SOLOMON — Audit Report / Information 2022

Nov 14, 2022

SOLOMON Technology Corporation Parent-only Financial Statements and Independent Auditors’ Report 2022 and 2021 (Stock Code 2359)

Company Address: No. 42, Xingzhong Rd., Neihu Dist., Taipei City Telephone: (02)8791-8989

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SOLOMON Technology Corporation

’ 2022 and 2021 Parent-only Financial Statements and Independent Auditors Report Table of Contents

Item I. Cover Page II. Table of Contents III. Independent Auditors’ Report IV. Parent-only Balance Sheet V. Parent-only Statement of Comprehensive Income VI. Parent-only Statement of Changes in Equity VII. Parent-only Statement of Cash Flows VIII. Notes to the Parent-only Financial Statements (I) Company history (II) Approval date and procedures of the financial statements (III) Application of new and amended standards and interpretations (IV) Summary of material accounting policies (V) Main sources of uncertainty of material accounting judgments, estimates and assumptions (VI) Description of major accounts (VII) Related party transactions (VIII) Pledged assets (IX) Material contingent liabilities and unrecognized contractual commitments (X) Material losses from disasters (XI) Material subsequent events (XII) Others (XIII) Note disclosures 1. Information of material transactions 2. Information of investee companies 3. Information of investments in Mainland China 4. Information of major shareholders (XIV) Operating segment information IX. Statements of major accounts Cash and Cash Equivalents Net Accounts Receivable Inventory Long-term Equity Investments under the Equity Method Accounts Payable Net Operating Income Operating Costs Marketing Expense

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dex 1 2-3 4-9 10-11 12-13 14 15-16 17-59 17 17 17-18 18-27 28 28-49 49-51 51 51 51 51 52-59 59 59-60 60 60 60 60 Statement 1 Statement 2 Statement 3 Statement 4 Statement 5 Statement 6 Statement 7 Statement 8

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Item Administrative and General Expenses Statement of Current Employee Benefits, Depreciation, Depletion and Amortization Expenses by Function	Page/Number/In
	dex Statement 9 Statement 10

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Independent Auditors’ Report (2023) Letter Cai-Shen-Bao-Zi No. 22004861

To SOLOMON Technology Corporation:

Audit Opinions

We audited the parent-only balance sheets of SOLOMON Technology Corporation as of December 31, 2022 and 2021, its parent-only statements of comprehensive income, parent-only statements of changes in equity and parent-only statements of cash flows for the periods from January 1 to December 31, 2022 and 2021 and the notes to the parent-only financial statements (including the summary of material accounting policies).

In our opinion, based on our audit results and other independent auditors’ reports (Please refer to Other Matters paragraphs), with respect to all material aspects, the foregoing parentonly financial statements were prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and thus provided a fair presentation of the parent-only financial positions of SOLOMON Technology Corporation on December 31, 2022 and 2021 and the parent-only financial performance and cash flows for the periods from January 1 to December 31, 2022 and 2021.

Basis for Audit Opinions

We conducted the audit in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the auditing standards in the Republic of China. Our responsibilities under such standards are further described in the paragraph of “Responsibilities of CPAs for the Audit of Parent-only Financial Statements.” As CPAs who are subject to independence requirements, we have, in accordance with the Standards of Professional Ethics for Certified Public Accountants of the Republic of China, remained independent from SOLOMON Technology Corporation and fulfilled all other responsibilities under the requirements. According to our audit results and other independent auditors’ reports, we believe that we have acquired sufficient and appropriate audit evidence as the basis of our audit opinions.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the parent-only financial statements of SOLOMON Technology Corporation for 2022. Such matters were addressed in the context of our audit of the parentonly financial statements as a whole and, in forming our opinions thereon, we have not provided any separate opinions on these matters.

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The key audit matters for SOLOMON Technology Corporation’s parent-only financial statements for 2022 are described as follows:

Impairment Assessment of Accounts Receivable

Matter description

Please refer to Notes 4 (8) and 4 (9) to the parent-only financial statements for the accounting policies for accounts receivable and impairments. Please refer to Note 5 (2) to the parent-only financial statements for the uncertainty of important judgments, accounting estimates and assumptions for the accounting policies adopted for the valuation of accounts receivable. Please refer to Note 6 (4) to the parent-only financial statements for the description of the accounts receivable account. SOLOMON Technology Corporation’s accounts receivable and loss allowance as of December 31, 2022, were NT$241,856 thousand and NT$1,191 thousand, respectively.

SOLOMON Technology Corporation collected payments over the loan period set based on the individual customers’ credit quality under the credit standard and regularly reviewed the reasonableness of estimated losses. The loss allowance was based on the estimated irrecoverable amount of expected credit losses which involved the subjective judgment of the management. Therefore, we deem the assessment of loss allowance for accounts receivable to be one of the most important matters in our audit.

Responsive audit procedures

The responsive procedures that we implemented are listed as follows:

1. Reviewing and assessing the assumption factors for expected credit losses adopted by SOLOMON Technology Corporation; the process involved assessing the reasonableness of the determination of aging ranges. Randomly auditing source documents to check their accuracy based on the aging schedule and randomly auditing loan conditions to verify the reasonableness of the account receivable age. Conducting a review to see if there were uncovered accounts receivable that had not been settled for a long period of time in order to determine if the loss allowance for accounts receivable was sufficient.

2. Understanding the reason for failure to collect material accounts receivable after the normal loan period expired or reviewing the subsequent collection of the accounts receivable.

Assessment of Allowance for Inventory Devaluation Losses

Matter description

Please refer to Note 4 (12) to the parent-only financial statements for the accounting policies for inventory valuation. Please refer to Note 5 (2) to the parent-only financial statements for the uncertainty of important judgments, accounting estimates and assumptions for the accounting policies adopted for inventory valuation. Please refer to Note 6 (5) to the parent-only financial statements for the description of the inventory account. SOLOMON Technology Corporation’s inventory and allowance for devaluation losses as of December 31, 2022, were NT$807,973 thousand and NT$19,671 thousand, respectively.

SOLOMON Technology Corporation is mainly engaged in the sale of generators,

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automatic parts and components and LCDs. As the life cycle of electronic products is short and there is fierce competition in the market, there is a higher risk of inventory devaluation losses or obsolescence. SOLOMON Technology Corporation’s inventory was measured at the lower of cost or net realizable value. As the inventory amount was material with plenty of items and the accounting estimate relied on the subjective judgment of the management, we deem the valuation of allowance for inventory devaluation losses to be one of the most important matters in our audit.

Responsive audit procedures

The responsive procedures that we implemented are listed as follows:

1. Assessing the consistency of SOLOMON Technology Corporation’s adoption of policies for allowance for inventory devaluation losses throughout the comparative financial statement period according to our understanding of its business and the industry that it is in and performing an assessment to check the reasonableness of the net realizable value determined by the management.

2. Understanding SOLOMON Technology Corporation’s inventory management procedure, reviewing its annual inventory plan and participating in its annual inventory to assess the effectiveness of the management’s separation and control of obsolete inventory.

3. Verifying the appropriateness of the logic of the inventory aging reporting system used by the management for valuation to make sure the information in the financial statements was consistent with SOLOMON Technology Corporation’s policies for allowance for inventory devaluation losses.

4. Testing the carrying value of inventory at the end of the period and conducting a random check to confirm the accuracy of the selling price and sales expense rate used to calculate the net realizable value and the correctness of the net realizable value.

- Reference to the Audits of Other CPAs

The financial statements of the investee companies accounted for using the equity method in the parent-only financial statements of SOLOMON Technology Corporation were audited by other CPAs instead of us. Therefore, our opinions expressed on the foregoing parent-only financial statements with respect to the amounts in the financial statements of such companies were based on the CPAs’ reports. The investments in the aforesaid investee companies accounted for using the equity method as of December 31, 2022 and 2021, amounted to NT$255,674 thousand and NT$186,840 thousand, respectively, accounting for 3.78% and 2.91% of the total consolidated assets. The comprehensive income recognized with respect to the said companies for the periods from January 1 to December 31, 2022 and 2021, amounted to NT$(42,235) thousand and NT$(21,629) thousand, respectively, accounting for (8.56%) and (11.54%) of the total consolidated comprehensive income.

Responsibilities of the Management and Governance Unit for the Parentonly Financial Statements

The management was responsible for preparing the parent-only financial statements with

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fair presentation in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and maintaining the necessary internal control related to preparation of the parent-only financial statements to ensure that the parent-only financial statements were free of material misstatements due to fraud or error.

In preparing the parent-only financial statements, the management was also responsible for evaluating SOLOMON Technology Corporation’s going concern ability, disclosure of relevant matters and use of the going concern basis of accounting, unless the management intended to liquidate or cease the operations of SOLOMON Technology Corporation, or there were no other actual feasible solutions other than liquidation or cessation of operations.

The governance unit of SOLOMON Technology Corporation was responsible for supervising the financial reporting process.

Responsibilities of CPAs for the Audit of the Parent-only Financial Statements

The purpose of our audit of the parent-only financial statements was to obtain reasonable assurance about whether or not the parent-only financial statements were free of material misstatements due to fraud or error, with an audit report issued thereafter. Reasonable assurance means a high degree of assurance. However, there was no guarantee that any material misstatement contained in the parent-only financial statements could be discovered during the audit conducted in accordance with the auditing standards in the Republic of China. A misstatement may be due to fraud or error. A misstatement was deemed material if the individual or aggregate amount misstated was reasonably expected to affect the economic decisions made by the users of the parent-only financial statements.

We relied on our professional judgment and maintained our professional skepticism during the audit conducted pursuant to the auditing standards in the Republic of China. We also performed the following tasks:

1. Identifying and assessing the risk of misstatements in the parent-only financial statements due to fraud or error; designing and implementing appropriate measures in response to the assessed risk; and acquiring sufficient and appropriate audit evidence as the basis of our audit opinions. Since fraud may involve collusion, forgery, intentional omission, fraudulent statement or violation of internal control, the risk of not detecting a material misstatement resulting from fraud is higher than that resulting from error.

2. Acquiring necessary understanding of the internal control related to the audit to design audit procedures appropriate for the current circumstances, provided that the purpose of the foregoing was not to express opinions regarding the effectiveness of the internal control of SOLOMON Technology Corporation.

3. Assessing the appropriateness of the accounting policies adopted by the management and the reasonableness of the accounting estimates and relevant disclosures made by the management.

4. Drawing a conclusion about the appropriateness of the management’s use of the going concern basis of accounting and whether or not there was material uncertainty in an event or

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circumstance which might cast significant doubt about the ability of SOLOMON Technology Corporation to remain as a going concern. If any material uncertainty was deemed to exist in such event or circumstance, we must provide a reminder in the audit report for the users of the parent-only financial statements to pay attention to the relevant disclosures therein or revise our audit opinions when any such disclosure was inappropriate. Our conclusion was based on the audit evidence obtained as of the date of this audit report. However, future events or circumstances could result in a situation where SOLOMON Technology Corporation is no longer able to remain as a going concern.

1. Assessing the overall presentation, structure and contents of the parent-only financial statements (including relevant notes) and whether or not the parent-only financial statements provided a fair presentation of the relevant transactions and events.

2. Acquiring sufficient and appropriate audit evidence of the financial information of the entities forming SOLOMON Technology Corporation to provide opinions regarding the parent-only financial statements. We are responsible for guidance, supervision and implementation in relation to SOLOMON Technology Corporation’s audit cases and for the formation of audit opinions for the parent-only financial statements.

The matters for which we communicated with the governance unit include the planned scope and time of the audit and our material audit findings (including significant internal control deficiencies identified during the audit).

We also provided a declaration to the governance unit stating that as CPAs who are subject to independence requirements, we have complied with the independence requirements in the Standards of Professional Ethics for Certified Public Accountants of the Republic of China. We also communicated with the governance unit regarding all relationships and other matters (including relevant safeguard measures) which were deemed likely to affect the independence of CPAs.

The key audit matters in the audit of the parent-only financial statements of SOLOMON Technology Corporation for 2022 were determined by us from the matters regarding which we communicated with the governance unit. We shall specify such matters in the audit report, except where public disclosure of certain matters is prohibited by applicable laws or regulations or where, under very exceptional circumstances, we have decided not to communicate certain matters in the audit report due to the reasonable expectation that any negative effect arising from such communication would be greater than the public interest enhanced.

PricewaterhouseCoopers Taiwan

Liang Yi-Chang CPA Chen Hsien-Cheng

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Financial Supervisory Commission Approval No.: Jin-Guan-Zheng-Shen-Zi No. 1070303009 Jin-Guan-Zheng-Shen-Zi No. 1060025060

March 17, 2023

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SOLOMON Technology Corporation Parent-only Balance Sheet December 31, 2022 and 2021

Unit: NT$ Thousand

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December 31, 2022 December 31, 2021
Assets Note Amount % Amount %
Current assets
1100 Cash and cash equivalents 6 (1) $ 575,243 9 $ 421,692 7
1110 Financial assets measured at fair 6 (2)
value through profit or loss – current 150,928 2 79,101 1
1136 Financial assets measured at 6 (3)
amortized cost – current - - 110,720 2
1150 Net notes receivable 6 (4) 20,676 - 8,791 -
1170 Net accounts receivable 6 (4) 240,665 4 268,482 4
1180 Net accounts receivable – related 7
- -
party 5,013 2,123
1200 Other receivables - -
19,060 5,778
1210 Other receivables – related party 7 - -
2,097 25,670
1220 Income tax assets in the current
period 114 - 114 -
130X Inventory 6 (5) 788,302 12 758,625 12
1410 Prepayments 6 (6) 144,534 2 148,504 2
11XX Total current assets
1,946,632 29 1,829,600 28
Non-current assets
1510 Financial assets measured at fair 6 (2)
value through profit or loss – non-
current 35,593 - 31,235 1
1535 Financial assets measured at 6 (3)
amortized cost – non-current 1,074,850 16 968,800 15
1550 Investments accounted for using the 6 (7)
equity method 2,360,782 35 2,230,218 35
1600 Property, plant and equipment 6 (8) and 8 410,736 6 416,811 6
1755 Right-of-use assets 6 (9) 5,741 - 4,482 -
1760 Net investment property 6 (11) and 8 861,835 13 873,043 14
1780 Intangible assets 2,920 - 1,150 -
1840 Deferred income tax assets 6 (16) 9,416 - 23,522 -
1900 Other non-current assets 6 (12) 54,201 1 49,851 1
15XX Total non-current assets
4,816,074 71 4,599,112 72
1XXX Total assets
$ 6,762,706 100 $ 6,428,712 100
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SOLOMON Technology Corporation Parent-only Balance Sheet December 31, 2022 and 2021

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Unit: NT$ Thousand
December 31, 2022 December 31, 2021
Liabilities and equity Note Amount % Amount %
Current liabilities
2100 Short-term loans 6 (13) $ 964,000 14 $ 1,307,264 20
2130 Contractual liabilities – current 6 (21) 468,805 7 191,277 3
2150 Notes payable 11,185 - 756 -
2170 Accounts payable 7 183,959 3 230,076 4
2200 Other payables 6 (14) and 7 87,442 1 73,867 1
2230 Income tax liabilities in the current 6 (16)
- -
period 3,774 3,400
2280 Lease liabilities – current 6 (9) - -
3,678 3,799
2300 Other current liabilities
41,755 1 27,083 1
21XX Total current liabilities
1,764,598 26 1,837,522 29
Non-current liabilities
2570 Deferred income tax liabilities 6 (16) 79,278 1 12,998 -
2580 Lease liabilities – non-current 6 (9) 2,177 - 861 -
2600 Other non-current liabilities - -
7,943 7,412
25XX Total non-current liabilities 89,398 1 21,271 -
2XXX Total liabilities
1,853,996 27 1,858,793 29
Equity
Share capital 6 (17)
3110 Common share capital 1,714,711 25 1,714,711 27
Capital reserves 6 (18)
3200 Capital reserves 215,138 4 215,138 3
Retained earnings 6 (19)
3310 Legal reserves 417,135 6 397,012 6
3320 Special reserves 147,260 2 133,468 2
3350 Undistributed earnings 2,536,828 38 2,262,892 35
Other equity 6 (20)
3400 Other equity
( 116,320) ( 2) ( 147,260) ( 2)
3500 Treasury stocks 6 (17) - -
( 6,042) ( 6,042)
3XXX Total equity 4,908,710 73 4,569,919 71
Material contingencies and 9
unrecognized contractual commitments
Material subsequent events 11
3X2X Total liabilities and equity $ 6,762,706 100 $ 6,428,712 100
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The attached notes to the parent-only financial statements are part of the parent-only financial statements and should be read in conjunction.

Chairman: Chen Cheng-Lung

General Manager: Chen Cheng-Lung

Chief Accountant: Huang Chien-Chi

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SOLOMON Technology Corporation

Parent-only Statement of Comprehensive Income

January 1 to December 31, 2022 and 2021

Unit: NT$ Thousand (Earnings per share in NT$)

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2022 2021
Item Note Amount % Amount %
4000 Operating income 6 (21) and 7 $ 3,157,169 100 $ 2,280,169 100
5000 Operating costs 6 (5) (26)
(27) ( 2,610,462) ( 83) ( 1,854,315) ( 82)
5950 Net gross operating profit 546,707 17 425,854 18
Operating expenses 6 (26)
(27) and 7
6100 Marketing expense ( 257,593) ( 8) ( 265,498) ( 12)
6200 Management expense ( 97,002) ( 3) ( 78,002) ( 3)
6300 R&D expense ( 93,441) ( 3) ( 70,315) ( 3)
6450 Expected credit impairment gain 6 (4) and 12
(2) 284 - 2,141 -
6000 Total operating expenses ( 447,752) ( 14) ( 411,674) ( 18)
6900 Operating profit 98,955 3 14,180 -
Non-operating income and expenses
7100 Interest income 6 (22) 88,968 3 64,857 3
7010 Other income 6 (23) and 7 79,448 3 63,481 3
7020 Other profits and losses 6 (24) 107,303 3 ( 33,129) ( 2)
7050 Financial costs 6 (25) ( 16,046) ( 1) ( 9,759) -
7070 Share of profits/losses of 6 (7)
subsidiaries, associates and joint
ventures under the equity method 184,648 6 113,138 5
7000 Total non-operating income and
expenses 444,321 14 198,588 9
7900 Pre-tax profit 543,276 17 212,768 9
7950 Income tax expense 6 (16) ( 85,044) ( 2) ( 14,254) -
8200 Net profit in the current period $ 458,232 15 $ 198,514 9
Other comprehensive income (net)
Items not reclassified as profit or
loss
8311 Remeasurement of defined benefit 6 (15)
plan $ 3,829 - $ 2,482 -
8330 Share of other comprehensive
income of subsidiaries, associates
and joint ventures under the equity
method – items not reclassified as
profit and loss 880 - 730 -
8349 Income tax related to items not 6 (16)
reclassified ( 766) - ( 496) -
8310 Total amount of items not
- -
reclassified as profit or loss 3,943 2,716
Items likely to be subsequently
reclassified as profit or loss
8361 Exchange differences on translation 6 (20)
of financial statements of foreign
operations 30,940 1 ( 13,791) ( 1)
8360 Total amount of items likely to be
subsequently reclassified as profit
or loss 30,940 1 ( 13,791) ( 1)
8500 Total comprehensive income in the
current period $ 493,115 16 $ 187,439 8
Basic earnings per share 6 (28)
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The attached notes to the parent-only financial statements are part of the parent-only financial statements and should be read in conjunction.

Chairman: Chen Cheng-Lung

General Manager: Chen Cheng-Lung Chief Accountant: Huang Chien-Chi

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SOLOMON Technology Corporation Parent-only Statement of Comprehensive Income January 1 to December 31, 2022 and 2021

9750 Basic earnings per share Diluted earnings per share 6 (28) 9850 Diluted earnings per share	Unit: NT$ Thousand (Earnings per share in NT$) $ 2.67 $ 1.16 $ 2.67 $ 1.16

The attached notes to the parent-only financial statements are part of the parent-only financial statements and should be read in conjunction.

General Manager: Chen Cheng-Lung Chief Accountant: Huang Chien-Chi

Chairman: Chen Cheng-Lung

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SOLOMON Technology Corporation Parent-only Statement of Changes in Equity January 1 to December 31, 2022 and 2021

Unit: NT$ Thousand

2021 Balance on January 1, 2021 Net profit in the current period Other comprehensive income in the current period Total comprehensive income in the current period Allocation and distribution of earnings: Legal reserves Special reserves Cash dividends Difference between the consideration and carrying amount of subsidiaries acquired or disposed of Changes in ownership interests in subsidiaries and associates Balance on December 31, 2021 2022 Balance on January 1, 2022 Net profit in the current period Other comprehensive income in the current period Total comprehensive income in the current period Allocation and distribution of earnings: Legal reserves Special reserves Cash dividends Balance on December 31, 2022	Note 6 (20) 6 (19) 6 (20) 6 (19)		Common share capital $ 1,714,711 - - - - - - - - $ 1,714,711 $ 1,714,711 - - - - - - $ 1,714,711	Capital reserves $ 212,085 - - - - - - 912 2,141 $ 215,138 $ 215,138 - - - - - - $ 215,138		Retained earnings
						Legal reserves $ 394,894 - - - 2,118 - - - - $ 397,012 $ 397,012 - - - 20,123 - - $ 417,135

The attached notes to the parent-only financial statements are part of the parent-only financial statements and should be read in conjunction.

General Manager: Chen Cheng-Lung

Chairman: Chen Cheng-Lung

Chief Accountant: Huang Chien-Chi

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SOLOMON Technology Corporation Parent-only Statement of Cash Flows January 1 to December 31, 2022 and 2021

Unit: NT$ Thousand

Cash flows from operating activities Pre-tax profit in the current period Adjustment items Profits and expenses Depreciation expense (including investment property and right-of-use assets) Amortization expense Expected credit reversal gain Net loss (gain) from financial assets and liabilities measured at fair value through profit or loss Interest expense Interest income Share of profits of subsidiaries, associates and joint ventures under the equity method Gain from disposal and scrapping of property, plant and equipment Changes in assets/liabilities related to operating activities Net changes in assets related to operating activities Financial assets and liabilities measured at fair value through profit or loss – current Notes receivable Accounts receivable Net accounts receivable – related party Other receivables Inventory Prepayments Net changes in liabilities related to operating activities Contractual liabilities Notes payable Accounts payable Other payables Other current liabilities Cash inflow (outflow) from operations Interest received Interest paid Income tax paid Net cash inflow (outflow) from operating activities

Note January 1 to December 31, 2022 January 1 to December 31, 2021 $ 543,276 $ 212,768 6 (8) (9) (11) 32,758 33,925 6 (26) 1,889 2,316 12 (2) ( 284 ) ( 2,141 ) 6 (2) (24) 45,236 ( 15,651 ) 6 (25) 16,046 9,759 6 (22) ( 88,968 ) ( 64,857 ) 6 (7) ( 184,648 ) ( 113,138 ) 6 (24) ( 13 ) - ( 121,421 ) ( 78,341 ) ( 11,885 ) ( 678 ) 28,101 ( 58,261 ) ( 2,890 ) 134,220 ( 13,074 ) ( 495 ) ( 29,850 ) ( 360,633 ) 3,970 64,492 277,528 65,109 10,429 ( 1,707 ) ( 46,117 ) 31,546 13,382 12,072 6 (29) 14,672 13,620 488,137 ( 116,075 ) 88,760 63,262 ( 15,853 ) ( 9,314 ) ( 5,051) ( 3,375) 555,993 ( 65,502)

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SOLOMON Technology Corporation Parent-only Statement of Cash Flows January 1 to December 31, 2022 and 2021

Cash flows from investing activities Decrease (Increase) in financial assets measured at amortized cost Proceeds from acquisition of investments accounted for using the equity method – subsidiaries Share payments returned on capital reduction in investee companies accounted for using the equity method Proceeds from acquisition of property, plant, and equipment Proceeds from disposal of property, plant and equipment (Increase) Decrease in deposits paid Decrease in other receivables – related party Proceeds from acquisition of intangible assets Cash dividends received from investments accounted for using the equity method Net cash inflow (outflow) from investing activities Cash flows from financing activities Repayment of short-term loans Borrowing of short-term loans Repayment of principal of lease liabilities Decrease (Increase) in other non-current liabilities Distribution of cash dividends Net cash inflow (outflow) from financing activities Effect of exchange rate Increase in cash and cash equivalents in the current period Opening balance of cash and cash equivalents Closing balance of cash and cash equivalents

Unit: NT$ Thousand Note January 1 to December 31, 2022 January 1 to December 31, 2021 $ 4,670 ( $ 680,800 ) 6 (7) ( 93,581 ) ( 60,000 ) 6 (7) 51,482 - 6 (8) ( 10,868 ) ( 15,431 ) 13 - ( 573 ) 3,787 23,573 70,831 ( 3,440 ) ( 768 ) 6 (7) 127,258 52,474 98,534 ( 629,907) 6 (29) ( 1,444,825 ) ( 709,205 ) 6 (29) 1,101,561 1,619,092 6 (9) (29) ( 4,582 ) ( 4,133 ) 6 (29) 531 ( 86 ) 6 (19) ( 154,324) ( 85,736) ( 501,639) 819,932 663 ( 911) 153,551 123,612 421,692 298,080 $ 575,243 $ 421,692

The attached notes to the parent-only financial statements are part of the parent-only financial statements and should be read in conjunction.

General Manager: Chen Cheng-Lung Chief Accountant: Huang Chien-Chi

Chairman: Chen Cheng-Lung

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SOLOMON Technology Corporation

Notes to the Parent-only Financial Statements 2022 and 2021

Unit: NT$ Thousand (Unless otherwise specified)

1. Company history

• (1) SOLOMON Technology Corporation (hereinafter referred to as the “Company”) was established in the Republic of China and commenced operation in May 1990. The Company was merged with its 100%-owned subsidiaries Mo Dao Investment Co., Ltd., Long Men Technology Corporation, and De Li Investment Co., Ltd. during 2007 and 2006. After the merger, the Company survived and Mo Dao Investment Co., Ltd., Long Men Technology Corporation, and De Li Investment Co., Ltd. were dissolved. The Company is mainly engaged in the sale, manufacturing, agency, and import of generators, semiconductors, electronic parts, and LCDs.

• (2) The Company’s stock was listed on Taiwan Stock Exchange Corporation in December 1996.

2. Approval date and procedures of the financial statements

The parent-only financial statements were approved for publication by the Board of Directors on March 17, 2023.

3. Application of new and amended standards and interpretations

• (1) Effect of adopting the newly promulgated or revised IFRSs endorsed, published and put in force by the Financial Supervisory Commission (hereinafter referred to as the “FSC”)

The newly promulgated, amended and revised standards and interpretations of IFRSs endorsed, published and put in force by the FSC and applicable in 2022 are listed in the following table:

New, revised or amended standards and interpretations Amendment to IFRS 3 “Reference to the Conceptual Framework” Amendment to IAS 16 “Property, Plant and Equipment: Proceeds before Intended Use” Amendment to IAS 37 “Onerous Contracts – Cost of Fulfilling a Contract” Annual Improvements to 2018-2020 Cycle	Effective date per IASB
	January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2022

As evaluated by the Company, the above standards and interpretations have no significant impact on the financial position and performance of the Company.

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• (2) Effect of not adopting the newly promulgated or revised IFRSs endorsed by the FSC

The newly promulgated, amended and revised standards and interpretations of IFRSs endorsed by the FSC and applicable in 2023 are listed in the following table:

New, revised or amended standards and interpretations Effective date per IASB Amendment to IAS 1 “Disclosure of Accounting Policies” January 1, 2023 Amendment to IAS 8 “Definition of Accounting Estimates” January 1, 2023 Amendment to IAS 12 “Deferred Tax related to Assets and January 1, 2023 Liabilities Arising from a Single Transaction”

As evaluated by the Company, the above standards and interpretations have no significant impact on the financial position and performance of the Company.

• (3) Effect of the IFRSs issued by the IASB but not yet endorsed by the FSC

The newly promulgated or revised standards and interpretations of the IFRSs issued by the IASB but not yet endorsed by the FSC are listed in the following table:

New, revised or amended standards and interpretations Effective date per IASB Amendments to IFRS 10 and IAS 28 “Sale or Contribution of To be determined by Assets between an Investor and its Associate or Joint Venture” IASB Amendment to IFRS 16 “Lease Liability in a Sale and January 1, 2024 Leaseback” IFRS 17 “Insurance Contracts” January 1, 2023 Amendment to IFRS 17 “Insurance Contracts” January 1, 2023 Amendment to IFRS 17 “Initial Application of IFRS 17 and January 1, 2023 IFRS 9—Comparative Information” Amendment to IAS 1 “Classification of Liabilities as Current or January 1, 2024 Non-current” Amendment to IAS 1 “Non-current Liabilities with Covenants” January 1, 2024

As evaluated by the Company, the above standards and interpretations have no significant impact on the financial position and performance of the Company.

4. Summary of material accounting policies

For the convenience of readers, the independent auditors’ report and the accompanying parent company only financial statements have been translated into English from the original Chinese version prepared and used in the R.O.C. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese - language independent auditors’ report and parent company only financial statements shall prevail.

The main accounting policies used for preparing the parent-only financial statements are described as follows. Unless otherwise specified, such policies are consistently applicable to all reporting periods.

• (1) Statement of compliance

The parent-only financial statements were prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

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• (2) Basis of preparation

• A. The parent-only financial statements were prepared on the basis of historical cost, except for the key items listed below:

  • (A) Financial assets and liabilities (including derivatives) measured at fair value through profit or loss, measured at fair value.

  • (B) Defined benefit liabilities recognized as the net amount calculated as pension fund assets less the present value of defined benefit obligations.

• B. Preparing financial statements in accordance with the International Financial Reporting Standards, International Accounting Standards, interpretations and pronouncements of interpretation (hereinafter collectively referred to as IFRSs) requires the use of some important accounting estimates. During the adoption of the Company’s accounting policies, the management needs to rely on their judgment when it comes to items that require demanding judgments, are highly complex or involve material assumptions and estimates in parent-only financial statements. For details, please refer to the description in Note 5.

• (3) Foreign currency translation

The parent-only financial statements use the Company’s functional currency, “NT dollars,” as the presentation currency.

• A. Foreign currency transactions and balances

• (A) Foreign currencies in foreign currency transactions are translated into the functional currency based on the spot exchange rate on the transaction or measurement date. The translation difference generated by the translation is recognized as profit or loss in the current period.

• (B) Valuation adjustments are made to the balance of monetary foreign currency assets and liabilities based on the spot exchange rate on the balance sheet date. The translation difference generated by the adjustments is recognized as profit or loss in the current period.

• (C) If the balance of non-monetary foreign currency assets and liabilities is measured at fair value through profit or loss, valuation adjustments are made based on the spot exchange rate on the balance sheet date. The exchange difference generated by the adjustments is recognized as profit or loss in the current period. If the balance is measured at fair value through other comprehensive income, valuation adjustments are made based on the spot exchange rate on the balance sheet date. The exchange difference generated by the adjustments is recognized as other comprehensive income in the current period. If the balance is not measured at fair value, it is measured at the historical exchange rate on the initial transaction date.

• (D) All exchange differences are recognized as “other profits and losses” in the income statement based on the nature of transaction.

• B. Translation of foreign operations

• (A) The business results and financial position of all the entities and associates whose functional currency and presentation currency are different are translated into the presentation currency using the following methods:

  • a. Assets and liabilities presented in each balance sheet are translated at the closing rate on the balance sheet date;

~19~

     - b. Profits and losses presented in each statement of comprehensive income are translated at the average exchange rate in the current period; and

     - c. All exchange differences generated from translation are recognized as other comprehensive income.

  - (B) When a foreign operation that is partially disposed of or sold is an associate, the exchange difference recognized as other comprehensive income is reclassified proportionally to profit or loss in the current period as part of gains or losses on sale. However, when the Company retains partial interest in the former foreign associate after losing significant influence over it, such transactions should be accounted for as disposal of all interest in the foreign operation.

  - (C) When a foreign operation that is partially disposed of or sold is a subsidiary, the accumulated exchange difference recognized as other comprehensive income is reattributed proportionally to the non-controlling interests of the foreign operation. However, when the Company retains partial interest in the former foreign subsidiary after losing control over it, such transactions should be accounted for as disposal of all interest in the foreign operation.

• (4) Criteria for classification of current and non-current assets and liabilities

• A. Assets that match any of the following conditions shall be classified as current assets:

  • (A) The asset is expected to be realized or is intended to be sold or depleted over normal business cycles.

  • (B) The asset is held primarily for the purpose of trading.

  • (C) The asset is expected to be realized within 12 months after the balance sheet date.

  • (D) Cash or cash equivalents, excluding those that are restricted for being used for exchange or settlement of liabilities at least within 12 months after the balance sheet date.

The Company classifies all assets that do not match the above conditions as non-current.

• B. Liabilities that match any of the following conditions shall be classified as current liabilities:

• A. The liability is expected to be settled over normal business cycles.

• B. The liability is held primarily for the purpose of trading.

• C. The liability is expected to be due to be settled within 12 months after the balance sheet date.

• D. The due date of the liability cannot be unconditionally extended for at least 12 months after the balance sheet date. The terms of the liability that may, at the option of the counterparty, result in settlement of the liability by issuance of equity instruments do not affect the classification of the liability.

The Company classifies all liabilities that do not match the above conditions as non-current.

• (5) Cash equivalents

Cash equivalents refer to short-term investments with high liquidity that can be converted into specified amounts of cash at any time with little risk of value changes. Time deposits that fit into the aforesaid definition and are held for the purpose of meeting short-term operating cash commitments are classified as cash equivalents.

~20~

• (6) Financial assets measured at fair value through profit or loss

• A. Financial assets measured at fair value through profit or loss refer to financial assets not measured at amortized cost or at fair value through other comprehensive income.

• B. The Company uses settlement date accounting for financial assets measured at fair value through profit or loss in accordance with the trading practice.

• C. The Company measures the financial assets at fair value at initial recognition and relevant transaction costs are recognized as profit or loss. The financial assets are subsequently measured at fair value and any gains or losses arising therefrom are recognized as profit or loss.

• D. When the right to receive dividends is established, the Company recognizes the dividend income as profit or loss, provided that the economic benefits related to the dividends are likely to flow in and the amount of the dividends can be measured reliably.

• (7) Financial assets measured at amortized cost

• A. Financial assets measured at amortized cost refer to financial assets that meet all the following conditions:

  • (A) The financial asset is held under an operating model with the purpose of receiving contractual cash flows.

  • (B) The contractual terms of the financial asset generate cash flows on a specific date that are solely payments of principal and interest.

• B. The Company uses transaction date accounting for financial assets measured at amortized cost in accordance with the trading practice.

• C. The Company measures the financial assets at fair value plus transaction costs at initial recognition and subsequently recognizes interest income using the effective interest method over the circulation period according to the amortization procedure as well as impairment losses. Derecognition gains or losses are then recognized as profit or loss.

• D. The Company holds time deposits that do not qualify as cash equivalents. As the discount of the time deposits does not have significant effect due to a short holding period, the Company measures them based on the investment amount.

• (8) Accounts and notes receivable

• A. Accounts and notes receivable refer to accounts and notes with the right to unconditionally receive the consideration for which goods or services are exchanged pursuant to contractual agreements.

• B. They are short-term accounts and notes receivable without payment of interest. As the discount of the accounts and notes receivable does not have significant effect, the Company measures them at the initial invoice amount.

• (9) Impairment of financial assets

On each balance sheet, the Company measures the loss allowance for financial assets measured at amortized cost and accounts receivable containing significant financing components, whose credit risk is not significantly increased after initial recognition, at the amount of the 12-month expected credit losses in consideration of all reasonable and supportable information (including forward-looking information). If their credit risk is significantly increased after initial recognition, the loss allowance is measured at the amount of the expected credit losses throughout the lifetime. For accounts receivable that do not contain significant financing

~21~

components, the loss allowance is measured at the amount of the expected credit losses throughout the lifetime.

• (10) Derecognition of financial assets

In case of any of the following circumstances, the Company derecognizes financial assets:

• A. The contractual rights to receive the cash flows from financial assets become invalid.

• B. The contractual rights to receive the cash flows from financial assets are transferred and substantially all of the risks and rewards from ownership of the financial assets have been transferred.

• C. The contractual rights to receive the cash flows from financial assets are transferred and control of the financial assets is not retained.

• (11) Lessor’s lease transactions – operating leases

The lease income from operating leases less any incentive given to the lessee is amortized under the straight-line method over the lease term and recognized as profit or loss in the current period.

• (12) Inventory

Inventory is measured at the lower of cost or net realizable value, and its cost is determined using the moving average approach. The item-by-item method is adopted to determine the lower of cost and net realizable value. Net realizable value means the estimated selling price in the ordinary course of business less the estimated cost required for completion and the relevant variable selling expenses.

• (13) Investments accounted for using the equity method – subsidiaries and associates

• A. Subsidiaries refer to entities (including structured entities) controlled by the Company. An entity is controlled by the Company when the Company is exposed and has rights to variable returns from its involvement in the entity and has the ability to affect the returns with its power over the entity.

• B. Unrealized gains or losses arising from transactions between the Company and its subsidiaries have been eliminated. Necessary adjustments have been made to the accounting policies of the subsidiaries to keep them consistent with those of the Company.

• C. The Company recognizes its share of profits or losses after the acquisition of subsidiaries as profit or loss in the current period and recognizes its share of other comprehensive income after the acquisition as other comprehensive income. If the Company’s share of losses of a subsidiary equals or exceeds our interest in the subsidiary, the Company will continue to recognize losses in proportion to its shareholding.

• D. Changes in the Company’s shareholding in its subsidiaries that do not result in a loss of control (transactions with non-controlling interests) are treated as equity transactions, namely transactions with the owners. The difference between the adjusted amount of noncontrolling interests and the fair value of considerations paid or received is directly recognized as equity.

• E. Associates refer to entities that the Company has significant influence and no control over, in which case, generally speaking, the Company directly or indirectly holds 20% or more of the voting rights in the entities. The Company adopts the equity method for its investments in associates and recognizes them at cost when acquiring them.

• F. The Company recognizes its share of profits or losses after the acquisition of associates as profit or loss in the current period and recognizes its share of other comprehensive income

~22~

after the acquisition as other comprehensive income. If the Company’s share of losses in any associate is equal to or exceeds its interest in the associate (including any other unsecured accounts receivable), the Company does not recognize further losses, unless the Company has incurred legal or constructive obligations to or made payments on behalf of the associate.

• G. When there are changes in the equity of an associate that are not associated with profits or losses and other comprehensive income and do not affect the Company’s shareholding percentage in the associate, the Company recognizes all equity changes as “capital reserves” in proportion to its shareholding.

• H. Unrealized gains and losses generated from transactions between the Company and its associates have been derecognized based on the percentage of its interest in the associates. Unless there is any evidence indicating that the assets transferred in the transactions have impaired, the unrealized losses are derecognized, too. Necessary adjustments have been made to the accounting policies of the associates to keep them consistent with those of the Company.

• I. If the Company loses significant influence over an associate when disposing of it, the accounting treatment of all amounts related to the associate and previously recognized as other comprehensive income is on the same basis as that for the Company’s direct disposal of the relevant assets or liabilities. In other words, profits or losses previously recognized as other comprehensive income are reclassified as profit or loss when the relevant assets or liabilities are disposed of. Thus, the profits or losses are reclassified from equity to profit or loss when the Company loses significant influence over the associate. If the Company still has significant influence over the associate, the amount previously recognized as other comprehensive income is transferred out proportionally based on the above method.

• J. According to the Regulations Governing the Preparation of Financial Reports by Securities Issuers, the profit or loss and other comprehensive income in the current period presented in the parent-only financial statements shall be the same as the allocations of profits or losses attributable to owners of the parent company in the current period presented in the financial statements prepared on the basis of consolidation. Owners’ equity in the parentonly financial statements shall also be the same as equity attributable to owners of the parent company in the financial statements prepared on the basis of consolidation.

• (14) Property, plant and equipment

• A. Property, plant and equipment are accounted for at the acquisition cost and relevant interest during construction is capitalized.

• B. Subsequent costs are included in the carrying amount of the asset or recognized as an individual asset only when future economic benefits associated with the item are likely to flow in the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part shall be derecognized. All other maintenance expenses are recognized as profit or loss in the current period at the time of their occurrence.

• C. The property, plant and equipment are subsequently measured under the cost model. Except for land that is not depreciated, all property, plant and equipment are depreciated using the straight-line method over the estimated useful life. If the property, plant and equipment comprise any significant components, they are depreciated individually.

• D. The Company reviews the residual value, useful life and depreciation method of all assets at the end of each fiscal year. If the expected residual value and useful life are different from the previous estimates or there has been a significant change in the pattern in which

~23~

the future economic benefits of the asset are expected to be consumed, such change shall be treated in accordance with the requirements on changes in accounting estimates in IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” on the date of its occurrence.

The useful life of different types of assets is as follows:

Premises and buildings	3-55 years
Machines/equipment	3-12 years
Office equipment	3-12 years
Other equipment	2-20 years

• (15) Lessee’s lease transactions – right-of-use assets and lease liabilities

• A. Lease assets are recognized as right-of-use assets and lease liabilities on the date on which they become available for use by the Company. For short-term leases or leases of lowvalue underlying assets, the lease payments are recognized as expense using the straightline method over the lease term.

• B. As for lease liabilities, the unpaid lease payments are recognized at present value discounted at the incremental loan interest rate of the Company on the lease commencement date. Lease payments include fixed payments, less any receivable lease incentives.

The lease liabilities are subsequently measured at amortized cost using the interest method and interest expenses are amortized over the lease term. If changes in the lease term or lease payments do not result from contract revisions, the lease liabilities are re-assessed and a re-measurement is made to adjust right-of-use assets.

• C. The right-of-use assets are recognized at cost (including the initially measured amount of the lease liabilities and any initial direct cost incurred) on the lease commencement date.

The right-of-use assets are subsequently measured under the cost model and are depreciated when the useful life of the right-of-use assets or the lease term expires, whichever is earlier. When reassessing the lease liabilities, any remeasurement of the lease liabilities is adjusted for the right-of-use assets.

(16) Investment property

Investment property is recognized at acquisition cost and subsequently measured under the cost model. Except for land, the investment property is depreciated using the straight-line method over an estimated useful life of 48-55 years.

• (17) Intangible assets

Computer software is recognized at acquisition cost and amortized using the straight-line method over an estimated useful life of 3-5 years.

• (18) Impairment of non-financial assets

The Company estimates the recoverable amount of assets with signs of impairment on the balance sheet date. When the recoverable amount falls below the carrying value, an impairment loss is recognized. The recoverable amount is the higher of the fair value of an asset less the disposal cost and the value in use. When an asset impairment recognized in prior years may no longer exist or has decreased, the impairment loss is reversed, provided that the carrying amount

~24~

of the asset increased after reversal of the impairment loss does not exceed the carrying amount of the asset less amortization or depreciation expense without recognition of the impairment loss.

• (19) Loans

Loans refer to long-term and short-term borrowings from banks At initial recognition, the Company measures the loans at fair value less transaction costs and subsequently uses the effective interest method to recognize interest expenses at the difference between the proceeds net of transaction costs and the redemption value as profit or loss over the circulation period according to the amortization procedure.

• (20) Accounts and notes payable

• A. Accounts and notes payable refer to debts incurred due to the purchase of raw materials, goods, or services on credit terms and notes payable arising from operating and nonoperating activities.

• B. They are short-term accounts and notes payable without payment of interest. As the discount of the accounts and notes payable does not have significant effect, the Company measures them at the initial invoice amount.

• (21) Derecognition of financial liabilities

The Company derecognizes financial liabilities when the obligations specified in contracts are fulfilled, canceled, or expired.

• (22) Employee benefits

• A. Short-term employee benefits

Short-term employee benefits are measured at an undiscounted amount expected to be paid and recognized as expense when the related services are provided.

• B. Pension

• (A) Defined contribution plan

Under the defined contribution plan, pension contributions that shall be made are recognized as pension cost in the current period on an accrual basis. Pre-paid contributions are recognized as assets to the extent that a cash refund or reduction in future payments is available.

• (B) Defined benefit plan

• a. Under the defined benefit plan, net obligations are calculated based on the discounted future benefits earned by employees for services rendered during the current period or in the past and stated at the present value of the defined benefit obligations on the balance sheet date less the fair value of plan assets. The defined benefit obligations are calculated by an actuary using the projected unit credit method every year. The discount rate is the yield rate of government bonds that have the same currency and period under the defined benefit plan on the balance sheet date.

• b. Remeasurements arising from the defined benefit plan are recognized as other comprehensive income and recorded in retained earnings in the period of their incurrence.

• c. Expenses related to past service costs are immediately recognized as profit or

~25~

loss.

• C. Remuneration to employees and to directors and supervisors

Remuneration to employees and to directors and supervisors is recognized as expense and liabilities when it is subject to legal or constructive obligations and its amount can be estimated reasonably. Any difference between the amount of remuneration actually distributed to employees, directors and supervisors as resolved at the shareholders’ meeting and the estimated amount is treated as an accounting estimate change. If employees’ remuneration is distributed in shares, the closing price on the day before the date of the Board’s resolution is used as a basis for calculating the number of shares to be distributed.

• (23) Income tax

• A. Income tax expense includes current and deferred income taxes. Income taxes related to the items recognized as other comprehensive income or directly recognized as equity are recognized as comprehensive income or directly recognized as equity, respectively. The other income taxes are recognized as profit or loss.

• B. The Company calculates the current income tax based on the tax rates and laws of countries where the Company operates or generates taxable income that have been enacted or substantively enacted by the balance sheet date. The management regularly assesses the reporting of income taxes in accordance with applicable income tax laws and regulations and estimates income tax liabilities based on tax payments expected to be made to the taxation authority, if applicable. The income tax imposed on undistributed earnings according to the Income Tax Act is recognized as income tax on undistributed earnings based on the actual distribution of earnings only after the earning distribution proposal is passed at the shareholders’ meeting in the year following the year in which the earnings are generated.

• C. Deferred income taxes are recognized at temporary difference between the carrying amounts of assets and liabilities on the parent-only balance sheet and their tax bases using the balance sheet approach. The deferred income tax liabilities generated from the goodwill initially recognized are not recognized. If the deferred income tax results from the initially recognized assets or liabilities in transactions (excluding corporate mergers) and does not affect the accounting profit or the taxable income (taxable loss) at the time of the transaction, the deferred income tax is not recognized. Temporary differences resulting from investments in subsidiaries and associates are not recognized if the Company is able to control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. The tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date and are expected to be applicable when the relevant deferred income tax assets are realized or deferred income tax liabilities are settled are adopted for the deferred income taxes.

• D. Deferred income tax assets are recognized when it is probable that temporary differences will be available for offsetting future taxable income. Unrecognized and recognized deferred income tax assets are reassessed on each balance sheet date.

• E. When there is a legally enforceable right to offset the amounts of current income tax assets and liabilities recognized and an intention to settle on a net basis or realize the assets and settle the liabilities simultaneously, the current income tax assets may be offset against the current income tax liabilities. When there is a legally enforceable right to offset the amounts of current income tax assets and liabilities and when deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on the

~26~

same taxable entity or different taxable entities that intend to settle on a net basis or realize the assets and settle the liabilities simultaneously, the deferred income tax assets and liabilities may be offset against each other.

(24) Share capital

• A. Common shares are classified as equity. The incremental cost directly attributable to the issue of new shares and stock options is recognized as a debit item of the proceeds in equity, net of income taxes.

• B. When repurchasing issued shares, the Company recognizes the considerations paid, including any directly attributable incremental cost, at the net amount after tax as a debit item of shareholders’ equity. When reissuing the repurchased shares, the difference between the received considerations less any directly attributable incremental cost and income tax effects and the carrying value is recognized as an adjustment to shareholders’ equity. In addition, since January 1, 2002, the Company’s shares held by its subsidiaries have been treated as treasury stocks.

• (25) Distribution of dividends

Dividends distributed to the Company’s shareholders are recognized in the financial statements when a resolution to distribute the dividends is adopted at a shareholders’ meeting. Cash dividends distributed are recognized as liabilities.

• (26) Recognition of income

• A. Sale of goods

  • (A) Sales revenue is recognized when control over products is transferred to a customer. The customer has discretion regarding the sales channels and prices of the products and the Company has no unfulfilled performance obligations that may affect the customer’s acceptance of the products. At the time the products are delivered to the designated location, the risk of the products being out of date and lost is already transferred to the customer. When the customer accepts the products pursuant to the sales contract or there is objective evidence demonstrating that all acceptance criteria have been met, the goods is deemed delivered.

  • (B) The Company offers a standard warranty for the products sold and is obligated to make refunds for product defects. The warranty is recognized as a liability provision at the time the products are sold.

  • (C) Accounts receivable are recognized when goods are delivered to a customer as the Company has had unconditional rights to contract proceeds since that time and may collect consideration from the customer after that time.

• B. Costs of obtaining contracts with customers

Although it is expectable that the Company’s incremental costs incurred for obtaining contracts with customers can be recovered, the costs are recognized as expense at the time of their incurrence since the relevant contract terms are shorter than one year.

• (27) Government subsidies

Government subsidies shall be recognized when it is reasonable to ensure that the business will comply with the conditions incident to the government subsidies and the subsidies may be received affirmatively. If the government subsidies in nature are used to offset the expenses incurred by the Group, they are recognized as profit or loss on a systematic basis in the period

~27~

during which the relevant expenses are incurred.

5.

Main sources of uncertainty of material accounting judgments, estimates and assumptions

When the Company prepared the parent-only financial statements, the management used their judgment to determine which accounting policies were to be adopted and made accounting estimates and assumptions based on reasonable expectations of future events and according to the situation on the balance sheet date. There might be differences between the made material accounting estimates and assumptions and the actual results. Hence, historical experience and other factors would be taken into account to make continuous assessments and adjustments. Such estimates and assumptions led to a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the following fiscal year. The following is the description of the uncertainty of material accounting judgments, estimates and assumptions:

• (1) Important judgments for accounting policies adopted:

None.

• (2) Important accounting estimates and assumptions

• A. Valuation of accounts receivable

When there is objective evidence suggesting a sign of impairment, future cash flow estimates are taken into consideration. The amount of impairment losses is measured based on the difference between the carrying value of the asset and the present value of the estimated future cash flow discounted at the initial effective interest rate of the financial asset. If the actual cash flow in the future is less than estimated, significant impairment losses may occur.

• B. Valuation of inventory

Inventory shall be evaluated on the basis of the lower of cost or net realizable value. Hence, the Company must use judgments and estimates to determine the net realizable value of the inventory on the balance sheet date. As technology advances rapidly, the Company assesses the amount of inventory with normal wear and tear and obsolescence and without market sales value on the balance sheet date and writes down the cost of the inventory to the net realizable value. The valuation of inventory is mainly estimated according to the product demand within a certain period in the future; therefore, significant changes may occur.

6. Description of major accounts

• (1) Cash and cash equivalents

Cash: Check deposits and demand deposits Cash on hand and petty cash Cash equivalents: Time deposits	December 31, 2022 $ 213,496 75 361,672 $ 575,243	December 31, 2022 $ 213,496 75 361,672 $ 575,243	December 31, 2021	December 31, 2021	December 31, 2021
		$ $		$ $	206,350 75 215,267
					421,692

A. The Company deals with financial institutions with good credit ratings and has dealings with multiple financial institutions to spread credit risk. Thus, the possibility of defaults is

~28~

expected to be extremely low.

• B. The Company did not pledge the cash and cash equivalents.

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

Item	December 31, 2022	December 31, 2021
Current items:
Financial assets measured at fair value
through profit or loss on a mandatory basis
Listed/OTC stocks	$ 77,920	$ 84,051
Domestic and foreign funds	110,000	-
	187,920	84,051
Valuation adjustments	( 36,992)	( 4,950)
	$ 150,928	$ 79,101
Item	December 31, 2022	December 31, 2021
Non-current items:
Financial assets measured at fair value
through profit or loss on a mandatory basis
Listed/OTC stocks	$ 198,343	$ 198,997
Non-listed/non-OTC stocks	48,000	43,000
	246,343	241,997
Valuation adjustments	( 210,750)	( 210,762)
	$ 35,593	$ 31,235

• A. Details on financial assets measured at fair value through profit or loss and recognized as profit or loss are as follows:

Financial assets measured at fair value through profit or loss on a mandatory basis Equity instruments	2022 ($ 45,236)	2021 $ 15,651

• B. The Company did not pledge the financial assets measured at fair value through profit or loss.

• C. Please refer to Note 12 (2) for information on the credit risk of the financial assets measured at fair value through profit or loss.

• (3) Financial assets measured at amortized cost

Item Current items: Time deposit with an initial maturity date over three months Non-current items: Common corporate bonds	December 31, 2022 $ - $ 1,074,850	December 31, 2021	December 31, 2021
			$ 110,720
			$ 968,800

• A. Details on financial assets measured at amortized cost and recognized as profit or loss are

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as follows:

Interest income	2022 $ 84,232	2021 $ 64,003

• B. The Company did not pledge the financial assets measured at amortized cost as collateral.

• C. Please refer to Note 12 (2) for information on the credit risk of the financial assets measured at amortized cost. The Company invests in certificates of deposit with financial institutions with good credit ratings. Thus, the possibility of defaults is expected to be extremely low.

• (4) Notes and accounts receivable

Notes receivable Accounts receivable Less: Loss allowance	December

• A. The Company’s accounts receivable were not overdue. Please refer to the description in Note 12 (2) for the aging analysis of the accounts receivable.

• B. The balances of the accounts and notes receivable on December 31, 2022 and 2021, were derived from customers contracts. The balance of the accounts receivable from customer contracts on January 1, 2021, was $208,080.

• C. The Company did not hold any collateral.

• D. Please refer to Note 12 (2) for information on the credit risk of the accounts and notes receivable.

• (5) Inventory

December 31, 2022 Cost Inventory of goods $ 807,973 December 31, 2021 Cost Inventory of goods $ 773,399 The inventory-related losses and expenses recognized in the current period are as follows: Cost of sold inventory Loss from inventory devaluation (Gain from price recovery)	Allowance for devaluation loss ($ 19,671) Allowance for devaluation loss ($ 14,774) 2022 $ 2,605,565 4,897	Carrying amount $ 788,302 Carrying amount $ 758,625 2021 $ 1,864,769 ( 10,454)	Carrying amount $ 788,302 Carrying amount $ 758,625 2021 $ 1,864,769 ( 10,454)	Carrying amount $ 788,302 Carrying amount $ 758,625 2021 $ 1,864,769 ( 10,454)
		2021 $
			1,864,769 ( 10,454)

~30~

$ 2,610,462

$ 1,854,315

The net realizable value of inventory recovered since the Company sold the products for which devaluation losses were recognized.

• (6) Prepayments

Prepayment for purchase Others	December 31, 2022 $ 117,745 26,789 $ 144,534	December 31, 2021	December 31, 2021
			$ 127,341 21,163 $ 148,504

• (7) Investments accounted for using the equity method

Subsidiary Solomon Cayman International Corp. Solomon Goldentek Display Corp. Moredel Investment Corp. Solomon Smartnet Corp. Solomon Data International Corporation Total Profit Solomon Wireless Technology Corp. Cornucopia Innovation Corporation Solomon Science Technology (VN) Co., Ltd. Solomon Robotics (THAI) Ltd. Solomon Technology (USA) Corp. GD Investment Corp. Fast Energy Corporation Solomon Energy Technology Corporation Sheng-Peng Technology Corp.	December 31, 2022 $ 201,432 1,252,153 308,039 257,521 138,500 6,472 16 40,032 11,358 5,719 11,913 82 - 121,744 5,801 $ 2,360,782	December 31, 2021	December 31, 2021
			$ 228,008 1,141,138 326,115 247,102 125,371 7,807 16 54,348 3,254 5,667 2,563 346 243 88,240 - $ 2,230,218

• A. The investment gain valuated using the equity method and recognized in 2022 and 2021 was $184,648 and $113,138, respectively. It was recognized based on the financial statements audited by the CPA commissioned by each investee company. Details on changes in the account are as follows:

January 1 Increase in investments accounted for using the equity method Share payments returned on capital reduction in investee companies accounted for using the equity method Share of gains or losses form investments accounted for using the equity method	2022 $ 2,230,218 93,581 ( 51,482) 184,648	2021 $ 2,119,360 60,000 - 113,138

~31~

Distribution of earnings accounted for using the equity method Changes in capital reserves Changes in other equity December 31	( 127,258) - 31,075 $ 2,360,782	( 52,474) 3,053 ( 12,859) $ 2,230,218	52,474) 3,053 12,859)

• B. The Company’s subsidiary Moredel Investment Corp. held the Company’s shares to ensure financial operations before the Company Act was amended on November 12, 2001, and recognized a gain (loss) on valuation of financial assets of $221 and $472 in 2022 and 2021, respectively. The Company treated the shares as treasury stocks pursuant to the financial accounting standards and did not recognize relevant profits and losses.

• C. Please refer to Note 4 (3) to the Company’s consolidated financial statements for 2022 for information on the Company’s subsidiaries.

• (8) Property, plant and equipment

January 1, 2022 Cost Accumulated depreciation 2022 January 1 Addition Reclassification Disposal Disposal - accumulated depreciation Depreciation expense December 31 December 31, 2022 Cost Accumulated depreciation	Land $ 261,234 - $ 261,234 $ 261,234 - - - - - $ 261,234 $ 261,234 - $ 261,234	Premises and buildings $ 201,153 ( 75,938) $ 125,215 $ 125,215 - - - - ( 3,715) $ 121,500 $ 201,153 ( 79,653) $ 121,500	Machines/e quipment $ 51,364 ( 27,671) $ 23,693 $ 23,693 9,230 173 - - ( 10,864) $ 22,232 $ 60,767 ( 38,535) $ 22,232	Machines/e quipment $ 51,364 ( 27,671) $ 23,693 $ 23,693 9,230 173 - - ( 10,864) $ 22,232 $ 60,767 ( 38,535) $ 22,232	Office equipment $ 15,454 ( 14,377) $ 1,077 $ 1,077 1,102 - ( 2,873) 2,873 ( 1,041) $ 1,138 $ 13,683 ( 12,545) $ 1,138	Office equipment $ 15,454 ( 14,377) $ 1,077 $ 1,077 1,102 - ( 2,873) 2,873 ( 1,041) $ 1,138 $ 13,683 ( 12,545) $ 1,138	Others $ 19,730 ( 14,138) $ 5,592 $ 5,592 536 - - - ( 1,496) $ 4,632 $ 20,266 ( 15,634) $ 4,632	Total $ 548,935 ( 132,124)
								$ 416,811
								$ 416,811 10,868 173 ( 2,873) 2,873 ( 17,116) $ 410,736
								$ 557,103 ( 146,367)
								$ 410,736

January 1, 2021 Cost Accumulated depreciation 2021 January 1 Addition Reclassification Depreciation	Land $ 292,326 - $ 292,326 $ 292,326 - ( 31,092) -	Premises and buildings $ 224,796 ( 80,823) $ 143,973 $ 143,973 3,735 ( 18,782) ( 3,711)	Premises and buildings $ 224,796 ( 80,823) $ 143,973 $ 143,973 3,735 ( 18,782) ( 3,711)	Machines/e quipment $ 38,848 ( 17,118) $ 21,730 $ 21,730 11,321 1,227 ( 10,585)	Machines/e quipment $ 38,848 ( 17,118) $ 21,730 $ 21,730 11,321 1,227 ( 10,585)	Office equipment $ 15,096 ( 11,467) $ 3,629 $ 3,629 358 - ( 2,910)	Office equipment $ 15,096 ( 11,467) $ 3,629 $ 3,629 358 - ( 2,910)	Others $ 19,713 ( 12,616) $ 7,097 $ 7,097 17 - ( 1,522)	Total $ 590,779 ( 122,024)
			$ ( $
									$ 468,755
			$ (						$ 468,755 15,431 ( 48,647) ( 18,728)

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expense December 31 December 31, 2021 Cost Accumulated depreciation	$ 261,234 $ 261,234 - $ 261,234	$ 125,215 $ 201,153 ( 75,938) $ 125,215	$ 23,693 $ 51,364 ( 27,671) $ 23,693	$ 1,077 $ 15,454 ( 14,377) $ 1,077	$ 5,592 $ 19,730 ( 14,138) $ 5,592	$ 416,811
						$ 548,935 ( 132,124)
						$ 416,811

• A. Please refer to the description in Note 8 for information on the Company’s provision of the property, plant and equipment as collateral.

• B. There was no interest capitalization on the property, plant and equipment.

• (9) Lease transactions – lessee

• A. The Company’s leased assets include buildings and company vehicles and the leases often have a term of 1 to 5 years. The leases are individually negotiated and contain a variety of terms and conditions. The leased assets shall not be used as collateral for loans and are subject to no other limitations.

• B. Information on the carrying value of right-of-use assets and the depreciation expense recognized is as follows:

Premises Transportation equipment (company vehicles) Premises Transportation equipment (company vehicles)	December 31, 2022 Carrying amount $ 5,176 565 $ 5,741 2022 Depreciation expense $ 3,275 1,159 $ 4,434	December 31, 2022 Carrying amount $ 5,176 565 $ 5,741 2022 Depreciation expense $ 3,275 1,159 $ 4,434	December 31, 2022 Carrying amount $ 5,176 565 $ 5,741 2022 Depreciation expense $ 3,275 1,159 $ 4,434	December 31, 2022 Carrying amount $ 5,176 565 $ 5,741 2022 Depreciation expense $ 3,275 1,159 $ 4,434	December 31, 2022 Carrying amount $ 5,176 565 $ 5,741 2022 Depreciation expense $ 3,275 1,159 $ 4,434	December 31, 2021	December 31, 2021	December 31, 2021	December 31, 2021	December 31, 2021	December 31, 2021
							Carrying amount $ 2,757 1,725 $ 4,482 2021 Depreciation expense $ 2,659 1,572 $ 4,231
				expense					expense
					$ $					$ $
											4,231

• C. The Company recognized $5,777 and $3,612 as an addition to right-of-use assets in 2022 and 2021, respectively.

• D. Information on the profit or loss items related to leases is as follows:

Items that affect profit or loss in the current period Interest expense on lease liabilities Short-term lease expense Low-value asset lease expense	2022 $ 40 $ 5,045 $ 2,058	2021 $ 41 $ 4,802 $ 2,241	2021 $ 41 $ 4,802 $ 2,241	$ 41
			$ 2,241

• E. The total cash outflow for leases of the Company in 2022 and 2021 was $11,725 and $11,217, respectively.

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(10) Lease transactions – lessor

• A. The Company’s assets leased out are buildings and the leases often have a term of 1 to 3 years. The leases are individually negotiated and contain a variety of terms and conditions. To secure the use of the assets leased out, the lessee is often prohibited from using the leased assets as collateral for loans or from providing them for use by others using any other methods.

• B. The Company recognized $51,157 and $49,434 as rental income pursuant to operating leases in 2022 and 2021, respectively. There were no variable lease payments included.

• C. A maturity analysis of lease payments under the Company’s operating leases is as follows:

2022 2023 2024 2025	December 31, 2022 $ - 34,427 21,289 5,544 $ 61,260	December 31, 2021	December 31, 2021
			$ 42,005 19,212 6,795 - $ 68,012

• (11) Investment property

January 1, 2022 Cost Accumulated depreciation 2022 January 1 Depreciation expense December 31 December 31, 2022 Cost Accumulated depreciation January 1, 2021 Cost Accumulated depreciation 2021 January 1 Reclassification Depreciation expense December 31 December 31, 2021	Land $ 546,336 - $ 546,336 $ 546,336 - $ 546,336 $ 546,336 - $ 546,336 Land $ 515,244 - $ 515,244 $ 515,244 31,092 - $ 546,336	Premises and buildings $ 585,258 ( 258,551) $ 326,707 $ 326,707 ( 11,208) $ 315,499 $ 585,258 ( 269,759) $ 315,499 Premises and buildings $ 557,880 ( 238,989) $ 318,891 $ 318,891 18,782 ( 10,966) $ 326,707	Total $ 1,131,594 ( 258,551) $ 873,043 $ 873,043 ( 11,208) $ 861,835 $ 1,131,594 ( 269,759) $ 861,835 Total $ 1,073,124 ( 238,989) $ 834,135 $ 834,135 49,874 ( 10,966) $ 873,043	Total $ 1,131,594 ( 258,551) $ 873,043 $ 873,043 ( 11,208) $ 861,835 $ 1,131,594 ( 269,759) $ 861,835 Total $ 1,073,124 ( 238,989) $ 834,135 $ 834,135 49,874 ( 10,966) $ 873,043
				$ 834,135
				$ 834,135 49,874 ( 10,966) $ 873,043

~34~

Cost Accumulated depreciation	$ 546,336 - $ 546,336	$ 585,258 $ 1,131,594 ( 258,551) ( 258,551) $ 326,707 $ 873,043	$ 585,258 $ 1,131,594 ( 258,551) ( 258,551) $ 326,707 $ 873,043
			$ 873,043

• A. Rental income and direct operating expenses on investment property:

Rental income on investment property Direct operating expenses incurred from investment property generating rental income in the current period Direct operating expenses incurred from investment property not generating rental income in the current period	2022 $ 51,157 $ 11,764 $ 5,906	2021 $ 49,434 $ 10,959 $ 5,498	2021 $ 49,434 $ 10,959 $ 5,498
			$ 10,959
			$ 5,498

• B. The fair value of the investment property held by the Company on December 31, 2022 and 2021, was $1,619,167 and $1,501,592, respectively, according to the valuation results provided by the independent valuation experts. The fair values were valuated using the income approach and comparative approach and calculated with a certain weight taken into account. The key assumptions under the income approach are shown below:

Income capitalization rate	December 31, 2022 1.55%~4.35%	December 31, 2021 1.79%~2.15%

• C. Please refer to the description in Note 8 for information on the Company’s provision of the investment property as collateral.

• (12) Other non-current assets

Receivables on demand Less: Loss allowance – receivables on demand Deposits paid Net defined benefit assets Deferred expense Others	December 31, 2022 $ 22,893 ( 22,893) 14,825 35,455 - 3,921 $ 54,201	December 31, 2021
		$ 21,907 ( 21,907) 14,252 31,460 220 3,919 $ 49,851

• (13) Short-term loans

Bank loans Credit loans Secured loans Range of interest rates	December 31, 2022 $ 914,000 50,000 $ 964,000 1.36%~1.98%	December 31, 2021	December 31, 2021	December 31, 2021
			$ 470,264 837,000 $ 1,307,264 0.80%~1.10%	$ 470,264 837,000 $ 1,307,264

~35~

Note: Please refer to the description in Note 8 for information on pledged collateral.

(14) Other payables

Salaries and bonuses payable Service expense payable Land value tax and house tax payable Freight payable Labor and health insurance expenses payable Other payables	December 31, 2022 $ 63,461 2,151 3,433 1,601 3,733 13,063 $ 87,442	December 31, 2022 $ 63,461 2,151 3,433 1,601 3,733 13,063 $ 87,442	December 31, 2021	December 31, 2021	December 31, 2021
		$ $		$ $	49,348 821 4,363 1,127 4,007 14,201
					73,867

• (15) Net defined benefit liabilities

A. Defined benefit plan

The Company has established a defined benefit pension plan in accordance with the “Labor Standards Act.” The plan is applicable to the length of service of all full-time employees calculated before the “Labor Pension Act” was implemented on July 1, 2005, and the length of service of employees who choose to stay in the pension scheme under the Labor Standards Act calculated after the implementation of the “Labor Pension Act.” The pension paid to employees who meet the criteria for retirement is calculated based on their length of service and their average salary for the 6 months prior to their retirement. Employees whose length of service is no more than 15 years (inclusive) will receive two base points for each year of service and employees whose length of service is more than 15 years will receive one base point for each additional year of service. The maximum number of accumulated base points is 45. The Company makes a pension contribution of 2% of the total salary on a monthly basis and deposits it into a special account with the Bank of Taiwan in the name of the Labor Pension Fund Supervisory Committee. In addition, before the end of each fiscal year, if the balance of the labor pension fund account referred to in the preceding paragraph is insufficient to pay the pension calculated above to employees expected to meet the criteria for retirement in the following fiscal year, the Company will make and deposit full contributions into the account by the end of March of the next fiscal year.

• (A) The amounts recognized in the balance sheet are as follows:

Present value of defined benefit obligations Fair value of plan assets Net defined benefit liabilities (assets)	December 31, 2022 $ 35,651 ( 71,106) ($ 35,455)	December 31, 2021 $ 40,088 ( 71,548) ($ 31,460)	December 31, 2021 $ 40,088 ( 71,548) ($ 31,460)

• (B) The changes in net defined benefit liabilities are as follows:

Present value of defined benefit	Fair value of plan assets	Net defined benefit	Net defined benefit
			liabilities (assets)

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2022 Balance on January 1 Service costs in the current period Interest expense (income) Remeasurement: Return on plan assets (excluding any amount included in interest income or expense) Effect of changes in financial assumptions Experience adjustments Pension paid Balance on December 31 2021 Balance on January 1 Service costs in the current period Interest expense (income) Remeasurement: Return on plan assets (excluding any amount included in interest income or expense) Effect of changes in financial assumptions Experience adjustments Pension paid Balance on December 31	obligations $ 40,088 54 281 40,423 - ( 2,020) 4,232 2,212 ( 6,984) $ 35,651 Present value of defined benefit obligations $ 54,210 335 163 54,708 - ( 1,214) 36 ( 1,178) ( 13,442) $ 40,088	($ 71,548) - ( 501) ( 72,049) ( 6,041) - - ( 6,041) 6,984 ($ 71,106) Fair value of plan assets ($ 82,478) - ( 248) ( 82,726) ( 1,304) - - ( 1,304) 12,482 ($ 71,548)	($ 71,548) - ( 501) ( 72,049) ( 6,041) - - ( 6,041) 6,984 ($ 71,106) Fair value of plan assets ($ 82,478) - ( 248) ( 82,726) ( 1,304) - - ( 1,304) 12,482 ($ 71,548)	($ 31,460) 54 ( 220) ( 31,626) ( 6,041) ( 2,020) 4,232 ( 3,829) - ($ 35,455) Net defined benefit	($ 31,460) 54 ( 220) ( 31,626) ( 6,041) ( 2,020) 4,232 ( 3,829) - ($ 35,455) Net defined benefit	($ 31,460) 54 ( 220) ( 31,626) ( 6,041) ( 2,020) 4,232 ( 3,829) - ($ 35,455)
					liabilities (assets) ($ 28,268) 335 ( 85) ( 28,018) ( 1,304) ( 1,214) 36 ( 2,482) ( 960) ($ 31,460)

(C) The Company’s defined retirement benefit plan fund assets are entrusted by the Bank of Taiwan through contracted management according to the proportion and amount for contracted management items set forth in the annual investment/utilization plan of the fund and within the scope as defined in Article 6 of the Regulations for Management, Utilization and Supervision of the National Pension Insurance Fund (i.e.

~37~

being deposited in domestic or foreign financial institutions, invested in domestic/foreign listed, OTC, or privately offered equity securities and in domestic/foreign real estate-related securitized products, etc.) The relevant utilization is supervised by the Labor Pension Fund Supervisory Committee. Regarding the utilization of the fund, the minimum earnings approved to be distributed every year shall not be less than the attainable earnings calculated based on the 2-year time deposit interest rates offered by local banks. Any deficit shall be made up for with the money from the national treasury upon the approval of the competent authority. As the Company has no right to participate in the utilization and management of the fund, the classification of the fair value of plan assets cannot be disclosed in accordance with Paragraph 142 of IAS 19. Please refer to the labor pension fund utilization report for each year published by the government for the fair value of all assets constituting the fund on December 31, 2022 and 2021.

• (D) A summary of pension-related actuarial assumptions is shown below:

Discount rate Future salary increase rate	2022 1.30% 3.00%	2021 0.70%
		3.00%

Future mortality assumptions are based on the statistics and experiential estimates announced by countries.

The present value of defined benefit obligations that has been affected due to changes in the main adopted actuarial assumptions is analyzed as follows:

December 31, 2022 Effect on the present value of defined benefit obligations December 31, 2021 Effect on the present value of defined benefit obligations	Discount rate Increase by 0.25% ($ 787) Discount rate Increase by 0.25% ($ 731)	Decrease by 0.25% $ 818 Decrease by 0.25% $ 752	Future salary increase rate Increase by 0.25% Decrease by 0.25% $ 714 ($ 691) Future salary increase rate Increase by 0.25% Decrease by 0.25% $ 635 ($ 621)	Future salary increase rate Increase by 0.25% Decrease by 0.25% $ 714 ($ 691) Future salary increase rate Increase by 0.25% Decrease by 0.25% $ 635 ($ 621)
			Increase by 0.25% $ 635
				0.25% ($ 621)

The above sensitivity analysis was conducted to analyze the effect of changes in a single assumption, with all other assumptions remaining unchanged. Changes in many assumptions could be correlated with each other in practice. The sensitivity analysis used the same method as that for calculating the net pension liabilities in the balance sheet.

The method and assumptions used for the sensitivity analysis in the current period are the same as those in the previous period.

• (E) The Company expects to pay a defined benefit plan contribution of $2,232 in 2023.

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• (F) As of December 31, 2022, the weighted average lifetime of the defined benefit plan was 10 years. A maturity analysis of pension payments is as follows:

Less than 1 year 2-5 years Over 5 years	$ 2,229 11,720 13,206 $ 27,155

B. Defined contribution plan

Since July 1, 2005, the Company has had its defined contribution plan in place in accordance with the “Labor Pension Act.” The plan is applicable to employees who are of Taiwanese nationality. The Company deposits a labor pension distribution of 2% of the salary of the employees who choose to opt in to the labor pension scheme under the “Labor Pension Act” into their personal accounts with the Bureau of Labor Insurance every month. The pension is paid monthly or at once to the employees based on the amount of money in their personal pension accounts and the accumulated gains.

The pension cost recognized by the Company in accordance with the aforesaid pension plan in 2022 and 2021 was $13,149 and $12,761, respectively.

(16) Income tax

• A. The income tax expenses comprise the following:

• (A) The income tax expenses comprise the following:

Income tax in the current period: Income tax incurred from income in the current period Income tax levied on undistributed earnings Underestimation (overestimation) of income tax in prior years Total income tax in the current period Deferred income tax: Initial generation and reversal of temporary differences Income tax expense	2022	$	$ 577 650 4,197 5,424 79,620 85,044	2021	$	$ - - ( 276) ( 276) 14,530 14,254	$ - - ( 276)
							( 276)

• (B) The amount of income taxes related to other comprehensive income:

Remeasurement of defined benefit obligations	2022	($ 766)	2021	($ 496)

• B. The relationship between the income tax expenses and the accounting profit is as follows:

2022 2021 Income tax on pre-tax profit calculated $ 108,655 $ 42,553

~39~

at the statutory tax rate
Income tax effect of adjustment items as	( 28,458)	( 22,014)
per law
Income tax effect of loss deductions	-	( 6,009)
Underestimation (overestimation) of	4,197	( 276)
income tax in prior years
Income tax levied on undistributed	650	-
earnings
Income tax expense	$ 85,044	$ 14,254

• C. The amount of the deferred income tax assets or liabilities resulting from temporary differences is shown below:

Temporary difference: - Deferred income tax assets: Loss allowance in excess of limit Allowance for inventory devaluation losses Unrealized exchange loss Unrealized installation expense - Deferred income tax liabilities: Unrealized exchange gain Remeasurement of defined benefit obligations Realized installation expense	2022 January 1 $ 4,077 3,246 11,342 4,857 $ 23,522 $ - ( 12,998) - ($ 12,998)	Recognized as profit or loss $ 57 687 ( 11,342) ( 3,508) ($ 14,106) $ - ( 17,649) ( 47,865) ($ 65,514)	Recognized as other comprehensiv e income $ - - - - $ - ($ 766) - - ($ 766)	December 31 $ 4,134 3,933 - 1,349 $ 9,416 ($ 766) ( 30,647) ( 47,865) ($ 79,278)	December 31 $ 4,134 3,933 - 1,349 $ 9,416 ($ 766) ( 30,647) ( 47,865) ($ 79,278)	December 31 $ 4,134 3,933 - 1,349 $ 9,416 ($ 766) ( 30,647) ( 47,865) ($ 79,278)	December 31 $ 4,134 3,933 - 1,349 $ 9,416 ($ 766) ( 30,647) ( 47,865) ($ 79,278)	December 31 $ 4,134 3,933 - 1,349 $ 9,416 ($ 766) ( 30,647) ( 47,865) ($ 79,278)
					( ( ($	( (	$ $
								9,416
							($ 766) 30,647) 47,865)
							79,278)

Temporary difference: - Deferred income tax assets: Loss allowance in excess of limit Allowance for inventory devaluation losses Unrealized exchange loss Unrealized installation expense - Deferred income tax liabilities: Remeasurement of defined benefit obligations	2021 January 1 $ 3,649 5,337 8,207 20,859 $ 38,052 ($ 12,502)	Recognized as profit or loss $ 428 ( 2,091) 3,135 ( 16,002) ($ 14,530) $ -	Recognized as other comprehensiv e income $ - - - - $ - ($ 496)	December 31 $ 4,077 3,246 11,342 4,857 $ 23,522 ($ 12,998)	December 31 $ 4,077 3,246 11,342 4,857 $ 23,522 ($ 12,998)

~40~

• D. The expiry dates for the Company’s unused taxable losses and the amount of the unrecognized deferred income tax assets are as follows:

December 31, 2022

Year of occurrence 2020	Approved amount $ 65,308	Amount of unused taxable losses $ -	Amount of unrecognized deferred income tax assets $ -	Year of expiration
				2030

December 31, 2021

Year of occurrence 2020	Reported amount $ 75,590	Amount of unused taxable losses $ 45,538	Amount of unrecognized deferred income tax assets $ 45,538	Year of expiration
				2030

• E. Deductible temporary differences not recognized as deferred income tax assets:

Deductible temporary difference	December 31, 2022 $ 249,018	December 31, 2021 $ 267,982

• F. The Company’s profit-seeking business income taxes filed have been certified by the tax authority up until 2020.

(17) Common share capital

• A. As of both December 31, 2022 and 2021, the Company’s authorized capital was $5,000,000 (including employee stock warrants of $560,000 and shares of convertible corporate bonds amounting to $500,000), with 171,371 thousand outstanding shares (excluding treasury stocks) at a par value of NT$10 per share.

• B. Treasury stocks

• (A) Details on changes in the Company’s shares held by its subsidiaries are as follows:

Balance on January 1, 2022 Balance on December 31, 2022	Moredel Investment Corp. Number of shares (thousand shares) Carrying value 100 $ 6,042 100 $ 6,042	Moredel Investment Corp. Number of shares (thousand shares) Carrying value 100 $ 6,042 100 $ 6,042	Market price $ 2,400 $ 2,621	Market price $ 2,400 $ 2,621
	Number of shares (thousand shares) 100 100
				$ 2,621

~41~

Balance on January 1, 2021 Balance on December 31, 2021	Moredel Investment Corp. Number of shares (thousand shares) Carrying value 100 $ 6,042 100 $ 6,042	Moredel Investment Corp. Number of shares (thousand shares) Carrying value 100 $ 6,042 100 $ 6,042	Market price $ 1,928 $ 2,400	Market price $ 1,928 $ 2,400
	Number of shares (thousand shares) 100 100
				$ 2,400

  - (B) According to the Securities and Exchange Act, treasury stocks held by the Company shall not be pledged or be entitled to any shareholder rights.

• (18) Capital reserves

• A. Pursuant to the Company Act, the capital reserve generated from the income derived from the issuance of new shares at a premium and from the endowments received may not only be used to offset losses, but also be distributed to shareholders in new shares or cash in proportion to the shares initially held thereby if the Company has no accumulated losses. According to the relevant provisions in the Securities and Exchange Act, the total proportion of the above capital reserve used for capitalization is limited to 10% of the paidin capital every year. The Company shall not use the capital reserve to offset capital losses, unless the surplus reserve is insufficient to offset such losses.

• B. Details on and changes in the Company’s capital reserve are shown in the following table:

January 1 Changes in the current period December 31	2022 Trading of treasury stocks $ 32,683 - $ 32,683	Changes in ownership interests in subsidiaries $ 142,666 - $ 142,666	Consolidated excess $ 9,473 - $ 9,473	Others $ 30,316 - $ 30,316	Total $ 215,138 - $ 215,138	Total $ 215,138 - $ 215,138
		interests in subsidiaries

January 1 Changes in the current period December 31	2021 Trading of treasury stocks $ 32,683 - $ 32,683	Changes in ownership interests in subsidiaries $ 140,525 2,141 $ 142,666	Consolidated excess $ 9,473 - $ 9,473	Others $ 29,404 912 $ 30,316	Total $ 212,085 3,053 $ 215,138

• (19) Retained earnings

• A. According to the Articles of Incorporation, where the Company has earnings at the yearend closing in a fiscal year, 10% thereof shall be set aside as legal reserves as required by

~42~

laws after they are used to pay taxes and offset accumulated losses. Provision for special reserves is then required pursuant to the Securities and Exchange Act and related administrative rules. The remaining earnings, if any, shall be added to the undistributed earnings carried from prior years as distributable earnings. The Board of Directors shall subsequently draw up a distribution proposal and submit the same to a shareholders’ meeting for a resolution on the distribution of the earnings. The Board of Directors is authorized to adopt a resolution to distribute the abovementioned earnings, legal reserve, and capital reserve in cash at a meeting attended by more than two-thirds of directors with the consent of a majority of all attending directors and the distribution shall be reported at a shareholders’ meeting. The distribution of the earnings, legal reserve, and capital reserve by issuing new shares is subject to a resolution adopted at a shareholders’ meeting according to the preceding paragraph.

• B. The legal reserve shall not be used unless it is used to offset the Company’s losses and distributed to shareholders in new shares or cash in proportion to the shares initially held thereby. The legal reserve shall not be distributed in new shares or cash unless the portion distributed exceeds 25% of the paid-in capital.

• C. The Company may distribute earnings only after recognizing special reserves based on the debit balance of equity items on the balance sheet in the current year as required by laws. When the debit balance of the equity items is reversed subsequently, the reversed amount may be included as distributable earnings.

• D. The Company’s 2021 and 2020 earning distribution proposals approved at the shareholders’ meeting held on June 8, 2022 and July 15, 2021, respectively, are stated as follows:

Legal reserves Special reserves (reversed) Cash dividends	2021 Amount $ 20,123 13,792 154,324	Dividend per share (NT$) $ 0.90	2020 Amount $ 2,118 ( 3,436) 85,736	Dividend per share (NT$) $ 0.50

• E. The 2022 earning distribution proposal presented by the Board of Directors on March 16, 2023, is as follows:

Legal reserves Reversed special reserves Cash dividends	2022 Amount $ 46,217 ( 30,939) 257,207	Dividend per share (NT$) $ 1.50

The Company’s 2022 earning distribution proposal has not been approved at the shareholders’ meeting as of March 17, 2023. For the earning distribution approved by the Board of Directors and resolved at the shareholders’ meeting, please visit the “Market Observation Post System.”

~43~

(20) Other equity items

2022 2021 Foreign currency translation Foreign currency translation January 1 ($ 147,260) ($ 133,469) Difference from foreign currency translation – the Company 30,940 ( 13,791) December 31 ($ 116,320) ($ 147,260) ing income 2022 2021 Income from contracts with customers $ 3,157,169 $ 2,280,169	2021 Foreign currency	2021 Foreign currency	2021 Foreign currency	translation
		2021	($ 133,469) ( 13,791) ($ 147,260) $ 2,280,169	($ 133,469) ( 13,791) ($ 147,260)

(21) Operating income

A. Sub-items of income from contracts with customers

The Company’s income from goods and services transferred at a specific timing can be disaggregated into the following main segments:

2022 Income from external customers 2021 Income from external customers	Taiwan Electronic channel industry $ 83,323 Taiwan Electronic channel industry $ 110,317	Optoelectronic manufacturing industry $ 257,700 Optoelectronic manufacturing industry $ 347,536	Electromechanic al Business Group $ 1,139,077 Electromechanic al Business Group $ 645,638	Intelligent Business Group Total $ 1,677,069 $ 3,157,169 Intelligent Business Group Total $ 1,176,678 $ 2,280,169	Intelligent Business Group Total $ 1,677,069 $ 3,157,169 Intelligent Business Group Total $ 1,176,678 $ 2,280,169
			Group

B. Contractual liabilities

The Company’s recognized contractual liabilities related to the income from contracts with customers are as follows:

December 31, 2022 December 31, 2021 January 1, 2021 Advance sale receipts $ 468,805 $ 191,277 $ 126,168

• C. The opening balance of the Company’s contractual liabilities recognized as income in 2022 and 2021 was $141,230 and $95,794, respectively.

(22) Interest income

Bank deposit interest

2022

2021 $ 4,736 $ 854

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Interest income from financial assets measured at amortized cost (23) Other income Rental income Dividend income Government subsidy income Other income – others (24) Other profits and losses Net gain (loss) from foreign currency exchange Net gain (loss) from financial assets and liabilities measured at fair value through profit or loss Gain from disposal of property, plant and equipment Others (25) Financial costs Interest expense (26) Additional information on the nature of expense Changes in the inventory of finished goods, work in process, and raw materials Employee benefit expense Depreciation expense of property, plant and equipment (including right-of-use assets) Amortization expense Transportation expense Service expense Operating rent Other expenses Operating costs and expenses	2022 2022 2022 2022	$ $	84,232 $ 88,968 $ 51,157 15,443 7,171 5,677 $ 79,448 $ 177,209 ( 45,236) 13 ( 24,683) $ 107,303 $ 16,046 2,610,462 352,697 21,550 1,889 3,166 21,456 7,103 39,891 3,058,214	2021 2021 2021 2021	64,003 $ 64,857 $ 49,434 1,160 5,279 7,608 $ 63,481 ($ 27,056) 15,651 - ( 21,724) ($ 33,129) $ 9,759 $ 1,854,315 328,828 22,959 2,316 2,447 19,175 7,043 28,906 $ 2,265,989	64,003 $ 64,857 $ 49,434 1,160 5,279 7,608 $ 63,481 ($ 27,056) 15,651 - ( 21,724) ($ 33,129)	$	$	64,003
									64,857
							$ $		49,434 1,160 5,279 7,608 63,481
								27,056) 15,651 - 21,724)
								33,129)
								$ 9,759

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(27) Employee benefit expense

Salary expense Labor and health insurance expenses Pension expense Remuneration to directors Other employment expenses	2022	$ 290,464 25,534 12,983 11,382 12,334 $ 352,697	2021	$ 275,758 25,067 13,011 4,472 10,520 $ 328,828

Note: As of December 31, 2022 and 2021, the Company had 315 and 306 employees, respectively and the number of non-employee directors was 4.

• A. According to the Articles of Incorporation, the Company shall subtract any accumulated losses from earnings in the year. A minimum amount of 1% of the remaining (if any) shall be appropriated as remuneration to employees and a maximum amount of 2% shall be appropriated as remuneration to directors and supervisors.

• B. In 2022 and 2021, the Company’s estimated amount of remuneration to employees was $5,600 and $2,193, respectively, and the estimated amount of remuneration to directors and supervisors was $11,202 and $4,387, respectively. The above amounts were stated as remuneration expense. The remuneration to employees and to directors and supervisors in 2022 was estimated as 1% and 2%, respectively, of the earnings in the year. The amount actually distributed as resolved by the Board of Directors was $5,600 and $11,202, respectively. The remuneration to employees was distributed in cash.

There is consistency between the amounts of remuneration to employees and to directors and supervisors for 2021 resolved by the Board of Directors and the amounts recognized in the financial statements for 2021.

Please visit the Market Observation Post System for information on the remuneration (bonuses) to employees and the remuneration to directors and supervisors that were approved by the Board of Directors and resolved at the shareholders’ meeting.

• (28) Earnings per share

Basic earnings per share Net profit attributable to the common shareholders of the parent company in the current period Diluted earnings per share Net profit attributable to the common shareholders of the	2022 Amount after tax $ 458,232 $ 458,232	Weighted average outstanding shares (thousand shares) 171,371 171,371	Earnings per share (NT$) $ 2.67	Earnings per share (NT$) $ 2.67
	tax	shares)

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parent company in the current period Effect of dilutive potential common shares - remuneration to employees Net profit attributable to the common shareholders of the parent company in the current period plus the effect of potential common shares Basic earnings per share Net profit attributable to the common shareholders of the parent company in the current period Diluted earnings per share Net profit attributable to the common shareholders of the parent company in the current period Effect of dilutive potential common shares - remuneration to employees Net profit attributable to the common shareholders of the parent company in the current period plus the effect of potential common shares	- $ 458,232 2021 Amount after tax $ 198,514 $ 198,514 - $ 198,514	215 171,586 Weighted average outstanding shares (thousand shares) 171,371 171,371 92 171,463	$ 2.67 Earnings per share (NT$) $ 1.16 $ 1.16	$ 2.67
	tax	shares)
				$ 1.16

(29) Changes in liabilities from financing activities

January 1, 2022 Changes in cash flows from financing activities Interest expenses paid (Note)	Short-term loans $1,307,264 ( 343,264) -	Other current liabilities $ 27,083 14,672 -	Other non- current liabilities $ 7,412 531 -	Lease liabilities $ 4,660 ( 4,582) ( 40)	Total liabilities from	Total liabilities from
						financing activities $ 1,346,419 ( 332,643) ( 40)

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Other non-cash changes - - December 31, 2022 $ 964,000 $ 41,755 Note: Recognized as cash flows from operating activities	- $ 7,943	$	5,818 5,856	5,818 $ 1,019,554	5,818

January 1, 2021 Changes in cash flows from financing activities Interest expenses paid (Note) Other non-cash changes December 31, 2021	Short-term loans $ 397,377 909,887 - - $1,307,264	Current liabilities $ 13,463 13,620 - - $ 27,083	Non-current liabilities $ 7,498 ( 86) - - $ 7,412	Non-current liabilities $ 7,498 ( 86) - - $ 7,412	Lease liabilities $ 5,181 ( 4,133) ( 41) 3,653 $ 4,660	Total liabilities from	Total liabilities from
							financing activities $ 423,519 919,288 ( 41) 3,653 $ 1,346,419

Note: Recognized as cash flows from operating activities

7. Related party transactions

• (1) Names of related parties and their relationship with the Company

Names of related parties Yumon International Trade Shanghai Limited Corporation (Yumon International) Solomon Goldentek Display Corp. (Solomon Goldentek Display) Solomon Trading (Shenzhen) Ltd. (Solomon Shenzhen) Solomon Data International Corporation (Solomon Data International) Solomon Cayman International Corp. (Solomon Cayman) Cornucopia Innovation Corporation (Cornucopia Innovation) Moredel Investment Corp. (Moredel Investment)

Relationship with the Company

Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary

• (2) Significant transactions with the related parties

• A. Operating income

Sale of goods: Subsidiary – Yumon International Subsidiary	2022	$ 432,746 79,139 $ 511,885	2021	$ $	245,340 101,039
					346,379

Except for the transaction with the subsidiary Yumon International where the transaction price was negotiated by both parties and the payment was collected after subtracting the

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accounts payable resulting from commissioning the subsidiary to install generators based on its funding status, the transaction terms for all the above related party transactions were not significantly different from general transaction terms. The payment term for regular customers ranges from 90 to 120 days.

B. Purchase

Purchase of goods: Subsidiary	2022 $ 10,237	2021 $ 15,673

The transaction price for the Company’s purchases from related parties was negotiated by both parties. The payment terms were not significantly different from general transaction terms. The payment term for regular suppliers ranges from 30 to 90 days.

C. Payments receivable from related party

Accounts receivable: Subsidiary – Yumon International Subsidiary D. Payments payable to related party Accounts payable: Subsidiary E. Other income (1) Rental income (stated as “other income”): Subsidiary	December 31,	December 31,	December 31,	2022 $ 708 4,305 5,013 2022 1,384 8,402	December 31,	December 31,	December 31,	2021
	$ December 31,		$		$ December 31,		$	$ 351 1,772
								2,123
								2021
		$ 2022 $	$			$ 2021 $	$	2,320
								8,399

The Company leases out part of its office premise and plant to related parties with an O/A 60-day payment term.

(2) Management fee income (stated as a debit item of “operating expenses”) Subsidiary	2022 $ 16,178	2021 $ 16,069

The centralized office model is adopted for the Company’s group management departments and the Company charges the above related parties a management fee in proportion to the departments’ involvement in the management of each associate. The

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payment term is O/A 60 days.

F. Other receivables

Other receivables are pre-paid utilities expenses, rents, allocated management fees, dividends receivable, etc.. The details are as follows:

Subsidiary – Moredel Investment Subsidiary formation on remuneration to key management Salaries and other short-term employee benefits Post-employment benefits	December 31,	December 31,	December 31,	December 31,
		2022		$
			$ $

• (3) Information on remuneration to key management

8. Pledged assets

Details on the Company’s assets provided as collateral are shown below:

Details on assets Property, plant and equipment and investment property	December 31, 2022 $ 1,240,837	December 31, 2021 $ 1,255,667	Purpose of collateral
			Collateral for short- term loans from financial institutions

9. Material contingent liabilities and unrecognized contractual commitments

• (1) As of December 31, 2022, the Company’s letter of credit issued but not yet used was $309,185.

• (2) As of December 31, 2022, the Company’s promissory notes issued as security for the performance of sales contracts amounted to $65,735.

• (3) As of December 31, 2022, the Company’s promissory notes issued to implement governmentsubsidized plans amounted to $51,870.

• (4) Please refer to the description in Note 13 for the Company’s funds loaned and endorsements/guarantees provided.

• Material losses from disasters

None.

11. Material subsequent events

Please refer to Note 6 (19) for the 2023 earning distribution proposal.

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12. Others

(1) Capital management

The Company’s capital management aims to ensure that the Group can operate as a going concern, maintain the best capital structure to reduce the cost of funds, and offer returns to shareholders. In order to maintain or adjust the capital structure, the Company may adjust dividends paid to the shareholders, return capital to the shareholders, issue new shares or sell assets to reduce debts.

• (2) Financial instruments

• A. Types of financial instruments

Financial assets Financial assets measured at fair value through profit or loss Financial assets measured at fair value through profit or loss Financial assets measured at amortized cost Cash and cash equivalents Financial assets measured at amortized cost Notes receivable Accounts receivable Other receivables Deposits paid (stated as “other non- current assets”) Financial liabilities Financial liabilities measured at amortized cost Short-term loans Notes payable Accounts payable Other accounts payables Deposits received Lease liabilities	December 31, 2022 $ 186,521 575,243 1,074,850 20,676 245,678 21,157 14,825 $ 2,138,950 $ 964,000 11,185 183,959 87,442 7,943 $ 1,254,529 $ 5,855	December 31, 2022 $ 186,521 575,243 1,074,850 20,676 245,678 21,157 14,825 $ 2,138,950 $ 964,000 11,185 183,959 87,442 7,943 $ 1,254,529 $ 5,855	December 31, 2022 $ 186,521 575,243 1,074,850 20,676 245,678 21,157 14,825 $ 2,138,950 $ 964,000 11,185 183,959 87,442 7,943 $ 1,254,529 $ 5,855	December 31, 2021 $ 110,336 421,692 1,079,520 8,791 270,605 31,448 14,252 $ 1,936,644 $ 1,307,264 756 230,076 73,867 7,412 $ 1,619,375 $ 4,660	December 31, 2021 $ 110,336 421,692 1,079,520 8,791 270,605 31,448 14,252 $ 1,936,644 $ 1,307,264 756 230,076 73,867 7,412 $ 1,619,375 $ 4,660	December 31, 2021 $ 110,336 421,692 1,079,520 8,791 270,605 31,448 14,252 $ 1,936,644 $ 1,307,264 756 230,076 73,867 7,412 $ 1,619,375 $ 4,660	December 31, 2021 $ 110,336 421,692 1,079,520 8,791 270,605 31,448 14,252 $ 1,936,644 $ 1,307,264 756 230,076 73,867 7,412 $ 1,619,375 $ 4,660
		$			$
						421,692 1,079,520 8,791 270,605 31,448 14,252 1,936,644
		$			$ $	1,307,264 756 230,076 73,867 7,412 1,619,375
							$ 4,660

• B. Risk management policy

• (A) The Company’s day-to-day operations are affected by multiple financial risks, including market risk (exchange rate risk and price risk), credit risk, and liquidity risk.

• (B) The Finance Department implements risk management in accordance with the policy approved by the Board of Directors. The Company’s Finance Department is responsible for identifying, assessing, and avoiding financial risks by closely cooperating with the Group’s operating units.

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• C. Nature and level of material financial risks

• (A) Market risk

Exchange rate risk

• a. The Company operates transnationally and thus incurs exchange rate risk generated from transactions using functional currencies different from the one of the Company, which mainly are the US dollar and Chinese yuan. The relevant exchange rate risk arises from future commercial transactions and recognized assets and liabilities.

• b. As the business activities that the Company is engaged in involve several functional currencies (the functional currency of the Company is the NT dollar), there is effect from exchange rate volatility on the Company. Information on foreign currency assets and liabilities with significant exchange rate volatility effect is shown below:

(Foreign currency: functional currency) Financial assets Monetary items USD : NTD EUR : NTD CNY : NTD Investments accounted for using the equity method USD : NTD HKD : NTD THB : NTD Financial liabilities Monetary items USD : NTD EUR : NTD	December 31, 2022 Foreign currency (thousand dollars) Exchange rate $ 53,893 30.71 1,377 32.72 258 4.41 $ 6,559 30.71 1,644 3.94 6,397 0.96 $ 887 30.71 70 32.72	December 31, 2021 Foreign currency (thousand dollars) Exchange rate $ 52,134 27.68 405 31.32 84 4.34 $ 8,237 27.68 2,200 3.55 6,790 0.96 $ 3,218 27.68 3,338 31.32
	Foreign currency (thousand dollars) $ 53,893 1,377 258 $ 6,559 1,644 6,397 $ 887 70	Foreign currency (thousand dollars) $ 52,134 405 84 $ 8,237 2,200 6,790 $ 3,218 3,338

• c. As exchange rate volatility has significant effect, all exchange losses (both realized and unrealized) recognized with respect to the monetary items of the Company in 2022 and 2021 were $177,209 and ($27,056), respectively.

• d. The sensitivity analysis of the Company’s exchange rate risk focused on the effect of the appreciation or depreciation of relevant foreign currencies with respect to the main foreign currency monetary items on the financial reporting date on the Company’s profit or loss. When there was an 1% appreciation or depreciation of the NT dollar against the aforesaid foreign currencies, the profit or loss was increased or reduced by $18,977 and $15,074 in 2022 and 2021, respectively, provided that all the other factors remained the same.

Price risk

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• a. The Company’s equity instruments exposed to price risk are financial assets measured at fair value through profit or loss. To manage the price risk from investments in equity instruments, the Company diversifies its portfolio based on the limit set by it.

• b. The Company mainly invests in equity instruments issued by domestic companies and open-end funds. The price of such equity instruments is affected due to the uncertainty of their future value. When the price of the equity instruments rose or dropped by 1% and all the other factors remained the same, the net profit after tax was increased or reduced by $1,865 and $1,103 in 2022 and 2021, respectively, due to the gain or loss from equity instruments measured at fair value through profit or loss.

Cash flow and fair value interest rate risks

• a. The Company’s short-term loans for the purchase of materials are fixed interest rate debts. The risk of the loans is contingent on changes in market interest rates. However, as they will fall due within one year, no significant market risk is expected to occur.

• b. When the loan interest rate rose or dropped by 1% and all the other factors remained the same, the net profit after tax was reduced or increased by $9,640 and $13,073 in 2022 and 2021, respectively.

• (B) Credit risk

• a. The Company’s credit risk is the risk of failure of a customer or a counterparty trading financial instruments with the Company to fulfill the contractual obligations leading to the Company’s financial loss. The risk is mainly generated from accounts receivable that cannot be collected from the counterparty according to the payment terms and from contractual cash flows classified as investments in debt instruments measured at amortized cost and at fair value through profit or loss.

• b. According to the Company’s explicitly defined internal loan policy, all operating entities of the Group must conduct management and credit risk analysis for every new customer before setting payment terms and proposing delivery terms and conditions. The customers’ credit quality is assessed by taking into consideration their financial position, past experiences and other factors for internal risk control.

• c. The Company adopts the premises and assumptions provided by IFRS 9 as bases for determining if the credit risk of financial instruments increases significantly after initial recognition. When a contract payment is overdue over 90 days according to the agreed payment terms, the credit risk of financial assets is considered to have significantly increased after initial recognition.

• d. The Company adopts the premises and assumptions provided by IFRS 9. When a contract payment is overdue over 180 days according to the agreed payment terms, a default is considered to have occurred.

• e. The credit impairment indicators used by the Company to identify investments in debt instruments are shown below:

  • (A) The issuer incurs significant financial difficulties or there is a significantly increased possibility that it will enter into bankruptcy or other financial

~53~

reorganization;

• (B) The issuer incurs financial difficulties resulting in the disappearance of the active market of the financial asset;

• (C) The issuer defaults on or fails to pay the interest or principal;

• (D) There are changes adverse to national and regional economic situations that are associated with the default of the issuer.

• f. The Company adopts the simplified approach to estimate expected credit losses for accounts receivable from customers by the characteristics of the customers based on a provision matrix.

• g. The Company takes into consideration the study reports of Taiwan Institute of Economic Research for future prospects when adjusting the loss rate derived from information during specific historical and current periods to estimate the loss allowance for accounts receivable. The provision matrix on December 31, 2022 and 2021, respectively, is as follows:

December 31, 2022 Expected loss rate Total carrying value Loss allowance December 31, 2021 Expected loss rate Total carrying value Loss allowance	Not overdue 0.15%- 0.62% $ 239,778 $ 408 0.11%- 0.14% $ 268,208 $ 315	Overdue 30 days 66.27%- 86.10% $ 2,040 $ 745 16.72%- 44.38% $ 502 $ 183	Overdue 31- 90 days 100% $- $- 49.36%- 83.36% $ 753 $ 499	Overdue 91- 180 days 100% $ 38 $ 38 97.34%- 100% $ 420 $ 404	Overdue over 181 days 100% $- $- 100% $ 74 $ 74	Total $ 241,856
						$ 1,191 $ 269,957
						$ 1,475

• h. The table about changes in the loss allowance for accounts receivable, for which the Company adopted the simplified approach, is as follows:

January 1 Reversal of impairment losses Transferred to receivables on demand Effect of exchange rate December 31 January 1 Reversal of impairment losses Transferred to receivables on demand Effect of exchange rate December 31	2022 $ 1,475 ( 284) ( 686) 686 $ 1,191 2021 $ 3,656 ( 2,141) 178 ( 218) $ 1,475	$ 1,475 ( 284) ( 686) 686 $ 1,191

• i. The Company places investments in debt instruments measured at amortized cost with high-credit-quality counterparties. As assessed, there are no significant expected credit impairment losses.

• (C) Liquidity risk

• a. Cash flow forecasting is carried out individually by each operating entity of the

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Company and the results are summarized by the Company’s Finance Department. The Company’s Finance Department monitors the forecasting of the Company’s needs for current funds to ensure there are sufficient funds to meet the operating needs and maintains adequate unused committed lending facilities to prevent the Company from violating relevant lending limits or terms. Consideration is given to the Company’s debt financing plans, compliance with debt terms, and achievement of internal target balance sheet financial ratios when making such forecasts.

• b. The following table presents the Company’s non-derivative financial liabilities that are grouped by relevant maturity dates. The non-derivative financial liabilities are analyzed based on the remaining period from the balance sheet date to the contract maturity date. The amount of contractual cash flows disclosed in the following table is undiscounted:

Non-derivative financial

liabilities: December 31, 2022 Short-term loans Notes payable Accounts payable Other payables Other non-current liabilities Lease liabilities	Within 1 year $ 964,872 11,185 129,137 87,442 7,943 3,504	1 to 2 years $ - - 54,822 - - 1,962	2 to 3 years $ - - - - - 278	Over 3 years $ - - - - - -

Non-derivative financial

liabilities: December 31, 2021 Short-term loans Notes payable Accounts payable Other payables Other non-current liabilities Lease liabilities	Within 1 year $ 1,307,943 756 175,254 73,867 7,412 3,819	1 to 2 years $ - - 54,822 - - 862	2 to 3 years $ - - - - - -	Over 3 years $ - - - - - -

• (3) Fair value information

• A. The levels of the valuation technique adopted to measure the fair value of financial instruments and non-financial instruments are defined as follows:

  • Level 1: Quoted prices in active markets for identical assets or liabilities accessible to an entity on the measurement date (unadjusted). Active markets are ones where asset or liability transactions take place with sufficient frequency and volume for pricing information to be provided on an ongoing basis. All the fair values of the Company’s investments in listed/OTC stocks fall under Level 1.

  • Level 2: Level 2 inputs are inputs other than the quoted prices included in Level 1 that are directly or indirectly observable for the asset or liability. The Company’s investments in bond instruments without active market fall under Level 2.

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Level 3: Level 3 inputs are inputs that are unobservable to the asset or liability.

• B. Please refer to the description in Note 6 (12) for information on the fair value of investment property measured at cost.

• C. Financial instruments not measured at fair value

The carrying amounts of the Company’s cash and cash equivalents, notes and accounts receivable, other receivables, deposits paid for other non-current assets, short-term loans, notes and accounts payable, and other payables are reasonable approximations of their fair values.

• D. The Company classifies the financial and non-financial instruments measured at fair value based on the nature, characteristics and risks of the assets and liabilities as well as the levels of the fair values. The relevant information is shown below:

• (A) The following is information on the Company’s classification based on the nature of the assets and liabilities:

December 31, 2022 Assets Recurring fair value Financial assets measured at fair value through profit or loss Equity securities December 31, 2021 Assets Recurring fair value Financial assets measured at fair value through profit or loss Equity securities	Level 1 $ 152,958 Level 1 $ 81,799	Level 2 $ - Level 2 $ -	Level 3 $ 33,563 Level 3 $ 28,537	Total $ 186,521
				Total $ 110,336

• (B) The methods and assumptions used by the Company to measure the fair value are as follows:

• a. The quoted market price used by the Company as fair value inputs (i.e. Level 1 inputs) is listed based on the characteristics of the instruments in the following:

Listed (OTC) stocks Open-end funds Quoted market price Closing price Net value

• b. The fair value of all financial instruments, except for the aforementioned financial instruments in the active market, is acquired using the valuation technique or with reference to the quotation of the counterparty. When the valuation technique is used for acquisition of the fair value, the current fair value of other financial instruments with substantially similar conditions and characteristics, the cash flow discounting method, and other valuation techniques may be used as a reference, including the market information application model acquirable on the parent-only balance sheet date (e.g. TPEx yield curve and Reuters average interest rate quote of commercial paper).

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• c. Generally, forward exchange contracts are valuated at the current forward exchange rate.

• d. The valuation model is created based on the estimated approximation and the valuation technique may not be able to reflect all factors associated with the Company’s financial and non-financial instruments. Therefore, estimates made using the valuation model are adjusted properly based on additional parameters, such as model risk or liquidity risk. According to the Company’s fair value valuation model management policy and relevant control procedures, the management believes that valuation adjustments are appropriate and necessary for fair presentation of the fair value of financial and non-financial instruments in the parent-only balance sheet. Price information and parameters used in the valuation process are carefully assessed and adjusted based on the current market situation appropriately.

• E. There was no transfer between Level 1 and Level 2 in 2022 and 2021.

• F. Movements in Level 3 equity instruments from January 1 to December 31, 2022 and 2021, are listed in the following table:

re listed in the following table:
January 1 Purchase in the current period Profits recognized as profit or loss December 31	2022 Equity instruments $ 28,537 5,000 26 $ 33,563	2021 Equity instruments $ 10,881 13,000 4,656 $ 28,537

• G. There was no transfer-in/transfer-out to/from Level 3 from January 1 to December 31, 2022 and 2021.

• H. The Company’s Finance Department is responsible for verifying the independent fair value of financial instruments in the process of valuation of Level 3 fair values to make valuation results close to the market situation based on information from independent sources and make sure that the information sources are independent, reliable and consistent with other resources and reflect executable prices. The Company also regularly adjusts the valuation model, conducts retrospective testing, updates inputs and data required for the valuation model, and makes any other necessary fair value adjustment to ensure reasonable valuation results.

• I. The quantitative significant unobservable inputs of the valuation model used for Level 3 fair value measurements are analyzed and described as follows:

Fair value on December 31, 2022 Non-derivative equity instruments: Non- listed/non- OTC stocks $ 33,563	Valuation technique Comparable company method	Significant unobservable inputs PE multiplier, PB multiplier, corporate value-to-operating profit ratio multiplier, corporate value-to- profit before tax, interest, depreciation and amortization ratio	Relationship between
			the input and the fair value The higher the multipliers and control premium, the higher the fair value. The higher the discount for lack of marketability, the lower the fair value. The higher the

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multiplier, discount weighted average for lack of funding cost and marketability, control discount for minority premium interest, the lower the fair value. The higher the long-term revenue growth rate and longterm pre-tax operating income, the higher the fair value.

Relationship between Fair value on Valuation Significant the input and the fair December 31, 2021 technique unobservable inputs value Non-derivative equity instruments: Non$ 28,537 Comparable PE multiplier, PB The higher the listed/noncompany multiplier, corporate multipliers and control OTC stocks method value-to-operating premium, the higher profit ratio multiplier, the fair value. The corporate value-tohigher the discount for profit before tax, lack of marketability, interest, depreciation the lower the fair and amortization ratio value. The higher the multiplier, discount weighted average for lack of funding cost and marketability, control discount for minority premium interest, the lower the fair value. The higher the long-term revenue growth rate and longterm pre-tax operating income, the higher the fair value.

13. Note disclosures

• (1) Information of material transactions

• A. Loaning of funds to others: Please refer to Table 1.

• B. Making of endorsements/guarantees for others: Please refer to Table 2.

• C. Securities held at end of period (excluding those controlled by investee subsidiaries, associates and joint ventures): Please refer to Table 3.

• D. Aggregate purchases or sales of the same securities amounting to NT$300 million or more than 20% of the paid-in capital: None.

• E. Acquisition of property amounting to NT$300 million or more than 20% of the paid-in capital: None.

• F. Disposal of property amounting to NT$300 million or more than 20% of the paid-in capital: None.

• G. Purchases and sales with related parties amounting to NT$100 million or more than 20% of the paid-in capital: Please refer to Table 4.

• H. Accounts receivable from related parties amounting to NT$100 million or more than 20% of the paid-in capital: Please refer to Table 5.

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• I. Transactions of derivative instruments: None.

• J. Business relationship and important transactions between the parent company and subsidiaries and between the subsidiaries, and the amounts of such transactions: Please refer to Table 6.

• (2) Information of investee companies

Information related to investee companies (excluding those in Mainland China), their place of registration, etc.: Please refer to Table 7.

• (3) Information of investments in Mainland China

• A. Basic information: Please refer to Table 8.

• B. Material transactions occurring directly or indirectly through businesses in a third area and investee companies in Mainland China: Please refer to Tables 4, 5, 6.

• (4) Information of major shareholders

Please refer to Table 9.

14. Operating segment information

Please refer to the Company’s consolidated financial statements for 2022 for information on the operating segments.

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SOLOMON Technology Corporation Cash and Cash Equivalents December 31, 2022

Unit: NT$ Thousand

	SOLOMON Technology Corporation Cash and Cash Equivalents December 31, 2022
Statement 1		Unit: NT$ Thousand
Item	Summary	Amount Remarks
Cash on hand and
petty cash		$ 75
Check deposits		77,849
Demand deposits
- NTD deposits		36,891
- Foreign currency	USD 2,501 thousand, with a conversion rate of
deposits	USD 1 to NTD 30.71	76,852
	EUR 652 thousand, with a conversion rate of EUR
	1 to NTD 32.72	21,328
	JPY 20 thousand, with a conversion rate of JPY 1
	to NTD 0.2324	5
	HKD 36 thousand, with a conversion rate of HKD
	1 to NTD 3.938	140
	CNY 98 thousand, with a conversion rate of CNY
	1 to NTD 4.408	431
	The deposits will mature in three months, with an
Time deposits	interest rate of 3.90%-5.05%	361,672
		$ 575,243

Statement 1 Page 1

SOLOMON Technology Corporation Net Accounts Receivable

December 31, 2022

Statement 2			Unit: NT$ Thousand
Name of customer	Summary	Amount	Remarks
A		$ 56,835
B		23,737
C		22,215
D		21,119
E		19,219
F		16,633
G		14,064
			The balance for each
Others			customer did not exceed 5% of the total
		68,034	amount of the account
		241,856
Less: Loss allowance		( 1,191)
		$ 240,665

Statement 2 Page 1

SOLOMON Technology Corporation Inventory

December 31, 2022

Unit: NT$ Thousand

Statement 3 Item Goods Less: Allowance for devaluation loss	Summary	Amount Cost Market price 807,973 $ 788,302 ( 19,671) $ 788,302	Unit: NT$ Thousan Remarks The net realizable value was used as the market price

Statement 3 Page 1

SOLOMON Technology Corporation - Long term Equity Investments under the Equity Method January 1 to December 31, 2022

Statement 4 Name Solomon Cayman International Corp. Solomon Smartnet Corp. Solomon Goldentek Display Corp. Moredel Investment Corp. Solomon Wireless Technology Corp. Total Profit Holdings Ltd. Solomon Data International Corporation GD Investment Corp. Cornucopia Innovation Corporation Solomon Science Technology (VN) Co., Ltd. Solomon Robotics (THAI) Ltd. Solomon Technology (USA) Corp. Fast Energy Corporation Solomon Energy Technology Corporation Sheng-Peng Technology Corp.	Opening balance Number of shares Amount 14,736,130 $ 228,008 20,000,000 247,102 42,030,186 1,141,138 28,460,900 326,115 96,407 16 3,088,700 7,807 6,507,676 125,371 43,400 346 6,100,000 54,348 - 3,254 2,488,000 5,667 6,500 2,563 30,000 243 12,000,000 88,240 - - $ 2,230,218	Increase in the	current Amount $ 24,666 29,807 186,669 14,140 - - 13,129 - - 11,912 - 16,569 - 60,000 5,100 $ 361,992	Decrease in the current period Number of shares Amount - ($ 51,242) - ( 19,388) - ( 75,654) - ( 32,216) - - - ( 1,335) - - - ( 264) - ( 14,316) - ( 3,808) - 52 - ( 7,219) ( 30,000) ( 243) ( 26,496) - 701 ($ 231,428)	Closing balance Number of shares Shareholding percentage 14,736,130 100.00 20,000,000 100.00 42,030,186 70.77 28,460,900 100.00 96,407 96.41 3,088,700 100.00 6,507,676 30.45 43,400 100.00 6,100,000 35.06 - 100.00 2,488,000 100.00 12,500 100.00 - - 18,000,000 100.00 510,000 51.00	Amount $ 201,432 257,521 1,252,153 308,039 16 6,472 138,500 82 40,032 11,358 5,719 11,913 - 121,744 5,801 $ 2,360,782	Unit: NT$ Thousand Net equity value Unit price (NT$) Total price Provided as collateral or pledged $ 13.67 $ 201,432 無 12.88 257,521 〃 29.79 1,252,153 〃 10.82 308,039 〃 0.17 16 〃 2.10 6,472 〃 21.28 138,500 〃 1.89 82 〃 6.56 40,032 〃 - 11,358 〃 2.30 5,719 〃 953.04 11,913 〃 - - 〃 6.76 121,744 〃 11.37 5,801 〃	Unit: NT$ Thousand Net equity value Unit price (NT$) Total price Provided as collateral or pledged $ 13.67 $ 201,432 無 12.88 257,521 〃 29.79 1,252,153 〃 10.82 308,039 〃 0.17 16 〃 2.10 6,472 〃 21.28 138,500 〃 1.89 82 〃 6.56 40,032 〃 - 11,358 〃 2.30 5,719 〃 953.04 11,913 〃 - - 〃 6.76 121,744 〃 11.37 5,801 〃
		period Number of shares - - - - - - - - - - - 6,000 - 6,000,000 510,000		period Number of shares - - - - - - - - - - - - ( 30,000) -
	Number of shares 14,736,130 20,000,000 42,030,186 28,460,900 96,407 3,088,700 6,507,676 43,400 6,100,000 - 2,488,000 6,500 30,000 12,000,000 -				Number of shares 14,736,130 20,000,000 42,030,186 28,460,900 96,407 3,088,700 6,507,676 43,400 6,100,000 - 2,488,000 12,500 - 18,000,000 510,000		Unit price (NT$) $ 13.67 12.88 29.79 10.82 0.17 2.10 21.28 1.89 6.56 - 2.30 953.04 - 6.76 11.37
								collateral or
								pledged 無 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃

Statement 4 Page 1

SOLOMON Technology Corporation Accounts Payable

December 31, 2022

	December 31,	2022
Statement 5			Unit: NT$ Thousand
Name of customer	Summary	Amount	Remarks
H		$ 78,951
I		9,702
Others		$ 95,306	The balance for each
		$ 183,959	company did not exceed
			5% of the total amount of
			the account

Statement 5 Page 1

SOLOMON Technology Corporation Net Operating Income

January 1 to December 31, 2022

Unit: NT$ Thousand

Statement 6 Item Number (thousand) Total sales revenue Electronic parts, cathode-ray tubes and other electronic semiconductor products 46,452 Engine generators and other equipment 1 Automated equipment and electronic parts and components 267 Revenues from maintenance and design services and other services Total operating income Less: Sales returns and discounts Net operating income	Unit: NT$ Thousand Amount Remarks $ 536,234 1,139,207 1,495,741 3,171,182 10,238 3,181,420 ( 24,251) $ 3,157,169

Statement 6 Page 1

SOLOMON Technology Corporation Operating Costs

January 1 to December 31, 2022

Statement 7	Unit: NT$ Thousand
Item	Amount
Opening inventory of goods	$ 773,399
Plus: Purchase of goods in the current period	2,327,886
Less: Items transferred to expense	( 2,178)
Closing inventory of goods	( 807,973)
Cost of sales	2,291,134
Plus: Installation cost and maintenance cost	314,324
Import expense	107
Cost of goods sold	2,605,565
Less: Gain from price recovery	4,897
Operating costs in the current period	$ 2,610,462

Statement 7 Page 1

SOLOMON Technology Corporation Marketing Expense

January 1 to December 31, 2022

Statement 8				Unit: NT$ Thousand
Item	Summary	Amount		Remarks
Salary expense		$ 165,682
Insurance expense		15,767
Other expenses		76,144	The	balance of each item
		$ 257,593	did not exceed 5% of the
			total	amount of the
			account

Statement 8 Page 1

SOLOMON Technology Corporation Administrative and General Expenses January 1 to December 31, 2022

Statement 9				Unit: NT$ Thousand
Item	Summary	Amount		Remarks
Salary expense		$ 75,689
Insurance expense			5,142
Service expense			6,053
Depreciation			3,584
Other expenses			6,534	The balance of each item
		$ 97,002		did not exceed 5% of the
				total amount of the account

Statement 9 Page 1

			SOLOMON Technology Corporation	SOLOMON Technology Corporation
	Statement of Current Employee Benefits, Depreciation,			Depletion and Amortization Expenses by Function
			January 1 to December 31, 2022
Statement 10					Unit: NT$ Thousand
		2022		2021
By function By nature		Classified as operating costs	Classified as operating expenses Total	Classified operating	as costs	Classified as operating expenses	Total
Employee benefit
expenses
Salary expense		$ -	$ 290,464	$ 290,464	$ -	$ 275,758		$ 275,758
Labor and health insurance expenses		-	25,534	25,534	-	25,067		25,067
Pension expense		-	12,983	12,983	-	13,011		13,011
Remuneration directors	to	-	11,382	11,382	-	4,472		4,472
Other employee benefit expenses		-	12,334	12,334	-	10,520		10,520
Depreciation expense		-	21,550	21,550	-	22,959		22,959
Amortization expense		-	1,889	1,889	-	2,316		2,316

Note 1: As of December 31, 2022 and 2021, the Company had 315 and 306 employees, respectively, and the number of non-employee directors was 4.

Note 2: The Company’s average employee benefit expense in 2022 and 2021 was $1,098 and $1,074, respectively. The average employee salary expense in 2022 and 2021 was $935 and $913, respectively. The average employee salary expense in 2022 was adjusted by 2.35%.

• Note 3: The Company’s remuneration to supervisors in 2022 and 2021 was $0 and $330, respectively. Note 4: Please specify the Company’s salary and remuneration policies (including those for the directors, supervisors, managerial officers, and employees).

• (1) The Company’s policy, standards and packages for payment of remuneration to the directors and supervisors, the procedures for determination of the remuneration, and the relevance to the operating performance and future risks:

• a. The Board of Directors is authorized to determine the remuneration of the Company’s directors and supervisors based on their individual participation in and contribution to the Company’s operations and with reference to the general level in the industry at home and abroad.

• b. According to the Articles of Incorporation, the Company shall subtract any accumulated losses from earnings in the year. A minimum

Statement 10 Page 1

SOLOMON Technology Corporation Statement of Current Employee Benefits, Depreciation, Depletion and Amortization Expenses by Function January 1 to December 31, 2022

Statement 10

Unit: NT$ Thousand

amount of 1% of the remaining (if any) shall be appropriated as remuneration to employees and a maximum amount of 2% shall be appropriated as remuneration to directors and supervisors. The distribution of the remuneration is subject to a resolution of the Board of Directors.

• (2) The Company’s policy, standards and packages for payment of remuneration to the managerial officers, the procedures for determination of the remuneration, and the relevance to the operating performance and future risks:

• a. The remuneration of the Company’s managerial officers is determined based on their professional experience and length of service.

• b. According to the Articles of Incorporation, the Company shall subtract any accumulated losses from earnings in the year. A minimum amount of 1% of the remaining (if any) shall be appropriated as remuneration to employees and a maximum amount of 2% shall be appropriated as remuneration to directors and supervisors. The distribution of the remuneration is subject to a resolution of the Board of Directors.

• (3) The Company’s policy, standards and packages for payment of remuneration to the employees, the procedures for determination of the remuneration, and the relevance to the operating performance and future risks:

• a. The remuneration policy for the Company’s employees uses their personal capability, contribution to the Company, and performance as the bases and the remuneration is positively correlated with the operating performance. In addition, the Company has controlled future risks well and there is a certain degree of correlation between the remuneration policy and the future risks. The overall salary and remuneration packages comprise three main elements, namely the base salary, bonuses and employee remuneration, and benefits. In accordance with the standards for payment of remuneration, the base salary is determined based on the competition for the position in the market and the Company’s policies. The bonuses and employee remuneration paid are associated with the employee’s or the department’s achievement of goals or the Company’s operating performance. The benefits shall be designed on the premise that laws and regulations are complied with and to meet the needs of the employees and allow them to enjoy the benefits together.

• b. According to the Articles of Incorporation, the Company shall subtract any accumulated losses from earnings in the year. A minimum amount of 1% of the remaining (if any) shall be appropriated as remuneration to employees and a maximum amount of 2% shall be appropriated as remuneration to directors and supervisors. The distribution of the remuneration is subject to a resolution of the Board of Directors.

Statement 10 Page 2

SOLOMON Technology Corporation Loaning Funds to Others January 1 to December 31, 2022

Table 1 No. (Note 1) Lending company 1 Moredel Investment	Borrowing company Current account Solomon Energy Other receivables	Related party Y	Maximum amount in the current period 4,000	Closing balance -	Actual drawdown amount -	Range of interest rates 1%	Nature of loaning of funds (Note 4) 2	Business transaction amount -	Reasons for the need of short-term financing Working capital	Allowance set aside for bad debts Collateral Name Value - - -	Unit: NT$ Thousand (Unless otherwise specified) Limit on loans to individual borrowers (Note 2) Limit on total loans (Note 3) Remarks 128,895 257,789

Note 1: Number column description:

• (1) “0” is reserved for the issuer.

• (2) Each investee company is numbered in sequential order starting from 1.

Note 2: According to the Company’s lending procedure, the amount of loans to a single enterprise with short-term financing needs is limited to 40% of the Company’s net worth. The amount of loans to companies having business dealings with the Company is limited to the higher of the amount of purchases and sales between both parties. The amounts of the subsidiaries’ loans to a single enterprise and their total loans given for short-term financing needs shall not exceed 40% of the net worth of the Company (However, the amount of Dong Guan Goldentek’s total loans given is limited to 80%).

Note 3: According to the Company’s lending procedure, the amount of the Company’s total loans given is limited to 80% of the net worth of the Company. Note 4: The nature of loaning of funds is described as follows:

• (1) Business relationships: 1.

• (2) Needs for short-term financing: 2.

Table 1 Page 1

Table 2

SOLOMON Technology Corporation Endorsements/Guarantees for Others January 1 to December 31, 2022

Unit: NT$ Thousand (Unless otherwise specified)

No. (Note 1) Endorser/guarantor Endorsee/guarantee Company name Relationship (Note 2) 0 SOLOMON Solomon Energy 2	Limit on endorsements /guarantees to a single enterprise (Note 3) $ 981,742	Maximum endorsement/ guarantee balance in the current period $ 157,000	Maximum endorsement/ guarantee balance in the current period $ 157,000	Closing endorsement/ guarantee balance $ 157,000	Actual drawdown amount $ 37,900	Endorsement /guarantee amount secured with property $ -	Cumulative endorsement/ guarantee amount as a percentage of the net worth in the most recent financial statements 3.20	Maximum limit on endorsements /guarantees (Note 3) $ 2,454,354	Endorsement s/guarantees made by the parent company for subsidiaries Y	Endorsement s/guarantees made by subsidiaries for the parent company N	Endorsement s/guarantees made for the operations in Mainland China N	Remarks

Note 1: Number column description:

• (1) “0” is reserved for the issuer.

• (2) Each investee company is numbered in sequential order starting from 1.

Note 2: The relationship between the endorser/guarantor and the endorsee/guarantee is classified into the following six categories. It is only necessary to mark the type:

• (1) Companies with business relationships.

• (2) Subsidiaries in which the Company holds more than 50% of the common stock equity.

(3) Investee companies in which the parent company and its subsidiaries hold more than 50% of the common stock equity, calculated on a consolidated basis.

(4) The parent company, directly or indirectly through a subsidiary, holding more than 50% of the common stock equity of the Company.

(5) Companies in the same industry that are required to provide mutual guarantee pursuant to contracts for undertaking engineering projects.

(6) Companies receiving endorsements/guarantees from the shareholders proportionally to their shareholding due to a joint venture relationship.

• Note 3: According to the Company’s endorsement/guarantee procedure, the amount of the Company’s total endorsements/guarantees is limited to 50% of the net worth of the Company and the amount of endorsements/guarantees provided for the same company shall not exceed 20% of the guarantor’s net worth.

Table 2 Page 1

SOLOMON Technology Corporation

Securities Held at End of Period (Excluding Those Controlled by Investee Subsidiaries, Associates and Joint Ventures) December 31, 2022

Table 3

Unit: NT$ Thousand (Unless otherwise specified)

Holding company Type and name of securities SOLOMON Hua Nan Phoenix Money Market Fund Raydium Evergreen Unimicron IROC Chenfeng Sogotec Enterprise TAIWAN-CA Tai-Ling Biotech Taiwan Truewin Technology Liwatt X Lion Best Global Limited-Tranche A Notes Lion Best Global Limited-Tranche B Notes Moredel Investment SOLOMON Hwa Fong Rubber Ind. Raydium Integrated Solutions Airbag Packing Keystone Tech	Relationship with the securities issuer Account - Financial assets measured at fair value through profit or loss – current - Financial assets measured at fair value through profit or loss – current - Financial assets measured at fair value through profit or loss – current - Financial assets measured at fair value through profit or loss – current - Financial assets measured at fair value through profit or loss – non-current - Financial assets measured at fair value through profit or loss – non-current - Financial assets measured at fair value through profit or loss – non-current - Financial assets measured at fair value through profit or loss – non-current - Financial assets measured at fair value through profit or loss – non-current - Financial assets measured at fair value through profit or loss – non-current Financial assets measured at fair value through profit or loss – non-current - Financial assets measured at amortized cost – non-current - Financial assets measured at amortized cost – non-current Parent company of the Company Financial assets measured at fair value through profit or loss – current - Financial assets measured at fair value through profit or loss – current - Financial assets measured at fair value through profit or loss – current - Financial assets measured at fair value through profit or loss – non-current - Financial assets measured at fair value through profit or loss – non-current - Financial assets measured at fair value through profit or loss – non-current	Number of shares/units 6,669,817 39,000 84,000 128,000 70,745 1,500,000 852 29,847 321,538 200,000 500,000 - - 100,432 1,327,556 80,000 1,522,659 400,000 200,000	Carrying am

Table 3 Page 1

	Gintung Energy	-	Financial assets measured at fair value through	57,141	-	0.15%	-	〃
			profit or loss – non-current
Solomon Cayman	Capital Investment Development Corp	-	Financial assets measured at fair value through	330,000	10,134	0.77%	10,134	〃
			profit or loss – non-current
	Polar Tech.	-	Financial assets measured at fair value through	190,000	-	18.21%	-	〃
			profit or loss – non-current
	UKNOWIKNOW HOLDINGS INC.	-	Financial assets measured at fair value through	150,000	-	5.22%	-	〃
			profit or loss – non-current
Solomon Data		-	Financial assets measured at fair value through	80,000	-	1.36%	-	〃
International	CENZ Automation		profit or loss – non-current
	Taiwan Truewin Technology	-	Financial assets measured at fair value through	100,000	6,208	0.37%	6,208	〃
			profit or loss – non-current
	Cerulean Asset Management Venture	-	Financial assets measured at fair value through	3,000	3,000	3.22%	3,000	〃
	Capital Limited Partnership		profit or loss – non-current
	Meng-Lue Corporate Venture Fund	-	Financial assets measured at fair value through	1,875	1,875	2.08%	1,875	〃
	Limited Partnership		profit or loss – non-current
Solomon Goldentek		-	Financial assets measured at fair value through	105,000	4,273	-	4,273	〃
Display	United Microelectronics Corporation		profit or loss – current
	Unimicron Technology Corp.	-	Financial assets measured at fair value through	90,000	10,800	0.01%	10,800	〃
			profit or loss – current
	Giant Manufacturing Co., Ltd.	-	Financial assets measured at fair value through	15,000	3,008	-	3,008	〃
			profit or loss – current
		-	Financial assets measured at fair value through	250,000	85	4.25%	85	〃
	CENZ Automation Co., Ltd.		profit or loss – non-current
	Lion Best Global Limited-Tranche B Notes	-	Financial assets measured at amortized cost – non-current	-	307,100	-	307,100	〃
	Meng-Lue Venture Capital Limited Partnership	-	Financial assets measured at fair value through profit or loss – non-current	3,750	3,750	4.17%	3,750	〃
	Cerulean Asset Management Venture	-	Financial assets measured at fair value through	4,500	4,500	4.82%	4,500	〃
	Capital Limited Partnership		profit or loss – non-current
Solomon Smartnet	Raydium	-	Financial assets measured at fair value through	22,000	10,471	0.03%	10,471	〃
			profit or loss – current
		-	Financial assets measured at fair value through	40,000	1,628	-	1,628	〃
	United Microelectronics		profit or loss – current
Cornucopia		-	Financial assets measured at fair value through	320,000	13,216	0.18%	13,216	″
Innovation	Weltrend		profit or loss – current
	Meng-Lue Corporate Venture Fund	-	Financial assets measured at fair value through	1,875	1,875	2.08%	1,875	″
	Limited Partnership		profit or loss – non-current

Note: Not pledged.

Table 3 Page 2

Table 4

SOLOMON Technology Corporation

Purchases and Sales with Related Parties Amounting to NT$100 Million or More Than 20% of the Paid-in Capital January 1 to December 31, 2022

Unit: NT$ Thousand (Unless otherwise specified)

Purchasing (selling) company Name of counterparty SOLOMON Yumon International Yumon International SOLOMON Solomon Goldentek Display Dong Guan Goldentek Solomon Goldentek Display Dong Guan Goldentek Dong Guan Goldentek Solomon Goldentek Display Dong Guan Goldentek Solomon Goldentek Display	Relationship Parent- subsidiary Parent- subsidiary Parent- subsidiary Parent- subsidiary Parent- subsidiary Parent- subsidiary	Purchase (sale) (Sale) Purchase Purchase Note 4 (Sale) Note 4	Transaction Amount Percentage in total purchases (sales) ($ 432,746) ( 13) 432,746 54 731,592 78 ( 278,524) - ( 731,592) ( 88) 278,524 -	Differences of transaction terms from those of regular transactions and reasons for such differences Loan period Unit price Loan period Note 1 Agreed by both parties Note 2 Note 1 Agreed by both parties Note 2 Note 3 Note 3 Note 3 Note 4 Note 4 Note 4 Note 3 Note 3 Note 3 Note 4 Note 4 Note 4	Notes/accounts receivable (payable) Balance Percentage in total accounts/notes receivable (payable) $ 708 - ( 708) - ( 142,644) ( 90) - - 142,644 88 - -	Remarks

Note 1: The payment was collected after being offset against the accounts receivable based on the funding status of Yumon International.

Note 2: The loan period for regular customers ranges from 90 to 120 days.

Note 3: The unit price was negotiated by both parties. The payment was made based on the funding status after being offset against the payment receivable for entrusted procurement. The payment term for regular suppliers ranges from about 60 to 90 days.

Note 4: It was an entrusted procurement transaction. The payment was collected after being offset against the accounts payable based on the funding status on a monthly basis.

Table 4 Page 1

SOLOMON Technology Corporation

Accounts Receivable from Related Parties Amounting to NT$100 Million or More Than 20% of the Paid-in Capital December 31, 2022 Table 5

	December 31, 2022
Table 5 Company from which payments accounted for are receivable Name of counterparty Relationship Dong Guan Goldentek Solomon Goldentek Display Parent-subsidiary	Balance of payments receivable from the related party $ 142,644	Turnover 3.83	Overdue payments receivable from the related party Amount Treatment - Active collection			Unit: NT$ Thousand (Unless otherwise specified) Subsequently recovered amount of payments receivable from the related party Allowance set aside for bad debts $ 85,562 $ -
				Amount
					-
								for bad debts $ -

Table 5 Page 1

Table 6

SOLOMON Technology Corporation

Business Relationship and Important Transactions between the Parent Company and Subsidiaries and between the Subsidiaries, and the Amounts of Such Transactions January 1 to December 31, 2022

Unit: NT$ Thousand (Unless otherwise specified)

Transaction

No. (Note 4) Name of transacting party Counterparty 0 SOLOMON Yumon International 0 SOLOMON Solomon Goldentek Display 1 Solomon Goldentek Display Dong Guan Goldentek 1 Solomon Goldentek Display Dong Guan Goldentek 1 Solomon Goldentek Display Dong Guan Goldentek	Relationship with transacting party (Note 5) Account 1 Sale 1 Sale 1 Purchase 1 Accounts payable 1 Other receivables	Amount $ 432,746 72,510 731,592 142,644 278,524	Transaction terms Note 1 Note 2 Note 2 Note 2 Note 3	Percentage of total consolidated operating	Percentage of total consolidated operating
					income or assets (Note 6) 8% 1% 14% 2% 3%

Note 1: After the payments receivable and payable were offset against each other, the payments were collected based on the funding status. The payment term for regular customers ranges from about 90-120 days. Note 2: The payment term was 90-180 days after the payments receivable and payable were offset against each other.

Note 3: The receivables were the procurement payments made by the parent company on behalf of the subsidiary.

Note 4: The business transactions between the parent company and its subsidiaries shall be indicated in the “No.” column. This column shall be completed as follows:

(1) 0 is reserved for the parent company.

• (2) Each subsidiary is numbered in sequential order starting from 1.

Note 5: The relationship with the transacting party is classified into the following three categories. It is only necessary to mark the type (It is not necessary to disclose the same transaction between the parent company and its

subsidiaries or between the subsidiaries repeatedly. For example, if the parent company has disclosed a transaction with one of its subsidiaries, it is not required for the subsidiary to disclose the transaction again. If a subsidiary has disclosed a transaction with another subsidiary, it is not required for the latter to disclose the transaction again):

(1) Parent to subsidiary.

(2) Subsidiary to parent.

(3) Subsidiary to subsidiary.

Note 6: For asset or liability accounts, the transaction amount’s percentage of total consolidated operating income or assets shall be calculated as the closing balance as a share of the total assets; for profit or loss accounts, the percentage shall be calculated as the accumulated amount as a share of the total consolidated operating income.

Table 6 Page 1

SOLOMON Technology Corporation

Information Related to Investee Companies (Excluding Those in Mainland China), Their Place of Registration, etc. January 1 to December 31, 2022

Table 7 Name of investor company Name of investee company Place of registration Principal business SOLOMON Solomon Cayman Cayman Islands Holding company SOLOMON Solomon Smartnet Taiwan IC cards SOLOMON Solomon Goldentek Display Taiwan Manufacturing of LCDs SOLOMON Moredel Investment Taiwan Professional investment SOLOMON Solomon Wireless Technology Taiwan Communication products SOLOMON Solomon Data International Taiwan Manufacturing of LCD panels SOLOMON Total Profit Samoa Holding company SOLOMON GD Investment Taiwan Installation and sale of generators SOLOMON Cornucopia Innovation Taiwan Manufacturing of machines/equipment and electronic parts and components SOLOMON Solomon Science Technology (VN) Vietnam Supply and sale of intelligence technology SOLOMON Solomon Robotics (THAI) Ltd. Thailand Supply and sale of intelligence technology SOLOMON Solomon Technology (USA) United States Supply and sale of intelligence technology SOLOMON Fast Energy Taiwan Self-usage renewable energy generation equipment SOLOMON Solomon Energy Taiwan Import and export of electrical power-related products SOLOMON Sheng-Peng Technology Taiwan Import and export of electrical power-related products Moredel Investment Solomon Data International Taiwan Manufacturing of LCD panels Moredel Investment Solomon Goldentek Display Taiwan Manufacturing of LCDs Moredel Investment INGA NANO Technology Taiwan Installation of computer equipment and retail and wholesale of electronic materials Solomon Smartnet Solomon Data International Taiwan Manufacturing of LCD panels Solomon Smartnet Solomon Goldentek Display Taiwan Manufacturing of LCDs	Initial investment amount End of current period End of previous year $ 264,367 $ 315,607 200,000 200,000 1,359,694 1,359,694 457,384 457,384 599,665 599,665 58,339 58,339 13,859 13,859 434 434 65,000 65,000 27,200 15,288 8,209 8,209 54,074 37,505 - 300 180,000 120,000 5,100 - 41,883 41,883 62,233 62,233 - 24,700 38,418 38,418 62,233 62,233	Holding percentage at end of period Number of shares Percentage Carrying amount 14,736,130 100.00 $ 201,432 20,000,000 100.00 257,521 42,030,186 70.77 1,252,153 28,460,900 100.00 308,039 96,407 96.41 16 6,507,676 30.45 138,500 3,088,700 100.00 6,472 43,400 100.00 82 6,100,000 35.06 40,032 - 100.00 11,358 2,488,000 100.00 5,719 12,500 100.00 11,913 - - - 18,000,000 100.00 121,744 510,000 51.00 5,801 3,902,740 18.87 81,478 5,500,000 9.26 166,798 - - - 4,368,117 21.11 90,351 5,610,000 9.26 166,798	Unit: NT$ Thousand (Unless otherwise specified) Gain or loss of investee company in the current period Investment gain or loss recognized in the current period Remarks $ 20,622 $ 20,622 1 27,185 27,185 1 237,465 168,055 1 11,758 11,537 1 - - 1 41,992 12,862 1 ( 1,456) ( 1,456) 1 ( 264) ( 264) 1 ( 40,831) ( 14,316) 1 ( 4,143) ( 4,143) 1 ( 340) ( 340) 1 ( 9,081) ( 9,081) 1 ( 1) ( 1) 1 ( 26,713) ( 26,713) 1 1,061 701 1 41,992 - 1、3 237,465 - 1、3 ( 393) - 3、4 41,992 - 1、3 237,465 - 1、3

Table 7 Page 1

Solomon Cayman	Solomon Group	United States	Holding company	3,183	3,183	150,000	100.00	-	-	-	3、4
Solomon Cayman	Soundtek Ltd.	Seychelles	Professional investment	22,041	23,764	-	30.00	-	-	-	3、4
Solomon Cayman	Goldentek (B.V.I.)	British Virgin	Sale of LCDs and	452	2,175	48,501	0.39	1,658	52,640	-	2、3
		Islands	modules
Solomon Cayman	GD Power Ltd.	Seychelles	Holding company	-	25,586	-	-	-	-	-	2、3
Solomon Energy	Solomon Energy (Singapore)	Singapore	Self-usage renewable	14,752	10,644	700,000	100.00	88	( 6,485)	-	2、3
			energy generation
			equipment
Solomon Data International	Cornucopia Innovation	Taiwan	Manufacturing of	25,268	25,300	2,300,000	13.22	20,037	( 40,155)	-	1、3
			machines/equipment and
			electronic parts and
			components
Solomon Data International	AggrEnergy	Taiwan	Energy technology	24,532	-	23,502,128	18.21	28,896	23,963	-	1、3
			service
Solomon Data International	Ju Xin Energy	Taiwan	Energy technology	36,000	-	3,600,000	5.00	35,976	( 521)	-	1、3
			service
Solomon Goldentek Display Corp.	Goldentek Display System (BVI) Co., Ltd.	British Virgin Islands	Production and sale of LCDs and modules	423,146	863,143	12,387,686	99.61	423,535	52,640	-	2、3
Solomon Goldentek Display Corp.	Futek Trading Co., Ltd.	British Virgin	Entrepot trade	14,406	14,406	1,050,000	100.00	384	( 8,081)	-	2、3
		Islands
Solomon Goldentek Display Corp.	Cornucopia Innovation Corporation	Taiwan	Manufacturing of	4,500	4,500	360,000	2.07	3,355	( 35,068)	-	1、3
			machines/equipment and
			electronic parts and
			components
Futek Trading Co., Ltd.	Solomon Goldentek Display (Hong	Hong Kong	Entrepot trade	2,175	2,175	500,000	100.00	384	( 8,081)	-	1、3
	Kong) Corp.
Solomon Goldentek Display (Dong	Goldentek Smart International Limited	Hong Kong	Production and sale of	-	162,125	-	-	-	-	-	1、3
Guan) Ltd.			LCDs and modules and
			investment business

Note 1: A subsidiary. Note 2: A sub-subsidiary. Note 3: The investee company’s profit or loss in the current period was recognized as that of the ultimate parent company. Note 4: An investee company valuated using the equity method.

Table 7 Page 2

SOLOMON Technology Corporation Information of Investments in Mainland China – Basic Information January 1 to December 31, 2022

				January 1 to December 31,	January 1 to December 31,	2022
Table 8 Name of investee company in Mainland China Principal business Solomon Goldentek Display (Dong Guan) Ltd. Production and sale of new types of LCDs and modules Solomon Shenzhen International trade Yumon International International trade Zhuhai Wan Jia Manufacturing and sale of magnetic materials Tien Yun Technology (Suzhou) Microphones, LCD cables	Paid-in capital $ 161,760 11,814 208,828 61,420 9,213	Method of investment (Note 1) 1 1 1 1 2	Accumulated amount of investments remitted from Taiwan at beginning of current period $ 563,976 11,547 65,956 4,497 -	Amount of investments remitted or recovered in the current period Remitted Recovered $ - $459,085 - - - - - - - -		Accumulated amount of investments remitted from Taiwan at end of current period $ 104,891 11,547 65,956 4,497 -	Gain or loss of investee company in the current period $ 23,283 ( 1,456) 20,337 - -	The Company’s shareholding in direct or indirect investments 99.61 100.00 100.00 7.65 30.00	Investment gain or loss recognized in the current period (Note 3) i $ 23,192 ( 1,456) 20,337 - -	Unit: NT$ Thousand (Unless otherwise specified) Carrying amount of nvestments at end of period Investment gain received as of the current period Remarks $ 423,489 $ - 6,461 - 179,768 - - - - - Note 2
				the curren Remitted $ - - - - -	the curren
										a

Note 1: Investment methods are classified into the following two categories. It is only necessary to mark the type: (1) Investment in Mainland China companies through an investee company established in a third area.

(2) Investment in Mainland China companies by investing in an existing company in a third area.

(3) Investment in Mainland China companies through an existing investee company established in Mainland China. Note 2: The subsidiary Solomon Cayman invested US$90 thousand from its own funds in Soundtek Ltd. in Mainland China. Note 3: The gain or loss was valuated based on the financial statements for the same period audited by the parent company’s CPA. Note 4: Solomon Cayman, a 100% owned subsidiary of the Company, increased the capital of Yumon International with US$800 thousand and US$3,000 thousand from its own funds in 2011 and 2013, respectively.

Table 8 Page 1

Company name SOLOMON Technology Corporation	Accumulated amount of investments remitted from Taiwan to Mainland China at end of current period $ 614,867	Amount of investments approved by the Investment Commission, MOEA $ 912,070	Amount of investments approved by the Investment Commission, MOEA $ 912,070	Limit on the amount of investments in
				Mainland China
				as required by
				the Investment
				Commission, MOEA $ 3,197,134

Note 1: The data of Dong Guan Goldentek was reported by Solomon Goldentek Display. The listed figure includes the information of the company. Note 2: The limit was calculated based on the Company’s net equity value without consideration of the investments of Solomon Goldentek Display.

Table 8 Page 2

SOLOMON Technology Corporation Information of major shareholders December 31, 2022

Table 9 Chen Cheng-Lung Chen Lu Su-Yue Chen Jan-Sun Xin Li Investment Corp.	Name of major shareholders	Shares Number of shares held 15,733,057 13,958,843 9,481,377 9,235,114	Shareholding percentage 9.17 8.14 5.52 5.38

Table 9 Page 1