Stock Code : 1734

Sinphar Pharmaceutical Co., Ltd.

Parent Company Only 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	-
Balance Sheets	1
Statements of Comprehensive Income	2
Statements of Changes in Equity	3
Statements of Cash Flows	4
Notes to Financial Statements
1. General Information	5
2. The Authorization of the Financial Statements	5
3. Application of New and Amended Standards and Interpretations	5~6
4. Summary of Significant Accounting Policies	7~18
5. Significant Accounting Judgments and Assumptions, and Major Sources of Estimation Uncertainty	18~19
6. Description of Significant Accounts	19~38
7. Related Party Transactions	38~41
8. Pledged Assets	41
9. Significant Contingent Liabilities and Unrecognized Contract Commitments	41
10. Significant Disaster Losses	41
11. Significant Subsequent Events	41
12. Others	41~48
13. Supplementary Disclosures
A. Significant transactions information	48
B. Information on investees	48
C. Information on investments in Mainland China	48
14. Segment Information	48
15. Statements Of Major Accounting Items	53~65

INDEPENDENT AUDITORS' REPORT

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

Opinion

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

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as of December 31,2025 and 2024, and its financial performance and its 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.

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 Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements for the year ended December 31, 2025. These matters were addressed in the context of our audit of the parent company only 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 Company's parent company only financial statements for the year ended December 31, 2025 are stated as follows:

Inventory Valuation

Please refer to Note 4(7.) and 5(2.) in the accompanying parent company only financial statements for related disclosures of the Company's valuation of inventory accounting policies and critical accounting estimate and assumption.

The Company 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 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 parent company only financial statements for related disclosures of the Company's revenue recognition accounting policies and critical accounting estimate and assumption.

Some products of the Company 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.

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

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulation Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditors' Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent company only 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 parent company only 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 parent company only 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 Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the parent company only financial statements or, if such disclosure are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only 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 entity or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for direction, supervision and performance of the investee 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 parent company only 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
The Republic of China

March 10, 2026

For the convenience of readers and for information purpose only, the auditors' report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors' report and financial statements shall prevail.

Sinphar Pharmaceutical Co., Ltd.

PARENT COMPANY ONLY 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)	$ 470,738	8	$ 701,496	12
Financial assets at amortized cost – current	6 (2)	3,642	-	3,926	-
Notes receivable, net	6 (3)	137,975	2	146,625	2
Accounts receivable, net	6 (4) and 6(20)	526,313	9	467,592	8
Inventories	6 (5)	669,550	12	606,351	10
Prepayments		42,269	1	41,239	1
Other current assets	7 (3)	7,870	-	2,980	-
Total current assets		1,858,357	32	1,970,209	33
NONCURRENT ASSETS
Financial assets at fair value through profit and loss, non-current	6 (6)	42,269	1	44,981	1
Financial assets at fair value through other comprehensive income, non-current	6 (6)	52,684	1	50,732	1
Investments accounted for using equity method	6 (7)	1,137,464	20	1,133,520	19
Property, plant and equipment	6 (8), 7 (3) and 8	2,300,584	40	2,320,362	39
Right-of-use assets	6 (9)	880	-	-	-
Investment property, net	6 (10) and 8	109,819	2	110,604	2
Intangible assets	6 (11) and 8	22,539	-	28,282	1
Deferred tax assets	6 (25)	195,485	3	185,366	3
Prepayments for equipment		49,019	1	29,114	1
Refundable deposits		16,980	-	18,498	-
Other non-current assets		17,430	-	20,346	-
Total non-current assets		3,945,153	68	3,941,805	67
TOTAL		$ 5,803,510	100	$ 5,912,014	100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term loans	6 (12)	$ 150,000	3	$ 330,000	6
Contract liabilities-current	6 (20)	102,286	2	93,389	1
Notes payable		2	-	38	-
Accounts payable	7 (3)	231,333	4	186,539	3
Other payable	6 (13) and 7(3)	323,635	5	303,802	5
Current tax liabilities		51,170	1	36,918	1
Lease liabilities – current	6 (9)	576	-	-	-
Long-term loans - current portion	6 (14) and 8	45,746	1	348,976	6
Other current liabilities, others		44,063	1	42,494	1
Total current liabilities		948,811	17	1,342,156	23
NONCURRENT LIABILITIES
Long-term loans	6 (14) and 8	1,269,898	22	1,175,941	20
Lease liabilities – non-current	6 (9)	308	-	-	-
Net defined benefit liability, non-current	6 (15)	22,265	-	15,089	-
Other non-current liabilities, others	6 (25) and 7(3)	118,355	2	115,627	2
Total non-current liabilities		1,410,826	24	1,306,657	22
Total liabilities		2,359,637	41	2,648,813	45
EQUITY
Capital stock	6 (16)	1,901,968	33	1,811,398	31
Capital surplus	6 (17)	924,140	16	924,140	15
Retained earnings	6 (18)
Legal capital reserve		211,577	4	179,959	3
Special capital reserve		137,171	2	137,171	2
Unappropriated retained earnings		364,268	6	331,295	6
Total retained earnings		713,016	12	648,425	11
Other Equity	6 (19)	(95,251)	(2)	(120,762)	(2)
Total equity		3,443,873	59	3,263,201	55
TOTAL LIABILITIES AND EQUITY		$ 5,803,510	100	$ 5,912,014	100

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

Sinphar Pharmaceutical Co., Ltd.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

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

ITEM	Note	2025		2024
		Amount	%	Amount	%
NET REVENUE	6 (20) and 7 (3)	$ 3,066,355	100	$ 2,860,315	100
COST OF REVENUE	6 (5), 6(23) and 7 (3)	(1,772,307)	(58)	(1,726,564)	(60)
GROSS PROFIT		1,294,048	42	1,133,751	40
Less: Unrealized profit on sales		(3,435)	-	(768)	-
Add: Realized profit on sales		768	-	568	-
GROSS PROFIT		1,291,381	42	1,133,551	40
OPERATING EXPENSES	6 (23) and 7 (3)
Selling expenses		(615,802)	(20)	(528,180)	(18)
Administrative expenses		(157,171)	(5)	(157,284)	(6)
Research and development expenses		(104,333)	(4)	(117,682)	(4)
Total operating expenses		(877,306)	(29)	(803,146)	(28)
NET OPERATIONS INCOME		414,075	13	330,405	12
NON-OPERATING INCOME AND EXPENSES
Interest income		6,652	-	11,622	1
Other income	6 (21) and 7 (3)	37,893	1	36,953	1
Other gains and losses	6 (22) and 7 (3)	(17,586)	-	10,812	-
Finance costs	6 (24)	(32,812)	(1)	(35,657)	(1)
Share of the loss of subsidiaries and associated and joint ventures accounted for using equity method	6 (7)	(1,739)	-	(30,241)	(1)
Total non-operating income and expenses		(7,592)	-	(6,511)	-
INCOME BEFORE INCOME TAX		406,483	13	323,894	12
INCOME TAX (EXPENSE) BENEFIT	6 (25)	(40,732)	(1)	(19,189)	(1)
NET INCOME		365,751	12	304,705	11
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 loss from investments in equity instruments measured at fair value through other comprehensive income		65	-	(611)	-
Share of other comprehensive loss of subsidiaries, associates and joint ventures accounted for using equity method		(2,164)	-	(5,249)	-
		(8,055)	-	5,611	-
Items that may be reclassified subsequently to profit or loss:
Exchange differences arising on translation of foreign operations		5,095	-	27,834	1
Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method		40	-	2	-
Income tax related to components of other comprehensive income that will be reclassified to profit or loss		(1,019)	-	(5,567)	-
		4,116	-	22,269	1
Other comprehensive income (loss) for the year, net of income tax		(3,939)	-	27,880	1
TOTAL COMPREHENSIVE INCOME FOR THE YEAR		$ 361,812	12	$ 332,585	12
EARNINGS PER SHARE	6 (26)
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.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars)

ITEM	Capital Stock		Retained Earning			Other Equity Interests		Total Equity
	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
Balance, January 1, 2024	$ 1,677,221	$ 924,140	$ 142,979	$ 121,367	$ 369,802	$ (92,720)	$ (44,451)	$ 3,098,338
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)
Stock dividends of ordinary share	134,177	-	-	-	(134,177)	-	-	-
Total appropriations of earnings	134,177	-	36,980	15,804	(354,683)	-	-	(167,722)
Net profit in 2024	-	-	-	-	304,705	-	-	304,705
Other comprehensive income (loss) in 2024, net of income tax	-	-	-	-	11,471	22,269	(5,860)	27,880
Total comprehensive income (loss) in 2024	-	-	-	-	316,176	22,269	(5,860)	332,585
Balance, December 31, 2024	1,811,398	924,140	179,959	137,171	331,295	(70,451)	(50,311)	3,263,201
Appropriations of earnings
Legal reserve appropriated	-	-	31,618	-	(31,618)	-	-	-
Cash dividends of ordinary share	-	-	-	-	(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)
Net profit in 2025	-	-	-	-	365,751	-	-	365,751
Other comprehensive income (loss) in 2025, net of income tax	-	-	-	-	(5,956)	4,116	(2,099)	(3,939)
Total comprehensive income (loss) in 2025	-	-	-	-	359,795	4,116	(2,099)	361,812
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

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

Sinphar Pharmaceutical Co., Ltd.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

ITEM	2025	2024
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	$ 406,483	$ 323,894
Adjustments for:
Depreciation expense (including investment property)	169,775	159,846
Amortization expense	16,964	25,989
Interest expense	32,812	35,657
Interest income	(6,652)	(11,622)
Dividend income	(641)	-
Share of loss of subsidiaries and associates and joint ventures accounted for using equity method, net	1,739	30,241
Loss (gain) on disposal of property, plant and equipment	(165)	-
Unrealized profit on sales	3,435	768
Realized profit on sales	(768)	(568)
Changes in operating assets and liabilities:
Notes receivable, net	8,650	17,275
Accounts receivable, net	(58,721)	(41,590)
Inventories	(63,199)	99,423
Prepayments	(1,030)	(5,458)
Other current assets	(5,594)	1,801
Contract liabilities	8,897	9,037
Notes payable	(36)	38
Accounts payable	44,794	(115,657)
Other payable	20,157	10,996
Other current liabilities	1,569	5,240
Net defined benefit liability	1,220	(8,992)
Other operating liabilities	1,061	12,737
Cash generated from operations	580,750	549,055
Interest received	6,652	11,622
Dividend received	641	-
Interest paid	(33,114)	(35,375)
Income taxes paid	(36,914)	(1,232)
Net cash generated from operating activities	518,015	524,070
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of investments accounted for using equity method	-	(47,650)
Acquisition of financial assets at fair value through other comprehensive income	(1,887)	(41,207)
Acquisition of financial assets at amortized cost	(33,372)	(3,926)
Proceeds from disposal of financial assets at amortized cost	33,656	-
Acquisition of property, plant and equipment	(78,795)	(157,505)
Proceeds from disposal of property, plant and equipment	170	-
Decrease (increase) in refundable deposits	1,518	6,238
Acquisition of intangible assets	(6,136)	(16,179)
Increase in other non-current assets	(1,426)	(1,853)
Increase in prepayments for equipment	(90,819)	(54,722)
Net cash used in investing activities	(177,091)	(316,804)
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in short-term loan	(180,000)	(30,000)
Proceeds from long-term debt	-	50,000
Repayments of long-term debt	(209,273)	(60,046)
Increase (decrease) in refundable deposits	(1,000)	1,000
Payments of the principal portion of lease liabilities	(269)	-
Cash dividends paid	(181,140)	(167,722)
Net cash used in financing activities	(571,682)	(206,768)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(230,758)	498
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD	701,496	700,998
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD	$ 470,738	$ 701,496

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

Sinphar Pharmaceutical Co., Ltd.
NOTES TO PARENT COMPANY ONLY 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. (the Company or 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 Western medicines, Chinese medicines, medicinal cosmetics and detergents.

Sinphar’s shares have been listed on the Taipei Exchange since October 17, 2000. On August 26, 2002, Sinphar’s stocks were approved for listing on the Taiwan Stock Exchange. The address of its registered office and principal place of business is No.84, Zhongshan Rd., Dongshan Township, Yilan County, Taiwan.

The parent company only financial statements are presented in the Company’s functional currency, New Taiwan dollars.

APPROVAL OF FINANCIAL STATEMENTS

The accompanying parent company only financial statements were approved by the Company’s board of directors and issued 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 Company’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 Company.

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 Company's financial condition and financial performance based on the Company's 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 Company 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 Company shall disaggregate items with dissimilar characteristics in the primary financial statements and in the notes. The Company 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 Company 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 financial statements were issued, the Company 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 SIGNIFICANT ACCOUNTING POLICIES

(1.) Statement of Compliance

The accompanying parent company only financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs endorsed by the FSC.

(2.) Basis of Preparation of the Parent Company Only Financial Statement

A. Except for the following items, the accompanying parent company only financial statements have been prepared on the 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 present value of defined benefit obligation.

B. The preparation of the parent company only 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 Company’s accounting policies. The areas involving a high degree of judgment or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.

C. The subsidiaries, associates and jointly controlled entities are incorporated in the parent company only financial statements under the equity method.

(3.) Foreign Currencies

A. Foreign currency transaction

Transactions in currencies other than the Company’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 parent company only financial statements, the functional currencies of the Company and the foreign entities (including subsidiaries, associates, joint ventures and branches in other countries that use currency different from the currency of the Company) 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 Company 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.

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

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

(A.) Assets 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 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 a liability for at least 12 months after the reporting period.

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 expected to be paid off within 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 Company 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.

(5.) 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.

(6.) Financial Instruments

Financial assets and financial liabilities are recognized in balance sheets when the Company 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 Company 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.

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 Company 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 Company'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 Company 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 Company applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

(B.) Impairment of financial assets

The Company 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 Company 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 Company 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 Company has transferred substantially all risks and rewards of ownership of the financial asset.

c. The Company 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 Company designates the financial liabilities upon initial recognition as at FVTPL when the financial liabilities accord to one of the followings:

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(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.

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 liabilities 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 Company 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 Company 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 Company 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.

(7.) 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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(8.) Investments Accounted for Using Equity Method

Investments in subsidiaries are accounted for using the equity method. A subsidiary is an entity that is controlled by the Company.

Under the equity method, an investment in subsidiary is initially recognized at cost and adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the subsidiary as well as the distribution received. The Company also recognized its share in change in the equity of subsidiaries.

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. Any difference between the carrying amount of the subsidiary and the fair value of the consideration paid or received is recognized directly in equity.

When the Company’s share of losses of a subsidiary equal or exceed its interest in that subsidiary (which includes any carrying amount of the investment in subsidiary accounted for by the equity method and long-term interests that, in substance, form part of the Company’s net investment in the subsidiary), the Company continues recognizing its share of further losses.

When the Company loses control of a subsidiary, and retained investment of the former subsidiary is measured at fair value at that date. A gain of loss is recognized in profit or loss and calculated as the difference between 1) the aggregate of the fair value of consideration received and the fair value of any retained interest at the date when control is lost; and 2) the previous carrying amount of the investments in such subsidiary. In addition, the Company shall account for all amount previously recognized in other comprehensive income in relation to the subsidiary on the same basis as would be required if the subsidiary had directly disposed of the related assets and liabilities.

When the Company transacts with its subsidiaries, profits and losses resulting from the transactions with the subsidiaries are recognized in the Company’s parent company only financial statements only to the extent of interest in the subsidiaries that are not owned by the Company.

(9.) Property, Plant and Equipment

A. Property, plant and equipment 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 Company 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.

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The estimated useful lives of property, plant and equipment are as follows:

Buildings: 5~55 Years

Machinery: 1~10 Years

Transportation: 5~8 Years

Office Equipment: 1~15 Years

Other Equipment: 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 Company, 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.

(10.) Leases

At the inception of a contract, the Company assesses whether the contract is, or contains, a lease. For a contract that contains a lease component and non-lease components, the Company 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 Company 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 Company 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 Company by the end of the lease terms or if the costs of right-of-use assets reflect that the Company will exercise a purchase option, the Company 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 Company uses the lessee's incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest

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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 Company 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 Company 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.

(11.) Investment properties

Investment properties are properties held to earn rentals and/or for capital appreciation (including property under construction for such purposes) and include land held for a currently undetermined future use.

Owned investment properties are initially measured at cost, including transaction costs, and subsequently measured at cost less accumulated depreciation and accumulated impairment loss. All investment properties are depreciated using the straight-line method.

On derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

(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 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;

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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 Company 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 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 Company 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 Company in the current or

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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 Company can no longer withdraw the offer of the termination benefit and when the Company recognize any related restructuring costs. The benefits expected to be due more than 12 months after balance sheet date should be 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 Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. 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 Company 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

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

A. Revenue from sale of goods

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 Company 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 Company'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.

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(19.) Government grants

Government grants are recognized at their fair value only when there is reasonable assurance that the Company 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 Company recognizes as expenses the related costs for which the grants are intended to compensate.

Government grants related to property, plant and equipment are presented by deducting the grants from the asset’s carrying amount and are amortised to profit or loss over the estimated useful lives of the related assets as reduced depreciation expenses.

(20.) Earnings per Share

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

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

The Company 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 parent company only financial statements, the critical accounting judgments the Company 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 Company determines the business model at a level that reflects how companies 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 Company 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 Company 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 Company satisfies it performance obligation. The Company estimates sales returns and allowance based on historical experience and other known factors. The Company assesses the reasonableness of the estimates

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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 Company makes these assumptions and selects inputs for impairment calculation based on the Company'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(4.) for the assumption and input data.

(C.) Evaluation of inventories

As inventories are stated at the lower of cost and net realizable value, the Company must determine the net realizable value of inventories on balance sheet date using judgments and estimates. The Company 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 Company 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 Company'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	$ 1,359	$ 1,350
Check deposits	6	9
Demand deposits	469,373	552,604
Cash equivalent
Time deposits
(with original maturities within
three months)	-	147,533
Total	$ 470,738	$ 701,496

A. The Company 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 amortized cost

ITEM	31-Dec-25	31-Dec-24
Current :
Time deposits
(with original maturities greater than three months)	$ 3,642	$ 3,926
Interest rate range	0.5%~1.5%	0.65%~1.40%

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.

(3.) Notes Receivable, Net

ITEM	31-Dec-25	31-Dec-24
Notes receivable	$ 138,482	$ 147,132
Less: Loss allowance	(507)	(507)
	$ 137,975	$ 146,625

A. As of December 31, 2025 and 2024, the notes receivables were not pledged.

B. Please refer to table below for information on loss allowance of notes receivable.

(4.) Accounts Receivable, Net

ITEM	31-Dec-25	31-Dec-24
Accounts receivable
Gross carrying amount measured at amortized cost	$ 533,572	$ 474,851
Less: Loss allowance	(7,259)	(7,259)
	$ 526,313	$ 467,592

A. The Company'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 receivable were not pledged.

C. The Company 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.

The following table details the loss allowance of note receivables and accounts receivables based on the Company's provision matrix.

December 31, 2025	Expected Credit Loss Ratio	Gross Carrying Amount	Loss Allowance (Lifetime ECL)	Amortized Cost
Not past due	0%~1%	$ 641,726	$ 776	$ 640,950
1 to 60 days	5%	24,081	1,204	22,877

December 31, 2025	Expected Credit Loss Ratio	Gross Carrying Amount	Loss Allowance (Lifetime ECL)	Amortized Cost
61 to 120 days	30%	591	177	414
121 to 180 days	50%	94	47	47
Over 181 days	100%	5,562	5,562	-
Total		$ 672,054	$ 7,766	$ 664,288
December 31, 2024	Expected Credit Loss Ratio	Gross Carrying Amount	Loss Allowance (Lifetime ECL)	Amortized Cost
---	---	---	---	---
Not past due	0%~1%	$ 589,566	$ 724	$ 588,842
1 to 60 days	5%	26,449	1,322	25,127
61 to 120 days	30%	324	97	227
121 to 180 days	50%	42	21	21
Over 181 days	100%	5,602	5,602	-
Total		$ 621,983	$ 7,766	$ 614,217

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

	For the Year Ended December 31
	2025	2024
Opening Balance	$ 7,766	$ 7,766
Add: Impairment loss	-	-
Closing Balance	$ 7,766	$ 7,766

E. These amounts were recognized without considering other credit enhancements held by the Company. The Company 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 Company 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.

(5.) Inventories

ITEM	31-Dec-25	31-Dec-24
Merchandise	$ 2,432	$ 1,102
Finished goods	230,821	241,711
Work in process	80,986	54,263
Raw materials	304,384	268,268
Materials	50,927	41,007
Total	$ 669,550	$ 606,351

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	$ 1,752,828	$ 1,716,148
Loss on decline (gain on reversal) in market value of inventories	8,174	(7,072)
Loss on inventory scrapped	12,236	19,188
Others	(931)	(1,700)
Total	$ 1,772,307	$ 1,726,564

B. No inventories were pledged or held as collateral.

(6.) Financial Assets at Fair Value through profit and loss / other comprehensive income – non-current

ITEM	31-Dec-25	31-Dec-24
Financial assets mandatorily measured at fair value through profit or loss
Overseas unlisted preferred shares
PHYTOCEUTICA INC. CANCAP	$ 4,844	$ 4,844
PHARMACEUTICAL, LTD.	42,269	44,981
	47,113	49,825
Less: Accumulated impairments	(4,844)	(4,844)
Total	$ 42,269	$ 44,981
Financial assets mandatorily measured at fair value through other comprehensive income
Domestic listed ordinary (OTC) shares	$ 37,955	$ 36,068
Domestic unlisted ordinary shares	17,266	17,266
Less: Valuation adjustments	(2,537)	(2,602)
Total	$ 52,684	$ 50,732

A. The Company 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. 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.

C. As of December 31, 2025 and 2024, the financial assets at fair value through profit or loss were not pledged or held as collateral.

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

(7.) Investments Accounted for Using Equity Method

Name of Investee	31-Dec-25			31-Dec-24
	Original Investment Amount	Percentage Of Ownership	Carrying Amount	Original Investment Amount	Percentage Of Ownership	Carrying Amount
CANCAP PHARMACEUTICAL LTD. (ordinary shares)	$ 92,255	100.00%	$ (83,978)	$ 92,255	100.00%	$ (81,266)
SUNETIC BIOTECH INC.	745,748	83.47%	883,276	745,748	83.47%	850,671
UJNIVERSAL NEXT TECHNOLOGIES INC.	17,467	100.00%	50	17,467	100.00%	52
ZuniMed Biotech Co., Ltd.	109,990	100.00%	96,437	109,990	100.00%	93,527
SynCore Biotechnology Co., Ltd.	1,864,935	64.26%	157,701	1,864,935	64.26%	189,270
Total	$ 2,830,395		1,053,486	$ 2,830,395		1,052,254
Add: Transfer into debit item of financial asset at FV through PL			83,978			81,266
FVTPL			$ 1,137,464			$ 1,133,520

A. As of December 31, 2025 and 2024, the investment accounted for using equity method for CANCAP PHARMACEUTICAL LTD. has been consistently dealing with operating deficit. This caused the Company to carry a credit balance on the carrying amount of its related long-term investment. The Company also owns the preference shares of the investee, hence the credit balance amounted to NT$83,978 thousand and NT$81,266 thousand were respectively debited as Financial Assets at Fair Value through Profit and Loss.

B. The Subsidiary, CANCAP PHARMACEUTICAL LTD.'s Board of Directors resolved in August 2024 to redeem and cancel all 2,420 thousand common shares to offset accumulated losses. Simultaneously, the Company raised capital through the issuance of 2,000 thousand ordinary shares. The total amount issued through the cash capital increase was CAD 2,000 thousand at a subscription price of CAD 1 per share, with all shares fully subscribed by the Company.

C. The stocks of SynCore Biotechnology Co, Ltd are listed for publicly traded. As of December 31, 2025 and 2024, the Company held its shares with market values amounted to NT$562,677 thousand and NT$787,522 thousand.

D. Please refer to Note 13 for the information of investments accounted for using equity method.

(8.) Property, Plant and Equipment

Cost	Land	Buildings	Machinery	Other Equipment	Unfinished Construction and Equipments Pending Acceptance	Total
1-Jan-25	$ 583,960	$ 2,212,641	$ 1,445,025	$ 256,379	$ 31,592	$ 4,529,597
Additions	-	10,971	35,395	16,449	15,934	78,749
Disposals	-	-	(1,887)	-	-	(1,887)
Reclassification	-	11,792	45,781	11,511	1,111	70,195
31-Dec-25	$ 583,960	$ 2,235,404	$ 1,524,314	$ 284,339	$ 48,637	$ 4,676,654
Accumulated depreciation and Impairment
1-Jan-25	$ -	$ 956,261	$ 1,066,271	$ 186,703	$ -	$ 2,209,235
Depreciation	-	68,677	79,938	20,102	-	168,717
Disposals	-	-	(1,882)	-	-	(1,882)
Reclassification	-	-	-	-	-	-
31-Dec-25	$ -	$ 1,024,938	$ 1,144,327	$ 206,805	$ -	$ 2,376,070
Cost
1-Jan-24	$ 583,960	$ 2,029,741	$ 1,350,956	$ 235,370	$ 129,705	$ 4,329,732
Additions	-	23,539	36,087	14,555	84,550	158,731
Disposals	-	-	-	-	-	-
Reclassification	-	159,361	57,982	6,454	(182,663)	41,134
31-Dec-24	$ 583,960	$ 2,212,641	$ 1,445,025	$ 256,379	$ 31,592	$ 4,529,597

Accumulated depreciation and Impairment	Land	Buildings	Machinery	Other Equipment	Unfinished Construction and Equipments Pending Acceptance	Total
1-Jan-24	$ -	$ 893,312	$ 986,738	$ 170,123	$ -	$ 2,050,173
Depreciation	-	62,949	79,533	16,580	-	159,062
Disposals	-	-	-	-	-	-
Reclassification	-	-	-	-	-	-
31-Dec-24	$ -	$ 956,261	$ 1,066,271	$ 186,703	$ -	$ 2,209,235
Carrying Amount
31-Dec-25	$ 583,960	$ 1,210,466	$ 379,987	$ 77,534	$ 48,637	$ 2,300,584
31-Dec-24	$ 583,960	$ 1,256,380	$ 378,754	$ 69,676	$ 31,592	$ 2,320,362

A. The property, plant and equipment were pledged or held as collateral, please refer to Note 8 for details.

B. As of December 31, 2025 and 2024, the Company acquired agricultural lands from non-related parties for the purpose of plant planning which could not be registered ownership of the Company. 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 Company, the mortgage right of the land was registered to the Company.

(9.) Lease agreements (31-Dec-24:None.)

A. Right-of-use assets

ITEM	31-Dec-25
Buildings	$ 1,153
Less: accumulated depreciation	(273)
Right-of-use assets, net	$ 880
	Buildings
---	---
	Cost
1-Jan-25	$ -
Additions	1,153
31-Dec-25	$ 1,153

B. Lease liabilities

ITEM	31-Dec-25
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 Company leases several buildings for use as employee dormitories with a lease term of 2 years. At the termination of the lease term, the Company 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 Company did not assess impairment.

(10.) Investment Properties

	Land	Buildings	Total
Cost
1-Jan-25	$ 86,197	$ 33,881	$ 120,078
Additions	-	-	-
Reclassification	-	-	-
31-Dec-25	$ 86,197	$ 33,881	$ 120,078
Accumulated depreciation and impairments
1-Jan-25	$ -	$ 9,474	$ 9,474
Depreciation	-	785	785
Reclassification	-	-	-
31-Dec-25	$ -	$ 10,259	$ 10,259
Cost
1-Jan-24	$ 86,197	$ 33,881	$ 120,078
Additions	-	-	-
Reclassification	-	-	-
31-Dec-24	$ 86,197	$ 33,881	$ 120,078
Accumulated depreciation and impairments
1-Jan-24	$ -	$ 8,690	$ 8,690
Depreciation	-	784	784
Reclassification	-	-	-
31-Dec-24	$ -	$ 9,474	$ 9,474
Carrying Amount
31-Dec-25	$ 86,197	$ 23,622	$ 109,819
31-Dec-24	$ 86,197	$ 24,407	$ 110,604

A. Rental income from investment properties and direct operating expenses arising from investment property are shown below:

	For the Year Ended December 31
	2025	2024
Rental income from investment properties	$ 3,848	$ 3,848
Direct operating expenses arising from the investment properties that generated rental income during the period	$ 1,099	$ 1,100

B. Investment properties are depreciated on a straight-line basis based on 15~50 years useful lives.

C. The investment properties that are not valued by an external independent valuer are valued by the Company's management using the rental of adjacent area as reference. This was the cash flow approach and belonged to

the level 3 fair value measurement. The fair values as at December 31, 2025 and 2024 were amounted to NT$117,467 thousands and NT$127,273 thousands, respectively.

D. For details on related party transactions involving the leasing of investment properties, please refer to Note 7(3).
E. Information on investment properties pledged to others as collaterals is provided in Note 8.

(11.) Intangible Assets

ITEM	Dec-31-25		Dec-31-24
Software	$	65,256	$	100,908
Less: Accumulated amortization and impairment		(42,717)		(72,626)
Net	$	22,539	$	28,282
	Software
	Cost	Accumulated amortization and impairment		Carrying Amount
1-Jan-25	$ 100,908	$ (72,626)		$ 28,282
Additions	6,879	(12,622)		(5,743)
Disposals	(42,531)	42,531		-
Reclassification	-	-		-
31-Dec-25	$ 65,256	$ (42,717)		$ 22,539
1-Jan-24	$ 86,609	$ (65,898)		$ 20,711
Additions	16,145	(13,720)		2,425
Disposals	(6,992)	6,992		-
Reclassification	5,146	-		5,146
31-Dec-24	$ 100,908	$ (72,626)		$ 28,282

The software was pledged as collateral for long-term loans, please refer to Note 8.

(12.) Short-term loans

31-Dec-25
Category	Amount	Interest Rate
Unsecured loans	$ 150,000	1.88%~2.12%
	31-Dec-24
Category	Amount	Interest Rate
Unsecured loans	$ 330,000	1.88%~2.22%
(13.) Other payables
ITEM	31-Dec-25	31-Dec-24
Salaries and bonuses payable	$ 114,621	$ 111,643
Advertisement expenses payable	48,679	36,231
Research expenses payable	13,221	14,896
Employees’ compensation and Directors’ remuneration payable	21,394	17,047
Labor and health insurance payable	9,725	9,323
Pension payable	6,480	6,331
Other	109,515	108,331
Total	$ 323,635	$ 303,802

(14.) Long-term loans and current portion of long-term liabilities

ITEM	31-Dec-25	31-Dec-24
Secured loans	$ 1,045,644	$ 1,184,917
Unsecured loans	270,000	340,000
Subtotal	1,315,644	1,524,917
Less: current portion	(45,746)	(348,976)
Total	$ 1,269,898	$ 1,175,941
Interest rate	1.850%~2.8013%	1.850%~2.8013%

Please refer to Note 8 for collaterals pledged for long-term borrowings.

(15.) Retirement Benefit Plans

Defined contribution plans

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 Company make monthly contributions of 6% of each individual employee's salary or wage to employees' pension accounts.

NT$30,092 thousand and NT$38,292 thousand were contributed by the Company for the years ended December 31, 2025 and 2024, respectively.

Defined benefit plan

The Company 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 Company 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 Company 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 Company will make contribution for the deficit by next March. The pension fund is managed by the government's designated authorities and the Company has no right to influence their investment strategies.

A. Amounts recognized in the parent company only balance sheets are 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

	For the Year Ended December 31, 2025
ITEM	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	-	(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
	For the Year Ended December 31, 2024
ITEM	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
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:

	31-Dec-25		31-Dec-24
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 Company 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 Company 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	5,081	5,089
Other employees benefits	32,351	30,050
Total	$ 51,124	$ 46,049

(16.) Capital Stock

The movements in the number of the Company'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	190,157	$ 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 Company's authorized capital amount was NT$2,500,000 thousand, consisting of 250,000 thousand shares of ordinary stocks.

(17.) Capital Surplus

ITEM	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 the Company 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 the Company 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 the Company'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 reverse 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 the Company’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 the Company incurs no loss.

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

(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 the company 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:

The appropriations of earnings for 2025 are to be presented for approval in the shareholders' meeting which is to be held on June 19, 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
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.) Operating revenue

ITEM	For the Year Ended December 31
	2025	2024
Revenue from contracts with customers
Net revenue from the sale of goods	$ 3,427,361	$ 3,197,650
Less: Sales returns and allowances	(361,006)	(337,335)
Total	$ 3,066,355	$ 2,860,315

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(4.))	$ 526,313	$ 467,592	$ 426,002
Contract liabilities-current	$ 102,286	$ 93,389	$ 84,352

(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	$ 81,321	$ 75,784

(21.) Other Income

	For the Year Ended December 31
ITEM	2025	2024
Government grants	$ 2,158	$ 6,500
Rental income	14,369	11,537
Dividend income	641	-
Others	20,725	18,916
Total	$ 37,893	$ 36,953

(22.) Other Gains and Losses

	For the Year Ended December 31
ITEM	2025	2024
Net currency exchange gains (losses)	$ (15,690)	$ 12,254
Gains on disposal of Property, Plant and Equipment	165	-
Others	(2,061)	(1,442)
Total	$ (17,586)	$ 10,812

(23.) Employee Benefits Expense, Depreciation and Amortization

ITEM	For the Year Ended December 31, 2025
	Cost of revenue	Operating expenses	Total
Employee benefits expense
Salaries and wages	$ 272,505	$ 294,801	$ 567,306
Labor and health insurance	31,381	29,445	60,826
Pension	28,376	34,766	63,142
Remuneration to directors	-	10,574	10,574

34 -

ITEM	For the Year Ended December 31, 2025
	Cost of revenue	Operating expenses	Total
Other employee benefits	19,720	22,392	42,112
Depreciation	135,020	33,970	168,990
Amortization	5,109	11,855	16,964
Total	$ 492,111	$ 437,803	$ 929,914
ITEM	For the Year Ended December 31, 2024
	Cost of revenue	Operating expenses	Total
Employee benefits expense
Salaries and wages	$ 254,632	$ 293,457	$ 548,089
Labor and health insurance	29,096	26,574	55,670
Pension	16,045	34,916	50,961
Remuneration to directors	-	9,041	9,041
Other employee benefits	19,087	20,167	39,254
Depreciation	128,432	30,630	159,062
Amortization	7,283	18,706	25,989
Total	$ 454,575	$ 433,491	$ 888,066

A. As of December 31, 2025 and 2024, the number of employees of the Company were 822, the directors who have not served as employees were both 9.

B. The average employee benefits expense are NT$ 902 thousand and NT $854 thousand in 2025 and 2024, respectively.

C. The average salaries and wages are NT$ 698 thousand and NT$ 674 thousand in 2025 and 2024, respectively.

D. The adjustment rate of average salaries and wages is 3.56%.

E. Salary Policy

Directors’ remuneration

(A) The Company's Articles of Incorporation stipulate that the remuneration for all directors is determined by the board of directors, regardless of operating profit or loss, which would be paid at the usual level of the industry.

(B) The Company's Articles of Incorporation stipulate the company shall allocate not higher than 5% of annual profits during the period to directors' and supervisors' remuneration.

Executive compensation

The remuneration for the management of the Company is based on the nature of the department, personnel positioning, work performance and business development progress, and is reviewed by the remuneration committee and resolved by the board of directors.

Employees’ compensation

The remuneration of the Company's employees includes the salary, various allowances, position subsidy additions, overtime wages and various bonuses, as well as the employee remuneration paid by the Company according to the annual profitability. The Company's Articles of Incorporation stipulate the company shall allocate 2%~8% of income before income tax during the period to employees' compensation.

F. 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:

35 -

	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.

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

(24.) Finance Costs

	For the Year Ended December 31
ITEM	2025	2024
Interest expense
Bank borrowings	$ 32,802	$ 35,657
Interest on lease liabilities	10	-
Financial cost	$ 32,812	$ 35,657

(25.) 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	$ 44,434	$ 18,966
Adjustments for prior periods	98	-
Total	$ 44,532	$ 18,966
Deferred tax
Deferred income tax related to origination and reversal of temporary differences	(3,800)	223
Income tax expense	$ 40,732	$ 19,189

B. Income tax recognized in other comprehensive loss:

	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:

ITEM	For the Year Ended December 31
	2025	2024
Profit before income tax	$ 406,483	$ 323,894
Tax calculated based on profit before tax and statutory tax rate	$ 81,297	$ 64,779
Effects from items disallowed by tax regulation	(49,525)	(26,558)
Investment tax credit	12,662	(19,255)
Net change in deferred income tax	(3,800)	223
Income tax adjustments for prior years	98	-
Income tax expense	$ 40,732	$ 19,189

Under the Act for the Development of Biotech and Pharmaceutical Industry, the Company 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 carry forward, and investment tax credits:

	For the Year Ended December 31, 2025
	Jan-1	Profit and loss	Other comprehensive income	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
	$ 86,808	$ -	$ -	$ 86,808

37 -

	For the Year Ended December 31, 2024
	Jan-1	Profit and loss	Other comprehensive income	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
	$ 85,684	$ 1,124	$ -	$ 86,808

The above-mentioned deferred income tax liabilities were classified as other non-current liabilities.

E. Unrecognized deferred tax assets:

ITEMS	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	50,554	72,151
	$ 82,948	$ 103,972

F. Information of unused loss carry forward:

As of December 31, 2025, information on the operating loss carryforward from the subsidiary's capital reduction to cover accumulated deficits is as follows.:

Expiry Year	Remaining Creditable Amount	Tax effect
2033	$ 752,376	$ 150,475

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

(26.) 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

For the Year Ended December 31

ITEM	2025	2024
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
SynCore Biotechnology Co., Ltd.	Subsidiaries
ZuniMed Biotech Co., Ltd.	Subsidiaries
CANCAP PHARMACEUTICAL LTD.	Subsidiaries
Sinphar Tian-Li Pharmaceutical Co., Ltd.(Hangzhou)	Sub-subsidiaries
Board of Directors, General Manager and Vice General Manager	Key management personnel
CANADA BIOTECH	Other related parties
Shu Fei Yu	Other related parties

(2.) Significant transaction with related parties

A. Operating revenue

	For the Year Ended December 31
Related party category/Name	2025	2024
Subsidiary/SynCore	$ 11,614	$ 5,042

The prices of sales with related parties were not significantly different from those of sold to third parties, and the payment term is 30-90 days.

B. Purchases of goods

	For the Year Ended December 31
Related party category/Name	2025	2024
Subsidiaries/ZuniMed	$ 81,207	$ 70,312

39 -

Related party category/Name	For the Year Ended December 31
	2025	2024
Sub-subsidiaries/Sinphar Tian-Li	55,021	24,796
	$ 136,228	$ 95,108

The prices of purchase and commission processing with related parties were not significantly different from those of purchased from third parties, and the payment term is 30-90 days.

C. Disposal of property, plant and equipment (For the year ended December 31, 2024: None.)

Related party category/Name	For the Year Ended December 31,2025
	Proceeds from disposal	Gain on disposal
Sub-subsidiaries/Sinphar Tian-Li	$ 262	$ 165

D. Lease arrangement-operating lease

The subsidiary, SynCore, leased buildings from the Company mainly for the use of office and laboratory with lease terms from August 1, 2022 to March 31, 2026. The rental price was determined in accordance with mutual agreement and the payment would be collected monthly. As of the year ended December 31, 2025 and 2024, the rental receivables were NT$1,954 thousand and NT$7,906 thousand, respectively. The rental incomes were NT$9,800 thousand in 2025 and 2024, respectively.

E. Trademarks and royalties

Under an agreement between the Company and its related party, CANADA BIOTECH, the Company 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 Company paid the royalties amounted to NT$870 thousand and NT$922 thousand in 2025 and 2024 respectively. The payments were recognized as marketing expense.

F. Others

(A.) The Company collected the common general administration fee, research and development cost and other income from its related party in 2025 and 2024. The amounts were described as follows:

Related party category/Name	For the Year Ended December 31
	2025	2024
Subsidiaries
SynCore	$ 8,493	$ 11,210
Others	901	391
	$ 9,394	$ 11,601

The Company entered a sales agency agreement with its Subsidiary, SynCore. The Company would charge a service fee based on the quantity of sales. The service income in 2025 and 2024 were NT$1,498 thousand and NT$6,672 thousand respectively; As of December 31, 2024, the advance service incomes were amounted to NT$1,049 thousand.

(B.) For the year ended December 31, 2025 and 2024, the Company paid its subsidiary, SynCore, NT$307 thousand and NT$151 thousand, respectively, for research and development expenses and other expenses related to drug development.

(C.) For the years ended December 31, 2025, the Company paid its subsidiary, CANCAP, service fee amounted to NT$1,630 thousand.

(D.) The Company paid its subsidiaries various related operating expenses in 2025 and 2024. The amounts were described as follows:

	For the Year Ended December 31
Related party category/Name	2025	2024
Subsidiaries
SynCore	$ 155	$ 480

(E.) For the years ended December 31, 2025 and 2024, utility expenses paid by the subsidiary, SynCore, on behalf of the Company amounted to NT$206 thousand and NT$354 thousand, respectively.
(F.) For the year ended December 31, 2025, molding expenses paid by the subsidiary, ZuniMed, on behalf of the Company amounted to NT$286 thousand
(G.) The Company 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 the company. Therefore, the Company 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(8.) for more information.

G. Receivables from / payables to related parties

Item	Related party category/Name	31-Dec-25	31-Dec-24
Other receivables	Subsidiary/SynCore	$ 310	$ 569
Accounts payable	Subsidiary/ZuniMed	$ 12,093	$ 9,022
	Sub-subsidiary/Sinphar Tian-Li	18,844	10,811
	Total	$ 30,937	$ 19,833
Other payables	Subsidiary/SynCore	$ 94	$ -

The above-mentioned other receivable was recognized as other current asset.

No endorsement or guarantee was obtained for outstanding receivables from and payables to related parties and no loss allowances were recognized for receivables from related parties for 2025 and 2024.

H. Endorsements/guarantees obtain

Related party category/Name	31-Dec-25
	Endorsement/Guarantee received	Used Balance	Unused Balance
Subsidiary/ZuniMed	$ 25,000	$ 25,000	$ -
	31-Dec-24
Related party category/Name	Endorsement/Guarantee received	Used Balance	Unused Balance
Subsidiary/ZuniMed	$ 25,000	$ 25,000	$ -

The above is a supply guarantee of the medical institution.

I. Endorsements and Guarantees

Related Party Categories	31-Dec-25
	Endorsement/Guarantee provided	Used Balance	Unused Balance
Subsidiary/SynCore	$ 200,000	$ -	$ 200,000
Subsidiary/ZuniMed	30,000	8,000	22,000
	$ 230,000	$ 8,000	$ 222,000

41 -

Related Party Categories	31-Dec-24
	Endorsement/Guarantee provided	Used Balance	Unused Balance
Subsidiary/SynCore	$ 250,000	$ -	$ 250,000
Subsidiary/ZuniMed	30,000	8,000	22,000
	$ 280,000	$ 8,000	$ 272,000

(3.) Compensation of key management personnel

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

ITEM	For the Year Ended December 31
	2025	2024
Salaries and other short-term employee benefits	$ 37,201	$ 67,971

A. 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.

B. Please refer to the shareholder meeting's annual report for the information about the above-mentioned remuneration to board of directors and the main management personnel.

8. PLEDGED ASSETS

The Company's assets pledged as collateral for long-term loans are as follows:

ITEM	31-Dec-25	31-Dec-24
Property, plant and equipment	$ 1,180,113	$ 1,216,433
Investment properties	109,819	110,604
Intangible assets	1,640	3,280
Total	$ 1,291,572	$ 1,330,317

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

A. 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.

B. As of December 31, 2025 and 2024, Capital expenditures committed but not yet incurred are as follows:

ITEM	31-Dec-2025	31-Dec-2024
Property, plant and equipment	$ 72,120	$ 47,860

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

12. OTHER INFORMATION

(1.) Capital risk management

The Company requires an adequate capital structure to enable expansion and enhancement of its plant and equipment. Therefore, the Company 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 policies

The Company'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 Company 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 Company 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, EUR, JPY and HKD.

(b.) Foreign currency exposure and sensitivity analysis

	31-Dec-25
	Foreign Currencies (In Thousands)	Exchange Rate	Carrying Amount (In Thousands)	Sensitivity analysis
				Movement	Impact on Profit or loss	Impact on Equity
Financial assets
Monetary items
USD : NT$	$ 449	31.4300	$ 14,120	1%	$ 141	$ -
CNY : NT$	930	4.4960	4,183	1%	42	-
EUR: NT$	50	36.9000	1,851	1%	19
JPY : NT$	882	0.2008	177	1%	2	-
HKD : NT$	117	4.0380	474	1%	5	-
Financial liabilities
Monetary items
USD : NT$	$ 680	31.4300	$ 21,385	1%	$ 214	$ -
CNY : NT$	1,663	0.2008	334	1%	3	-
	31-Dec-24
---	---	---	---	---	---	---
	Foreign Currencies (In Thousands)	Exchange Rate	Carrying Amount (In Thousands)	Sensitivity analysis
				Movement	Impact on Profit or loss	Impact on Equity
Financial assets
Monetary items
USD : NT$	$ 5,447	32.7850	$ 178,573	1%	$ 1,786	$ -
CNY : NT$	1,057	4.4780	4,731	1%	47	-
EUR: NT$	65	34.1400	2,235	1%	22
JPY : NT$	8,588	0.2099	1,803	1%	18	-
HKD : NT$	117	4.2220	494	1%	5	-

43 -

	31-Dec-24
	Foreign Currencies (In Thousands)	Exchange Rate	Carrying Amount (In Thousands)	Movement	Sensitivity analysis Impact on Profit or loss	Impact on Equity
Financial liabilities
Monetary items
USD : NT$	$ 107	32.7850	$ 3,521	1%	$ 35	$ -
CNY : NT$	2,414	4.4780	10,811	1%	108

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 Company, the Company disclosed the summarized foreign exchange gains (losses) information of monetary items. The realized and unrealized foreign exchange gains (losses) were NT$ (15,690) thousand and NT$12,254 thousand for the year ended December 31, 2025 and 2024, respectively.

(d.) The unrealized exchange gains (losses) of fluctuation risk on foreign currency monetary item is significant. The unrealized foreign exchange gains (losses) were NT$ (1,288) thousand and NT$ 450 thousand for the year ended December 31, 2025 and 2024, respectively.

b. Price risk

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

The Company primarily invested in the domestic and foreign publicly traded and unlisted stocks. 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 net loss for the years ended December 31, 2025 and 2024 would have increased/decreased by NT$ 423 thousand and NT$ 450 thousand, respectively, as they were classified as financial assets at FVTPL; the other comprehensive income for the years ended December 31, 2025 and 2024 would have increased/decreased by NT$ 527 thousand and NT$ 507 thousand, respectively, as they were classified as financial assets at FVTOCI.

Assuming a hypothetical increase/decrease of 1% in prices of the beneficiary certificate at the end of the reporting period

c. Interest rate risk

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

	Carrying Amount
Item	31-Dec-25	31-Dec-24
Fair value interest rate risk
Financial assets	$ 3,642	$ 151,459
Financial liabilities	-	-
Net	$ 3,642	$ 151,459
Cash flow interest rate risk
Financial assets	$ 469,373	$ 552,604
Financial liabilities	(1,465,644)	(1,854,917)
Net	$ (996,271)	$ (1,302,313)

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

The Company 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 Company's variable-rate financial instruments are floating-rate assets (liabilities). 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$9,963 thousand and NT$13,023 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 Company. The Company 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 Company 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 Company 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 Company may choose to strengthen overall risk management including collection in advance or guarantee provided by customers to mitigate the credit risk of certain customers.

b. Financial credit risk:

The financial department of the Company regularly monitors and reviews the credit risk of bank deposit and other financial instruments. The Company mitigates its exposure by selecting counterparties (banks, financial institutions, Company organizations and government authorities) with well credit and investment-grade credit ratings. The credit risk is insignificant. The Company 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 December 31, 2024, accounts receivable from the top 10 customers represent $27.18\%$ , and $25.68\%$ of total accounts receivables of the Company,

respectively. The Company believes the concentration risk is insignificant for the remaining accounts receivable.

(b.) Measurement of expected credit losses

Notes receivable and Accounts receivable: Simplified approach, please refer to Note 6(4.).

Judgment on whether credit risk increasing significantly: None.

a. Liquidity risk management

The Company'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 Company 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	$ 50,000	$ 100,000	$ -	$ -	$ -	$ 150,000	$ 150,000
Lease liabilities	294	294	310			898	884
Notes Payable	2			-	-	2	2
Accounts payable	231,333	-	-	-	-	231,333	231,333
Other payables	147,072	24,343	-	-	-	171,415	171,415
Long-term borrowing, including current portion	22,774	22,972	1,263,287	6,611	-	1,315,644	1,315,644
Total	$ 451,475	$ 147,609	$ 1,263,597	$ 6,611	$ -	$ 1,869,292	$ 1,869,278
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	$ 100,000	$ 230,000	$ -	$ -	$ -	$ 330,000	$ 330,000
Notes Payable	38	-	-	-	-	38	38
Accounts payable	186,539	-	-	-	-	186,539	186,539
Other payables	120,728	24,011	-	-	-	144,739	144,739
Long-term borrowing, including current portion	326,321	22,655	1,143,998	31,943	-	1,524,917	1,524,917
Total	$ 733,626	$ 276,666	$ 1,143,998	$ 31,943	$ -	$ 2,186,233	$ 2,186,233

The Company 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 Company 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	$ 470,738	$ 701,496
Financial assets at amortized cost - current	3,642	3,926
Notes and accounts receivable (including related parties)	664,288	614,217

46 -

	31-Dec-25	31-Dec-24
Refundable deposits	16,980	18,498
Financial assets at FVTPL – non-current	42,269	44,981
Financial assets at FVTOCI – non-current	52,684	50,732
Financial liabilities
Financial liabilities measured at amortized cost
Short-term loans	150,000	330,000
Notes and accounts payable (including related parties)	231,335	186,577
Other payable (including related parties)	171,415	144,739
Long-term loans (including the current portion)	1,315,644	1,524,917

(3.) Fair value information

A. Details of the fair values of the Company’s financial assets and financial liabilities not measured at fair value and investment property measured at cost are provided in Note 12. (3)2. and Note 6.(10), respectively.

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.

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 Company invested in equity investments without active market included within level 3.

B. Financial instruments that are not measured at fair value

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

C. Fair value hierarchy information

The Company’s financial instruments measured at fair value were under a recurring basis.

The following table presents the Company’s financial instruments measured at fair value on a recurring basis:

Items	31-Dec-25
	Level 1	Level 2	Level 3	Total
Asset:
Fair value on a recurring basis
Financial assets measured at FVTPL
Foreign unlisted publicly traded preference share	$ -	$ -	$ 42,269	$ 42,269

	31-Dec-25
Items	Level 1	Level 2	Level 3	Total
Financial assets at FVTOCI
Domestic listed ordinary (OTC) shares	$ 38,147	$ -	$ -	$ 38,147
Domestic unlisted ordinary shares	-	-	14,537	14,537
Total	$ 38,147	$ -	$ 14,537	$ 52,684
	31-Dec-24
Items	Level 1	Level 2	Level 3	Total
Asset:
Fair value on a recurring basis
Financial assets measured at FVTPL
Foreign unlisted publicly traded preference share	$ -	$ -	$ 44,981	$ 44,981
Financial assets at FVTOCI
Domestic listed ordinary (OTC) shares	$ 34,776	$ -	$ -	$ 34,776
Domestic unlisted ordinary shares	-	-	15,956	15,956
Total	$ 34,776	$ -	$ 15,956	$ 50,732

D. Valuation techniques and assumptions used in fair value measurement

(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.

(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 Company 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 Company.

(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 Company 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. SUPPLEMENTARY DISCLOSED

(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.

(2.) Information of investees: Table 3.

(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 4.
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: Note 7 and Table 3.

14. SEGMENT INFORMATION

Please refer to the consolidated financial statements of Sinphar Pharmaceutical Co., Ltd. and subsidiaries for operating segment information.

48 -

Sinphar Pharmaceutical Co., Ltd.

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

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 4

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 company.
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.

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

ITEM	STATEMENT INDEX
MAJOR ACCOUNTING ITEMS IN ASSETS, LIABILITIES AND EQUITY
STATEMENT OF CASH AND CASH EQUIVALENTS	1
STATEMENT OF NOTES AND ACCOUNTS RECEIVABLE, NET	2
STATEMENT OF INVENTORIES	3
STATEMENT OF NON-CURRENT FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS	4
STATEMENT OF NON-CURRENT FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME	5
STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD	6
STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT	Note 6(8.)
STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION AND ACCUMULATED IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENT	Note 6(8.)
STATEMENT OF CHANGES IN INVESTMENT PROPERTY	Note 6(10.)
STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION AND ACCUMULATED IMPAIRMENT OF INVESTMENT PROPERTY	Note 6(10.)
STATEMENT OF CHANGES IN INTANGIBLE ASSETS	Note 6(11.)
STATEMENT OF DEFERRED INCOME TAX ASSETS / LIABILITIES	Note 6(25.)
STATEMENT OF SHORT-TERM LOANS	7
STATEMENT OF ACCOUNTS PAYABLES	8
STATEMENT OF OTHER PAYABLE	Note 6(13.)
STATEMENT OF LONG-TERM LOANS	9
MAJOR ACCOUNTING ITEMS IN PROFIT OR LOSS
STATEMENT OF NET REVENUE	10
STATEMENT OF COST OF REVENUE	11
STATEMENT OF OPERATING EXPENSES	12
STATEMENT OF LABOR, DEPRECIATION AND AMORTIZATION BY FUNCTION	Note 6(23.)

53 -

STATEMENT 1

Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF CASH AND CASH EQUIVALENTS

DECEMBER 31, 2025

Amounts in Thousands of New Taiwan Dollars and Foreign Currencies in Dollars

Item	Description	Amount
Cash	Petty cash and cash on hand	$ 1,359
Bank deposits	Check deposits	6
	Demand deposits:
	Chang Hwa Commercial Bank, Ltd. Datung Branch	183,939
	First Commercial Bank Su’ao Branch	110,164
	Taiwan Business Bank Co., Ltd. Su’ao Branch	33,984
	Taiwan Cooperative Bank Bei Luodong Branch	20,529
	Bank of Taiwan Lou Tung Branch	19,951
	Taishin International Bank Business Department	18,213
	others	74,606
		461,386
	Foreign currency deposits:
	Chang Hwa Commercial Bank, Ltd. Datung Branch (USD$ 137,011.63 Exchange rate:31.4300)	4,306
	Mega International Commercial Bank Co., Ltd. Yilan Branch (EUR$ 39,500.76 Exchange rate:36.9000)	1,458
	Mega International Commercial Bank Co., Ltd. Yilan Branch (HKD$ 113,172.07 Exchange rate:4.0380)	457
	Mega International Commercial Bank Co., Ltd. Yilan Branch (CNY$ 92,367.80 Exchange rate:4.4960)	415
	others	1,351
		7,987
		$ 470,738

STATEMENT 2

Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF NOTES AND ACCOUNTS RECEIVABLE

DECEMBER 31, 2025

Amounts in Thousands of New Taiwan Dollars

Client Name	Description	Amount	Note
Notes Receivable:
Third Parties:
Hoja Life Development Co.,Ltd.	Payments	$ 9,663	-
Others( The amount of individual clients in others does not exceed 5% of this account balance)	Payments	128,819	-
		138,482
Less : Loss allowance		(507)
Net		$ 137,975
Accounts Receivable:
Third Parties:
H Company	Payments	$ 41,135
Watson’s Personal Care Stores(Taiwan) Co., Limited.	Payments	32,351	-
Others( The amount of individual clients in others does not exceed 5% of this account balance)	Payments	460,086	-
		533,572
Less : Loss allowance		(7,259)
Net		$ 526,313

STATEMENT 3

Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF INVENTORIES

DECEMBER 31, 2025

Amounts in Thousands of New Taiwan Dollars

Item	Description	Amount		Note
		Cost	Net Realizable Value
Raw materials	Western medicine raw materials, natural raw materials, etc.	$ 339,915	$ 345,560	-
Materials	Empty capsules, medicine bottles and instructions, etc.	55,698	55,248	-
Work in process	Pharmaceuticals in progress, etc.	85,042	80,986	-
Finished goods	Medicines, health food, etc.	243,779	390,898	-
Merchandise	Health food	2,539	4,780	-
		726,973
Less: Allowance for loss		(57,423)
Net		$ 669,550

STATEMENT 4

Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF NON-CURRENT FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

FOR THE YEAR ENDED DECEMBER 31, 2025

Amounts in Thousands of New Taiwan Dollars; Shares / Units

Name of financial instruments	As of January 1, 2025		Additions		Decrease		As of December 31, 2025		Collateral	Note
	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount
CANCAP PHARMACEUTICAL LTD. (preferred share)	51,500	$ 44,981	-	$ -	-	$ (2,712)	51,500	$ 42,269	-	-
PHYTOCEUTICA INC.(preferred share)	90,362	4,844	-	-	-	-	90,362	4,844	-	-
		49,825		-		(2,712)		47,113
Less: Accumulated Impairment		(4,844)		-		-		(4,844)
Total		$ 44,981		$ -		$ (2,712)		$ 42,269

Note: The decrease of NT$2,712 thousand for the current period was due to the operating losses incurred by CANCAP PHARMACEUTICAL LTD., an investee accounted for using the equity method. These losses resulted in a credit balance in the carrying amount of the long-term equity investment in the investee. Consequently, the credit amount of NT$83,978 thousand recognized under the equity method for the current period was applied as a deduction from 'Financial Assets Measured at Fair Value through Profit or Loss.' The remaining difference of NT$2,712 thousand between the carrying amount and the beginning balance represents the decrease for the current period.

STATEMENT 5

Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF NON-CURRENT FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31, 2025

Amounts in Thousands of New Taiwan Dollars; Shares / Units

Name of financial instruments	As of January 1, 2025		Additions		Decrease		Other movements	As of December 31, 2025		Collateral	Note
	Shares	Amount	Shares	Amount	Shares	Amount	Amount (Note1)	Shares	Amount
Datun Entertainment Development Co., Ltd. (ordinary shares)	7	$ 15,956	-	$ -	-	$ -	(1,419)	7	14,537	-	-
Synmosa Biopharma Corporation (ordinary shares)	1,008,000	34,776	169,390	1,887	-	-	$ 1,484	1,177,390	38,147	-	-
Total		$ 50,732		$ 1,887		$ -	$ 65		$ 52,684

Note1: Adjustments made based on the mark-to-market valuation method.

STATEMENT 6

Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2025

Amounts in Thousands of New Taiwan Dollars; Shares / Units

Name of financial instruments	As of January 1, 2025		Additions		Decrease						As of December 31, 2025		Market price or net equity value
	Shares	Amount	Shares	Amount	Shares	Amount	Share of profit (loss)	Cumulative translation difference	Unrealized Loss on Financial Assets at Fair Value Through Other Comprehensive Income	Shares	Percentage of Ownership	Amount	Unit price	Total	Collateral	Note
CANCAP PHARMACEUTICAL LTD.(ordinary shares)	2,000,000	$ (81,266)		$		$ -	$ (2,865)	$ 153	$ -	2,000,000	100.00%	$ (83,978)	$ -	$ (83,978)	-	Note 1
SUNETIC BIOTHECH INC	18,854,534	850,671	-	-	-	-	27,661	4,944	-	18,854,534	83.47%	883,276	-	916,945	-	-
UNIVERSAL NEXT TECHNOLOGIES INC	503,845	52	-	-	-	-	-	(2)	-	503,845	100.00%	50	-	50	-	-
ZuniMed Biotech Co., Ltd.	10,300,000	93,527	-	-	-	-	2,910	-	-	10,300,000	100.00%	96,437	-	102,030	-	-
SynCore Biotechnology Co., Ltd.	22,597,472	189,270	-	-	-	-	(29,445)	40	(2,164)	22,597,472	64.26%	157,701	-	158,176	-	-
		1,052,254		$ -		$ -	$ (1,739)	$ 5,135	$ (2,164)			1,053,486		$ 1,093,223
Add:
Credit balance of investments accounted for using equity method		81,266										83,978
Total		$ 1,133,520										$ 1,137,464

Note1: CANCAP PHARMACEUTICAL LTD., which is evaluated by the equity method, has a credit balance on the book value of the long-term investment due to the operating loss. The amount of NT$83,978 thousand has been transferred to "Financial Assets measured at Fair Value through Profit or Loss - non-current".

STATEMENT 7

Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF SHORT-TERM LOANS

DECEMBER 31, 2025

Amounts in Thousands of New Taiwan Dollars

Description	Nature	Ending Balance	Contract Period	Range of Interest Rate	Credit Line	Collateral	Note
Unsecured borrowings	Taiwan Cooperative Bank, Ltd.	50,000	2025/12~2026/11	1.878%	150,000	-	-
	E.SUN Commercial Bank, Ltd.	50,000	2025/09~2026/09	2.12%	100,000	-	-
	Chang Hwa Commercial Bank, Ltd.	50,000	2025/06~2026/05	1.885%	150,000	-	-
		$ 150,000

STATEMENT 8

Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF ACCOUNTS PAYABLE

DECEMBER 31, 2025

Amounts in Thousands of New Taiwan Dollars

Client Name	Description	Amount	Note
Related parties:
Sinphar Tian-Li Pharmaceutical Co., Ltd.(Hangzhou)	Payments	$ 18,844	-
ZuniMed Biotech Co., Ltd.	Payments	12,093	-
		30,937
Third parties:
Prince Pharmaceutical Co., Ltd.	Payments	10,560	-
Others(The amount of individual item in others does not exceed 5% of the account balance)	Payments	189,836	-
		200,396
Total		$ 231,333

STATEMENT 9

Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF LONG-TERM LOANS

DECEMBER 31, 2025

Amounts in Thousands of New Taiwan Dollars

Creditor	Description	Amount	Contract Period	Interest Rate	Collateral (Note 1)	Note
Bank of Taiwan Lou Tung Branch	Secured Loans	$ 22,478	2013/10-2028/10	2.355%	Buildings	Monthly installments, divided into 180 installments equal repayments
	Secured Loans	22,619	2020/07-2027/07	2.548%	Machinery	Monthly installments, divided into 84 installments equal repayments
	Secured Loans	240,000	2025/03-2027/03	1.978%	Land and buildings	During the credit period, maturity to renew
First Commercial Bank Su’ao Branch	Secured Loans	15,188	2011/12-2026/12	2.425%	Land and buildings	Monthly installments, divided into 180 installments equal repayments
	Secured Loans	140,000	2025/01-2027/01	1.925%	Land and buildings	During the credit period, maturity to renew
	Unsecured Loans	270,000	2025/01-2027/01	1.975%	None	During the credit period, maturity to renew
Mega International Commercial Bank Co., Ltd. Yilan Branch	Secured Loans	339,000	2025/01-2029/01	1.906% ~1.996%	Land and buildings	During the credit period, maturity to renew
Taiwan Business Bank Co., Ltd. Su’ao Branch	Secured Loans	16,359	2007/11-2027/11	2.320%	Land and buildings	Monthly installments, divided into 240 installments equal repayments
	Secured Loans	250,000	2025/05-2027/05	1.850%	Land and buildings	During the credit period, maturity to renew
Subtotal		1,315,644
Less: Current portion		(45,746)
		$ 1,269,898

Note1: Please refer to Note 8 for collaterals pledged for long-term borrowings.

STATEMENT 10

Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF OPERATING REVENUES

FOR THE YEAR ENDED DECEMBER 31, 2025

Amounts in Thousands of New Taiwan Dollars

Item	Quantity (Unit)	Amount	Note
Pharmaceutical	Thousand grain, kilogram and liter	$ 2,125,062	-
Healthy food	Thousand grain, kilogram and liter	1,204,426	-
Cosmetic	Kilogram and liter	97,873	-
Sales revenue		3,427,361
Less: Sales return			-
and allowances		(361,006)	-
Total		$ 3,066,355

STATEMENT 11

Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF OPERATING COSTS

FOR THE YEAR ENDED DECEMBER 31, 2025

Amounts in Thousands of New Taiwan Dollars

Item	Amount
Raw materials :
Beginning raw materials	$ 293,194
Add: Raw materials purchased	842,122
Less: Ending raw materials	(339,915)
Scrap of inventories	(1,804)
Transfers to expense	(9,832)
Raw materials sold	(1,214)
Loss on physical inventory	(335)
Raw materials used during the year	782,216
Supplies :
Beginning supplies	46,954
Add: Supplies purchased	280,314
gain on physical inventory	1,266
Less: Ending supplies	(55,698)
Scrap of inventories	(1,942)
Transfers to expense	(3,996)
Supplies sold	(796)
Supplies used during the year	266,102
Direct labor	151,631
Manufacturing expense	562,647
Manufacturing cost	1,762,596
Add: Beginning work in progress	57,096
Outsourcing costs	38,850
Less: Ending work in progress	(85,042)
Scrap of inventories	(3,516)
Transfers to expense	(10,380)
Cost of finished goods and merchandise	1,759,604
Add: Beginning finished goods and merchandise	258,356
Finished goods purchased	4,757
Less: Ending finished goods and merchandise	(246,318)
Scrap of inventories	(4,974)
Transfers to expense	(18,597)
Cost of goods manufactured and sold	1,752,828
Other operating costs	19,479
Total operating costs	$ 1,772,307

STATEMENT 12

Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF OPERATING EXPENSE

FOR THE YEAR ENDED DECEMBER 31, 2025

Amounts in Thousands of New Taiwan Dollars

Item	Selling Expenses	Administrative Expenses	Research and Development Expenses	Total
Wages and salaries	$ 208,832	$ 66,894	$ 54,141	$ 329,867
Advertisement expense	176,869	5,229	-	182,098
Insurance expense	19,110	6,795	5,463	31,368
Donation expense	2,016	10,557	50	12,623
Depreciation	9,958	10,980	13,032	33,970
Amortizations	514	11,036	305	11,855
Consumables	95	99	14,658	14,852
Promotional expenses	100,193	-	-	100,193
Others (Note)	98,215	45,581	16,684	160,480
	$ 615,802	$ 157,171	$ 104,333	877,306
Expected credit losses				-
				$ 877,306

Note: The amount of each item in others does not exceed 5% of the account balance.

AI assistant

SINPHAR — Audit Report / Information 2025

51911_rns_2026-05-29_e4fb0649-cc9b-4a3f-adff-e9421bbb7af9.pdf

Sinphar Pharmaceutical Co., Ltd.

Tables of Contents

Our key audit procedures in response

Revenue Recognition

Our key audit procedures in response

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

Auditors' Responsibilities for the Audit of the Parent Company Only Financial Statements

Sinphar Pharmaceutical Co., Ltd.

PARENT COMPANY ONLY BALANCE SHEETS

Sinphar Pharmaceutical Co., Ltd.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

Sinphar Pharmaceutical Co., Ltd.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

Sinphar Pharmaceutical Co., Ltd.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1.) Statement of Compliance

(2.) Basis of Preparation of the Parent Company Only Financial Statement

(3.) Foreign Currencies

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

(5.) Cash and Cash Equivalent

(6.) Financial Instruments

A. Financial assets

(A.) Measurement category

a. Financial assets at FVTPL

b. Equity investment at FVTOCI

c. Financial assets at amortized cost

(B.) Impairment of financial assets

(C.) Derecognition of financial assets

B. Financial liabilities

(A.) Subsequent measurement

(B.) Derecognition of financial liabilities

C. Modification of Financial Instruments

(7.) Inventories

(10.) Leases

A. The Company as lessee

Right-of-use assets

Lease liabilities

(B.) Estimated impairment of financial assets

(C.) Evaluation of inventories

(D.) Impairment assessment of tangible and intangible assets

(E.) Realizability of deferred tax assets

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1.) Cash and Cash Equivalents

(18.) Retained Earnings and Dividend Policy

7. TRANSACTIONS WITH RELATED PARTIES

(3.) Compensation of key management personnel

8. PLEDGED ASSETS

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

12. OTHER INFORMATION

(1.) Capital risk management

(2.) FINANCIAL INSTRUMENTS

b. Price risk

c. Interest rate risk

(3.) Fair value information

13. SUPPLEMENTARY DISCLOSED

14. SEGMENT INFORMATION

INFORMATION ON INVESTMENT IN MAINLAND CHINA

Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF CASH AND CASH EQUIVALENTS

DECEMBER 31, 2025

Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF NOTES AND ACCOUNTS RECEIVABLE

Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF INVENTORIES

Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF NON-CURRENT FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

FOR THE YEAR ENDED DECEMBER 31, 2025

Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF NON-CURRENT FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31, 2025

Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2025

Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF SHORT-TERM LOANS

Sinphar Pharmaceutical Co., Ltd.

SINPHAR Audit Report / Information 2025