	(34,149)	(36,489)
Income taxes paid	(41,907)	(5,304)
Net cash generated from operating activities	584,662	593,512
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at fair value through other comprehensive income	(1,887)	(41,207)
Proceeds from disposal of financial assets at fair value through other comprehensive income	541	-
Acquisition of financial assets at amortized cost	(153,147)	(95,409)
Proceeds from disposal of financial assets at amortized cost	125,140	-
Acquisition of property, plant and equipment	(95,115)	(179,143)
Proceeds from disposal of property, plant and equipment	49	482
Decrease (increase) in refundable deposits	1,105	6,914
Acquisition of intangible assets	(6,236)	(16,276)
Decrease (increase) in other non-current assets	4,518	(5,145)
Increase in prepayments for equipment	(99,594)	(61,294)
Net cash used in investing activities	(224,626)	(391,078)
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in short-term loan	(182,000)	(30,000)
Proceeds from long-term debt	-	50,000
Repayments of long-term debt	(211,618)	(62,363)
Increase (decrease) in refundable deposits	(999)	1,002
Payments of the principal portion of lease liabilities	(269)	-
Cash dividends paid	(181,140)	(167,722)
Net cash used in financing activities	(576,026)	(209,083)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	4,457	7,832
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(211,533)	1,183
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD	1,075,672	1,074,489
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD	$ 864,139	$ 1,075,672

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

Sinphar Pharmaceutical Co., Ltd. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2025 and 2024
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

GENERAL INFORMATION

Sinphar Pharmaceutical Co., Ltd. (Sinphar) was incorporated in the Republic of China (“R.O.C.”) on July 2, 1977. Sinphar mainly engages in the production, processing and trading of various medicines, Chinese medicines, medical cosmetic products and nutrients. The main operations of Sinphar and its subsidiaries (collectively as “the Group”) are described in the Note 4(3.). Sinphar is the Group’s ultimate parent Group.

The consolidated financial statements are presented in the Group's functional currency, New Taiwan Dollars.

APPROVAL OF FINANCIAL STATEMENTS

The accompanying consolidated financial statements were approved and authorized for issue by the Board of Directors on March 10, 2026.

APPLICATION OF NEW AND REVISED STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1.) Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC).

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

New, Amended and Revised Standards and Interpretations	Effective Date Announced by IASB
Amendments to IAS 21 “Lack of Exchangeability”	January 1, 2025
The initial application of the Amendments to IAS 21 “Lack of Exchangeability” does not have a significant impact on the Group’s accounting policies.

(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 and effective from 2026 are as follows:

New, Amended and Revised Standards and Interpretations	Effective Date Announced by IASB
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 Contract”	January 1, 2023
Amendments to IFRS 17 “Initial Application of IFRS 17 and IFRS 9—Comparative Information”	January 1, 2023

New, Amended and Revised Standards and Interpretations
Effective Date Announced by IASB
Annual Improvements to IFRS Accounting Standards—Volume 11
January 1, 2026

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

(3.) New IFRSs issued by International Accounting Standards Board ("IASB") but not yet endorsed and issued into effect by the FSC.

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

New, Amended and Revised Standards and Interpretations	Effective Date Announced by IASB
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 IASB
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 : On September 25, 2025, the FSC announced that IFRS 18 will take effect starting from January 1, 2028. Domestic entities could elect to apply IFRS 18 for an earlier period after the endorsement of IFRS 18 by the FSC.

(1) IFRS 18 “Presentation and Disclosure in Financial Statements” and Consequential Amendments

IFRS 18 will replace IAS 1 “Presentation of Financial Statements”. The main changes comprise:

Items of income and expenses included in the statement of profit or loss shall be classified into the operating, investing, financing, income taxes and discontinued operations categories.
The statement of profit or loss shall present totals and subtotals for operating profit or loss, profit or loss before financing and income taxes and profit or loss.
Provides guidance to enhance the requirements of aggregation and disaggregation: The Group shall identify the assets, liabilities, equity, income, expenses and cash flows that arise from individual transactions or other events and shall classify and aggregate them into groups based on shared characteristics, so as to result in the presentation in the primary financial statements of line items that have at least one similar characteristic. The Group shall disaggregate items with dissimilar characteristics in the primary financial statements and in the notes. The Group labels items as "other" only if it cannot find a more informative label.

In addition, a consequential amendment has been made to IAS 7 "Statement of Cash Flows", requiring the Group to use operating profit or loss as the starting point when presenting cash flows from operating activities under the indirect method.

Except for the impact described above, as of the date the accompanying consolidated financial statements were issued, the Group is currently evaluating the impact of the amendments on its financial position and financial performance. The impact will be disclosed upon completion of the evaluation.

4. SUMMARY OF MATERIAL ACCOUNTING POLICIES

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

(1.) Statement of Compliance

The accompanying consolidated financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs endorsed and issued into effect by the FSC..

(2.) Basis of Preparation

A. Except for the following items, the accompanying consolidated financial statements have been prepared on a historical cost basis:

(A.) The financial assets and liabilities measured at fair value through profit and loss (including derivative financial instruments).

(B.) The financial assets measured at fair value through other comprehensive income.

(C.) Defined benefit liabilities recognized based on the net amount of pension fund assets less the present value of defined benefit obligation.

B. The preparation of financial statements in compliance with IFRSs endorsed by FSC requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in process of applying the Group's accounting policies. The areas involving a high degree of judgment 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. The basis for the preparation of consolidated financial statements

(A.) All subsidiaries are included in the Group's consolidated financial statements. Subsidiaries are the 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.) All intra-Group transactions, balances, and unrealized gains or losses are eliminated in full on consolidation. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

(C.) Profit or loss and each component of other comprehensive income are attributed to the shareholders of the parent and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the shareholders of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

(D.) Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control of the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their

relative interests in subsidiaries. Any difference between the amount of the non-controlling interests adjusted and the fair value of the consideration paid or received is recognized directly in equity.

(E.) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

B. The subsidiaries included in the consolidated financial statements:

Name of the Investor	Name of subsidiaries	Main Business	Percentage of Ownership
			31-Dec-25	31-Dec-24
Sinphar Pharmaceutical Co., Ltd.	CANCAP PHARMACEUTICAL LTD.	Production and sale of healthy food	100.00%	100.00%
Sinphar Pharmaceutical Co., Ltd	SUNETIC BIOTECH INC.	Investment business	83.47%	83.47%
Sinphar Pharmaceutical Co., Ltd	UNIVERSAL NEXT TECHNOLOGIES INC.	Investment business	100.00%	100.00%
Sinphar Pharmaceutical Co., Ltd	ZuniMed Biotech Co., Ltd.	Production and sale of medical appliances	100.00%	100.00%
Sinphar Pharmaceutical Co., Ltd	SynCore Biotechnology Co., Ltd.	New drug and biotechnology service	64.26%	64.26%
SynCore Biotechnology Co., Ltd.	SynCore Biotechnology Europe GmbH	New drug development and biotechnology service	100.00%	100.00%
SUNETIC BIOTECH INC.	Sinphar Tian-Li Pharmaceutical Co., Ltd.(Hangzhou)	Production and sales of raw materials, pharmaceuticals, etc.	100.00%	100.00%
Sinphar Tian-Li Pharmaceutical Co., Ltd.(Hangzhou)	Hetian Tianli Shasheng Pharmaceutical Development Co., Ltd.	Scientific research and production and sales of shasheng Pharmaceutical	91.00%	91.00%
Sinphar Tian-Li Pharmaceutical Co., Ltd.(Hangzhou)	Hangzhou Vitrum Healthy Food Co., Ltd.	Sale of cosmetics and healthy food	100.00%	100.00%

C. Subsidiaries not included in the consolidated financial statements: None
D. Adjustments for subsidiaries with different balance sheet dates: None

E. Significant restrictions: None
F. Subsidiaries hold the securities issued by the parent company: None
G. Subsidiaries that have material non-controlling interests to the Group:

Subsidiary	Location	Proportion of equity and voting rights held by non-controlling interests
		31-Dec-25	31-Dec-24
SynCore Biotechnology Co., Ltd.	Taiwan	35.74%	35.74%
SUNETIC BIOTECH INC.	Mauritius	16.53%	16.53%
Subsidiary	Profit or loss allocated to non-controlling interests
---	---	---
	For the Year Ended December 31, 2025	For the Year Ended December 31, 2024
SynCore Biotech Co., Ltd.	$ (16,351)	$ (19,400)
SUNETIC BIOTECH INC.
(Excluding non-controlling interest held by the subsidiary)	5,527	1,114
Others	(657)	(1,202)
Total	$ (11,481)	$ (19,488)

Non-controlling interests

Subsidiary	31-Dec-25	30-Dec-24
SynCore Biotech Co., Ltd	$ 87,966	$ 105,498
SUNETIC BIOTECH INC.
(Excluding non-controlling interest held by the subsidiary)	174,966	168,460
Others	8,372	9,018
Total	$ 271,304	$ 282,976

Please refer to Note 13 and Table 4 for information on the subsidiaries' main business locations and countries of registrations.

Summarized financial information of the subsidiaries:

(a.) Balance Sheet

SynCore Biotechnology Co., Ltd. and Subsidiaries

ITEM	31-Dec-25	31-Dec-24
Current assets	$ 215,264	$ 260,460
Non-current assets	40,438	57,341
Current liabilities	(10,074)	(22,122)
Non-current liabilities	-	(991)
Equity	$ 245,628	$ 294,688
Equity attributed to :
Sinphar (note 1)	$ 158,176	$ 189,704
Non-controlling interests	87,966	105,498
IFRS16 adjustments (note 2)	(514)	(514)
	$ 245,628	$ 294,688

Note 1: The rental expenses of property and building as of December 31, 2025 and 2024 were NT $475 thousand and NT $434 thousand, respectively. These transactions between the consolidated companies and the time difference of revenue recognition were eliminated for the preparation of consolidated report.

Note 2: They were property and building leased from the parent Group. Since these were interGroup transactions, the accumulative effects aroused from the first application to IFRS 16 were eliminated for the preparation of the consolidated financial statement.

SUNETIC BIOTECH INC. and Subsidiaries

ITEM	31-Dec-25	31-Dec-24
Current assets	$ 443,995	$ 358,974
Non-current assets	717,267	749,584
Current liabilities	(38,844)	(35,942)
Non-current liabilities	(15,517)	(17,816)
Equity	$ 1,106,901	$ 1,054,800
Equity attributed to :
Sinphar	$ 916,945	$ 872,917
Non-controlling interests	181,584	172,865
Non-controlling interests of the subsidiaries	8,372	9,018
	$ 1,106,901	$ 1,054,800

(b.) Statements of comprehensive incomes

SynCore Biotechnology Co., Ltd. and Subsidiaries

ITEM	For the Year Ended December 31, 2025	For the Year Ended December 31, 2024
Revenue	$ 27,043	$ 23,337
Net loss	$ (45,755)	$ (54,283)
Other comprehensive loss	(3,305)	(8,165)
Total comprehensive loss	$ (49,060)	$ (62,448)
Net loss attributable to :
Sinphar (Note)	$ (29,404)	$ (34,883)
Non-controlling interests	(16,351)	(19,400)
	$ (45,755)	$ (54,283)
Total comprehensive loss attributable to :
Sinphar (Note)	$ (31,528)	$ (40,130)
Non-controlling interests	(17,532)	(22,318)
	$ (49,060)	$ (62,448)

Note : The rental expenses of property and building for the years ended December 31, 2025 and 2024 were NT $(41) thousand and NT $99 thousand, respectively. These transactions between the consolidated companies and the time difference of revenue recognition were eliminated for the preparation of consolidated report.

SUNETIC BIOTECH INC. and Subsidiaries

ITEM	For the Year Ended December 31, 2025	For the Year Ended December 31, 2024
Sales Revenue	$ 326,149	$ 277,666
Net income	$ 46,824	$ 1,053
Net loss attributable to non-controlling interests	(657)	(1,202)
Net income (loss)	46,167	(149)
Other comprehensive income (loss)	5,934	35,641
Total comprehensive income (loss)	$ 52,101	$ 35,492
Net profit (loss) attributable to :
Sinphar	$ 39,084	$ 879
Non-controlling interests	7,740	174
Non-controlling interests of the subsidiaries	(657)	(1,202)
	$ 46,167	$ (149)
Total comprehensive income (loss) attributable to :
Sinphar	$ 44,028	$ 30,345
Non-controlling interests	8,719	6,010
Non-controlling interests of the subsidiaries	(646)	(863)
	$ 52,101	$ 35,492

(c.) Statements of Cash Flows
SynCore Biotechnology Co., Ltd and Subsidiaries

ITEM	2025	2024
Net cash used in operating activities	$ (38,333)	$ (49,241)
Net cash used in investing activities	(252)	(457)
Net cash used in financing activities	(9,630)	(9,514)
Effect of exchange rate	62	3
Net decrease in cash and cash equivalents	$ (48,153)	$ (59,209)
Dividends paid to non-controlling interests	$ -	$ -

SUNETIC BIOTECH INC. and Subsidiaries

ITEM	2025	2024
Net cash generated from operating activities	$ 104,914	$ 119,112
Net cash used in investing activities	(44,019)	(117,987)
Net cash generated from financing activities	-	2
Effect of exchange rate	4,244	9,794
Net increase in cash and cash equivalents	$ 65,139	$ 10,921
Dividends paid to non-controlling interests	$ -	$ -

(4.) Foreign Currencies

A. Foreign currency transaction

Transactions in currencies other than the Group’s functional currency are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period. Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured at historical cost in a foreign currency are not retranslated. Except for financial instruments at FVTOCI, financial instruments that are designated as foreign operation net hedge or qualified as cash flow hedge, the retranslation foreign exchange differences are recognized in other comprehensive income. In other cases, the exchange differences are recognized in profit and loss.

B. Translation of foreign operation

For the purpose of preparing consolidated financial statements, the functional currencies of the Group and the foreign entities (including subsidiaries, associates, joint ventures and branches in other countries that use currency different from the currency of the Group) are translated into the presentation currency - the New Taiwan dollar as follows: assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; profits and losses items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income.

On the disposal of a foreign operation involving the loss of control, joint venture or significant influence over the foreign operation, all of the exchange differences accumulated in equity in respect of that operation are reclassified to profit or loss.

In relation to a partial disposal of a subsidiary that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences is re-attributed to the non-controlling interests of the subsidiary and is not recognized in profit or loss. For all other partial disposals, the proportionate share of the accumulated exchange differences recognized in other comprehensive income is reclassified to profit or loss.

(5.) Classification of Current and Noncurrent Assets and Liabilities

A. Assets that meet one of the following criteria are classified as current assets:

(A.) Assets that expected to be realized or intended to be sold or used within normal operating cycle;
(B.) Assets held primarily for the purpose of trading;
(C.) Assets that are expected to be realized within 12 months after the reporting period; and
(D.) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle liabilities more than twelve months after the balance sheet date.

Assets that are not classified as current are classified as non-current.

B. Liabilities that meet one of the following criteria are classified as current liabilities:

(A.) Liabilities that are expected to be settled within the normal operating cycle;
(B.) Liabilities held primarily for the purpose of trading;
(C.) Liabilities due to be settled within 12 months after the reporting period (It is still a current liability even if a long-term refinancing or rearrangement of payment agreement is completed after the balance sheet date and before the financial report is approved); and
(D.) Liabilities for which the Group does not have an unconditional right to defer settlement for at least 12 months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Liabilities that are not classified as current are classified as non-current.

(6.) Cash and Cash Equivalent

Cash and cash equivalent includes cash on hand, bank deposit and short-term, highly liquid investment that are readily convertible to know amount of cash and which are subject to an insignificant risk of change in value. Time deposits with original maturities within three months from the closing date that meet the definition above and are held for purpose of meeting short-term cash commitments in operations are classified as cash equivalent.

(7.) Financial Instruments

Financial assets and financial liabilities are recognized in balance sheets when the Group becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss.

A. Financial assets

(A.) Measurement category

The Group adopts trade-date accounting to recognize financial assets.

Financial assets are classified as financial assets at FVTPL, financial assets at amortized cost, and equity investments at FVTOCI.

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a. Financial assets at FVTPL

Financial asset is classified as at FVTPL when the financial asset is mandatorily classified or designated as at FVTPL. Financial assets mandatorily classified as at FVTPL including equity investments not designated as at FVTOCI and debt instruments that do not meet the criteria of amortized cost or the FVTOCI.

Financial assets at FVTPL are initially and subsequently measured at fair value, with any gains or losses arising from remeasurement recognized in other gains or losses income. Fair value is determined in the manner described in Note 12(3).

b. Equity investment at FVTOCI

On initial recognition, the Group may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments, instead, they will be transferred to retained earnings.

Dividends on these investments in equity instruments are recognized in profit or loss when the Group's right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

c. Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

(a.) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
(b.) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets measured at amortized cost are measured at carrying amount determined by the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:

(a.) Purchased or originated credit-impaired financial assets, for those financial assets, the Group applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.
(b.) Financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets, for those financial assets, the Group applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

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(B.) Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses (“ECL”) on financial assets at amortized cost (including accounts receivable).

The loss allowance for accounts receivable is measured at an amount equal to lifetime ECL. For other financial assets, when the credit risk on the financial instrument has not increased significantly since initial recognition, a loss allowance is recognized at an amount equal to 12-month ECL. If there has been a significant increase in credit risk since initial recognition, a loss allowance is recognized at an amount equal to lifetime ECL.

ECL reflects the weighted average of credit losses with the respective risks of a default occurring as the weights. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

The Group recognizes an impairment loss for aforementioned financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

(C.) Derecognition of financial assets

The Group derecognizes a financial asset when one of the following conditions is met:

a. The contractual rights to receive the cash flows from the financial asset expire.
b. The contractual rights to receive cash flows of the financial asset have been transferred and the Group has transferred substantially all risks and rewards of ownership of the financial asset.
c. The Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

The difference between the book value and the price of financial assets at amortized cost will be recognized to profit or loss on disposal of the financial assets. The cumulative gain or loss of the investments in equity instruments at FVTOCI will not be reclassified to profit or loss on disposal of the equity investments. Instead, they will be transferred to retained earnings.

B. Financial liabilities

(A.) Subsequent measurement

Except for the following, financial liabilities measured at amortized cost are measured using the effective interest rate method after initial recognition.

a. Financial liabilities at FVTPL are financial liabilities held for trading or financial liabilities designated upon initial recognition as at FVTPL. Repurchase currently, and the derivative financial instruments unless financial guarantee contract and designated and effective as a hedging instrument, are classified financial liabilities held for trading. The Group designates the financial liabilities upon initial recognition as at FVTPL when the financial liabilities accord to one of the followings:

(a.) They are hybrid (combined) contracts containing at least an embedded derivative and the host contract is an asset not within the scope of IFRS 9; or
(b.) Eliminates or significantly reduces measurement or recognition; or
(c.) A tool to manage and evaluate its performance on a fair value basis in accordance with a written risk management policy.

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b. Financial liabilities at FVTPL are stated at fair value upon initial recognition, related transaction costs and any gain or loss arising on remeasurement are recognized in profit or loss.

c. A financial liability that designated as financial liabilities measured at FVTPL, which amount of change in fair value resulting from a change in credit risk, is recognized as other comprehensive income, and that will not be reclassified subsequently to profit or loss. The amount of the remaining fair value change in the liability is reported in the profit and loss. However, if the aforementioned accounting treatment triggers or exacerbates the improper accounting ratio, the full profits or losses of the liability are reported in the profit or loss.

(B.) Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires. When derecognition of financial liabilities, the difference in the respective carrying amounts and the consideration paid, including any non-cash assets transferred or liabilities assumed, are recognized in profit or loss.

C. Modification of Financial Instruments

When the contractual cash flows of a financial instrument are renegotiated or modified and the renegotiation or modification does not result in the derecognition of that financial instrument, the Group recalculates the gross carrying amount of the financial asset or the amortized cost of the financial liabilities using the original effective interest rate and recognizes a modification gain or loss in profit or loss. Any costs or fees incurred adjust the carrying amount of the modified financial instrument and are amortized over the remaining term of the modified financial instrument. If the renegotiation or modification results in the derecognition of that financial instrument is required, then the financial instrument is derecognized accordingly.

If the basis for determining the contractual cash flows of a financial asset or financial liability changes resulting from interest rate benchmark reform and the change is necessary as a direct consequence of interest rate benchmark reform and the new basis for determining the contractual cash flows is economically equivalent to the previous basis, the Group applies the practical expedient to account for that change as a change in effective interest rate. If changes are made to a financial asset or financial liability in addition to changes to the basis for determining the contractual cash flows required by interest rate benchmark reform, the Group first applies the practical expedient aforementioned to the changes required by interest rate benchmark reform, and then applies the applicable requirements to any additional changes to which that practical expedient does not apply.

(8.) Inventories

Inventories, under a perpetual system, are measured at the lower of cost and net realizable value. Cost is determined using the weighted average method. The cost of finished goods and work in progress comprises raw materials, direct labor, other direct costs, and related production overheads (allocated based on normal operating capacity), excluding borrowing costs. The item-by-item approach is used in applying the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

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(9.) Agriculture (biological assets and agricultural products)

Agricultural activities are the management of the biological transformation and harvesting of biological assets for sale, conversion into agricultural products or conversion into additional biological assets. Biological assets are measured at fair value less costs of disposal. However, biological assets may be measured at cost less accumulated depreciation if the fair value cannot be obtained from the active market, on the alternative option of the fair value clearly unreliable. Agricultural products harvested from biological assets shall be measured at the fair value less costs to sell.

Gains or losses on initial recognition of biological assets measured at fair value less cost to sell, and gains or losses arising from changes of biological assets in the fair value less cost to sell are included in profit or loss in the period in which they occur.

The agricultural activities of the Group are the cultivation of the parasitic plant Cistanche tubulosa, which is mainly used as raw materials for the finished products of the Group.

(10.) Property, Plant and Equipment

A. Property, plant and equipment (including bearer plants) are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized. For property, plant and equipment under construction, sample produced from testing whether the asset is functioning properly before its intended use are measured at lower of the costs or net realizable value. Proceeds from selling such an item and the cost of the item are recognized in profit or loss.

B. Subsequent costs are included in the asset's carrying amount or recognized 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 reliably measured. The carrying amount of the replaced component is derecognized. All other repairs and maintenance expense are recognized in profit or loss as incurred.

C. Except for land, which is not depreciated, other items of property, plant and equipment are measured at cost, the depreciable amount shall be allocated by the straight-line method over its useful life. Depreciation methods, useful lives, and residual values are reviewed at the end of each reporting period. 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 accounting 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: 3~55 Years

Machinery: 1~18 Years

Transportation: 2~10 Years

Office Equipment: 1~15 Years

Other Equipment (including bearer plants): 1~10 Years

D. If an item of property, plant and equipment or any significant component is disposed or there is no future economic benefit flow to the Group, the carrying amount is derecognized in profit and loss. The gain or loss arising from the derecognition of an item of property, plant and equipment shall be determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item, and it shall be recognized in profit and loss.

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(11.) Leases

At the inception of a contract, the Group assesses whether the contract is, or contains, a lease. For a contract that contains a lease component and non-lease components, the Group allocates the consideration in the contract to each component on the basis of the relative stand-alone price and accounts for each component separately.

(A.) The Group as lessee

Except for short-term leases and leases of low-value asset where lease payments are recognized as expenses on a straight-line basis over the lease terms, the Group recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease.

Right-of-use assets

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, less any lease incentives received, and plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets. Right-of-use assets are subsequently measured at cost less accumulated depreciation and accumulated impairment losses and adjusted for any remeasurement of the lease liabilities.

Right-of-use assets are presented as a separate line item in the consolidated balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms. However, if the ownership of the underlying assets is transferred to the Group by the end of the lease terms or if the costs of right-of-use assets reflect that the Group will exercise a purchase option, the Group depreciates the right-of-use assets from the commencement dates to the end of the useful lives of the underlying assets.

Lease liabilities

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments, in-substance fixed payments. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses the lessee's incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, a change in the assessment of an option to purchase an underlying asset, a change in the amounts expected to be payable under a residual value guarantee, or a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Group remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss.

(B.) The Group as lessor

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

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(12.) Intangible Assets

A. Intangible assets acquired separately (with finite useful lives)

Intangible assets acquired from government grants are measured at fair value. Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis as follow.

(A.) Computer Software: 1~10 Years
(B.) Technology: 10~20 Years
(C.) License: The duration of patent right and the duration of the contract whichever is shorter

The estimated useful life, residual value, and amortization period and method are reviewed at the end of each reporting period, with the effect of any changes in estimates accounted for on a prospective basis.

B. Internally-generated intangible assets - research and development expenditure

(A.) Expenditure on research activities is recognized as an expense in the period in which it is incurred except for the goodwill or intangible assets from business combination.
(B.) An internally-generated intangible asset arising from the development phase of an internal project is recognized if, and only if, all of the following conditions have been demonstrated:

a. The technical feasibility of completing the intangible asset so that it will be available for use or sale;
b. The intention to complete the intangible asset and use or sell it;
c. The ability to use or sell the intangible asset;
d. When the intangible asset could generate probable future economic benefits;
e. The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and
f. The ability to measure reliably the expenditure attributable to the intangible asset during its development.

(C.) Capitalized intangible assets in development phase are stated at cost, less accumulated amortization and accumulated impairment loss. Intangible assets with indefinite useful lives that are not amortizable.
(D.) The assessment of intangible assets with indefinite life is reviewed annually to determine whether the useful lives of intangible asset with indefinite life continues to be with indefinite life. If not, the change in useful life from infinite to finite is recorded as change in accounting estimate.

C. Disposal of the assets

Any gain or loss arising from the disposal of the assets is determined as the difference between the disposal proceeds and the carrying amount of the asset and is recognized in profit or loss.

(13.) Impairment of Non-Financial Assets

The Group assesses the recoverable amounts of those assets at the end of reporting period when there is an indication that they are impaired. An impairment loss is recognized when the recoverable amount is the higher of fair value less costs to sell and its value in use. If circumstances indicate that impairment no

19 -

longer exists, a reversal of impairment loss is recognized limited to previously recognized impairment loss. When the carrying amount is the higher than an asset’s recoverable amounts.

Goodwill, intangible assets with indefinite useful lives and intangible assets not yet available for use are assessed for impairment periodically. When the carrying amount of an asset exceeds its recoverable amount, the impairment loss recognized for goodwill is not reversed in subsequent periods.

(14.) Provisions

Provisions are recognized when the Group has a present legal or constructive obligation from 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. The discount rate shall be a pre-tax rate that reflects current market assessment of the time value and the risk specific to the liability. Where discounting is used, the carrying amount of a provision increases in each period to reflect the passage of time. This increase is recognized as interest expense. Future operating loss is not recognized as provisions.

(15.) Employee Benefits

A. Short-term employee benefits

Expenses recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid when service rendered by employee.

B. Pensions

(A.) Defined contribution plans

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

(B.) Defined benefit plans

a. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in the current or prior period(s). The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The defined benefit net obligation is estimated annually by independent actuaries using the projected unit credit method.

b. Remeasurements of defined benefit plans are recognized in other comprehensive income as incurred and are recorded as retained earnings.

c. Past-service costs are recognized immediately in profit or loss.

C. Employee’s compensation and directors’ remuneration

Employees’ compensation and directors’ and supervisors’ remuneration are recognized as expenses and liabilities, provided that such recognition is required under legal or constructive obligations and those amounts can be reliably estimated. Any difference between the amount accrued and the amount actually distributed is accounted for a change in accounting estimate.

D. Termination benefits

A liability for a termination benefit is recognized at the earlier of when the Group can no longer withdraw the offer of the termination benefit and when the Group recognize any related restructuring costs. The benefits expected to be due more than 12 months after balance sheet date should be

20 -

discounted to the present value.

(16.) Taxation

A. Income tax expenses include both current taxes and deferred taxes. Except for expenses related to the items recognized in other comprehensive income or directly in equity, all current and deferred taxes shall be recognized in profit or loss.

B. The current income tax is calculated based on the tax laws enacted or substantively enacted at the end of each reporting period in the countries where the Group 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. According to Income Tax Act in the R.O.C., income tax on unappropriated earnings is expensed in the year the shareholders' meeting approved the appropriation of earnings which is the year subsequent to the year the earnings are generated.

C. Deferred income tax is recognized, 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 it does not give rise to equal deductible and taxable temporary differences at the time of transaction. Deferred tax is provided on temporary differences arising on investments in subsidiaries, 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 realized or the deferred tax liability is settled.

D. Deferred tax assets arising from deductible temporary differences, unused loss carry forward and unused tax credits are recognized only to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at the end of each reporting period.

E. Current income tax assets and liabilities are offset, and the net amount is reported at the end of the reporting period when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realized the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset at the end of the reporting period when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same tax authority on either the same entity or different entities that intend to settle on a net basis or realized the asset and settle the liability simultaneously.

F. Tax credit resulting from acquisitions of equipment or technology, research and development expenditures, employee training, 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 utilized.

(17.) Revenue

The Group identifies the contract with the customers, and recognizes revenue when performance obligations are satisfied.

A. Revenue from sale of goods

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Revenue from the sale of goods is mainly from sale of medical product. When a customer obtains control of promised goods, at which time the goods are delivered to the customer's specific location and performance obligation is satisfied.

B. Royalties

Royalties are the rights of using intellectual property in authorized duration. The received royalties are recognized in royalty revenue on a time basis over the period of the authorization.

C. Technical service

The Group provides research and development technology test services. Revenue from services is recognized as revenue during the period when services are provided to customers. If the services rendered exceed the payment, a contract asset is recognized. If the payments exceed the services rendered, a contract liability is recognized.

The Group’s estimates of revenue, costs and completion degree are revised with the test situation. Any income and cost increase or decrease caused by the estimated changes will be reflected in profit or loss during the period when the revision situation is known to the management.

(18.) Borrowing costs

The borrowing cost directly attributable to the acquisition, construction or production of a qualified assets, is capitalized as part of the cost of the assets until substantially all necessary activities to reach the intended use or status for sale of the assets have been completed.

To the extent that an entity borrows funds specifically for the purpose of obtaining a qualifying asset, the entity shall determine the amount of borrowing costs eligible for capitalization as the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of those borrowings.

Except for the aforementioned, all other borrowing costs are recognized as profit or loss in the period in which they are incurred.

(19.) Government grants

Government grants are recognized 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 recognized in profit or loss on a systematic basis over the periods in which the Group recognizes as expenses the related costs for which the grants are intended to compensate.

Government grants that are deemed as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future costs are recognized in profit or loss in the period in which they are receivable.

(20.) Earnings per Share

The Group discloses the basic and diluted earnings per share attributable to ordinary equity holders of Sinphar. The calculation of basic earnings per share is based on the profit or loss attributable to the ordinary shareholders of Sinphar divided by the weighted-average number of ordinary shares outstanding. The calculation of diluted earnings per share is based on the profit or loss attributable to ordinary shareholders of Sinphar divided by the weighted-average number of ordinary shares outstanding after adjustment for the effect of all dilutive potential ordinary shares.

22 -

23 -

5. SIGNIFICANT ACCOUNTING JUDGMENTS AND ASSUMPTIONS, AND MAJOR SOURCES OF ESTIMATION UNCERTAINTY

The Group takes into account the economic impact of changes in climates and related governmental policies and regulations and the conflicts between Ukraine and Russia as well as related international sanctions and inflation and volatility in interest rate on significant accounting estimates and reviews the basic assumptions and estimation on an ongoing basis. If a change in accounting estimate affects only the current period, the effect is recognized in the current period. If a change in accounting estimate affects both current and future periods, the effects are recognized in both periods.

In the preparation of the consolidated financial statements, the critical accounting judgments the Group has made and the major sources of estimation and assumption uncertainty are described as follows:

A. Critical judgments in applying accounting policies

Business model assessment for financial assets

The Group determines the business model at a level that reflects how groups of financial assets are managed together to achieve a particular business objective. This assessment involves judgment and consideration of all relevant evidence, such as how the performance of the assets is evaluated, the risks that affect the performance of the assets, and how the managers of the assets are compensated. The Group constantly assesses the adequacy of its business model and monitors financial assets measured at amortized cost and debt investments measured at fair value through other comprehensive income. When these assets are derecognized prior to their maturity, the Group reviews the reasons for their disposal and whether the reasons are consistent with the objective of the business for which the assets were held. If the objective of the business for an asset is changed, the classification of the asset is prospectively changed from the reclassification date.

B. Critical accounting estimates and assumptions

(A.) Revenue Recognition

Sales revenue, excluding related estimated sales returns, discounts and other similar allowance, is recognized when the control of goods or services is transferred to the customer and the Group satisfies its performance obligation. The Group estimates sales returns and allowance based on historical experience and other known factors. The Group assesses the reasonableness of the estimates periodically.

(B.) Estimated impairment of financial assets

The provision for impairment of accounts receivables, debt investments, and financial guarantee contracts is based on assumptions on default risk and expected loss rates. The Group makes these assumptions and selects inputs for impairment calculation based on the Group's historical experience and existing market conditions, as well as forward looking information. If the future cash inflows are less than expected, a material impairment loss may arise. Please refer to Note 6(5.) for the assumption and input data.

(C.) Evaluation of inventories

As inventories are stated at the lower of cost and net realizable value, the Group must determine the net realizable value of inventories on balance sheet date using judgments and estimates. The Group evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of

inventories to the net realizable value. The management considers current market and historical experience on specific future product demand for evaluation basis, and change of these factors may significantly affect the results.

(D.) Impairment assessment of tangible and intangible assets

In the course of impairment assessments, the Group determines, based on how assets are utilised and relevant industrial characteristics, the useful lives of assets and the future cash flows of a specific group of the assets. Changes in economic circumstances or the Group's strategy might result in material impairment of assets in the future.

(E.) Realizability of deferred tax assets

Deferred tax assets are recognized only to the extent that it is probable that future taxable profits will be available against which the deferred tax asset can be utilized. If future generated profit less than expected, there would be significant reversed of deferred tax assets recognized as profit and loss when occurred.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1.) Cash and Cash Equivalents

ITEM	31-Dec-25	31-Dec-24
Cash on hand	$ 1,745	$ 1,811
Check deposits	207	534
Demand deposits	599,237	805,247
Cash equivalent
Time deposits
(with original maturities within three months)	262,950	268,080
Total	$ 864,139	$ 1,075,672

A. The Group trades with a variety of financial institutions all with high credit quality to disperse credit risk, and the management expects that the probability of counterparty default is remote.
B. The cash and cash equivalents were not pledged.

(2.) Financial Assets at Fair Value through Profit or Loss

ITEM	31-Dec-25	31-Dec-24
Financial assets mandatorily measured at fair value through profit or loss, current
Beneficiary certificates	$ 6,475	$ 6,475
Valuation adjustments	596	481
Total	$ 7,071	$ 6,956
Financial assets mandatorily measured at fair value through profit or loss, non-current
Overseas unlisted preferred shares	$ 4,844	$ 4,844
Valuation adjustments	(4,844)	(4,844)
Total	$ -	$ -

A. The Group invested in the preferred stocks of PHYTOCEUTICA INC., it is not entitled to other rights of ordinary shares, except for that dividends and distribution of residual assets preferred over ordinary

shares.

B. As of December 31, 2025 and 2024, the financial assets at fair value through profit or loss was not pledged or held as collateral.
C. Please refer to Note 12 for information about the related credit risk management and the valuation techniques.

(3.) Financial assets at amortized cost

ITEM	31-Dec-25	31-Dec-24
Current :
Time deposits
(with original maturities greater than three months)	$ 123,416	$ 95,409
Interest rate range	0.5%~2.5%	0.65%~3.55%

A. As of December 31, 2025 and 2024, the financial assets at amortized cost were not pledged.
B. Please refer to Note 12 for information about the related credit risk management and the valuation techniques.

(4.) Notes Receivable, Net

ITEM	31-Dec-25	31-Dec-24
Notes receivable	$ 139,147	$ 147,623
Less: Loss allowance	(507)	(507)
	$ 138,640	$ 147,116

A. As of December 31, 2025 and 2024, the notes receivable were not pledged.
B. Please refer to table below for information on loss allowance of notes receivable.

(5.) Accounts Receivable, Net

ITEM	31-Dec-25	31-Dec-24
Accounts receivable
Gross carrying amount measured at amortized cost	$ 583,599	$ 503,160
Less: Loss allowance	(8,381)	(8,376)
	$ 575,218	$ 494,784

A. The Group's average credit terms of accounts receivable were 30 to 210 days, which was determined with factors of customers' industrial environment, business scales and profitability.
B. The accounts receivables were not pledged.
C. The Group applies the simplified approach to provisions for expected credit losses, which permits the use of a lifetime expected credit losses provision for all notes receivable and accounts receivable. The lifetime expected credit losses on accounts receivables are estimated by reference to past default experience with the respective debtors and an analysis of the debtors' current financial positions. According to the past experience of credit loss, there is no significant difference between different customer categories, thus the provision matrix doesn't further distinguish customer categories, and is set up the expected credit loss ratio by the past due days.

25 -

The following table detailed the loss allowance of notes receivables and accounts receivables based on the Group's provision matrix.

December 31, 2025	Expected Credit Loss Ratio	Gross Carrying Amount	Loss Allowance (Lifetime ECL)	Amortized Cost
Not past due	0%~1%	$ 689,233	$ 1,347	$ 687,886
1 to 60 days	5%	26,278	1,306	24,972
61 to 120 days	30%	1,329	377	952
121 to 180 days	50%	95	47	48
Over 181 days	100%	5,811	5,811	-
Total		$ 722,746	$ 8,888	$ 713,858
December 31, 2024	Expected Credit Loss Ratio	Gross Carrying Amount	Loss Allowance (Lifetime ECL)	Amortized Cost
Not past due	0%~1%	$ 615,742	$ 1,346	$ 614,396
1 to 60 days	5%	28,381	1,419	26,962
61 to 120 days	30%	684	205	479
121 to 180 days	50%	126	63	63
Over 181 days	100%	5,850	5,850	-
Total		$ 650,783	$ 8,883	$ 641,900

D. The movements of the loss allowances of notes receivable and accounts receivable were as follows:

	For the Year Ended December 31, 2025	For the Year Ended December 31, 2024
Balance on January 1	$ 8,883	$ 8,716
Add: Recognition of impairment losses	-	142
Foreign exchange gains and losses	5	25
Balance at December 31	$ 8,888	$ 8,883

E. These amounts were recognized without considering other credit enhancements held by the Group. The Group writes off an accounts receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. However, the Group continues to engage in enforcement activity to recover the receivables due. Any recovered amounts are recognized in profit or loss.
F. Please refer to Note 12 for information about the related credit risk management and the valuation techniques.

(6.) Inventories

ITEM	31-Dec-25	31-Dec-24
Merchandise	$ 2,686	$ 1,102
Finished goods	264,741	291,541
Work in process	102,964	93,100
Raw materials	301,983	287,275
Materials	52,312	41,888
Total	$ 724,686	$ 714,906

A. The cost of inventories recognized as expense for 2025 and 2024:

	For the Year Ended December 31
ITEM	2025	2024
Cost of goods sold	$ 1,899,582	$ 1,885,277
Loss on decline in market value of inventories	3,584	812
Loss on inventory scrapped	12,402	29,715
Others	(1,138)	(2,192)
Total	$ 1,914,430	$ 1,913,612

B. No inventories were pledged or held as collateral.

(7.) Prepayments

ITEM	31-Dec-25	31-Dec-24
Payments in Advance	$ 36,453	$ 36,447
Offset Against Business Tax Payable	35,579	34,809
Other Prepayments	14,213	12,956
Total	$ 86,245	$ 84,212

(8.) Financial Assets at FVTOCI – non-current

ITEM	31-Dec-25	31-Dec-24
Equity instruments
Domestic listed ordinary (OTC) shares	$ 37,955	$ 36,068
Domestic unlisted ordinary shares	17,266	17,266
Foreign listed shares	-	37,102
Overseas unlisted preferred shares	36,409	36,409
Subtotal	91,630	126,845
Valuation adjustments	(38,946)	(72,205)
Total	$ 52,684	$ 54,640

A. These investments in equity instruments were held for long-term strategic purposes. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believed that recognizing short-term fluctuations from these investments' fair value in profit or loss would not be consistent with the Group's strategy of holding these investments for long-term purposes.

B. The financial assets at FVTOCI were not pledged or held as collateral.

C. In April 2025, the Group disposed of the ordinary shares of Medigene Co., Ltd. at a fair value of NT$541 thousand. The related unrealized loss of NT$36,561 thousand previously accumulated in other equity—financial assets at fair value through other comprehensive income was transferred to retained earnings. Consequently, the Company adjusted other equity and transferred NT$23,494 thousand to retained earnings based on its ownership percentage.

D. Please refer to Note 12 for information about the related credit risk management and the valuation techniques.

(9.) Property, Plant and Equipment

	Land	Buildings	Machinery	Other Equipment	Unfinished Construction and Equipment Pending Acceptance	Total
Cost
1-Jan-25	$ 717,584	$ 3,195,005	$ 1,976,927	$ 373,244	$ 31,592	$ 6,294,352
Additions	-	13,874	44,122	17,221	18,899	94,116
Disposals	-	(144)	(10,667)	(409)	-	(11,220)
Reclassification	-	11,944	46,701	11,604	1,111	71,360
Effect of exchange rate changes	-	3,659	1,685	231	115	5,690
31-Dec-25	$ 717,584	$ 3,224,338	$ 2,058,768	$ 401,891	$ 51,717	$ 6,454,298
Accumulated Depreciation and Impairment
1-Jan-25	$ -	$ 1,306,149	$ 1,434,585	$ 287,078	$ -	$ 3,027,812
Depreciation	-	96,717	107,635	25,107	-	229,459
Disposals	-	(67)	(9,685)	(368)	-	(10,120)
Effect of exchange rate changes	-	2,269	1,665	234	-	4,168
31-Dec-25	$ -	$ 1,405,068	$ 1,534,200	$ 312,051	$ -	$ 3,251,319
Cost
1-Jan-24	$ 717,584	$ 2,978,379	$ 1,845,800	$ 349,442	$ 129,705	$ 6,020,910
Additions	-	31,923	48,888	17,004	84,550	182,365
Disposals	-	(4,897)	(2,263)	(1,676)	-	(8,836)
Reclassification	-	159,361	73,609	6,946	(182,663)	57,253
Effect of exchange rate changes	-	30,239	10,893	1,528	-	42,660
31-Dec-24	$ 717,584	$ 3,195,005	$ 1,976,927	$ 373,244	$ 31,592	$ 6,294,352
Accumulated Depreciation and Impairment
1-Jan-24	$ -	$ 1,206,864	$ 1,320,187	$ 265,554	$ -	$ 2,792,605
Depreciation	-	91,637	109,855	21,909	-	223,401
Disposals	-	(2,539)	(1,770)	(1,564)	-	(5,873)
Effect of exchange rate changes	-	10,187	6,313	1,179	-	17,679
31-Dec-24	$ -	$ 1,306,149	$ 1,434,585	$ 287,078	$ -	$ 3,027,812
Carrying Amount
31-Dec-25	$ 717,584	$ 1,819,270	$ 524,568	$ 89,840	$ 51,717	$ 3,202,979
31-Dec-24	$ 717,584	$ 1,888,856	$ 542,342	$ 86,166	$ 31,592	$ 3,266,540

A. Property, plant and equipment were pledged as collateral for both long-term and short-term loans, please refer to Note 8.

B. As of December 31, 2025 and 2024 the Group acquired agricultural lands from non-related parties for the purpose of plant planning which could not be registered ownership of the Group. The acquisition cost was NT$23,184 thousand, and the land was registered in the name of Shu Fei Yu. To protect the interest of the Group, the mortgage right of the land was registered to belong to the Group.

(10.) Lease agreements

A. Right-of-use assets

ITEM	31-Dec-25	31-Dec-24
Land	$ 22,563	$ 22,473
Building	1,153	-
Total costs	23,716	22,473
Less:Accumulated depreciation	(4,842)	(3,901)
Right-of-use assets, net	$ 18,874	$ 18,572
	Land	Buildings
---	---	---
Cost
1-Jan-25	$ 22,473	$ -
Additions	-	1,153
Effect of exchange rate changes	90	-
31-Dec-25	$ 22,563	$ 1,153
Accumulated Depreciation
1-Jan-25	$ 3,901	$ -
Depreciation	628	273
Effect of exchange rate changes	40	-
31-Dec-25	$ 4,569	$ 273
Cost
1-Jan-24	$ 21,715	$ -
Additions	-	-
Effect of exchange rate changes	758	-
31-Dec-24	$ 22,473	$ -
Accumulated Depreciation
1-Jan-24	$ 3,141	$ -
Depreciation	647	-
Effect of exchange rate changes	113	-
31-Dec-24	$ 3,901	$ -

B. Lease liabilities

ITEM	31-Dec-25	31-Dec-24
Carrying amount of lease liabilities
Current	$ 576	$ -
Noncurrent	$ 308	$ -
Discount rates	2.1125%	-

Please refer to Note 12(2) for information on the maturity analysis of the lease liabilities.

C. Major lease-in activities and terms

The Group signed a contract with the Ministry of Land and Resources of the People's Republic of China, in 2003; the Group acquired the right-of-use of the lands in Yuhang development zone and Ka Zi Na Ke development zone for the purpose of setting up plants and agricultural usage. It was amounted for RMB $7,544 thousand for the right of usage for 50 years.

The Group leases several buildings for use as employee dormitories with a lease term of 2 years. At the termination of the lease term, the Group has no preferential purchase option on the leased buildings. Furthermore, the contract stipulates that the Group shall not sublease the underlying leased assets to any third party without the consent of the lessor.

As of December 31, 2025, there was no indication that the right-of-use assets were impaired, therefore the Group did not assess impairment.

D. The right-of-use assets were pledged as collateral for both long-term and short-term loans, please refer to Note 8.

(11.) Intangible Assets

	Trademarks	Software	Technology licenses	Total
Cost
1-Jan-25	$ 2,501	$ 101,006	$ 347,941	$ 451,448
Additions	-	6,979	-	6,979
Disposals	-	(42,614)	-	(42,614)
Reclassification	-	-	-	-
Effect of foreign currency exchange difference	10	-	-	10
31-Dec-25	$ 2,511	$ 65,371	$ 347,941	$ 415,823
Accumulated Depreciation and Impairment
1-Jan-25	$ 2,489	$ 72,662	$ 304,134	$ 379,285
Depreciation	9	12,722	6,895	19,626
Disposals	-	(42,614)	-	(42,614)
Effect of foreign currency exchange difference	10	-	-	10
31-Dec-25	$ 2,508	$ 42,770	$ 311,029	$ 356,307
Cost
1-Jan-24	$ 2,417	$ 86,806	$ 347,941	$ 437,164
Additions	-	16,242	-	16,242
Disposals	-	(7,188)	-	(7,188)
Reclassification	-	5,146	-	5,146
Effect of foreign currency exchange difference	84	-	-	84
31-Dec-24	$ 2,501	$ 101,006	$ 347,941	$ 451,448

	Trademarks	Software	Technology licenses	Total
Accumulated Depreciation and Impairment
1-Jan-24	$ 2,391	$ 65,953	$ 296,997	$ 365,341
Depreciation	15	13,897	7,137	21,049
Disposals	-	(7,188)	-	(7,188)
Effect of foreign currency exchange difference	83	-	-	83
31-Dec-24	$ 2,489	$ 72,662	$ 304,134	$ 379,285
Carrying Amount
31-Dec-25	$ 3	$ 22,601	$ 36,912	$ 59,516
31-Dec-24	$ 12	$ 28,344	$ 43,807	$ 72,163

A. The software was pledged as collateral for long-term loans, please refer to Note 8.
B. The aforementioned technology licenses were licensed by the National Health Research Institutes (NHRI) and were acquired from a Germany Group "Medigene". The main purpose of these technologies were to develop new drug for anticancer.

(12.) Short-term loans

Category	31-Dec-25
	Amount	Interest rate
Unsecured Loans	$ 150,000	1.88%~2.12%
Secured loans	38,000	2.17%~2.40%
Total	$ 188,000
Category	31-Dec-24
	Amount	Interest rate
Unsecured Loans	$ 330,000	1.88%~2.22%
Secured loans	40,000	2.17%~2.40%
Total	$ 370,000

The Group pledged some of its property, plant and equipment as collaterals for short-term borrowings. Please refer to Note 8 for more information.

(13.) Other Payables

Items	31-Dec-25	31-Dec-24
Salaries and bonuses payable	$ 125,585	$ 122,048
Advertisement expenses payable	48,679	36,231
Research expenses payable	13,221	14,896
Equipment payable	8,440	9,415
Employees’ compensation and Directors’ remuneration payable	21,394	17,047
Labor and health insurance payable	10,667	10,581

Items	31-Dec-25	31-Dec-24
Pension payable	6,954	6,724
Other	124,953	119,844
Total	$ 359,893	$ 336,786

(14.) Long-Term Borrowings and Current Portion of long-term borrowings

Items	31-Dec-25	31-Dec-24
Secured loans	$ 1,050,877	$ 1,192,495
Unsecured loans	270,000	340,000
Subtotal	1,320,877	1,532,495
Less: current portion	(48,118)	(351,290)
Total	$ 1,272,759	$ 1,181,205
Interest rate	1.850%~2.801%	1.850%~2.801%

The Group pledged some of its property, plant and equipment as collaterals for long-term borrowings. Please refer to Note 8 for more information.

(15.) Retirement Benefit Plans

Defined contribution plans

A. The employee pension plan under the Labor Pension Act of the R.O.C. (the Act) is a defined contribution plan. Pursuant to the plan, the Group and its domestic subsidiaries make monthly contributions of $6\%$ of each individual employee's salary or wage to employees' pension accounts. Pension benefits for employees of subsidiaries overseas were provided in accordance with the local regulations. NT$32,149 thousand and NT$39,801 thousand were contributed by the Group for the years ended December 31, 2025 and 2024, respectively.
B. Pension benefits for employees of subsidiaries overseas were provided in accordance with the local regulations. NT$5,243 thousand and NT$6,712 thousand were contributed by the Group for years ended December 31, 2025 and 2024, respectively.

Defined benefit plan

The Group and its domestic subsidiaries have defined benefit pension plans in accordance with the Labor Standards Law of the R.O.C. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Group contributes monthly an amount equal to $2\%$ of the employees' monthly salaries and wages to the retirement fund deposited in Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. The Group would assess as the balance in the aforementioned labor pension reserve account by the end of each year. If the account balance is not enough to pay the pension to the labors expected to be qualified for retirement in the next year, the Group will make contribution for the deficit by next March. The pension fund is managed by the government's designated authorities and the Group has no right to influence their investment strategies.

A. Amounts recognized in the consolidated balance sheets were as follows:

ITEM	31-Dec-25	31-Dec-24
Present value of defined benefit obligations	$ 61,449	$ 131,597
Fair value of plan assets	(39,184)	(116,508)
Net defined benefit liability	$ 22,265	$ 15,089

B. Movements of net defined benefit liabilities were as follows:

ITEM	For the Year Ended December 31, 2025
	Present value of defined benefit obligations	Fair value of plan asset	Net defined benefit liability
Balance at January 1	$ 131,597	$ (116,508)	$ 15,089
Service cost:
Current service cost	323	-	323
Interest expense (revenue)	2,124	(1,889)	235
Settlement profit (loss)	32,492	-	32,492
Amounts recognized in profit or loss	34,939	(1,889)	33,050
Remeasurement on the net defined benefit liability:
Return on plan assets	-	(9,072)	(9,072)
Actuarial (gains) losses
Effect of changes in demographic assumptions	(12)	-	(12)
Effect of changes in financial assumptions	2,877	-	2,877
Experience adjustments	12,163	-	12,163
Amounts recognized in other comprehensive income	15,028	(9,072)	5,956
Pension fund contribution	-	(4,327)	(4,327)
Paid Pension	(8,912)	8,912	-
Paid Settlement	(111,203)	83,700	(27,503)
Balance at December 31	$ 61,449	$ (39,184)	$ 22,265
ITEM	For the Year Ended December 31, 2024
---	---	---	---
	Present value of defined benefit obligations	Fair value of plan asset	Net defined benefit liability
Balance at January 1	$ 164,129	$ (128,577)	$ 35,552
Service cost:
Current service cost	429	-	429
Interest expense (revenue)	1,940	(1,535)	405
Settlement profit (loss)	11,835	-	11,835
Amounts recognized in profit or loss	14,204	(1,535)	12,669

34 -

ITEM	For the Year Ended December 31, 2024
	Present value of defined benefit obligations	Fair value of plan asset	Net defined benefit liability
Remeasurement on the net defined benefit liability:
Return on plan assets	-	(11,792)	(11,792)
Actuarial (gains) losses
Effect of changes in demographic assumptions	3	-	3
Effect of changes in financial assumptions	(5,736)	-	(5,736)
Experience adjustments	6,054	-	6,054
Amounts recognized in other comprehensive income	321	(11,792)	(11,471)
Pension fund contribution	-	(10,640)	(10,640)
Paid Pension	(10,269)	9,880	(389)
Paid Settlement	(36,788)	26,156	(10,632)
Balance at December 31	$ 131,597	$ (116,508)	$ 15,089

C. The defined benefit plan as of the year ended 2025 and 2024 were summarized by functions as follows:

	For the Year Ended December 31
	2025	2024
Operation Costs	$ 15,615	$ 4,354
Selling Expense	10,043	3,524
Administrative Expense	5,256	4,761
Research and Development Expense	2,136	30
	$ 33,050	$ 12,669

D. Through the defined benefit plans under the Labor Standards Law, the Group is exposed to the following risks:

(A.) Investment risk

The pension funds are invested in equity and debt securities, bank deposits, etc. at the discretion of the Bureau of Labor Funds of Ministry of Labor, or under the mandated management. However, under the Labor Standards Law, the rate of return on plan assets shall not be less than the average interest rate on a two-year time deposit published by the local banks.

(B.) Interest risk

A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the debt investments of the plan assets.

(C.) Salary risk

The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

E. The main actuarial assumptions used were as follows:

	31-Dec-25	31-Dec-24
Discount rate	1.40%	1.65%
Expected rate of salary increase	1.50%	1.50%
The weighted average duration of the defined benefit obligation	9 years	8 years

(A.) Assumptions on future mortality experience are set based on the 6th Taiwan Standard Ordinary Experience Mortality Table (TSO).
(B.) Reasonably possible changes at December 31, 2025 and 2024 to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below:

ITEM	31-Dec-25	31-Dec-24
Discount rate
0.25% increase	$ (1,330)	$ (2,812)
0.1% increase	(538)	(1,135)
0.25% decrease	546	2,902
0.1% decrease	1,380	1,150
Future salary increase rate
0.25% increase	1,375	2,900
0.25% decrease	(1,332)	(2,823)
Employee turnover rate
110% of the expected employee turnover rate	(90)	(24)
90% of the expected employee turnover rate	95	25

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

F. The contribution that the Group expects to make to its defined benefit pension plans in next year is NT$578 thousand.

Other Employees' benefits were as follows:

ITEM	31-Dec-25	31-Dec-24
Employees benefits payable	$ 13,692	$ 10,910
Compensated absences payable	5,198	5,465
Other employees benefits	32,351	30,050
Total	$ 51,241	$ 46,425

(16.) Capital Stock

The movements in the number of Sinphar's ordinary shares outstanding are as follows:

	For the Year Ended December 31, 2025
	Issued and paid shares (in thousands)	Issued capital
January 1	181,140	$ 1,811,398
Capitalization of Retained Earnings	9,057	90,570
December 31	190,197	$ 1,901,968

For the Year Ended December 31, 2024

	Issued and paid shares (in thousands)	Issued capital
January 1	167,722	$ 1,677,221
Capitalization of Retained Earnings	13,418	134,177
December 31	181,140	$ 1,811,398

At the Annual Shareholders' Meeting held on June 19, 2025, the Company approved a capital increase of NT$ 90,570 thousand through the capitalization of retained earnings. A total of 9,057 thousand common shares were issued, with a par value of NT$10 per share. The relevant registration and amendments have been duly completed.

At the Annual Shareholders' Meeting held on June 19, 2024, the Company approved a capital increase of NT$ 134,177 thousand through the capitalization of retained earnings. A total of 13,418 thousand common shares were issued, with a par value of NT$10 per share. The relevant registration and amendments have been duly completed.

As of Dec 31, 2025 the Sinphar's authorized capital amount was NT$2,500,000 thousand, consisting of 250,000 thousand shares of ordinary stocks.

(17.) Capital Surplus

	31-Dec-25	31-Dec-24
Additional paid in capital	$ 422,450	$ 422,450
Additional paid-in capital arising from bond conversion	190,611	190,611
Difference between consideration and carrying amount of subsidiaries acquired or disposed	310,439	310,439
Others	640	640
Total	$ 924,140	$ 924,140

Under Sinphar's Act, the capital surplus generated from excess of the issuance price over the par value of capital stock and donations may be used to offset a deficit; in addition, when Sinphar has no deficit, such capital surplus may be distributed as stock dividends or cash dividends. Further, the R.O.C. Securities and Exchange Law requires that the amount of capital surplus to be capitalized mentioned above should not exceed a certain percentage of Sinphar's paid in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

(18.) Retained Earnings and Dividend Policy

A. When allocating the net profits in each fiscal year, Sinphar shall be first utilized for paying taxes, offsetting losses of previous years, and then setting aside the 1) legal capital reserve at 10% of the profits left over, until the accumulated legal capital reserve equals Sinphar's paid-in capital; 2) special capital reverse in accordance with relevant laws or regulations or as requested by the authorities in charge; and 3) balance left over shall be allocated according to the resolution of the board of directors and the shareholders' meeting.

B. To consider about the economic circumstances, development phase, and future business expansion, dividends will be allocated in consideration of future capital expenditure and cash forecast. However, cash dividends are limited to over 20% of total dividends distributed.

C. The appropriation for legal capital reserve shall be made until the reserve equals Sinphar's paid-in capital. The reserve may be used to offset deficit, or be distributed as dividends in cash or stocks for the portion in excess of 25% of the paid-in capital if Sinphar incurs no loss.

36 -

D. Special Reserve :

ITEMS	31-Dec-25	31-Dec-24
Amount when first applied to IFRSs	$ 37,951	$ 37,951
Amount aroused from other equity interest	99,220	99,220
Total	$ 137,171	$ 137,171

(A.) In accordance with the regulations, Sinphar 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.

(B.) When IFRSs were first adopted, according to the special reserve regulation of Financial Supervisory Commission R.O.C, no. 1010012865 on April 6, 101, If Sinphar subsequently uses, disposes or reclassifies the relevant assets, the proportion originally set aside as the special reserve will be reversed into distributable retained earnings.

E. The appropriations of earnings for 2024 had been approved by the company's shareholders in its meeting held on June 19, 2025 and the appropriations and dividends per share were as follows:

	Appropriation of Earnings	Dividends Per Share(NT$)
Legal capital reserve	$ 31,618	$ -
Cash dividends of ordinary share	181,140	1
Stock dividends of ordinary share	90,570	0.5
Total	$ 303,328

F. The appropriations of earnings for 2025 had been approved in the meeting of the Board of Directors on March 10, 2026 and the appropriations and dividends per share were as follows:

	Appropriation of Earnings	Dividends Per Share(NT$)
Legal capital reserve	$ 33,630	$ -
Cash dividends of ordinary share	190,197	1
Stock dividends of ordinary share	114,118	0.6
Total	$ 337,945

The appropriations of earnings for 2025 are to be presented for approval in the shareholders' meeting which is to be held on June 16, 2026.

G. Information on the resolution of the Board of Directors' and shareholders' meetings regarding the appropriation of earnings is available from the Market Observation Post System on the website of the TWSE.

(19.) Others Equity Items

ITEM	Exchange Differences on Translation of Foreign Financial Statements	Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income	Total
Balance as at Jan 1, 2025	$ (70,451)	$ (50,311)	$ (120,762)
Exchange differences on translation of foreign financial statements	5,095	-	5,095
Income tax effects	(1,019)	-	(1,019)
Unrealized gain on financial assets at FVTOCI	-	65	65

38 -

ITEM	Exchange Differences on Translation of Foreign Financial Statements	Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income	Total
Share of other comprehensive income of associates accounted for using the equity method	40	(2,164)	(2,124)
Disposal of equity investments at fair value through other comprehensive income of subsidiaries	-	23,494	23,494
Balance as at Dec 31, 2025	$ (66,335)	$ (28,916)	$ (95,251)
Balance as at Jan 1, 2024	$ (92,720)	$ (44,451)	$ (137,171)
Exchange differences on translation of foreign financial statements	27,834	-	27,834
Income tax effects	(5,567)	-	(5,567)
Unrealized gain on financial assets at FVTOCI	-	(611)	(611)
Share of other comprehensive income of associates accounted for using the equity method	2	(5,249)	(5,247)
Balance as at Dec 31, 2024	$ (70,451)	$ (50,311)	$ (120,762)

(20.) Non-controlling Interests

ITEMS	For the Years Ended December 31
	2025	2024
Balance at January 1	$ 282,976	$ 299,536
Share attributable to non-controlling interests:
Net loss	(11,481)	(19,488)
Exchange differences arising from the translation of the translating foreign operations	1,012	5,847
Unrealized loss on financial assets at fair value through other comprehensive income	(1,203)	(2,919)
Balance at December 31	$ 271,304	$ 282,976

(21.) Net Revenue

ITEM	For the Year Ended December 31
	2025	2024
Revenue from contracts with customers
Sales revenue	$ 3,734,197	$ 3,487,204
Less: Sales returns and allowances	(363,376)	(336,576)
Net Sales revenue	3,370,821	3,150,628
Other operating revenue	500	-
Total	$ 3,371,321	$ 3,150,628

A. Breakdowns of contract revenue

(A.) Please refer to Note 14 for geographical and departmental information details.

(B.) Revenue was recognized at a specific point of time period when all the obligations were fulfilled.

B. Contract Balance

The accounts receivable and contract liabilities in relation to contract revenue were as follows:

ITEM	31-Dec-25	31-Dec-24	1-Jan-24
Accounts Receivable (6(5.))	$ 575,218	$ 494,784	$ 477,252
Contract liabilities-current	$ 103,355	$ 97,424	$ 85,654

(A.) Changes in contract liabilities mainly result from the time difference between the performance obligation satisfied and the customer’s payment.

(B.) Revenue from opening contract liabilities - sales of goods recognized as revenue in the current period were as follows:

	For the Year Ended December 31
Revenue	2025	2024
Amounts from opening contract liabilities - sales of good	$ 85,356	$ 76,384

(22.) Other Income

	For the Year Ended December 31
ITEM	2025	2024
Government grants	$ 4,252	$ 8,944
Rental income	2,113	1,694
Dividend income	641	-
Others	17,430	8,385
Total	$ 24,436	$ 19,023

(23.) Other Gains and Losses

	For the Year Ended December 31
ITEM	2025	2024
Net currency exchange gains (losses)	$ (19,001)	$ 13,428
Losses on disposal of assets	(1,051)	(2,481)
Gains on initial recognition of biological assets and agricultural product	2,532	3,297
Gains on financial assets at fair value through profit or loss	115	-
Others	(1,131)	(97)
Total	$ (18,536)	$ 14,147

(24.) Employee Benefits Expense, Depreciation and Amortization

For the Year Ended December 31, 2025
ITEM	Cost of revenue	Operating expenses	Total
Employee benefits expense
Salaries and wages	$ 303,547	$ 346,268	$ 649,815
Labor and health insurance	32,510	32,837	65,347
Pension	30,654	39,788	70,442
Other employee benefits	20,636	28,657	49,293
Depreciation	178,250	52,110	230,360
Amortization	5,109	18,862	23,971
Total	$ 570,706	$ 518,522	$ 1,089,228

For the Year Ended December 31, 2024

ITEM	Cost of revenue	Operating expenses	Total
Employee benefits expense
Salaries and wages	$ 283,483	$ 344,145	$ 627,628
Labor and health insurance	30,149	29,493	59,642
Pension	20,309	38,873	59,182
Other wages	20,340	25,228	45,568
Depreciation	174,238	49,810	224,048
Amortization	7,283	26,039	33,322
Total	$ 535,802	$ 513,588	$ 1,049,390

A. Sinphar shall allocate 2% to 8% and not higher than 5% of annual profits during the period to employees' compensation and directors' and supervisors' remuneration, respectively. Out of the aforementioned total employees' compensation, no less than 50% shall be allocated for salary adjustments or compensation distribution to non-managerial employees. If there is a change in the proposed amount after the annual consolidated financial statement are authorized for issue, the difference is recorded as a change in accounting estimate.

B. The employees' compensation and directors' and supervisors' remuneration for 2025 and 2024 were approved in the meetings of the Board of Directors on March 10, 2026 and March 5, 2025, respectively. The amounts recognized in the financial reports were as follows:

	2025		2024
	Employees' compensation	Directors' and supervisors' remuneration	Employees' compensation	Directors' and supervisors' remuneration
Amount resolved to be distributed	$ 13,692	$ 7,702	$ 10,910	$ 6,137
Amount recognized in financial reports	13,692	$ 7,702	10,910	6,137
Difference	$ -	$ -	$ -	$ -

The above-mentioned compensation was distributed in cash.

C. The information about employees' compensation and directors' and supervisors' remuneration of Sinphar as resolved by the meeting of Board of Directors is available from the Market Observation Post System on the website of the TWSE.

(25.) Finance Costs

ITEM	For the Year Ended December 31
	2025	2024
Interest expense
Bank borrowings	$ 33,837	$ 36,771
Interest on lease liabilities	10	-
Financial cost	$ 33,847	$ 36,771

(26.) Income Tax

A. The components of tax expense:

	For the Year Ended December 31
ITEM	2025	2024
Current tax
Current tax expense recognized in the current year	$ 51,418	$ 21,841
Adjustments for prior periods	80	510
Total	51,498	22,351
Deferred tax
Deferred income tax related to origination and reversal of temporary differences	(4,244)	(468)
Income tax expense	$ 47,254	$ 21,883

B. Income tax recognized in other comprehensive loss (income):

	For the Year Ended December 31
ITEM	2025	2024
Currency translation differences	$ 1,019	$ 5,567

C. Reconciliation between income tax expense (benefit) and accounting loss as follows:

	For the Year Ended December 31
ITEM	2025	2024
Profit before income tax	$ 401,524	$ 307,100
Tax calculated based on profit before tax and statutory tax rate	$ 79,916	$ 57,483
Effects from items disallowed by tax regulation	(42,395)	(26,467)
Investment tax credit	12,662	(19,255)
No deferred income tax assets have been recognized	1,235	10,080
Net change in deferred income tax	(4,244)	(468)
Income tax adjustments for prior years	80	510
Income tax expense (benefit)	$ 47,254	$ 21,883

The corporate income tax rate for entities subject to the R.O.C. Income Tax Act is 20%, and the tax rate for unappropriated earnings is 5%. The tax rate for subsidiaries in China is 25%. For entities located in other jurisdictions, taxes are calculated using the applicable tax rate for each individual jurisdiction. Under the Act for the Development of Biotech and Pharmaceutical Industry, Sinphar could recognize an investment tax credit within a limit of 20% of the investment price if the investee is applicable to the act.

D. Deferred income tax assets and liabilities

Deferred tax assets or liabilities arising from temporary differences, operating loss carryforward, and investment tax credits:

	For the Year Ended December 31, 2025
	Jan-1	Profit and loss	Other comprehensive income	Effect of exchange rate changes	Dec-31
Deferred income tax asset
Temporary difference
Employee benefits	$5,810	$212	$-	$-	$6,022
Sales returns and allowances	10,657	1,091	-	-	11,748
Unrealized loss on inventories	9,850	1,635	-	-	11,485
Exchange difference on foreign
operations	17,615	-	(1,019)	-	16,596
Others	609	862	-	-	1,471
Operating loss carryforwards	79,921	20,000	-	-	99,921
Investment tax credit	60,904	(12,662)	-	-	48,242
	$185,366	$11,138	$(1,019)	$-	$195,485
Deferred income tax liabilities
Temporary difference
Land value increment tax	$32,939	$-	$-	$-	$32,939
Gain on foreign investments accounted
for using the equity method	53,869	-	-	-	53,869
Others	2,167	(444)	-	(10)	1,713
	$88,975	$(444)	$-	$(10)	$88,521
	For the Year Ended December 31, 2024
	Jan-1	Profit and loss	Other comprehensive income	Effect of exchange rate changes	Dec-31
Deferred income tax asset
Temporary difference
Employee benefits	$3,263	$2,547	$-	$-	$5,810
Sales returns and allowances	10,710	(53)	-	-	10,657
Unrealized loss on inventories	11,264	(1,414)	-	-	9,850
Exchange difference on foreign
operations	23,182	-	(5,567)	-	17,615
Others	788	(179)	-	-	609
Operating loss carryforwards	80,000	(79)	-	-	79,921
Investment tax credit	41,649	19,255	-	-	60,904
	$170,856	$20,077	$(5,567)	$-	$185,366
Deferred income tax liabilities
Temporary difference
Land value increment tax	$32,939	$-	$-	$-	$32,939
Gain on foreign investments accounted
for using the equity method	52,745	1,124	-	-	53,869
Others	2,765	(691)	-	93	2,167
	$88,449	$433	$-	$93	$88,975
The above-mentioned deferred income tax liabilities were classified as other non-current liabilities.

E. Unrecognized deferred tax assets:

ITEM	31-Dec-25	31-Dec-24
Items not recognized as deferred tax assets:
Loss on investments accounted for using the equity method	$ 31,425	$ 30,852
Loss on financial assets evaluation	969	969
Unused operating loss carry forward	511,958	551,960
Others	9,246	9,773
Total	$ 553,598	$ 593,554

F. Information of unused loss carried forward:

As of December 31, 2025, operating loss carryforward of subsidiary as follow:

Expiry Year	Remaining Creditable Amount	Tax effect
2026	159,319	31,864
2027	254,647	50,929
2028	284,784	56,957
2029	393,517	78,704
2030	388,622	77,724
2031	466,158	93,232
2032	184,481	36,896
2033	796,176	159,235
2034	47,576	9,515
2035	84,118	16,823
Total	$ 3,059,398	$ 611,879

G. The tax authorities have examined income tax return of Sinphar through 2023.

(27.) Earnings per Share

ITEM	For the Year Ended December 31
	2025	2024
Basic earnings per share:
Net income attributable to ordinary shareholders of the parent	$ 365,751	$ 304,705
Weighted average number of shares outstanding for the period (in thousands)	190,197	190,197
Basic earnings per share, after tax (Unit: NT$ Per Share)	$ 1.92	$ 1.60
Diluted earnings per share:
Net income available to ordinary shareholders of the parent	$ 365,751	$ 304,705
Weighted average number of shares outstanding for the period (in thousands)	190,197	190,197
Effect of the dilutive potential ordinary shares
Employees’ compensation (share in thousands)	449	350
Weighted average number of shares outstanding for diluted earnings per share (share in thousand)	190,646	190,547
Diluted earnings per share, after tax (in dollars)	$ 1.92	$ 1.60

Effect of issuance of bonus shares is included in the retrospective adjustment in calculating earnings per share. If the Company offered to settle the compensation or bonuses paid to employees in shares or cash

at the Company's option, the Company assumed that the entire amount of the compensation or bonuses will be settled in shares, and the resulting potential shares are included in the weighted average number of shares outstanding used in the calculation of diluted earnings per share if the effect is dilutive. Such dilutive effect of the potential shares is included in the calculation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

7. TRANSACTIONS WITH RELATED PARTIES

(1.) Names of related parties and relationship categories

Names of related parties	Related party categories
CANADA BIOTECH	Other related parties
Shu Fei Yu	Other related parties
Board of Directors, General Manager and Vice General Manager	Key management personnel

(2.) Significant transactions with related parties

All transactions, account balances, incomes and expenses between Sinphar and its subsidiaries (which are related parties of Sinphar) were eliminated upon consolidation. Hence, there were not disclosed items in the note. The transactions with related parties were as follows:

A. Trademarks and royalties

Under an agreement between the Group and its related party, CANADA BIOTECH, the Group is required to pay royalties at a specified percentage of the gross profit from the sale of goods for the right to use the trademark licensed by CANADA BIOTECH. The Group paid the royalties amounted to NT$870 thousand and NT$922 thousand in 2025 and 2024 respectively. The payments were recognized as marketing expense.

B. Others

The Group has successively acquired nearby agricultural land for the plant planning. However, under the current regulations, the ownership of agricultural lands could not be registered under Sinphar. Therefore, the Group has appointed the other related party, Shu Fei Yu, to be the owner the land. Please refer to the property, plant and equipment session in Note 6(9) for more information.

(3.) Key management compensation

The remuneration to the Board of Directors and main management personnel were as follows:

	For the Year Ended December 31
	2025	2024
Salaries and other short-term employee benefits	$ 48,570	$ 77,076

The above-mentioned compensation for the year 2025 and 2024 includes severance pay related to the settlement of years of service under the defined benefit plan.

8. PLEDGED ASSETS

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

45 -

ITEM	31-Dec-25	31-Dec-24
Deposits in banks(classified within other current assets)	$ 817	$ 812
Property, plant and equipment, net	1,870,835	1,925,597
Right-of-use assets	14,465	14,943
Intangible assets	1,640	3,279
Total	$ 1,887,757	$ 1,944,631

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Group as of December 31, 2025 were as follows:

(1.) As of December 31, 2025, the Company issued guarantee notes to the Ministry of Economic Affairs' for Industry Innovation Platform Program amounting to NT$11,000 thousand.

(2.) The National Health Research Institutes (NHRI) and the Group entered into an exclusive license contract to transfer a new anticancer drug developing technology to SynCore in August 2008. According to this contract, after the authorized drug approved for commercialization, the Group will pay a certain percentage of net revenue for sales royalty fee, except for the fixed amounted license fee.

(3.) MacuCLEAR (an American Group) and the Group entered into the technology license contract to obtain the exclusive license of prescription to manufacture and market the new drug for dry age-related macular degeneration in Asia and Australia in November 2011. According to this contract, the Group will pay a certain percentage of sales profit for sales royalty fee.

(4.) Medigene (a German Company) and the Group entered into the agreement for the license of phase III clinical trial and collaboration development of the new anticancer drug "EndoTAG-1" (SB05). Based on the business developing strategy, the Group had revised the partial terms and conditions of the agreement with Medigene. The final revised agreement state that the Group obtained the complete rights of the EndoTAG technology platform (including developing the original item (SB05) and its derivative diseases, new item for diseases, new technology platform and new derivatives). The license fee was on a country-by-country basis no more than EUR 4,000 thousands and on the basis of certain percentage of net sales after the new drug (SB05) approved for commercialization.

(5.) Capital expenditures committed but not yet incurred are as follows

ITEMS	31-Dec-2025	31-Dec-2024
Property, plant and equipment	$ 83,958	$ 49,419

SIGNIFICANT LOSSES FROM DISASTERS: None.
SIGNIFICANT EVENTS AFTER REPORTING PERIOD: None.
OTHER INFORMATION

(1) Capital risk management

The Group requires an adequate capital structure to enable expansion and enhancement of its plant and equipment. Therefore, the Group manages its capital in a manner to ensure that it has sufficient and necessary financial resources to fund its working capital needs, capital asset purchases, research and development activities, dividend payments, debt service requirements and other business requirements associated with its existing operations over the next 12 months.

(2) FINANCIAL INSTRUMENTS

A. Financial Risk associated with financial instrument.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s risk management objectives are to manage the market risk (including foreign currency risk, interest risk and price risk), credit risk and liquidity risk related to its operating activities. The Group identifies measures and manages the aforementioned risks and mitigates the disadvantage impact on financial performance. The material treasury activities are reviewed by Audit Committees and/or Board of Directors in accordance with procedures required by relevant regulations or internal controls. During the implementation of such plans, Corporate Treasury function must comply with certain treasury procedures that provide guiding principles for overall financial risk management and segregation of duties.

The nature and degree of the significant financial risks are described as follows:

(A) Market risk

a. Foreign currency risk

(a.) The Group is exposed to the foreign currency risk due to the transaction of sales, purchase and cash denominated in foreign currency other than the Group’s functional currency. These non-functional currencies are USD, RMB, CAD, EUR, JPY and HKD.

(b.) Sensitivity analysis of foreign currency risk

Significant financial assets and liabilities denominated in foreign currencies are as follows:

	31-Dec-25
	Foreign Currencies (In Thousands)	Exchange Rate	Carrying Amount (In Thousands)
Financial assets
Monetary items
USD:NT$	$ 5,295	31.43	$ 166,410
RMB:NT$	45,600	4.5	205,016
CAD:NT$	1,823	22.94	41,818
EUR:NT$	107	36.9	3,962
JPY:NT$	886	0.2	178
HKD:NT$	117	4.04	474
Financial liabilities
Monetary items
USD:NT$	$ 91	31.43	$ 2,851
RMB:NT$	7,375	4.5	33,156
CAD:NT$	2	22.94	43
EUR:NT$	33	36.9	1,234
JPY:NT$	1,663	0.2	334

46 -

31-Dec-24

	Foreign Currencies (In Thousands)	Exchange Rate	Carrying Amount (In Thousands)
Financial assets
Monetary items
USD:NT$	$ 7,599	32.79	$ 249,148
RMB:NT$	43,312	4.48	193,953
CAD:NT$	1,965	22.82	44,831
EUR:NT$	108	34.14	3,677
JPY:NT$	8,632	0.21	1,812
HKD:NT$	117	4.22	495
Non-monetary items
EUR:NT$	114	34.14	3,908
Financial liabilities
Monetary items
USD:NT$	$ 122	32.79	$ 4,001
RMB:NT$	6,711	4.48	30,052
CAD:NT$	2	22.82	44
EUR:NT$	278	34.14	9,495

The foreign currency sensitivity analysis of the Group due to significant exchange rate fluctuations is as follows:

Sensitivity analysis	For the Year Ended December 31
	2025			2024
	Extent of variation	Impact on Profit or loss	Impact on Equity	Extent of variation	Impact on Profit or loss	Impact on Equity
Financial assets
Monetary items
USD:NT$	1%	$ 1,664	$ -	1%	$ 2,491	$ -
RMB:NT$	1%	2,050	-	1%	1,940	-
CAD:NT$	1%	418	-	1%	448	-
EUR:NT$	1%	40	-	1%	37	-
JPY:NT$	1%	2	-	1%	18	-
HKD:NT$	1%	5	-	1%	5	-
Non-monetary items
EUR:NT$	1%	-	-	1%	-	39
Financial liabilities
Monetary items
USD:NT$	1%	$ 29	$ -	1%	$ 40	$ -
RMB:NT$	1%	332	-	1%	301	-
CAD:NT$	1%	-	-	1%	-	-
EUR:NT$	1%	12	-	1%	95	-
JPY:NT$	1%	-	-	1%	-	-

47 -

If New Taiwan dollar strengthened against the relevant currency and all other variables were held constant, there would be an equal and opposite impact on profit or loss and other equity as of December 31, 2025, and December 31, 2024.

(c.) Since there were varieties of foreign currencies within the Group, the Group disclosed the summarized foreign exchange gains (losses) information of monetary items. The realized and unrealized foreign exchange gains were NT$ (19,001) thousand and NT$ 13,428 thousand for the year ended December 31, 2025 and 2024, respectively.

The Group believes the unrealized exchange gain (loss) of fluctuation risk on foreign currency monetary item is insignificant.

b. Price risk

The Group is exposed to price risk primarily related to its investment in instruments classified as financial assets at FVTPL and financial assets at FVTOCI.

The Group primarily invested in the domestic and foreign publicly traded and unlisted stocks and the domestic beneficiary certificates. The instruments prices are affected by the uncertainties of the investment targets' future value.

Assuming a hypothetical increase/decrease of 1% in prices of the equity instruments at the end of the reporting period, the other comprehensive income for the years ended December 31, 2025 and 2024 would have increased/decreased by NT$ 527 thousand and NT$ 546 thousand, respectively, as they were classified as financial assets at FVTOCI. Assuming a hypothetical increase/decrease of 1% in prices of the domestic beneficiary certificates, the net loss for the years ended December 31, 2025 and 2024 would have increased/decreased by NT$ 71 thousand and NT$ 70 thousand, respectively, as they were classified as financial assets at FVTPL.

c. Interest rate risk

The carrying amounts of the Group's financial assets and financial liabilities exposed to interest rate risk were as follows:

Item	Carrying Amount
	31-Dec-25	31-Dec-24
Fair value interest rate risk
Financial assets	$ 386,366	$ 363,489
Financial liabilities	-	-
Net	$ 386,366	$ 363,489
Cash flow interest rate risk
Financial assets	$ 599,237	$ 805,247
Financial liabilities	(1,508,877)	(1,902,495)
Net	$ (909,640)	$ (1,097,248)

(a.) Sensitivity analysis: Fair value interest rate risk

The Group did not designate any fixed interest rate financial instruments as fair value through profit or loss and derivatives instruments (interest rate swaps) to hedge its exposures to changes in fair values. As such, changes in interest rate would not affect the net income and the other comprehensive income at the end of the reporting period.

(b.) Sensitivity analysis: Cash flow interest rate risk

The Group's variable-rate financial instruments are floating-rate assets (liabilities).

48 -

Therefore, changes in market interest rates will cause their effective interest rates to change, resulting in fluctuations in future cash flows. A 1% increase (decrease) in market interest rates would have increased (decreased) net income for the years ended December 31, 2025 and 2024 by NT$9,096 thousand and NT$10,972 thousand, respectively.

(B) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial losses to the Group. The Group is exposed to credit risk from operating activities, primarily from account receivables, and from investing activities, primarily from bank deposits, fixed-income investments and other financial instruments. The Group managed the credit risk separately for business related and financial related risk.

a. Business related credit risk:

To maintain the quality of account receivable, the Group has established related credit risk management procedure. The risk assessment of individual customer includes evaluating financial position, internal evaluation, historical trading records and economic circumstance which could affect the payment ability of the customer. The Group may choose to strengthen overall risk management including collection in advance or credit insurance to mitigate the credit risk of certain customers.

b. Financial credit risk:

The financial department of the Group regularly monitors and reviews the credit risk of bank deposit and other financial instruments. The Group mitigates its exposure by selecting counterparties (banks, financial institutions, Group organizations and government authorities) with well credit and investment-grade credit ratings. The credit risk is insignificant. The Group has no debt instrument classified as financial assets measured at amortized cost and financial assets at FVTOCI.

(a.) Concentration of credit risk

As of December 31, 2025 and 2024, accounts receivable from the top 10 customers represent 24.08%, and 21.29% of total accounts receivables of the Group, respectively. The Group believes the concentration risk is insignificant for the remaining accounts receivable.

(b.) Expected credit impairment losses measurement

Notes receivable and Accounts receivable: Simplified approach, please refer to Note 6(4.) and (5).
Judgment on whether credit risk increasing significantly: None.

(C) Liquidity risk

a. Liquidity risk management

The Group's objective of managing liquidity risk is to maintain sufficient cash and cash equivalents required for operations, high liquidity securities, and bank financing lines for operations, and to ensure that the Group has sufficient financial flexibility.

b. Maturity analysis for financial liabilities:

Non-derivative financial liabilities	31-Dec-25
	Less than 6 Months	6–12 Months	1–2 Years	2–5 Years	Over 5 Years	Contractual Cash flows	Carrying Amount
Short-term loans	$ 58,000	$ 130,000	$ -	$ -	$ -	$ 188,000	$ 188,000
Lease liabilities	294	294	310	-	-	898	884

50 -

Non-derivative financial liabilities	31-Dec-25
	Less than 6 Months	6-12 Months	1-2 Years	2-5 Years	Over 5 Years	Contractual Cash flows	Carrying Amount
Notes payable	149	-	-	-	-	149	149
Accounts Payable	210,344	-	-	-	-	210,344	210,344
Other payable	171,150	24,343	-	-	-	195,493	195,493
Long-term borrowing, including current portion	23,960	24,158	1,265,404	7,355	-	1,320,877	1,320,877
Total	$ 463,897	$ 178,795	$ 1,265,714	$ 7,355	$ -	$ 1,915,761	$ 1,915,747
Non-derivative financial liabilities	31-Dec-24
---	---	---	---	---	---	---	---
	Less than 6 Months	6-12 Months	1-2 Years	2-5 Years	Over 5 Years	Contractual Cash flows	Carrying Amount
Short-term loans	$ 111,000	$ 259,000	$ -	$ -	$ -	$ 370,000	$ 370,000
Notes payable	233	-	-	-	-	233	233
Accounts Payable	185,212	-	-	-	-	185,212	185,212
Other payable	156,295	24,011	-	-	-	180,306	180,306
Long-term borrowing, including current portion	327,478	23,812	1,146,312	34,893	-	1,532,495	1,532,495
Total	$ 780,218	$ 306,823	$ 1,146,312	$ 34,893	$ -	$ 2,268,246	$ 2,268,246

The Group doesn't expect the timing of occurrence of the cash flows estimated through the maturity date analysis will be significantly earlier, nor expect the actual cash flow amount will be significantly different.

B. Categories of financial instruments

The following is the carrying amounts of the financial assets and financial liabilities of the Group at December 31, 2025 and December 31, 2024.

	31-Dec-25	31-Dec-24
Financial assets
Financial assets measured at amortized cost
Cash and cash equivalents	$ 864,139	$ 1,075,672
Financial assets at amortized cost - current	123,416	95,409
Net, notes and accounts receivable	713,858	641,900
Refundable deposits	18,305	19,410
Financial assets at FVTPL – current	7,071	6,956
Financial assets at FVTPL – non-current	-	-
Financial assets at FVTOCI – non-current	52,684	54,640

51 -

	31-Dec-25	31-Dec-24
Financial liabilities
Financial liabilities at amortized cost
Short-term loans	188,000	370,000
Net, notes and accounts payable	210,493	185,445
Other payable	195,493	180,306
Long-term loans (Including the current portion)	1,320,877	1,532,495

(3.) Fair value information

A. For the fair value of financial instruments that are not measured at fair value, please refer to the Note 12 (3.)B.

Fair value hierarchy definition

Level 1

Fair value measurements of the Level 1 are those derived from quoted prices in active markets for identical financial instruments. An active market is a market in which transactions for identical instrument take place with sufficient frequency and volume to provide public pricing information on an ongoing basis. The domestic and foreign publicly traded stocks and the domestic beneficiary certificates invested by the Group were classified as this hierarchy.

Level 2

Fair value measurements are those derived from inputs other than quoted prices included within Level 1 that observable for the instrument, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3

Fair value measurements are those derived from valuation techniques that include inputs for instrument that are not based on observable market data. The Group invested in equity investments without active market included within level 3.

B. Financial instruments that are not measured at fair value

The Group considers the carrying amounts of financial instruments that are not measured at fair value, such as cash and cash equivalents, notes and accounts receivables, other financial assets, refundable deposits, notes and accounts payable, approximate their fair values.

C. Fair value hierarchy information

The information on the Group's assets and liabilities that are measured at fair value on a recurring basis is as follows:

Items	31-Dec-25
	Level 1	Level 2	Level 3	Total
Asset:
Fair value on a recurring basis
Financial assets measured at FVTPL
Beneficiary certificates	$ 7,071	$ -	$ -	$ 7,071
Foreign unlisted publicly traded preference share	-	-	-	-

	31-Dec-25
Items	Level 1	Level 2	Level 3	Total
Financial assets at FVTOCI
Domestic listed (OTC) Stocks	38,147	-	-	38,147
Domestic unlisted ordinary shares	-	-	14,537	14,537
Foreign publicly traded stocks
Foreign unlisted publicly traded preference share	-	-	-	-
Total	$ 45,218	$ -	$ 14,537	$ 59,755
	31-Dec-24
Items	Level 1	Level 2	Level 3	Total
Asset:
Fair value on a recurring basis
Financial assets measured at FVTPL
Beneficiary certificates	$ 6,956	$ -	$ -	$ 6,956
Foreign unlisted publicly traded preference share	-	-	-	-
Financial assets at FVTOCI
Domestic listed (OTC) Stocks	34,776			34,776
Domestic unlisted ordinary shares	-	-	15,956	15,956
Foreign publicly traded stocks	3,908	-	-	3,908
Foreign unlisted publicly traded preference share	-	-	-	-
Total	$ 45,640	$ -	$ 15,956	$ 61,596

D. The valuation techniques and assumptions used by the Group to measure the fair value of instruments are as follows:

(A.) If there is an active market for the financial instruments, the fair value of the financial instruments is measured by using the quoted market prices. The quoted market prices announced by the main market place and the prices of government bonds classified as popular securities announced by Taipei Exchange (TPEx) are deemed as fair value foundation of publicly traded equity instruments and debt instruments with an active market.

If there are timely and frequent quoted prices from the exchange market, the broker, the dealer, industry association, price service organization, or the administrative, and the prices represent actual, frequent, and fair trades, the financial instruments are deemed as with an active market. Otherwise, the market is deemed as not active. In general, huge price gap, price gap apparently expanding, and small trading volume were indicators of a not active market.

The financial instruments held by the Group with active market quoted prices as their fair value are listed below by characteristics:

a. Publicly traded stock: Closing price
b. Beneficiary certificates: Net value

(B.) Except for the aforementioned financial instruments with active market, the fair value of other financial instruments is measured by valuation technique or quotation of counterparties. The fair

value from valuation technique could refer to the fair value of other financial instruments with similar substantial conditions and characteristics, discounted cash flow method and other valuation technique including model with observable market information on balance sheet date (e.g. yield curve of TPEx, quoted interest rate of Reuters commercial Note).

The fair values of non-listed equity investments were Level 3 fair value assets, and determined using the market approach by reference the peer companies valuation, third party quotation, net value and operation status. The significant unobservable input used was discount for lack of marketability. A movement in discount for the lack of marketability would not result in significant changes in the fair values.

(C.) The Group considered the credit risk evaluation adjustment for financial instruments and non-financial instruments to reflect the credit risk of the counterparty and the credit quality of the Group.

(D.) Valuation techniques used in Level 3 fair value Measurement:

The evaluation procedure of the financial instruments belong to Level 3 is verified by the financial department of the Group through verifying the independent source inputs to make sure the evaluation results closing to the market status. To make sure the reasonability of the evaluation results, the financial department verify the independence and reliability of source data, test and renew the input data, model and other necessary inputs.

(E.) There were no transfers between different fair value hierarchy for the years ended December 31, 2025 and 2024, respectively.

13. SEPARATELY DISCLOSED ITEMS

(1.) Information about significant transactions:

A. Loans to other parties: None.
B. Guarantees and endorsements for other parties: Table 1.
C. Marketable securities held at the end of the period: Table 2.
D. Marketable securities acquired or disposed of at costs or prices amounting to NT$100 million or 20% of the paid-in capital or more: None.
E. Receivables from related parties amounting to NT$100 million or 20% of the paid-in capital or more: None.
F. Business relationships and significant intercompany transactions: Table 3.

(2.) Information of investees: Table 4.

(3.) Information on investments in mainland China:

A. Information on investments in mainland China in which the Group exercised direct or indirect significant influence, control or joint control over the investee: Table 5.
B. Significant direct or indirect transactions with the investee in mainland China, its prices, terms of payment, unrealized gain or loss, and other related information helpful to understand the impact of investments in mainland China on the financial statements: Table 3.

14. SEGMENT INFORMATION

(1.) For the purpose of management, the chief operating decision-maker, the operation is separated based on business unit and have three reportable segments: Pharmaceuticals, Healthy food, and others. In addition, the Group does not put the asset and liability items into consideration when making an

53 -

operation decision. Thus, there is no need to disclose the related asset and liability information of the reportable segments.

(2.) Segment revenue and result

	Net revenue from external customers
	2025	2024
Pharmaceutical	$ 2,070,858	$ 2,068,586
Healthy food	1,184,733	973,166
Others	115,730	108,876
Total	$ 3,371,321	$ 3,150,628
	Segment operating
	2025	2024
Pharmaceutical	$ 442,142	$ 402,040
Healthy food	340,852	269,400
Others	32,205	22,450
Total	$ 815,199	$ 693,890
(3.) Reconciliations of the segments’ income
	2025	2024
Income from reportable segments	$ 815,199	$ 693,890
Unallocated corporate expenses	(398,341)	(400,026)
Non-operating incomes and expenses	(15,334)	13,236
Income before tax from continuing operation	$ 401,524	$ 307,100

(4.) Geographical information

Areas	For the Year Ended December 31
	2025	2024
Sales from external customers:
Taiwan	$ 2,922,848	$ 2,748,026
Mainland China	209,243	202,032
America	59,403	47,384
Indonesia	46,088	23,248
Vietnam	43,489	46,997
Others	90,250	82,941
Total	$ 3,371,321	$ 3,150,628

(5.) Major Customer Information:

For the year ended December 31, 2025 and 2024, the Group does not have customers representing over 10% of net revenue. Therefore, no major customer information was disclosed.

Sinphar Pharmaceutical Co., Ltd. and Subsidiaries

TABLE 1

Endorsements/Guarantees provided

For the Year Ended December 31, 2025

(Amounts in thousands of New Taiwan Dollars, Unless Specified Otherwise)

No. (Note1)	Endorsement / Guarantee Provider	Guaranteed Party		Limits on Endorsement/ Guarantee Amount Provided to Each Guaranteed Party (Note 3)	Maximum Balance for the Period	Ending Balance	Amount Actually Drawn	Amount of Endorsement/ Guarantee Collateralized by Properties	Ratio of Accumulated Endorsement/ Guarantee to Net Equity per Latest Financial Statements	Maximum Endorsement/ Guarantee Amount Allowable (Note 4)	Guarantee Provided by Parent Company	Guarantee Provided by A Subsidiary	Guarantee Provided to Subsidiaries in Mainland China
		Name	Nature of relationship (Note 2)
0	Sinphar Pharmaceutical Co., Ltd.	ZuniMed Biotech Co., Ltd.	1	$ 1,377,549	$ 30,000	$ 30,000	$ 8,000	$ -	0.87%	$ 1,721,936	Y	—	—
0	Sinphar Pharmaceutical Co., Ltd.	SynCore Biotechnology Co., Ltd.	1	$ 1,377,549	$ 250,000	$ 200,000	$ -	$ -	5.81%	$ 1,721,936	Y	—	—
1	ZuniMed Biotech Co., Ltd.	Sinphar Pharmaceutical Co., Ltd	2	$ 40,811	$ 25,000	$ 25,000	$ 25,000 (Note 5)	$ -	24.50%	$ 51,014	—	Y	—

Note 1: (1) The issuer fills in "0". (2) The subsidiaries are numbered in order starting from "1".
Note 2: (1) The endorser/guarantor parent company owns directly and indirectly more than the 50% voting shares of the endorsed/guaranteed subsidiary.
(2) The endorsed/guaranteed company owns directly and indirectly more than 50% voting shares of the endorser/guarantor parent company.
Note 3: Maximum endorsement/guarantee amount allowable is 40% of the net worth of the Endorsement/Guarantee Provider.
Note 4: Maximum endorsement/guarantee amount allowable is 50% of the net worth of the Endorsement/Guarantee Provider.
Note 5: It is a supply guarantee for the medical institution.

Sinphar Pharmaceutical Co., Ltd. and Subsidiaries

TABLE 2

Marketable Securities Held (Excluding Subsidiaries, Associate and Joint Venture)

As of December 31, 2025

(Amounts in thousands of New Taiwan Dollars, Unless Specified Otherwise)

Held Company Name	Marketable Securities Type and Name	Relationship with Sinphar	Financial Statement Account	December 31, 2025				Note
				Shares/Units	Carrying Value	Percentage of Ownership	Fair Value
Sinphar Pharmaceutical Co., Ltd.	Synmosa Biopharma Corporation	—	Financial assets at fair value through other comprehensive income(Non-Current)	1,177,390.00	$ 38,147	0.23%	$ 38,147	-
Sinphar Pharmaceutical Co., Ltd.	Datun Entertainment Development Co., Ltd.	—	Financial assets at fair value through other comprehensive income(Non-Current)	7.00	14,537	0.59%	14,537	-
SynCore Biotechnology Co., Ltd.	Fuh Hwa Money Market	—	Financial assets at fair value through profit or loss(Current)	252,743.00	3,839	-	3,839	-
SynCore Biotechnology Co., Ltd.	Fuh Hwa You Li Money Market	—	Financial assets at fair value through profit or loss(Current)	152,110.90	2,157	-	2,157	-
SynCore Biotechnology Co., Ltd.	JPMorgan (Taiwan) Glbl Fd of Bd Fds Inc	—	Financial assets at fair value through profit or loss(Current)	90,062.20	1,075	-	1,075	-

Sinphar Pharmaceutical Co., Ltd. and Subsidiaries

TABLE 3

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS

FOR THE YEAR ENDED DECEMBER 31, 2025

(Amounts in Thousands of New Taiwan Dollars)

No. (Note1)	Company Name	Counter-party	Nature of Relationships (Note 2)	Transaction Details
				Financial Statements Item	Amount	Transaction Terms	Percentage of consolidated revenue or assets%
0	Sinphar Pharmaceutical Co., Ltd.	Sinphar Tian-Li Pharmaceutical Co., Ltd.(Hangzhou)	1,2	Purchase	$ 55,021	Note 4	2%
0	Sinphar Pharmaceutical Co., Ltd.	Sinphar Tian-Li Pharmaceutical Co., Ltd.(Hangzhou)	1,2	Accounts Payable	18,844	Note 4	-
0	Sinphar Pharmaceutical Co., Ltd.	ZuniMed Biotech Co., Ltd.	1,2	Purchases	81,207	Note 4	2%
0	Sinphar Pharmaceutical Co., Ltd.	ZuniMed Biotech Co., Ltd.	1,2	Accounts Payable	12,093	Note 4	-
0	Sinphar Pharmaceutical Co., Ltd.	SynCore Biotechnology Co., Ltd.	1,2	Sales Revenue	11,614	Note 4	-
0	Sinphar Pharmaceutical Co., Ltd.	SynCore Biotechnology Co., Ltd.	1,2	Rental Income	9,800	Note 5	-
0	Sinphar Pharmaceutical Co., Ltd.	SynCore Biotechnology Co., Ltd.	1,2	Other Income	8,493	-	-
1	Sinphar Tian-Li Pharmaceutical Co., Ltd.(Hangzhou)	Hetian Tianli Shasheng Pharmaceutical Development Co., Ltd.	3	Purchases	16,430	Note 4	-
1	Sinphar Tian-Li Pharmaceutical Co., Ltd.(Hangzhou)	Hetian Tianli Shasheng Pharmaceutical Development Co., Ltd.	3	Accounts Payable	3,804	Note 6	-

Note 1: Sinphar and its subsidiaries are coded as follows:
1. Sinphar is coded "0".
2. The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.

Note 2: The relationship with the trader has the following three types:
1. Parent Company to a subsidiary.
2. Subsidiary to the parent Company.
3. Subsidiary to subsidiary.

Note 3: For the calculation of the ratio of the transaction amount to consolidated revenue or assets, if it is an asset-liability item, it is calculated by the balance at the end of the period in the consolidated assets; if it is a profit and loss item, it is calculated by the cumulative amount in the period as a share of the consolidated revenue.

Note 4: There is no significant difference of receive (payment) terms and price based on the actual transaction terms from general customers, the receive (payment) term is 30 to 365 days.

Note 5: The rent is determined by the general rental market price in the nearby areas and the mutual agreements from both parties. The rental income is received monthly according to the contract term.

Note 6: The selling price is determined by mutual agreement and general market price. Prepayment shall be made in advance according to the pre-ordered quantity during the credit period. A new selling price for the exceeded quantity will be negotiated if the actual quantity exceeds the scheduled quantity.

Sinphar Pharmaceutical Co., Ltd. and Subsidiaries

TABLE 4
Name, Location, and Related Information of Investees Over Which Sinphar Exercise Significant Influence (Excluding Information On Investment In Mainland China) as of December 31, 2025
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount		Balance as of December 31, 2025			Net Income (Losses) of the Investee	Share of Profits / Losses of Investee	Notes
				December 31, 2025	December 31, 2024	Shares	Percentage of Ownership	Carrying Value
Sinphar Pharmaceutical Co., Ltd.	CANCAP PHARMACEUTICAL LTD.(Ordinary shares)	Canada	Production and sale of healthy food	$ 92,255	$ 92,255	2,000,000	100.00%	$ -	$ (2,865)	$ (2,865)	Subsidiary
Sinphar Pharmaceutical Co., Ltd.	CANCAP PHARMACEUTICAL LTD.(Preference shares)	Canada	Production and sale of healthy food	126,247	126,247	51,500	100.00%	42,269	(2,865)	-	Subsidiary
Sinphar Pharmaceutical Co., Ltd.	SUNETIC BIOTECH INC.	Mauritius	Investment business	745,748	745,748	18,854,534	83.47%	883,276	46,824	27,661	Subsidiary
Sinphar Pharmaceutical Co., Ltd.	UNIVERSAL NEXT TECHNOLOGIES INC.	British Virgin Islands	Investment business	17,467	17,467	503,845	100.00%	50	-	-	Subsidiary
Sinphar Pharmaceutical Co., Ltd.	ZuniMed Biotech Co., Ltd.	Taiwan	Production and sale of medical appliances	109,990	109,990	10,300,000	100.00%	96,437	3,931	2,910	Subsidiary
Sinphar Pharmaceutical Co., Ltd.	SynCore Biotechnology Co., Ltd.	Taiwan	Biotechnology service	1,864,935	1,864,935	22,597,472	64.26%	157,701	(45,755)	(29,445)	Subsidiary
SynCore Biotechnology Co., Ltd.	SynCore Biotechnology Europe GmbH	Germany	New drugs development and biotechnology service	834	834	25,000	100.00%	840	19	19	Subsidiary

Note1 : The shares of profits/losses of investee were calculated based on the financial statements audited by the CPAs. The effect of realized (unrealized) gains and losses have already been considered.

Sinphar Pharmaceutical Co., Ltd. and Subsidiaries

TABLE 5

INFORMATION ON INVESTMENT IN MAINLAND CHINA

FOR THE YEAR ENDED DECEMBER 31, 2025

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

Investee Company	Main Businesses and Products	Total Amount of Paid-in Capital (RMB in Thousands)	Method of Investment	Accumulated Outflow of Investment from Taiwan as of January 1, 2025	Investment Flows		Accumulated Outflow of Investment from Taiwan as of December 31,2025	Net Income (Losses) of Investee Company	Percentage of Ownership	Shares of Profits/Losses (note 1)	Carrying Amount as of December 31, 2025	Accumulated Inward Remittance of Earnings as of December 31,2025
					Outflow	Inflow
Sinphar Tian-Li Pharmaceutical Co., Ltd.(Hangzhou)	Production and sales of raw materials, pharmaceuticals	RMB 193,005	Indirect investment in mainland China by SUNETIC BIOTECH INC., an 83.47% owned subsidiary of Sinphar	$ 645,635 (USD 19,786 thousand)	-	-	$ 645,635 (USD 19,786 thousand)	$ 47,535	83.47%	$ 28,254	$ 915,825	$ 179,317
Hetian Tianli Shasheng Pharmaceutical Development Co., Ltd.	Scientific research and production and sales of shasheng Pharmaceutical	RMB 10,000	Indirect investment in mainland China by Sinphar Tian-Li Pharmaceutical Co., Ltd.(Hangzhou), a sub-subsidiary Company of which Sinphar holds 83.47% of the total shares	-	-	-	-	(8,658)	75.96%	(5,540)	70,652	-
Hangzhou Vitrum Healthy Food Co., Ltd.	Sale of healthy food	RMB 30,000	Indirect investment in mainland China by Sinphar Tian-Li Pharmaceutical Co., Ltd.(Hangzhou) a sub-subsidiary Company of which Sinphar holds 83.47% of the total shares.	-	-	-	-	(105)	83.47%	(87)	1,081	-
Accumulated Investment in Mainland China as of December 31, 2025 (US$ in Thousands)	Investment Amounts Authorized by Investment Commission, MOEA (US$ in Thousands)	Upper Limit on Investment (Note 3)
---	---	---
652,200 (USD 19,986(Note 2))	795,845 (USD 25,321)	2,066,323

Note 1 : The shares profits/losses of investee were calculated based on the financial statements audited by the R.O.C. CPAs of the parent Group.
Note 2 : The amount included the indirect investment of UNIVERSAL NEXT TECHNOLOGY INC to Qinghai Mingxing Bio-Engineering Co., amounting to USD$ 200 thousand, which has already been cancelled by the Investment Board.
Note 3 : According to the regulations of the Investment Commission of the Ministry of Economic Affairs, the upper limit of the cumulative amount of its investment in the mainland is 60% of the net value.

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SINPHAR — Audit Report / Information 2025

51911_rns_2026-05-29_3818d38e-a114-4e32-ac2f-0da80a0e89a2.pdf

Sinphar Pharmaceutical Co., Ltd and Subsidiaries

Tables of Contents

INDEPENDENT AUDITORS' REPORT

Opinion

Basis for Opinion

Key Audit Matters

Cash and Cash Equivalents

Inventory Valuation

Our key audit procedures in response

Revenue Recognition

Our key audit procedures in response

Intangible Assets Impairment

Other Matter

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

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Sinphar Pharmaceutical Co., Ltd and Subsidiaries

CONSOLIDATED BALANCE SHEETS

Sinphar Pharmaceutical Co., Ltd and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Sinphar Pharmaceutical Co., Ltd and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Sinphar Pharmaceutical Co., Ltd and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

4. SUMMARY OF MATERIAL ACCOUNTING POLICIES

(1.) Statement of Compliance

(2.) Basis of Preparation

(3.) Basis of Consolidation

(4.) Foreign Currencies

A. Foreign currency transaction

B. Translation of foreign operation

B. Royalties

C. Technical service

(18.) Borrowing costs

(19.) Government grants

(20.) Earnings per Share

5. SIGNIFICANT ACCOUNTING JUDGMENTS AND ASSUMPTIONS, AND MAJOR SOURCES OF ESTIMATION UNCERTAINTY

6. DETAILS OF SIGNIFICANT ACCOUNTS

(10.) Lease agreements

7. TRANSACTIONS WITH RELATED PARTIES

(1.) Names of related parties and relationship categories

(2.) Significant transactions with related parties

A. Trademarks and royalties

B. Others

(3.) Key management compensation

8. PLEDGED ASSETS

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

(B) Credit risk

a. Business related credit risk:

b. Financial credit risk:

(a.) Concentration of credit risk

(b.) Expected credit impairment losses measurement

(C) Liquidity risk

a. Liquidity risk management

b. Maturity analysis for financial liabilities:

B. Categories of financial instruments

(3.) Fair value information

13. SEPARATELY DISCLOSED ITEMS

14. SEGMENT INFORMATION

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS

INFORMATION ON INVESTMENT IN MAINLAND CHINA

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SINPHAR Audit Report / Information 2025